Lots of retirees are unprepared for rising interest rates
Retirees need to be ready for rising interest rates (Fox Business)
While retirees will welcome the impact higher interest rates will have on their savings, they must adjust their portfolios accordingly. The reach for yield has caused retirees to move into longer durations and riskier debt, but that trade is already beginning to unwind in anticipation of a Fed rate hike. Bernard Kiely, a financial planner in Morristown, New Jersey suggests retirees should be "getting out of long-term bonds and getting into short-term bonds." Kelly also warns those holding low-interest long-term annuities are also at risk.
TD Ameritrade is trying to attract millionaires (Reuters)
The discount broker-dealer is looking looking into ways to attract high-income earners. "It's one of our top initiatives for 2016," said retail distribution division president Tom Bradley. He continued, "We think we can do a more effective job of enhancing our offering for folks with $1 million or more." When the company's fiscal year begins on October 1, those who qualify will receive additional perks. Benefits include advice from an investment consultant, priority order routing and access to special seminars and events, which may include professional sports games.
The student loan refinancing boom could hurt the US taxpayer (Bloomberg)
More and more private lenders are offering the opportunity to refinance student loans. The new lenders provide borrowers with the opportunity to refinance their higher interest bearing loans at a lower rate, easing their debt obligation. While this opportunity is undoubtedly good news for borrowers who qualify, it is bad news for the taxpayer. As Bloomberg puts it, "Traditionally, the student-loan program returns money to the U.S. Treasury. Now, the exodus of its most reliable customers could lead to losses."
MSCI will not include Chinese stocks (AFP)
MSCI's latest rebalancing will not include the addition of Chinese stocks. Recent speculation the shares would be added to the emerging markets index has provided support to the Shanghai Composite Index, but MSCI has decided to keep Chinese listings out of the index due to "remaining issues" over market access. China's Shanghai Composite is up nearly 60% so far this year.
A Merrill Lynch team moves over to Raymond James (Think Advisor)
An advisor team from Cincinnati is the latest to leave Merrill Lynch. The team of three, consisting of David Holwadel, Jeffrey Thompson and Yvette Bush, takes its $400 million in assets under management and $2 million in fees with them to Raymond James. "We sought a firm that offered the kind of culture I experienced working alongside my father, who was an advisor for 55 years," added Holwadel. He continued, "We feel as if we have returned home at Raymond James."