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Money 101:
Personal Money Planning's Newsletter
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Money 101 December 24, 2011 |
Howdy!
Thanks to those of you who came to our last seminar of the year a few weeks ago. If this is your first newsletter, welcome aboard! Many of you were interested in the Gross article I mentioned during my presentation, and I am happy to offer a link in the Money 101section. Enjoy! It's the time of year that many of us are reminded of the importance of family, and as the calendar flips over to a new year we are faced with the inevitable passage of time. It can be unpleasant, but planning for the care of aging parents is something many face. I am going to take part in an upcoming seminar called, " The Talk: The Parent Care Conversation" that will help people who are called to this task. C. Dan Campbell, P.C., will discuss legal issues and estate planning and Dr. Larry Williams, a sociologist at MSU, will talk about the psychological considerations. Jackie Spragins, an expert in long term care insurance will speak, and I, of course, will focus on the financial implications of the issues that arise during this conversation.
There is a $10 charge per person for this seminar, with net proceeds going to Hospice of Wichita Falls. It will be held on January 12 at the Lexington Suites (1917 Elmwood Ave. N.) in Wichita Falls from 6:00 p.m. to 8:00 p.m. Refreshments will be served. Please RSVP by calling the office at 940-692-6885. --Gary Silverman, CFP® |
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Gary's Soapbox
The Regulation Battle (Final Installment)
There's another battle being waged in the area of advisor regulations. It has to do with whether brokers should have to act as fiduciaries to their clients. Currently brokers and insurance agents only have to meet a suitability rule. This means their recommendations to you don't need to be based solely on whether the product is the best thing for you. Other factors can be taken into account.
For example, if product X is, in their opinion, a bit better for you than product Y, they can legally recommend product Y to you as long as it is suitable. Why might they do this? Experience shows that it's because product Y earns them more money.
Registered Investment Advisors have to operate under fiduciary rules. In the previous example it would be illegal for the advisor to recommend product Y, because fiduciary rules mean they must choose the product that is better for the client.
While it is understandable why brokers aren't all that excited to be put under fiduciary requirements, why would regulators (and more importantly, Congress) be waffling over the idea? Well, the argument is that without the extra profit motive that suitability rules give you, brokers would not be able to work with anybody other than rich folks, thus depriving the general public of valuable financial advice. It has been noted that the advisors only work with the real wealthy.
Hmmm...last time I saw, most of my clients would not be considered real wealthy. In fact the bulk of my clients are the middle-class folks that I've been told we advisors do not serve. And, last I saw, brokers are often discouraged from seeking business from the middle-class even with the existing suitability standards (they're still not a particularly profitable market segment). I'm thinking that their argument falls under the category of a "straw dog."
No, I think the true reason is much more logical: money. The three major broker groups that do lobbying on Capitol Hill, SIFMA, NAIFA, and the FSI spent almost $7 million on lobbying efforts last year. An additional $2.5 million was donated to campaigns in 2010. The major players from the investment advisor side spent a bit under $400,000.
Guess whose arguments tend to get the attention of the politicians?
And who's to blame them? After all, the brokerage houses and insurance companies represent some of the largest companies in the United States, employing hundreds of thousands of people. The majority of investment advisors have fewer than 10 employees. Both in size and money it is David and Goliath. And without a miracle, I wouldn't put my money on David.
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Gary's Latest Articles
From The Times Record News
Dear 99%
IRA Foibles Thinking about moving your IRA? Be sure to know the rules; otherwise, the move could cost you. Read more... |
 Money 101: European Debt Crisis
At the end of year seminar earlier this month, Gary mentioned an article by Bill Gross of Pimco regarding the European Debt Crisis. We didn't have copies available, but we do have a link we can share now. Here it is...
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Merry Christmas!
I hope you are having a wonderful holiday surrounded by family, friends and good food. As the year comes to a close, take some time to reflect on the blessings of the year, as well as your goals for the next. Happy Holidays to you and yours. Sincerely, 
Gary Silverman, CFP®
Personal Money Planning |
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©2011 Personal Money Planning . All rights reserved by Personal Money Planning and content may not be reproduced, disseminated, or transferred in any form or by any means, except with the prior written permission of Personal Money Planning unless specifically noted. (Permission is not difficult to obtain.) The one exception is for downloading and printing information from this newsletter for general education by the original recipient.
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DISCLOSURE
This newsletter is produced by Gary Silverman, dba Personal Money Planning, a registered investment advisor located in Wichita Falls, Texas.
Information in this newsletter is believed to provide accurate and authoritative information in regards to the subject matter covered. However, the accuracy, timeliness, or applicability of the information is not guaranteed and is provided with the understanding that we are not rendering legal, accounting, tax, or other professional advice or services.
This publication should not be construed by any consumer and/or prospective client as Personal Money Planning's solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet. Nor should links provided to other sites be construed as the recommendation of the services or products mentioned on those sites. If such services are required, the help of a competent professional should be sought.Remember that past performance may not be indicative of future results. Therefore, you should not assume that the future performance of any specific investment, investment strategy, or product made reference to (directly or indirectly) on this Website will be profitable or equal to indicated performance levels. Different types of investment involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for your investment portfolio.
Historical performance results for investment indexes and categories generally do not reflect the deduction of transaction or custodial charges or the deduction of an investment management fee, the incurrence of which would have the effect of decreasing historical performance results.
A copy of Personal Money Planning's current written disclosure statement discussing Personal Money Planning's business operations, services, and fees (known as an ADV Part II) is available from Personal Money Planning upon written request (and can be downloaded from our web site).
Personal Money Planning does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Personal Money Planning's web site or incorporated herein, and takes no responsibility therefore. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. |
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