Products April 29, 2009

The Principal Releases Adviser Tool for Business-Owner Clients

The Principal Financial Group now offers a service to help financial advisers work with their business owner clients to ensure buy-sell agreements are more effective.
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The Buy-Sell Review provides an in-depth look at the business continuation document, the Principal said in a news release. By gathering a few key pieces of information, financial advisers are able to give business owners a more accurate picture of their current business valuation, provisions of their agreement, and funding needs, the company said.

According to Principal, the tool, designed for financial advisers to share with business owners, provides a report including:

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  • Buy-Sell Review Summary—highlights issues and recommendations regarding the existing agreement;
  • Buy-Sell Review Detailed Report—an in-depth analysis including any buy-sell funding needs;
  • Business Valuation Proposal—a free informal business valuation using five commonly used methods.

Once the Review is complete, it serves as a starting point for the owner to meet with tax and legal advisers to either address potential issues or confirm the agreement meets the owner’s current objectives, the Principal said.

 

 

 

For more information, contact your Principal Financial Group financial representative or visit www.principal.com.

 

Deals & People April 29, 2009

BofA Loosens Penalty Boxes

Bank of America Corp. is getting rid of one of its pay cuts for some lower producers, according to reports.
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Merrill Lynch had implemented three penalty boxes this year (see “Merrill, Smith Barney Change Broker Compensation’). The Wall Street Journal reported that it is now removing the one in which brokers with six or more years’ experience bringing in $200,000 to $299,999 in annual production would receive only a 25% payout, rather than 37% on the regular pay scale. Now that pay cut will apply only to brokers with 10 or more years in business.

The remaining penalty categories cut pay for brokers with six or more years’ experience and less than $200,000 in production and those with 10 or more years doing less than $400,000 in production, according to the news report.

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The WSJ noted most firms made their penalty boxes harsher at the beginning of the year in an attempt to weed out long-time lower producers. UBS and Morgan Stanley also brought out tougher penalties this year.

Now the firms are cutting brokers a break. In a similar move, Citigroup Inc.’s Smith Barney is giving its brokers an extra month to increase production levels. It postponed implementation of its penalty guidelines to May 1, The WSJ said.

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