In Practice December 18, 2008

Many HNW Investors Not Seeking Advice about the Financial Crisis

As of mid-October, only about 20% of high net worth investors (HNW) had contacted their current investment adviser for advice about the financial crisis, new research says.
Reported by

Further, research firm Phoenix Marketing International notes, the majority (54%) of these investors had done nothing different in their investment behavior.

“Our research uncovered some interesting and somewhat counter-intuitive findings,” stated David Thompson, Managing Director, Phoenix Affluent Market, in a press release. “Our data strongly suggests that many advisers to HNW investors have yet to fully engage their wealthy clients concerning actions that they should be taking as a result of the economic meltdown.”

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The report, titled “The U.S. High Net Worth Market – A Segmented Portrait,” also says there are no clear market leaders among wealth management firms. “The door appears to be open for the emergence of a strong leader in delivering state-of-the-art services and products to HNW investors,” added Thompson.

Although Fidelity has consistently been the most successful in penetrating the HNW segments, there are no firms that stand above others in capturing assets of these investors, the company says. In fact, firms like Merrill Lynch, Smith Barney, Morgan Stanley, and Wachovia are about equal in HNW client loyalty and satisfaction.

 

 

More information about the study, including purchasing information, is available here.

Compliance December 17, 2008

White House Confirms Bush to Sign RMD Relief

President George Bush will sign into law a bill suspending a requirement that seniors take a required minimum distribution (RMD) from retirement accounts in 2009, the White House has announced.
Reported by

A Dow Jones news report said White House spokesman Tony Fratto confirmed the President’s intention to sign the RMD legislation, but indicated the timing of the bill-signing was uncertain because the White House had not yet received the legislation from Capitol Hill.

In addition to the RMD provisions waiving the a tax penalty for 2009, the bill eases defined benefit plan funding requirements, allowing them more time to meet those requirements. The bill also offers relief to multi-employer plans (See Pension, RMD Relief Waits President’s Signature).

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According to Dow Jones, the White House had opposed the pension changes, and it had been unclear if it would attempt to block the bill because of it. In November, the White House circulated an informal list of objections to those provisions.

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