An Advisor’s Perspective on FinReg

As the Senate passed the Financial Reform Bill (aka FinReg) 60-39 last Thursday, many investors and financial advisors are speculating about how this legislation may affect the financial services industry—specifically the relationship between investment advisors and retail consumers. FinReg was passed for three vital reasons: to end the “too big to fail” mentality, to protect the taxpayer by ending bailouts, and perhaps most importantly to protect consumers from unscrupulous financial practices. Some advisors fear that the implementation of a fiduciary standard will somehow inhibit investment opportunities and give the SEC overpowering regulatory authority. It is important to note that passing FinReg does not automatically create a fiduciary standard for investment advisors; it merely tasks the SEC with engaging in a six-month study to determine whether brokers provide investors with advice under a fiduciary standard (as defined in the Investment Advisers Act of 1940). In my eyes, that six month period gives Wall Street a chance to ‘fight back’ against these game-changing rules, or prepare for them, or some combination of both.

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Financial Planning During the Middle Years: 40-60

People’s attitudes towards money obviously change as they get older. The crucial middle years of 40-60 are a time when people generally focus the most on saving, accumulating wealth, and pondering the concept of retirement. While people often attempt to hit major savings goals in their 30’s, lifestyle changes including marriage and family, along with business establishment often push savings goals back 10-15 years. Not that saving is ever an easy task: In the 40-60 range, people often deal with college-related expenses for kids, aging parents who need help, deaths in the family, divorce, etc. All of these events pose challenges and opportunities of their own. So how exactly are people in this 40-60 age range dealing with all of the recent market volatility? Studies show they are reducing risk and hoarding cash to make sure their capital lasts for as long possible.

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