- Wednesday, October 16, 2024
Charles Schwab has recently revealed its plans to implement substantial cuts to both its workforce and real estate footprint as part of its ongoing integration process with former rival TD Ameritrade. According to a Securities and Exchange Commission filing, these cuts are expected to result in approximately $500 million in annual cost savings. However, the firm also acknowledges that there will be some expenses associated with the reduction in headcount and closure of offices. Despite these developments, Schwab's stock price continues to experience considerable volatility, with a decline of approximately 30% this year.
Former Advisor Sentenced to Life Imprisonment
One of the most notable stories in the wealth management industry this week revolves around the sentencing of a former financial advisor to life imprisonment. Keith Todd Ashley has been found guilty of multiple fraud counts, as well as carrying a firearm in relation to a crime of violence. Prosecutors allege that Ashley's involvement in a $1.1 million fraud scheme ultimately led to the death of one of his clients. The charge of carrying a firearm relates to the alleged killing, with prosecutors claiming that Ashley orchestrated it to appear as a suicide. However, he has not yet been convicted of murder.
Investors' Growing Interest in Advisor Collaboration
According to a recent report by Cerulli Associates, investors nearing retirement are increasingly inclined to seek guidance from financial advisors. The study reveals that among investors with more than five years until retirement, 27% heavily rely on advisors to manage their financial affairs. However, this figure considerably rises to 46% for those who anticipate retiring within the next five years.
Goldman Eyes Wealth Unit Sale
Goldman Sachs made a surprising move four years ago by acquiring United Capital, a registered investment advisor, for $750 million. This acquisition indicated Goldman Sachs' intention to serve a less affluent segment of retail clients, rather than its usual focus on ultrahigh-net-worth families. However, the tides are shifting, and Goldman is now considering selling its Personal Financial Management unit. The company states that this decision will allow them to redirect their resources and seize greater opportunities in other areas.
Biden's Latest Student Loan Play
The Biden administration has launched a new initiative designed to alleviate the burden of federal student loan debt for Americans. The Education Department is now accepting applications for the SAVE program, which links borrowers' monthly loan repayments to their income. Through this program, over one million borrowers will have their monthly bills reduced to zero. Additionally, average earners with federal student loans are projected to save over $1,000 annually.
LPL Wins Prudential's Wealth Management Business
Prudential Financial has chosen to transfer its $50 billion advisory business to LPL Financial's brokerage and wealth management platform. Prudential, previously partnered with Fidelity and other custodians, will have its 2,600 advisors maintain their affiliation with the insurer. However, these advisors will now register with LPL's broker-dealer and registered investment advisory services. The transition is anticipated to be finalized in the second half of 2024, pending regulatory approval and other conditions.
Meeting the Financial Needs of Special-Needs Families
Crafting a comprehensive financial plan and integrating it with estate and tax plans is a complex task. The challenge becomes even greater when working with clients who have family members living with disabilities. In this week's Advisor Q&A, Cindy Haddad shares how she and her business partner, John Nadworny, recognized a gap in planning for special-needs families and developed a successful financial-planning practice catering to this niche.
Wishing you a wonderful weekend.
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