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Wells Fargo brokerage to return $3.4 million for risky products


Wells Fargo brokerage to return $3.4 million for risky products

NEW YORK (Reuters) – A brokerage industry regulator on Monday ordered Wells Fargo & Co to return $3.4 million to customers after selling them inappropriate investment products, the latest sign that a culture of problematic sales practices has bled into areas outside its consumer bank.

From July 2010 to May 2012, Wells Fargo brokers sold risky exchange-traded products (ETPs) to at least 1,300 affected accounts with moderate and conservative risk profiles. The bank also failed to make sure brokers unloaded the products from customer accounts within 30 days, according to the Financial Industry Regulatory Authority (FINRA).

The products’ value shifted based on market volatility over short durations, but some Wells brokers mistakenly believed they could be used as long-term hedges against a market downturn, FINRA said.

Although Wells, the third-largest U.S. lender, had procedures in place to ensure the products were sold only under certain circumstances, the bank failed to implement them correctly, FINRA said. In doing so, the bank violated two securities rules.

Wells identified the problem and began remediation efforts in May 2012, around the time it faced a separate penalty from FINRA for similar violations related to other types of ETPs.

“In cooperating fully with FINRA, we have made significant policy and supervision changes, including the discontinuation of the ETPs in focus,” Wells Fargo spokeswoman Shea Leordeanu said on Monday.

Wells did not admit or deny wrongdoing in reaching the settlement.

Wells Fargo has been embroiled in a wider sales practices scandal that was touched off more than a year ago. It reached a $190 million settlement with bank regulators and a Los Angeles prosecutor after its employees opened bank accounts in customers’ names without their permission.

Since then, Wells has acknowledged that thousands of employees opened perhaps 3.5 million phony accounts to hit sales targets over a period of several years. The bank also said its employees had sold unwanted auto insurance, a mortgage rate-lock feature and other “add-on” products that customers did not request.

However, the questionable sales practices appeared to have had limited impact so far on its wealth management business, called Wells Fargo Advisors.

Last November, Wells’ management told lawmakers the bank had fired hundreds of employees with brokerage licenses for improper sales practices, but the workers technically were employed by the retail bank.

On a conference call with analysts on Friday to discuss third-quarter results, Chief Executive Officer Tim Sloan said its internal reviews have found the sales scandal did not affect Wells’ wealth or investment management businesses.

Last year, FINRA launched a review of cross-selling programs in which brokerages also try to sell clients products from other parts of the bank, like mortgages. The regulator said this order was unrelated to that review.

Brokerages frequently reach settlements with FINRA over violations that result in refunds to clients.

(FINRA corrects paragraph 2 to reflect that at least 1,300 accounts were affected, instead of at least 1,300 customers)

Additional reporting by Dan Freed; Editing by Andrea Ricci, Lauren Tara LaCapra and Jeffrey Benkoe


Published at Mon, 16 Oct 2017 19:07:16 +0000

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How to close the race-based chasm in U.S. retirement wealth

CHICAGO (Reuters) – The gap in U.S. retirement wealth between white and minority families has widened to the point where it really is not a gap anymore. It is a canyon.

In 2016, white families had six times more money saved for retirement on average than black or Latino families, according to new data from the Federal Reserve’s Survey of Consumer Finances. As recently as 2007, the gap was fourfold for black families and fivefold for Latino households, according to a new analysis of the Fed data by the Urban Institute. (

Research shows that low-income families can – and do – save. Instead, the widening chasm results from a range of economic factors and upside-down tax policy. Lifetime income inequality certainly is one driver, but the problem is much broader than that, said Signe-Mary McKernan, co-director of the institute’s opportunity and ownership initiative.

“The cards are stacked against lower-income Americans,” she said. “We’re a country built on the premise of economic opportunity but entire groups are not getting the same chances to move up.”

For starters, minority workers are far less likely than whites to hold jobs that offer tax-advantaged retirement saving programs like 401(k) plans. That means these workers are not enjoying the benefits of plan features such as employer matches or automated contributions. Even workers who are offered these accounts do not benefit as much, since the tax incentives associated with 401(k) and Individual Retirement Accounts are structured as deductions, and flow predominantly to taxpayers in higher brackets.

Lower rates of home ownership among minority households also contribute to the retirement gap, the researchers found. Last year, 68 percent of white households were homeowners, compared with 46 percent of Latino households and 42 percent of black households, the Urban Institute reports. That means fewer minority households can tap in to home equity to meet retirement needs.

”When you think about home ownership, part of the story is appreciation of home values, but families of color have faced structural barriers in achieving this goal,” said Kilolo Kijakazi, an Urban Institute fellow also working on the wealth gap research.

Well-qualified home buyers of color face substantial barriers such as being shown fewer homes, the institute’s research shows. And price appreciation for homes in neighborhoods of color is lower than in white neighborhoods with comparable income levels. Lower home ownership rates and less home equity mean fewer families of color can tap in to home equity to meet retirement needs.

Federal tax policy is upside-down here, too, with current tax subsidies flowing to the most affluent households, who are more likely to itemize their filings and tend to be in higher tax brackets. The capital gains exclusion on housing also benefits higher-income taxpayers, who tend to own more expensive homes.


Targeted federal policies could go far to close the gap – starting with the tax code. On home ownership, for example, we could establish a first-time homebuyer tax credit and a refundable credit on property taxes. This could be funded by limiting the mortgage interest deduction for the most affluent households. For example, the Bowles-Simpson fiscal commission back in 2010 proposed capping the deductibility of mortgage interest at $500,000.

Improving the federal Saver’s Credit also could be a big help. The credit provides a second layer of tax incentives for lower-income households beyond the benefit of tax deferral that everyone receives for contributing to a 401(k) or IRA. Taxpayers with yearly incomes of less than $31,000 (single filers) and $62,000 (joint filers) this year can claim a credit of up to $1,000 for contributions to a qualified retirement plan or individual retirement account (IRA) – but only if they have a tax liability.

Near 10 percent of tax filers could claim the credit, but only about 5 percent do so, according to the National Institute on Retirement Security. Restructuring the credit into a match would have the biggest impact. That could be done by making the credit refundable – in other words, available no matter what your tax liability (

Federal policy under the Trump administration is heading in exactly the opposite direction, especially where retirement saving and tax policy are concerned. The administration is phasing out the U.S. Department of the Treasury’s myRA program, a low-cost, simple entry-level retirement saving plan targeting workers who are not offered a plan by employers. And Congress has pulled back two Obama-era rules aimed at helping states launch their own low-cost saving programs.

Meanwhile, the administration’s tax plan would further fuel the inequality trends, not reverse them. Tax cuts would flow mainly to businesses and high-income households. If in place next year, 50 percent of the cuts would flow to households with the top 1 percent of income ($730,000 or more), according to the Tax Policy Center, while middle-income households (earning $50,000-$90,000) would receive about 8 percent. Low-income households would receive even less. And the plan is silent on the issue of mortgage interest deductions and credits for first-time homebuyers.

Instead, we need smart policies that help low-income households get ahead. Let’s start narrowing the retirement chasm – now.

Editing by Matthew Lewis


Published at Thu, 12 Oct 2017 15:00:15 +0000

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Weekly Initial Unemployment Claims decrease to 243,000


Weekly Initial Unemployment Claims decrease to 243,000

by Bill McBride on 10/12/2017 08:34:00 AM

The DOL reported:

In the week ending October 7, the advance figure for seasonally adjusted initial claims was 243,000, a decrease of 15,000 from the previous week’s revised level. The previous week’s level was revised down by 2,000 from 260,000 to 258,000. The 4-week moving average was 257,500, a decrease of 9,500 from the previous week’s revised average. The previous week’s average was revised down by 1,250 from 268,250 to 267,000.

Hurricanes Harvey, Irma, and Maria impacted this week’s claims.
emphasis added

The previous week was revised down.

The following graph shows the 4-week moving average of weekly claims since 1971.

Click on graph for larger image.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased to 257,500.

This was below the consensus forecast.  The recent increase in claims is due to the hurricanes.


Published at Thu, 12 Oct 2017 12:34:00 +0000

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Early filers for college financial aid reap benefits


Early filers for college financial aid reap benefits

NEW YORK (Reuters) – Want to increase your chance to get financial aid for college? File the Free Application for Federal Student Aid (FAFSA) by the end of 2017.

“The sooner the better,” said financial aid expert Mark Kantrowitz, publisher at

In a 2015 study he did for Edvisors, Kantrowitz found that students who quickly filed for aid in the first three months received double what those who waited obtained.

Time is already ticking. Families were allowed to file the FAFSA for the 2018-2019 school year as of Oct. 1 – this is the second year since the Department of Education shifted to the earlier date, from January.

The FAFSA is used by colleges to determine what families can afford to pay, and whether colleges should give students grants they will not have to pay back or federal student loans that they must repay. Families report their income and assets in the FAFSA and it is sent to colleges selected by students. Some private colleges also request an additional form known as the CSS Profile.

October may seem early for the FAFSA, because many students are still deciding on colleges. But an early start gives families a sense of the financial burden they can sustain, before students make their final lists.

Another reason to file early is state aid, said Kantrowitz. Thirteen states hand out financial aid on a first come, first serve basis until they run out of funds.

Students in four-year college programs received $11,380 on average in grants and scholarships in 2015-2016, according to the National Center for Education Statistics. State grants averaged $3,867 per student in 2015-2016. Private colleges granted $17,965 on average per student.

Parents complain about the grueling task of filling out the FAFSA form, but it is easier this year than the past, said Jessica Thompson, policy and research director for the Institute for College Access and Success.

With a change in technology, parents of first-year students do not have to record income details. Instead, the online FAFSA will upload the data from the IRS Data Retrieval Tool that taps into tax return from the previous year, which is 2016 for the 2018-19 FAFSA filing. (Security measures were put into the tool after a breach last spring so existing college students cannot use it yet.)

Yet it is not so easy that you should have your kid fill it out for you, said Kalman Chany, author of “Paying for College Without Going Broke,” a book that provides strategies for maximizing aid.

Mistakes can be costly. For instance, if you report $100,000 in a 401(k) as an investment account instead of a retirement asset, it could reduce aid eligibility by $5,640. Families need to be especially careful reporting rollovers from 401(k)s into IRAs so they do not appear to have cash available for college, said Chany.

Parents also need to take extra steps to insure colleges have the latest information, said Kantrowitz. An income change due to a layoff, retirement, or serious illness will not be reflected in the 2016 tax return and should be reported to college financial aid offices to ensure needs are assessed correctly. Amended returns also should be reported to financial aid offices, because they will not be captured by the automatic download tool.

The caveat to “the sooner the better” mantra is with families expecting a big influx of cash in the fall. Chany gives the example of parents who have just sold their home and are parking the money in a bank account temporarily while waiting to close on a new home. They could have to pay thousands more for college than someone with the same income but no temporary stockpile. Chany’s advice: Wait until the cash is dispatched into a new home and then file the FAFSA.

Editing by Beth Pinsker and Steve Orlofsky


Published at Wed, 11 Oct 2017 17:05:32 +0000

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Port of Long Beach: Record Month, “Looks like retailers are optimistic about the holiday season”


Port of Long Beach: Record Month, “Looks like retailers are optimistic about the holiday season”

by Bill McBride on 10/11/2017 06:45:00 PM


From the Port of Long Beach: Port of Long Beach Sets Record for September

Cargo volume continues to break records at the Port of Long Beach, which moved more containers last month than any September in its history.

The 701,619 twenty-foot equivalent units (TEUs) processed in Long Beach for September — up 28.3 percent — also resulted in the Port’s best quarter ever. In the third quarter (July, August and September), the Port of Long Beach handled 2,114,306 TEUs, as volumes swelled 15.9 percent over the same period last year.

“Simply put, we are having the best trade months in Port history,” said Harbor Commission President Lou Anne Bynum. “Back-to-school merchandise was strong for us, and it looks like retailers are optimistic about the holiday season.”

CR Note: I’ll have more on port traffic soon.

• At 8:30 AM ET, The initial weekly unemployment claims report will be released. The consensus is for 252 thousand initial claims, down from 260 thousand the previous week.

• Also at 8:30 AM, The Producer Price Index for September from the BLS. The consensus is a 0.4% increase in PPI, and a 0.2% increase in core PPI.

Published at Wed, 11 Oct 2017 22:45:00 +0000

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Exclusive: Symantec CEO says source code reviews pose unacceptable risk

by Pexels from Pixabay

Exclusive: Symantec CEO says source code reviews pose unacceptable risk

WASHINGTON (Reuters) – U.S.-based cyber firm Symantec (SYMC.O) is no longer allowing governments to review the source code of its software because of fears the agreements would compromise the security of its products, Symantec Chief Executive Greg Clark said in an interview with Reuters.

Tech companies have been under increasing pressure to allow the Russian government to examine source code, the closely guarded inner workings of software, in exchange for approvals to sell products in Russia.

Symantec’s decision highlights a growing tension for U.S. technology companies that must weigh their role as protectors of U.S. cybersecurity as they pursue business with some of Washington’s adversaries, including Russia and China, according to security experts.

While Symantec once allowed the reviews, Clark said that he now sees the security threats as too great. At a time of increased nation-state hacking, Symantec concluded the risk of losing customer confidence by allowing reviews was not worth the business the company could win, he said.

The company’s about-face, which came in the beginning of 2016, was reported by Reuters in June. Clark’s interview is the first detailed explanation a Symantec executive has given about the policy change.

In an hour-long interview, Clark said the firm was still willing to sell its products in any country. But, he added, “that is a different thing than saying, ‘Okay, we’re going to let people crack it open and grind all the way through it and see how it all works’.”

While Symantec had seen no “smoking gun” that foreign source code reviews had led to a cyberattack, Clark said he believed the process posed an unacceptable risk to Symantec customers.

“These are secrets, or things necessary to defend (software),” Clark said of source code. “It’s best kept that way.”

Because Symantec’s market share was still relatively small in Russia, the decision was easier than for competitors heavily invested in the country, Clark said.

“We’re in a great place that says, ‘You know what, we don’t see a lot of product over there’,” Clark said. “We don’t have to say yes.”

Symantec’s decision has been praised by some western cyber security experts, who said the company bucked a growing trend in recent years that has seen other companies accede to demands to share source code.

“They took a stand and they put security over sales,” said Frank Cilluffo, director of the Center for Cyber and Homeland Security at George Washington University and a former senior homeland security official to former President George W. Bush.

FILE PHOTO – Greg Clark, Chief Executive Officer of Symantec, takes part in the Yahoo Finance All Markets Summit in New York, U.S., February 8, 2017. REUTERS/Lucas Jackson

“Obviously source code could be used in ways that are inimical to our national interest,” Cilluffo said. “They took a principled stand, and that’s the right decision and a courageous one.”

Reuters last week reported that Hewlett Packard Enterprise (HPE) (HPE.N) allowed a Russian defense agency to review the inner workings of cyber defense software known as ArcSight that is used by the Pentagon to guard its computer networks.

HPE said such reviews have taken place for years and are conducted by a Russian government-accredited testing company at an HPE research and development center outside of Russia. The software maker said it closely supervises the process and that no code is allowed to leave the premises, ensuring it does not compromise the safety of its products. A spokeswoman said no current HPE products have undergone Russian source code reviews.

ArcSight was sold to British tech company Micro Focus International Plc (MCRO.L) in a sale completed in September.

    On Monday, Micro Focus said the reviews were a common industry practice. But the company said it would restrict future reviews of source code in its products by “high-risk” governments, and that any review would require chief executive approval.


Earlier this year, Beijing enacted a cyber security law that foreign business groups have warned could adversely impact trade because of its data surveillance and storage requirements. The law has further fueled concern that companies increasingly need to choose between compromising security to protect business or risk losing out on potentially lucrative markets.

Clark said Symantec had not received any requests to review source code from the Chinese government, but indicated he would not comply if Beijing made such a demand.

“We just have taken a policy decision to say, ‘Any foreign government that wants to read our source code, the answer is no’,” Clark said.

The U.S. government does not generally require source code reviews before purchasing commercially available software, according to security experts.

“As a vendor here in the United States,” Clark said, “we are headquartered in a country where it is OK to say no.”

Some security experts fear heightened requests may further splinter the tech world, leading to an environment where consumers and governments only feel safe buying products made in their own countries.

“We are heading down a slippery slope where you are going to end up balkanizing (information technology), where U.S. companies will only be able to sell software to parts of Europe,” said Curtis Dukes, a former head of cyber defense at the National Security Agency now with the non-profit Center for Internet Security, “and Russia won’t be able to sell products in the U.S.”

Additional reporting by Jack Stubbs in Moscow; Editing by Paul Thomasch


Published at Tue, 10 Oct 2017 21:26:00 +0000

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New York-area hedge fund manager charged with Ponzi fraud


New York-area hedge fund manager charged with Ponzi fraud

NEW YORK (Reuters) – A suburban New York hedge fund manager accused of losing or spending all but about $27,000 of the $21.8 million he told investors he had was criminally charged on Thursday with running a Ponzi scheme.

Prosecutors said Michael Scronic, who once worked at Morgan Stanley (MS.N) and has degrees from Stanford University and the University of Chicago, stole more than $19 million from 45 investors he had lured to his Scronic Macro Fund by lying about his track record.

Scronic, 46, of Pound Ridge, New York, allegedly lost money in 28 of 29 calendar quarters since April 2010, even as he reported largely positive returns on bogus account statements.

Prosecutors said he also spent $2.9 million on himself over 5-1/2 years, including $180,000 annually on credit cards, fees for beach and country club memberships, and mortgage payments for a vacation home near Stratton Mountain in Vermont.

Scronic was criminally charged with one count each of securities fraud and wire fraud.

He was released on $500,000 bond after a brief appearance in the federal court in White Plains, New York, and is forbidden from trading other people’s money or raising new funds.

The U.S. Securities and Exchange Commission filed related civil charges.

Robert Anello, a lawyer for Scronic, declined to comment.

The defendant had worked for Morgan Stanley from 1998 to 2005, including on an equities trading desk, court papers show. Morgan Stanley was not accused of wrongdoing.

Authorities said Scronic used some new money to repay earlier investors, but as cash became tight this summer refused to honor some investors’ redemption requests.

According to court papers, Scronic had emailed one of those investors in November 2015 that “what’s cool about my fund is that i‘m only in publicly traded options and cash so any redemptions are met within 2 business days so if you do need to withdraw for your business needs it will be quick and painless.”

Authorities said it proved otherwise.

They said Scronic blamed a vacation, a relative’s medical condition, email issues, and a new quarterly redemption policy for refusing the investor’s Aug. 8 redemption request.

As of Monday, that investor was still waiting for his money, court papers showed.

Reporting by Jonathan Stempel in New York; Editing by Tom Brown, Lisa Shumaker and David Gregorio


Published at Thu, 05 Oct 2017 21:45:59 +0000

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Costco Stock Gets Pummeled Despite Upbeat Quarter


Costco Stock Gets Pummeled Despite Upbeat Quarter

By Alan Farley | October 6, 2017 — 11:33 AM EDT

Costco Wholesale Corporation (COST) shares are getting pummeled in the aftermath of Thursday evening’s fiscal fourth quarter earnings report, dropping more than nine points to a four-week low despite beating EPS and revenue estimates. Weak gross margins have been cited for the decline, while fears of growing competition from, Inc.’s (AMZN) Whole Foods acquisition have also weighed on sentiment.

RBC, Stifel and Telsey analysts retained positive ratings after the news, insisting that investor fears are overblown and that the stock will prosper despite growing headwinds. Rapid e-commerce growth and solid traffic numbers have underpinned those optimistic outlooks, which may limit the downside in coming days. However, Morgan Stanley issued a downgrade ahead of the open, and others may follow, adding selling pressure that drops the price into critical support near $153. (See also: 7 Retail Stocks Hammered by Amazon May Be Good Buys.)

COST Long-Term Chart (1995 – 2017)

The stock tested the 1987 low near $5.50 at the end of 1994 and took off in a strong uptrend that cleared the top of a multi-year trading range near $15 in 1997. Rally momentum increased after the breakout, contributing to a powerful thrust that quadrupled the stock’s price into the 2000 high at $60.50. It plunged off that peak a few weeks later, dumping into the mid-$40s, with that price level holding support throughout the dotcom bear market.

Costco stock tested the bear market low in the first quarter of 2003 and turned higher, taking four years for the advancing price to reach the 2000 high. It broke out in the summer of 2007 and ticked higher into May 2008, when it topped out at $75.23, ahead of a steep decline during the economic collapse. That selling impulse settled at a four-year low at $38.17 in March 2009, giving way to a stair-step recovery that reached the prior high in the first quarter of 2011. (For more, see: Behind Costco’s 180% Rise in 10 Years.)

It broke out immediately, entering a powerful trend advance that posted the strongest gains so far this century. Buying pressure finally eased in February 2015 near $150, yielding a shallow rising channel that remains in force more than two years later. The relatively weak uptrend added more than 30 points into the May 2017 all-time high at $183.18, with price action since that time carving a triple top breakdown.

COST Short-Term Chart (2014 – 2017)

A base near $110 in the first half of 2014 gave way to strong rally into the February 2015 high at $156, printing the first peak in the rising channel. A decline into August undercut new support, leaving behind a candlestick shadow, ahead of less volatile price action that added three highs at resistance and two lows at support. The final high above $183 in May 2017 posted the middle peak of a triple top pattern that broke down in June when it undercut range support near $165. (See also: Costco’s Business Model Is Smarter Than You Think.)

Selling pressure ended in July at channel support near $150, generating a small-scale double bottom reversal, followed by a bounce into new resistance ahead of this week’s earnings report. The violently bearish reaction confirms the triple top breakdown, dropping the stock to $157 in the first hour of Friday’s session. In turn, this exposes a trip into channel support, which has now lifted to $153.

On-balance volume (OBV) topped out in March 2015 and entered an aggressive distribution wave that ended in August 2015, while an upturn into August 2016 fell short of the prior high. Bulls took control once again in the fourth quarter, lifting the indicator to an all-time high, while the June 2017 breakdown triggered violent downside that hit a three-year low. This bearish sequence raises the odds that the stock will eventually break support and enter a secular downtrend. (To learn more, see: Uncover Market Sentiment With On-Balance Volume.)

The Bottom Line

Costco stock fell nearly 10 points and 6% in the first hour of Friday’s session after a highly bearish reaction to fiscal fourth quarter earnings. Major technical damage in the second and third quarters could now generate a bearish feedback loop, breaking multi-year channel support and dropping the retailer’s shares into a bear market. (For additional reading, check out: Can Costco Recover From Amazon-Driven Decline?)


Published at Fri, 06 Oct 2017 15:33:00 +0000

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Fall is right time to rethink your Medicare drug plan options

By HansLinde from Pixabay

Fall is right time to rethink your Medicare drug plan options

CHICAGO (Reuters) – Forewarned is forearmed – and for U.S. seniors, the warning just arrived in the mail.

Each September, enrollees in Medicare prescription drug and Advantage plans receive letters from their insurance companies detailing any changes in coverage for the year ahead. Called the Annual Notice of Change, the document is well worth reviewing, because it arrives just ahead of the annual fall plan open enrollment period, which runs from Oct. 15 to Dec. 7.

In many cases, the letter should be a wake-up call to re-shop coverage, especially where Part D drug plans are concerned. These plans often change their premiums from year to year, along with their rules for cost-sharing, coverage of specific medications – and even whether a specific drug will be covered.

Medicare eligibility begins at age 65, and the first choice is between traditional Medicare and an Advantage plan, an all-in-one managed-care alternative that usually includes prescription drug coverage. Advantage plans also cap out-of-pocket expenses. Seniors who choose traditional Medicare usually add a standalone drug plan; many also add a Medigap supplemental policy. But all drug coverage features can change annually, and Advantage plans can make changes to their networks of healthcare providers at any time.

“What worked for you in the past won’t necessarily be best for you in the future,” said Casey Schwarz, senior counsel for education and federal policy at the Medicare Rights Center, a nonprofit consumer advocacy group. “It’s important to look at your options and evaluate whether you should switch plans.”

Few Medicare plan users re-shop their coverage, and those who do tend to focus only on premiums, said Schwarz. “People often mistakenly just choose the least expensive premium, or one that is middle-of-the-road.”

She urges people also to evaluate the network of providers – pharmacy delivery options in the case of standalone drug plans, and healthcare providers in the case of Advantage plans. Also read carefully the so-called formulary, which describes the rules for coverage of a medication – whether any quantity limits are imposed, or if the red tape of “prior authorization” will be invoked.


Drug plans are becoming more complicated. Most have deductibles, and just over half will charge the full amount permitted under Medicare’s rules ($405), according to the Kaiser Family Foundation (KFF). And most plans have shifted to using multiple copayment (flat fee) or coinsurance amount (percentage of total cost), rather than a single coinsurance rate. This is especially true for high-cost medications.

“Cost-sharing was more simple in the early days of Part D,” said Juliette Cubanski, associate director of the program on Medicare policy at KFF. Higher coinsurance rates could leave enrollees with substantial out-of-pocket costs, especially for high-cost specialty drugs.

Low-income seniors may face an additional challenge this year in finding a good-fit plan. A low-income subsidy program covers most or all insurance costs for roughly 12 million older Americans. But the number of plans that provide no-premium coverage will fall 6 percent next year – and seven regions will have no more than four plan offerings. Most notably, Florida will have just two.

One bit of good news is the continued shrinking of the notorious “donut hole,” the gap in coverage that affects plan enrollees with intensive drug needs. The gap next year begins when total combined spending by you and your insurance company reaches $3,750 in drug costs, and coverage resumes when total out-of-pocket spending reaches $5,000.

Outside the gap, your plan pays 75 percent of total costs, but that plunges to just 15 percent inside the gap. Under the Affordable Care Act, costs borne by enrollees inside the donut hole are shrinking gradually. In 2018, enrollees who fall into the gap will receive a 65 percent discount on brand-name drugs (up from 60 percent this year). The discount on generics will rise from 49 percent to 56 percent.


The best starting point for shopping plans is the Medicare Plan Finder at the Medicare website ( Plug in your Medicare number and drugs (you will need each drug’s name and dosage). The plan finder then displays a list of plans that match your needs, including their estimated total cost (premiums and out-of-pocket expenses); which drugs are covered; and customer-satisfaction ratings. The finder also will give you advice about drug utilization and restrictions.

If your drug needs are complicated, a range of expert help is available.

State Health Insurance Assistance Programs (SHIPs) provide free counseling on coverage options (click here to find your local SHIP The Trump administration and congressional budget writers have proposed to eliminate SHIP, but any cuts – if they do come at all – will affect this fall’s enrollment season.

The Medicare Rights Center also offers free counseling by phone (1-800-333-4114).

Finally, if you are willing to pay to obtain expert help with plan selection, hire an independent, fee-based counseling service such as Allsup Medicare Advisor (here) or Goodcare ( For a few hundred dollars, these firms will provide a written, personalized plan analysis and offer phone consultations.

Editing by Matthew Lewis


Published at Thu, 05 Oct 2017 16:15:44 +0000

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Column: Pre-tax retirement contributions at risk in tax reform


Column: Pre-tax retirement contributions at risk in tax reform

NEW YORK (Reuters) – If you like the income tax reduction you get for your 401(k) contribution then make sure to max out now, because you may not get the chance in the future.

Tax reform proposals of past years from both political parties have targeted the break people get for 401(k)s because it is a gigantic source of untaxed money – perhaps more than $580 billion over five years, according to a 2016 Joint Committee on Taxation estimate.

The Tax Policy Center suggests that Congress needs to find $2.4 trillion over 10 years to avoid increasing the deficit with the current tax reform proposal. So the temptation to end the 401(k) tax break could be intense. Currently, 401(k) contributions come from pre-tax earnings, and the government waits until you take the money out in retirement to tax it and the returns it has earned.

If Congress gets rid of this system, saving for retirement would be more like saving in a Roth IRA or Roth 401(k). With a Roth, you do not get any tax benefit when you contribute, but the money grows tax-free in the accounts. These accounts are also not subject to required minimum distributions, which retirees must take from 401(k)s beginning at age 70 1/2.

Roth rules can be a great benefit because people can count on every cent after retirement without worrying about Uncle Sam taxing it. Retirees also are not forced to spend their nest egg, so they can pass it along to heirs with fewer restrictions if they have money left over.

It is not clear, however, how the fine print would shake out, because there is no specific proposal on the table yet from Congress. Nevertheless, retirement saving advocates are bracing for a potential fight over preserving the 401(k) system’s tax breaks as negotiations over tax reform progress. They know Congress will start looking for sources of billions of dollars so it can cut taxes without adding to the nation’s budget deficits, notes Brigen Winters, an attorney with Groom Law Group and lobbyist for 401(k) advocates such as the Plan Sponsor Council of America.

Jack VanDerhei, research director for the Employee Benefit Research Institute, is already studying the potential impact, so he is ready at any time.

The big fear among experts like Winters and VanDerhei is that if people cannot contribute pre-tax money to their 401(k), they will cut back on saving and the nation’s looming retirement savings crisis will worsen. Americans already are saving so little that 52 percent of Americans are on track to struggle in retirement, according to the Center for Retirement Research at Boston College.

The way it works now takes some sting out of saving. For every $1,000 a person in the 25 percent tax bracket socks away, they pay $250 less in taxes, notes the H&R Block Tax Institute. If that money cannot go in pre-tax anymore, they would need to pay tax on all of their income and their take-home pay would diminish.

People do not like to see their take-home pay slip at all, says Aron Szapiro, director of Morningstar Public Policy Research. He calculated that a 30-year-old earning $50,000 and now saving 10 percent of pay, would cut savings to 7.5 percent to maintain the same level of take-home income while working. By retirement, the reduced savings level would lower total contributions to the nest egg to $230,400 from $307,200.  And that person would have only about $28,400 for living expenses compared with $30,800, Szapiro found.

Szapiro notes that young workers could ultimately benefit from the Roth treatment if their pay takes a big jump during their careers and they end up with a lot more income when they are retired than when they were young.

But he thinks most people miss an important point: The tax breaks people receive on 401(k) savings in the current system give them the financial leeway to save more early in life.

“If you take that away, people are going to say: why should I bother to contribute?’” says Szapiro. “It will be hard to get people to act, and that would be very bad for people in retirement.”

Editing by Steve Orlofsky


Published at Wed, 04 Oct 2017 21:20:30 +0000

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Wells Fargo wrongly hit homebuyers with fees

Wells Fargo draws bipartisan anger from Congress

Wells Fargo draws bipartisan anger from Congress

 Wells Fargo wrongly hit homebuyers with fees

Wells Fargo is in trouble once again — this time for fees charged to customers trying to nail down a mortgage.

The scandal-ridden bank said on Wednesday that some mortgage borrowers were inappropriately charged for missing a deadline to lock in promised interest rates, even though the delays were Wells Fargo’s fault.

Wells Fargo(WFC) said it will reach out to all 110,000 customers who were charged “mortgage rate lock extension fees” between September 2013 and this February. The bank promised to refund customers “who believe they shouldn’t have paid those fees.”

Here’s what happened: Interest rates offered on Wells Fargo mortgages typically carry expiration dates. Sometimes, those rates expire before the loan closes. The delay can be the bank’s fault or the borrower’s. If it’s the borrower’s fault, customers can pay a fee to extend the rate.

However, four former Wells Fargo employees told Congress in a letter last year that the bank blamed customers for mortgage paperwork delays even when it was the bank’s fault. The letter was first reported by ProPublica in January.

The federal Consumer Financial Protection Bureau is investigating the matter, according to Wells Fargo regulatoryfilings.

Now Wells Fargo says an internal review by the bank supports these claims.

Wells Fargo said on Wednesday that the review determined that the mortgage rate lock policy “was, at times, not consistently applied.” In some cases, borrowers were charged fees even though Wells Fargo was “primarily responsible for the delays,” the bank said.

It’s not clearhow many customers were wronged. A total of about $98 million in rate lock extension fees wascharged to 110,000 borrowers. Wells Fargo said it believes a “substantial number” of the charges were appropriate.

The bank said it plans to reach out to all of those customers later this year. “It’s not going to be a complicated process,” a Wells Fargo spokesman said.

CEO Tim Sloan said in a statement that the bank is paying the refunds “as part of our ongoing efforts to rebuild trust” with customers.

The mortgage mess is the latest black eye for Wells Fargo in a year of scandal. The bank has fired 5,300 employees for the creation of many as 3.5 million fake accounts. Thousands of customers were charged fees for accounts they didn’t open. The bank has blamed an out-of-control sales culture.

Wells Fargo has also said it charged up to 570,000 borrowers for car insurance they didn’t need. About 20,000 of themmay have had their vehicles repossessed as a result.

And Wells Fargo has been accused in a lawsuit of ripping off mom-and-pop businesses by overcharging them for processing credit card transactions.

Patricia McCoy, a former CFPB mortgage official, said the disclosure about the mortgage rate fees fits a pattern.

“Wells Fargo had a business model, until all of this came to light, that emphasized generating fees charged to consumers under duplicitous circumstances simply for the sake of padding revenue,” said McCoy, who is now a professor at Boston College Law School.

Testifying before the Senate on Tuesday, Wells Fargo’s CEO insisted that the bank has made fundamental changes to fix its broken culture.

“The past year has been humbling and challenging,” Sloan said. “We are resolving past problems even as we make changes to ensure nothing like this happens again at Wells Fargo.”


Published at Wed, 04 Oct 2017 15:48:58 +0000

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Disney Mulled Twitter Buy, Bought BAMTech Instead


Disney Mulled Twitter Buy, Bought BAMTech Instead

By Donna Fuscaldo | October 4, 2017 — 10:24 AM EDT

Walt Disney Co. (DIS) Chief Executive Bob Iger confirmed rumors swirling last year that it considered buying Twitter Inc. (TWTR) the embattled microblogging website operator.

Speaking during Vanity Fair’s New Establishment Summit this week, Iger said the company mulled an acquisition when it was exploring ways to provide and sell content directly to consumers. It opted instead to acquire a majority stake in BAMTech, the sports streaming service it already had an investment in.

“We thought Twitter had global reach, a pretty interesting user interface, and a compelling way that we might be able to present and sell the content our company makes to the consumer,” said Iger at the summit, according to CNBC. “But we decided, ultimately, not to go in that direction. And we ended up—took us months to do it—buying a platform called BAMTech.” The executive noted that the social media aspect of Twitter is “interesting,” but the company was focused on distribution. Disney will use BAMTech as the backing for its streaming services. (See more: Why Disney Stock Looks Cheap Given Growth Outlook.)

Chatter Over Twitter Deal

Last fall, Bloomberg, citing people familiar with the matter, reported Disney was interested in buying the social media company. That sparked all sorts of speculation as to what a combined company could look like. It also prompted some Wall Street watchers to express optimism for a deal. BTIG Research laid out in May a five-point plan to reposition the entertainment giant that included buying Twitter. According to analyst Richard Greenfield, management at the company should be using its strong balance sheet and free cash flow to “strategically reposition” it for future growth. In order to do that, he said he thought the company should stop repurchasing shares and instead use the money for acquisitions. He said at the time that Twitter would be an ideal way to reinvigorate ESPN. (See also: Disney Should Buy Twitter or Spotify: BTIG.)

While Disney chose BAMTech over Twitter that doesn’t mean the entertainment juggernaut isn’t done on the M&A front. In September, during a Bank of America media and communications conference, Iger told investors and analysts that its recent M&A activity will continue as the company aims to enhance its digital presence and take on the competition. Those comments sparked speculation with some investors betting one of the targets will be Snap Inc. (SNAP), the maker of the disappearing-message app Snapchat. That may not be too much of stretch since Disney’s newfound competitors—Alphabet Inc.’s (GOOG) Google and Facebook Inc. (FB)—expressed interest in acquiring the social media company. Google reportedly bid at least $30 billion in 2016. The offer, which was rejected by Snap, remained on the table after it went public. It’s not clear if Google is still interested in acquiring. Facebook also made an offer for Snap a few years ago, and that, too, was rejected.


Published at Wed, 04 Oct 2017 14:24:00 +0000

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Can Oracle Win in the Cloud Space Against Amazon?


Can Oracle Win in the Cloud Space Against Amazon?

By Shoshanna Delventhal | October 3, 2017 — 7:06 PM EDT

At Oracle Corp.’s (ORCL) annual OpenWorld conference, Chairman Larry Ellison focused his keynote speech on the tech giant’s new database, Oracle 18c, while spending a significant amount of time bashing Inc.’s (AMZN) rival product.

Amazon fired back at the Oracle co-founder with a representative of the e-commerce and cloud computing giant indicating that Ellison has “no facts, wild claims, and lots of bluster.” Yet some analysts on the Street are intrigued by Oracle’s new intelligent database service, which the chairman says he guarantees will cost half the price as Amazon’s Amazon Web Services (AWS). The 18c service will launch for data warehousing in December, with online transaction processing planned to be available next June. (See more: Oracle’s 10% Jump Is Just the Beginning: UBS)

Shares Could Surge 60%

Ellison and Oracle’s co-CEOs will only receive their stock awards—the bulk of their compensation packages—if they meet certain goals by 2020, including a boost in cloud revenues and the stock reaching $80 a share. For this to occur, ORCL would have to skyrocket more than 64% from its Tuesday closing price of $48.69.

Drexel Hamilton analyst Brian White is bullish on Oracle’s new cloud push, indicating that the tech titan will finally reap the benefits of its cloud investment, after the move has dragged down earnings-per-share (EPS) and sales. “During the keynote, Larry Ellison went through the results from six demos that clearly demonstrated that the Oracle 18c Autonomous Database was not only cheaper to use than Amazon but also much faster and more automated (thus saving labor costs),” wrote White.

Raymond James’ Michael Turits and Bank of America Merrill Lynch’s Kash Rangan also applauded the new service. Turits, who rates ORCL at outperform, called the announcement “an aggressive initiative to keep Oracle DB differentiated and price competitive in an increasingly fragmented database environment.” The BofA analyst, who maintains an $80 price target on ORCL, says EPS can reach $4 to $5 in fiscal 2020 if the company meets its target of $20 billion in cloud revenue. (See also: Oracle Hiring 1,000 Sales Reps in Cloud Push.)


Published at Tue, 03 Oct 2017 23:06:00 +0000

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Q&A: Maker’s Mark helped Bill Samuels Jr. make his mark

by PublicDomainPictures from Pixabay

Q&A: Maker’s Mark helped Bill Samuels Jr. make his mark

NEW YORK(Reuters) – Bourbon is a multi-billion-dollar business, but it began with just a few pioneering Kentucky families from Bardstown who all lived down the road from each other.

One of those iconic families started around 1790 and is still in the business. Bill Samuels Jr., son of the founder of Maker’s Mark, is chairman emeritus of the brand after 35 years as president and CEO. His son Rob currently runs the company – part of the Beam Suntory brand family since 2014 – but Bill Samuels is still a workhorse, giving speeches and running distillery tours.

For the latest in Reuters’ “Life Lessons” series, we talked to Samuels about how he helped his family transform a homespun hobby into a global phenomenon.

Q: Your dad created Maker’s Mark. What lessons did you learn from him?

A: It was really a hobby for him. He just wanted to focus on creating a bourbon that actually tasted good, because back in the ‘50s bourbon wasn’t really known for that. Of course his idea turned out to be a stroke of genius. But at first it didn’t seem like genius, because for a long time there wasn’t much of a business.

Q: What did you take away from your relationship with Jim Beam, who was your neighbor and godfather?

A: He was the best guy who ever lived. He had the greatest natural sales personality I have ever been around, and was always able to put people at ease. He was also a natural at harassing people, and my father and grandfather were his two favorite targets. From him I learned a lot of details about my family that they didn’t want shared.

Q: You even knew KFC’s Colonel Sanders?

A: At the time he had a little restaurant in Kentucky that we would go to, and he and my dad were gin rummy partners. That’s how it started. He was a real intense, restless man, and he had to find something to do, so instead of retiring he started his chicken business.

When I got my driver’s permit in 1955, he asked me if I wanted to help him, so I drove him around the state as he sold his chicken recipe. There weren’t any franchises then, it was just a menu item in family restaurants.

Q: When you joined your dad’s company and helped him grow it to what it is today, what did you learn about entrepreneurship?

A: When I came back from my career in the aerospace industry, he set me up in a little 10×12 office out by the airport. We had to figure out how to commercialize the business. So he pulled out his briefcase and gave me a sheet of paper with my three-word job description on it: “Go find customers.” And then he told me, by the way, don’t screw up the whisky.

Q: When things became a big success, how did you handle that wealth?

A: For a long time we didn’t have any money, growing up on a farm in Kentucky. But by the 1980s, when I decided I was a big success in the bourbon business, I thought it would be a good time to shift resources and become a thoroughbred racehorse owner. That was a total disaster. I haven’t forgotten it to this day.

Q: Were there ever times when you thought the business wasn’t going to make it?

A: Oh my God, yes. We started in 1953, and didn’t make a profit until 1968, when we made $2,000. And that profit was only because my dad wasn’t taking a salary. Now it’s worth several billion dollars, but a lot of that value can be traced back to the discipline of the early days. He did all the heavy lifting before I even grew up.

Q: Your son runs the business now, so what advice have you given him?

A: I have gone out of my way to not tell my son what to do. I wanted to bring him into the process and then get out of the way, which turned out to be exactly the right thing to do. Of the three of us, he is the true entrepreneur. My dad was the perfect craftsman, and I‘m somewhere in between. My son has been nice enough to allow me to keep my little office, and lets me take all the bourbon I can steal for drinking purposes.

Editing by Beth Pinsker and Dan Grebler

Our Standards:The Thomson Reuters Trust Principles.


Published at Mon, 02 Oct 2017 18:40:31 +0000

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Tax Reform Should Bode Well for Charles Schwab


Tax Reform Should Bode Well for Charles Schwab

By Donna Fuscaldo | September 28, 2017 — 1:09 PM EDT

Charles Schwab Corp. (SCHW), the discount brokerage firm, has been bouncing along near its 52-week high so far this week, but that doesn’t mean it won’t go higher, particularly if President Donald Trump gets tax reform pushed through.

That’s according to Seeking Alpha, which laid out a bevy of reasons why investors may want to buy shares of Charles Schwab, one of the leaders in the online brokerage world. Even at $44.01, close to its 52-week high of $44.35, shares could start to gain more, particularly in the first quarter of next year.

Charles Schwab (SCHW) Upsides and Downsides

Take tax reform for starters. While all eyes have been on technology stocks that have a lot of cash overseas and are hoping for a reduced tax rate to bring it back to the U.S., Charles Schwab is the opposite, with little business outside the U.S. That means that if tax reform does get passed and the corporate tax rate is reduced, Schwab stands to benefit the most. On top of that, because it doesn’t have big exposure overseas, it won’t suffer as much as rivals from a weakening U.S. dollar. If the U.S. dollar stays weak next year it could increase interest in stocks like Schwab.

Use Investopedia’s broker reviews to find a broker to match your investing goals.

But it’s not just tax reform that could draw more interest to the San Francisco-based discount broker. On the sector front, with ongoing consolidation, Schwab could become an attractive takeover target for a big financial firm that is betting the financial markets will be huge during the next 10 years. While Schwab has been a player in the consolidation, it could become a target, which should send the stock higher.

Back in 2011, the company spent $1 billion to acquire OptionsXpress as way to get in on the options trading market. Rival E*Trade has also been on a buying spree in recent years, spending $725 million last July for OptionsHouse. If Charles Schwab doesn’t get bought out, its not a bad thing either for the stock. That’s because consolidation in a sector may not bode well for consumers, but it does mean less competition, which in turn could result in higher commissions for the likes of Schwab. That would be a welcome reversal from the years of declines.


Published at Thu, 28 Sep 2017 17:09:00 +0000

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Exclusive: Macquarie leapfrogs Goldman to join top tier of commodity banks


Exclusive: Macquarie leapfrogs Goldman to join top tier of commodity banks

LONDON (Reuters) – Australia’s Macquarie Group Ltd has overtaken Goldman Sachs to break into the top three banks for commodities business, having significantly expanded its U.S. energy operations in recent years while rivals cut back.

The rise of Macquarie marks a huge shake-up in commodity banking, typically dominated by elite U.S. and European institutions until tough regulations forced withdrawals after the global financial crisis.

Macquarie, not burdened by the stiff regulations as an Australian bank, ranked in the top three in terms of revenue from commodities trading and related businesses for the first six months of the year, industry sources said.

This is the first time a bank outside the United States or Europe has broken into the top tier in commodities, or any other capital market sector.

Macquarie ranked behind Morgan Stanley and Citigroup for the first six months of 2017, but ahead of JP Morgan and Goldman, with the top three averaging $250-$300 million each in commodities revenues, down sharply from the first half of 2016, one source said.

Macquarie declined to comment ahead of its half-year results on Sept. 30.

The bank reported net trading income in commodities of A$1.16 billion ($921 million) for the financial year to the end of March this year, marking a 66 percent increase in four years.

Comparable financial numbers were not available for rivals because most banks do not make public their revenue from commodities, incorporating the sector into a broader category of fixed income, currencies and commodities (FICC).

Analysts estimate Goldman usually averages around $500 million in commodities revenues for the half year, but that this had slid to $150 million in the first six months of 2017.

“As people have dropped by the wayside, such as Barclays, Deutsche Bank and so on, Macquarie have been able to mop up some of that business,” said Seb Walker, partner at banking consultancy Tricumen.“Macquarie is the first ‘Asian’ bank to make the top three in any capital markets product.”

Deutsche Bank and Barclays, hit with tough capital requirements during a downturn in commodities, sharply pulled back from the sector in 2013-14, while in the United States the Dodd-Frank law banned proprietary trading by banks, prompting them to curb physical commodity business.


“We should expect more growth from Macquarie,” Walker said, noting the bank agreed in June to acquire Cargill’s North American power and gas business.

That deal came only months after Macquarie agreed to buy Cargill’s global petroleum business and marked the latest expansion by the bank of its energy franchise.

While other banks cut back, Macquarie has boosted its operations to become the largest non-producer marketer of physical gas in North America.

Trader Nick O‘Kane built up the bank’s U.S. energy business, starting off with the takeover of Los Angeles-based Cook Inlet Energy Supply in 2005.

Cook’s owner had 1/16th Inupiat Eskimo heritage and got guaranteed sales to California utilities which had to purchase 5 percent of natural gas from minorities.

In the aftermath of the global financial crisis in 2009, Macquarie acquired Constellation Energy’s downstream natural gas trading platform, a good example of the bank’s long-term commodity strategy, said a former Macquarie executive.

“That investment was at the bottom of a 10-year view from someone who plans to be there for another 10 years where as for some of the European banks it’s a year-to-year proposition.”

A banking source in Europe said Macquarie was also canny in taking advantage of its position as a non-U.S. bank.

“They use a different funding model to the U.S. banks constrained by regulations, using short-term paper so they can price more aggressively,” he said.


A wave of banks from Australia, Canada and China are grabbing market share in commodities after many big U.S. and European rivals withdrew or trimmed back, said Amrit Shahani, research director at financial industry analytics firm Coalition.

So-called “challenger” banks have boosted their market share in commodities to 28 percent last year from 19 percent in 2014, taking business away from the top 12 global investment banks, he added, declining to discuss individual banks.

The Coalition index of top investment banks does not include many of the banks such as Macquarie that are gathering steam in the commodities sector.

While Macquarie has been building up its commodities business, usual top dog Goldman Sachs faltered in the second quarter, reporting the weakest commodities results in its history as a public company.

Commodities trading among banks had been traditionally dominated by Goldman and Morgan Stanley, joined by JP Morgan and Citigroup and European banks during the commodities boom.

At its height, banks’ commodity revenue totaled about $15 billion, but has steadily slid to just over a third of that, totaling around $5.5-$6 billion last year, Shahani said.

In the first half of 2017, commodities revenues at the 12 biggest investment banks tumbled 41 percent year-on-year to its lowest since at least 2006, Coalition said this month.

“It’s been a very difficult year for the large banks. The question this year is whether the challenger banks can step into their shoes and displace them or will the global banks pop back in the second half,” Shahani said.

Additional reporting by Paulina Duran in Sydney; Melanie Burton in Melbourne; Anjuli Davies, Dmitry Zhdannikov and Fanny Potkin in London; Editing by Veronica Brown and Mark Potter


Published at Thu, 21 Sep 2017 15:54:48 +0000

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Top 7 Non-Financial Skills Required in Finance


Top 7 Non-Financial Skills Required in Finance

By Amy Fontinelle | Updated September 22, 2017 — 5:36 PM EDT

Did you know that having top-notch mathematical skills and financial knowledge is only the tip of the iceberg when it comes to excelling as a financial professional?

Mitch Pisik, who has held numerous senior management positions, including CEO role of Breckwell Products and has more than 20 years of experience in business development, operations and finance, advises that, “the accounting/financial aspect of the job is the floor – not the ceiling.”

In other words, if you can’t perform the other basic functions of your job, you won’t make it. In order to stick around and get ahead in finance, you need to master these essential non-financial skills.

1. Communication Skills

Financial professionals can’t just be good at crunching numbers – they must be able to communicate their knowledge with strong speaking, writing and presentation skills.

Beverly D. Flaxington, author of “7 Steps to Effective Business Building for Financial Advisors,” says that when you are presenting to a board, an investor or a prospect, you need to know how to convey complex information in a way people can easily understand.

2. Relationship-Management Skills

The people skills you need in order to succeed as a financial professional include understanding different personality types, listening, asking the right questions, resolving conflicts, educating others and counseling clients. Ontario-based financial planner Judith Cane says that success in finance is “15% technical knowledge and 85% psychology. When people come to see me it’s because they have issues with money. They spend too much, they don’t save anything or they save everything.” What clients often need, therefore, is an unbiased advisor who can understand their needs and help them make financial decisions.

Managing relationships is an important life skill, whether you’re dealing with subordinates, co-workers, bosses or people outside your company. When people trust you, like you and feel that you respect them, they will want to help you succeed, whether it’s by speaking highly of you, promoting you or signing up to be your client.

3. Marketing and Sales Skills

Robert L. Riedl, director of wealth management for Endowment Wealth Management in Appleton, Wisconsin, says financial professionals need to be able to market their professional skills and knowledge to prospects in their niche markets. To do so, it’s imperative to have a complete understanding of both your personal strengths and your firm’s professional strengths.

He further advises that in marketing yourself to clients, you shouldn’t just communicate how much you know, but also how much you care, because “the client’s most valuable assets and their biggest daily concern is not their monetary wealth, but rather their family.”

Clients want to know that you can help them manage their money to best provide for their family’s long-term needs.

4. Project Management Ability, Organizational Skills and Attention to Detail

Any task that takes more than a few minutes is essentially a project – one that you’ll need to manage effectively in order to be profitable. You’ll need to efficiently and effectively schedule your time, manage budgets, meet deadlines and get what you need from other people in time to complete your project successfully.

Both during and after any project, staying organized and paying attention to detail are also key.

Corporate finance professional Myles Wolfe says, “For any analytical project, someone will usually have questions about the inputs and assumptions. If you can’t deliver timely backup information, even if it is 100% accurate, people will question the accuracy of the final output.”

He says that it’s critical to have both your electronic files and hard copies organized to access information quickly. You might be asked a question months after your initial analysis by a CFO who needs the information in 30 minutes for a conference call. “Especially in the financial world, sloppiness is intolerable,” he says.

5. Problem-Solving Skills

You will always encounter problems in any job, and being able to solve them rather than cracking under pressure is essential.

To get ahead, it can also be helpful to look beyond your own personal responsibilities. Pisik advises that by helping your coworkers solve their problems rather than simply reporting them to upper management, you’ll be viewed as a team player.

“People will gravitate toward you and your career will flourish,” he says.

6. Technological Savvy

No matter where you work, you will need to be proficient with computer hardware and software and able to pick up new programs related to your job quickly. The more shortcuts, keys, programs and functions you know in Excel, the better off you will be in finance. You should also get familiar with marketing and communication software tools.

7. Tenacity and Ethics

A competitive personality, passion for your work and the stamina to work long hours and go above and beyond what’s expected of you and what your co-workers and competitors are doing are all crucial to success in finance. At the same time, you can’t be so competitive that you make poor choices, or your career and reputation will suffer.

Kevin R. Keller, CAE, CEO of the Certified Financial Planner Board of Standards, says that adhering to a set of ethical standards such as those required of certified financial planners™ (CFPs) is crucial to rebuilding the trust that has been broken by financial scandals. The Certified Financial Planner Board of Standards’ Standards of Professional Conduct requires CFPs to provide professional services with integrity, objectivity, competence, fairness, confidentiality, professionalism and diligence – people who work in finance would be wise to adhere to these principles.


Looking ahead to what bosses or clients will need from you in the immediate or even distant future will help you rise to the top. It’s not enough to just solve the day-to-day challenges of your job; you must be able to think long term. Consider the following:

  • What skills can you develop and what accomplishments can you put under your belt that will land you a promotion at your current company, get your foot in the door at another company or get you rehired if you are laid off or?
  • How can you make your boss’s life easier by anticipating what he or she will need from you tomorrow, next week or next month, and taking care of it ahead of time?
  • How can you develop relationships with your clients by paying close attention to their situations? For example, if you notice that the woman who has come to you for help managing an inheritance is pregnant, realizing that she could need help saving and investing for her child’s college education, updating her will and possibly creating a trust can help you create a long-term business relationship with that client.

Putting It All Together: Wisdom and Interpretation

Los Angeles-based writing consultant Elizabeth B. Danziger, founder of Worktalk Communications Consulting and author of “Get to the Point!,” says, “Clients of financial-service professionals are looking for more than knowledge and numbers: they’re looking for wisdom and interpretation.”

The Bottom Line

By combining your ability to analyze numbers with skills such as communication, project management and relationship development, you’ll emerge as a leader and position yourself to rise to the top of your field.


Published at Fri, 22 Sep 2017 21:36:00 +0000

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Bed Bath & Beyond shares plunge after disappointing earnings report

Bed Bath & Beyond shares plunge after disappointing earnings report


Bed Bath & Beyond shares plunged nearly 15% in early trading Wednesday following a disappointing earnings report.

The retailer said after the closing bell Tuesday that earnings for the second quarter were $94.2 million, a significant drop from the $167.3 million it reported in the same period last year. Same-store sales fell by about 2.6% from a year ago.

 The company said that while online sales grew by more than 20%, in-store sales have dipped.

The “unfavorable impacts” of restructuring costs and the damage sustained by Hurricane Harvey contributed to the results, Bed Bath & Beyond (BBBY) said in a news release.

The home goods provider is not the only traditional retailer struggling to keep up with online competitors.

Toys ‘R’ Us just filed for bankruptcy, succumbing to mountains of debt it accrued when trying to fight off Amazon (AMZNTech30) and Walmart (WMT). The news is troubling or toy makers Hasbro (HAS) and Mattel(MAT), who saw their stocks dip when the bankruptcy was just a rumor.

Across the board, stores are closing at an alarming rate as shoppers lose interest in brick-and-mortar locations. And as bad as things are now, Wall Street thinks things are only going to get worse.

According to analysis by Bespoke Investment Group, investors are more pessimistic about the retail industry now than they have been since September 2008.

But Bed Bath & Beyond may also be facing tougher competition from traditional rivals. Williams-Sonoma (WSM), which also owns Pottery Barn and West Elm, reported earnings last month that topped forecasts.

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Hedge funds want to kill $20 billion chemicals deal

Hedge funds want to kill $20 billion chemicals deal


An activist investor has built up a 15% stake in Swiss chemicals group Clariant and is vowing to fight its planned $20 billion merger with Huntsman.

White Tale Holdings, an investment partnership created by hedge funds Corvex and 40 North, has written to Clariant’s (CLZNY) board, urging them to rethink the deal.

“It both significantly destroys existing Clariant shareholder value and prevents Clariant from pursuing multiple alternative and immediate opportunities to unlock value for its shareholders,” the investor wrote in a letter published on Tuesday.

“The proposed transaction has no strategic merit and is a complete reversal of your own publicly-stated strategy of becoming a pure-play specialty chemicals company.”

White Tale Holdings said it had become Clariant’s biggest shareholder with a stake over just over 50 million shares and would vote against the merger unless the company explored “all strategic alternatives” to the deal.

Clariant and U.S.-based Huntsman (HUN) unveiled plans to create a global specialty chemical company in May, saying they expected the transaction to close by the end of 2017.

They said HuntsmanClariant would deliver annual costs savings worth more than $400 million, and enjoy a stronger market position in the U.S. and China.

In a statement late Tuesday, Clariant rejected White Tale’s criticisms and described the deal as the best option for creating value for all stakeholders.

“Since announcement the vast majority of Clariant’s shareholders have expressed their support for the deal,” it said, adding that it would not deviate from the agreement with Huntsman.

The deal has been billed as a “merger of equals” but Clariant shareholders would end up owning 52% of the combined company.

“The Board plans to cede operational control of one of the industry’s most prized specialty chemicals companies for no control premium to Huntsman’s management,” White Tale Holdings wrote, adding that it believed about 75% of the targeted cost savings could be delivered by Clariant on its own.

Clariant denied that it would be ceding operational control, saying its CEO Hariolf Kottmann would become chairman, while Huntsman President and CEO Peter Huntsman would become CEO, of the new company.

— Correction: An earlier version of this article incorrectly stated that Huntsman shareholders would own most shares in the new company.

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Hack of Wall Street regulator rattles investors, lawmakers

Hack of Wall Street regulator rattles investors, lawmakers

WASHINGTON (Reuters) – Wall Street’s top regulator came under fire on Thursday over its cyber security and disclosure practices after admitting hackers had breached its database of corporate announcements in 2016 and may have used it for insider trading.

The breach involved the U.S. Securities and Exchange Commission’s EDGAR filing system, which houses market-moving information with millions of filings ranging from quarterly earnings to statements on acquisitions.

The SEC said on Wednesday evening it discovered in August that cyber criminals might have used a hack detected in 2016 to make illicit trades.

On Wednesday afternoon, SEC Chairman Jay Clayton gave members of Congress a “courtesy call” about the hack before it was announced publicly, said Representative Bill Huizenga, chairman of the U.S. House subcommittee that oversees the SEC, in a phone call.

“It’s hugely problematic and we’ve got to be serious about how we protect that information as a regulator,” Huizenga said.

The SEC disclosure came two weeks after credit-reporting company Equifax Inc (EFX.N) said a breach had exposed sensitive personal of data up to 143 million U.S. customers. This followed last year’s cyber attack on SWIFT, the global bank messaging system.

It is particularly embarrassing for the SEC and its new boss Clayton, who has made tackling cyber crime one of the top enforcement issues.

“The chairman obviously recognizes the irony of the SEC potentially serving as the unwitting tipper in an insider trading scheme,” said John Reed Stark, president of a cyber consulting firm and a former SEC staff member.

The SEC has said it was investigating the source of the hack but did not say exactly when it happened or what sort of non-public data was retrieved. The agency said the attackers had exploited a weakness in a part of the EDGAR system and it had “promptly” fixed it.

Most reports filed with the SEC “generally don’t contain super-sensitive information,” and any insider trading would have taken place soon after company filings were made but before they were released to the public, said Gary LaBranche, president of National Investor Relations Institute.

“People are shocked and disappointed,” LaBranche said. Members of the institute, who work with 1,600 publicly traded companies, will be examining their trading reports for any unusual activity that could be tied to disclosures, he said.

U.S. President Donald Trump’s administration has prioritized protection of federal agency networks after breaches during the Obama administration, including at the Office of Personnel Management, Internal Revenue Service and State Department.

Trump in May signed an executive order requiring agencies to use a specific framework to assess and manage cyber risk, and prepare a report within 90 days about how they implement it.

The SEC did not respond when asked about that review or whether it triggered the disclosure. But Clayton said in his Wednesday statement that he began reviewing the agency’s cyber risk in May.

SEC Commissioners did not learn of the breach until recently. In a statement, Republican SEC Commissioner Mike Piwowar, who for part of 2017 also served as acting chairman, said he was “recently informed for the first time that an intrusion occurred in 2016.”

Erica Elliott Richardson, a spokeswoman for the Commodity Futures Trading Commission (CFTC),the top U.S. derivatives regulator, said in an emailed statement the agency constantly reviewed and updated its cybersecurity protections to guard against the growing threat of a breach.

“Our agency has successfully thwarted hundreds of attempted breaches,” she added.

The Canadian Securities Administrators, an umbrella group representing Canada’s provincial securities regulators, said on Thursday it would conduct an additional security review.

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