In November's roundup of pressing issues in the wealth management space, dive into the fallout of a massive continuing education cheating scheme, UBS' pay cuts for producers across the organization, forecasts for 2025's tax and retirement changes and more.
63 brokers suspended, 4 banned in CE cheating scheme
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A continuing education cheating scheme has landed at least 63 brokers suspensions and fines from the Financial Industry Regulatory Authority. Four brokers have been barred from the industry for refusing to cooperate with the investigation.
The disciplined brokers certified to the state of New York that they had completed 15 hours of continuing education to maintain their state insurance licenses when, in fact, someone else completed the requirements for them. All 63 brokers received a one-month suspension and a $5,000 fine.
It's possible that more brokers will be disciplined, but FINRA officials would not comment on whether any current investigations are ongoing. The alleged infractions date back to 2022.
How consolidation is testing fiduciary duty in RIAs
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The transaction merging Buckingham Strategic Wealth into The Colony Group under the private equity-fortified umbrella of Focus Financial Partners understandably drew headlines last May.
Focus had gone private in a deal with Clayton, Dubilier & Rice about nine months earlier, valuing the New York-based registered investment advisory firm aggregator at north of $7 billion. After that (and the departures of longtime Focus CEO Rudy Adolf and the other co-founders, Rajini Kodialam and Leonard Chang, in 2023), the rollup of Buckingham into Colony reflected a new approach: merging the 90 Focus-owned RIAs into a series of a few giant "hubs" rather than a dispersed network of independent partners in the conglomerate.
Focus
UBS to cut base pay for low-end producers — and some high-end
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UBS is reducing its base compensation for its low-end producers while making more modest cuts higher up the income-generation scale.
The new compensation policy rolled out by the Swiss banking giant on Thursday would cut payout rates next year for U.S. advisors producing less than $750,000 by between 2% and 4%. The actual reductions will depend on a variety of factors, including how long a given advisor has been with the firm.
Meanwhile some advisors, mostly at the $1 million production level or higher, will see a more modest 0.5% cut in their payout rates. For instance, advisors who have been with the firm for between five and 10 years and generate between $3 million and $4 million in annual revenue now earn a payout rate of 50.5%. That will fall to 50% next year, reducing a $4 million producer's compensation by $20,000.
Citi has long way to fulfill Sieg's big dreams
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In his first year on the job,
Speaking in June at the Morgan Stanley U.S. Financials, Payments & CRE Conference in New York, Sieg made it clear he's not in the business of dreaming small.
"You can't take this seat I'm in without, in my view, setting a very high bar in terms of what success should look like," according to a
Morgan Stanley wealth head bets on reinvestment over recruiting
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Morgan Stanley Head of Wealth Management Jed Finn thinks his division could hit its operating revenue goals practically overnight if it simply stopped investing in itself.
Morgan Stanley's $6 trillion wealth unit has long had a goal of hitting a 30% operating margin — meaning just under a third of its revenue will be left over once all the expenses have been subtracted. That margin inched upward again in the firm's third quarter to 28.3%, from 27% in the previous period.
Finn, who moved into his current position
A primer on the IRA 'bridge' to bigger Social Security benefits
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Clients approaching retirement can delay their future required minimum distributions — and accompanying income taxes — until they're 73 rather than starting them at 72, as was the rule prior to the Secure 2.0 Act. In 2033, the first RMDs will fall back to 75.
Those changes will help pre-retirees lock in more
How financial advisors are going full-RIA — with a 'brokerage'
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A prospective client speaking with advisor Bill Rabbitt recently posed the foundational query that more customers are asking these days.
"'Before we even talk, I have one question: Are you a fiduciary?' She said, 'I couldn't keep talking to you if I didn't ask you that question,'" said Rabbitt, the owner of West Hartford, Connecticut-based advisory practice
More financial advisors than ever before are answering in the affirmative with respect to every area of their advice. Planners like Rabbitt, though, represent a new and growing group of advisors: those who are registered only with
Medicare premiums quickly outpace Social Security COLA
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Seniors expecting a boost in their Social Security checks next year may be disappointed to find that Medicare is eating up most of the increase.
That's because in 2025, Medicare Part B premiums will rise more than twice as fast as Social Security's cost-of-living adjustment (COLA). According to the Centers for Medicare & Medicaid Services, next year's COLA will be 2.5%. The standard Part B premium, meanwhile, will jump by 5.9%.
Why does that matter? Because Part B premiums are automatically deducted from Social Security checks.
Planning for 2025's tax brackets and retirement rules
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Cooling inflation will bring some relief in the form of slightly lower taxes next year.
An average inflationary adjustment of 2.8% under IRS guidance for 2025 released
At the same time, the slower rise in cost-of-living expenses this year led the agency's subsequent
Fidelity's client-cash plans draw industry ire
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An upcoming change to how Fidelity Investments handles cash balances has drawn ire from some in the industry who say it doesn't have clients' best interests in mind.
Next year Fidelity plans to convert its existing RIA non-retirement clients' cash balances from money market funds to its cash management product, FCASH, as first reported in
The current annual percentage yield on FCASH is 2.35% (with a 2.32% interest rate), while Fidelity's own Government Money Market Fund (SPAXX) posts a 4.27% SEC seven-day yield. Currently, the cash balance in a Fidelity Cash Management Account is swept into an FDIC-insured interest-bearing account at one or more program banks; balances above $5 million may be placed in a non-FDIC insured money market fund.
