Coalition mulls finance options to boost housing supply

Developers complain of difficulties raising finance from banks for new schemes

 

The Government is exploring ways of providing finance to builders in a fresh attempt to boost the supply of homes in Dublin.

It is one of a series of measures discussed at a Cabinet sub-committee which heard there was little sign of construction activity on the ground in the capital, despite planning approval for up to 21,000 new homes.

Many developers complain that difficulties raising finance from Irish banks is a key obstacle blocking progress on new developments.

Ministers on Monday discussed ways of expanding the State’s pension reserve fund to provide up to 90 per cent of finance for developers for individual building projects where demand for housing is high.

While the idea of exchequer funding for builders is likely to be highly controversial in light of the property collapse, the Ireland Strategic Investment Fund is a sovereign wealth fund.

This means it would use a combination of money previously held in the national pension reserve, along with private investment, to provide up-front finance for builders.
Demand for housing

There have been discussions concerning provision of up to €500 million through this route, though some sources on Monday suggested more funds would be needed to make inroads into demand for housing.

The committee meeting was chaired by Taoiseach Enda Kenny and included Minister for Finance Michael Noonan, Minister for the Environment Alan Kelly and Minister of State for Housing Paudie Coffey.

Other ways of boosting the housing supply discussed by the subcommittee included:

Lowering local authority development levies, to make it cheaper for builders to start housing developments;

Expanding the role of the National Asset Management Agency to play a more central role in facilitating the construction of thousands of new houses and apartments;

Greater investment in infrastructure – such as water pipes, power lines and roads – to make priority-zoned lands usable for housing.

In the Dublin areas alone, it is estimated that up to €165 million in infrastructure could deliver up to 65,000 homes.

This Content was originally posted on : Carl O'Brien 

Radziwill: scale, deflation will continue to decrease

In the following months this year deflationary scale on an annual basis will continue to decrease, and the speed of these changes will largely depend on the situation on the raw material markets, ' says Finance Minister Artur Radziwiłł.

 

 

"August's CPI reading (0.6% YOY) was in line with the expectations of the Ministry of finance, and slightly higher than market expectations. The CSO data indicate already the sixth consecutive month deflation scale reduction in Poland, "said the Minister in a comment.

 

He pointed out that in comparison with previous years reported a smaller drop in seasonal food prices and non-alcoholic beverages, and food price deflation has been on an annual basis from 1.7 percent to 0.7 percent.

"We estimate that the base inflation in August stood at 0.3-0.4 percent on an annual basis (to 0.4 percent a month before). A sustained since July 2014, the deflation in prices of consumer goods and services is the result of several factors. the negative output gap (which translates to low inflation base) and still low in energy and food prices, "he said.

"We anticipate that in the next few months of this year, the scale of deflation (in annual terms) will continue to decrease, and the speed of these changes will largely depend on the situation on the raw material markets," he added.

GUS reported Tuesday that deflation in August amounted to 0.4% in terms of monthly and annual-0.6 percent. Economists interviewed by PAP szacowali, that the prices of goods and services fell in August by 0.7 percent on a yearly basis, and the month-by 0.4%.

As written in wtorkowym communication of GUS the greatest impact on the price index of consumer goods and services in total were in August lower by 0.8% and food prices lower by 1.5 percent, prices of clothing and footwear. In August, also staniał transport (by 1.1%).

Chip Hollingsworth: 5 secrets you should never keep from your financial advisor

The best relationships are based on honesty and trust. That's true for your personal relationships as well as your relationships with professionals who help you with your problems. You shouldn't keep your symptoms a secret from your doctor, and you shouldn't withhold pertinent information from your lawyer. Doing so can lead to unfortunate consequences. This same idea applies to your relationship with your financial advisor.

It's important that you're upfront and honest when meeting with your financial advisor. Here are the top 5 secrets I've seen clients keep to themselves over the past 25 years.

'I'M THINKING OF DIVORCING MY SPOUSE/GETTING MARRIED'

Many clients feel that a change in their marital status has no impact on their financial plan. That's simply not true; a change in marital status can affect future generations.

A well-designed financial plan will address prenuptial agreements, beneficiary designations, transfer-on-death designations, inheritance distributions, blended family concerns and legacy planning. If the financial advisor is kept removed from your plans of divorce or marriage, they won't be able to implement these considerations into your financial plan.

'I HAVE A LOT OF CREDIT CARD DEBT'

A few thousand dollars here and there on credit cards might seem irrelevant if you're able to make the minimum payments, but the cost of this consumer debt can be astronomical over time. For example, it could take you about 30 years to pay off a credit card with a $10,000 balance and 20 percent interest - even if you pay the minimum monthly amount. And, you will have paid $16,000 in interest to the bank.

Do yourself a favor, and let your financial advisor know about your credit card debt. He or she can help you figure out a credit card debt reduction plan so you can avoid paying a large amount of interest.

'I'M GOING TO BE A CAREGIVER'

While a client might not have a health issue, they might find themselves in a caregiver role or being financially responsible for the care of someone. Inform your financial advisor if you're going to be a caregiver so they can create a comprehensive financial plan that includes liquidity needs, risk management measures and anything else you might need to prepare for the expected and unexpected needs.

'I CARRY LARGE DEDUCTIBLES'

Many people have recognized that carrying large deductibles can keep home and auto insurance as well as health insurance premiums low. During your meeting with your financial advisor, they should ask why you're carrying large deductibles, but in the event that they don't, let them know that having this level of liquidity is important. You don't want to have to surrender a variable investment on a down-market day.

'I DON'T FULLY UNDERSTAND RISK'

A good financial advisor will know their client's risk tolerance. But unfortunately, some clients agree to a more aggressive portfolio design that they don't fully understand. Never be timid to ask questions. It's your money, and you're paying for the advice in some fashion. Don't walk away from your hard-earned money without knowing how it's going to be handled - especially in volatile markets.

Chip Hollingsworth writes for GOBankingRates.com (), a leading portal for personal finance news and features, offering visitors the latest information on everything from interest rates to strategies on saving money, managing a budget and getting out of debt.

The Ballers Guide to Choosing a Financial Advisor

 

Second in a series. Having concluded its first season and been renewed for a second, the hit HBO show Ballers on life after football paints a picture of financial planners and their clients living high on the hog. This post, we offer up some Ballers-inspired cautionary notes on what to look for in a professional financial planner and what scenes should send you running for the hills.

Full disclosure: In all my years as a CERTIFIED FINANCIAL PLANNER, I have never snorted rails of cocaine off a hooker's bosom. Nor have I ever witnessed any of my colleagues doing so either. Yet, if you take the HBO show 'Ballers' at face value, you might think that's all we get up to when we're not working our spreadsheets. Perhaps such hijinks happen in a financial advisors office or two somewhere out there but certainly not in ours. Yet, despite the program's OTT misrepresentation financial planners as party boys (and girls), I still maintain that the show gets many of the follies and foibles about money absolutely correct. 

So what can 'Ballers' teach us mere mortals about choosing a financial planner?  

The Big Four

The four questions anyone should ask before hiring a financial planner are:
 

1) Do you trust them?
2) Can they help you reach your financial goals?
3) Do they have your best interests at heart?
4) Are they a Certified Financial Planner™?

A response of NO to any of these questions should be a deal breaker. For sure, there are many more questions to ask a financial advisor before actually hiring them--things like fee structure, experience and investment philosophy-- but these initial four are easy to answer and are non-negotiable in my book. So bearing this in mind, let's see how the Ballers guys do.

Trust

Joe Krudel (played by Rod Corddry) really epitomizes the sleazy car salesman image of an 80's era boiler room stockbroker who makes outlandish promises that seem too good to be true (and we all know how those usually pan out, right?) Joe may be a nice-ish guy and a lot of fun, but do you really want to trust him with your life savings? If I reminded you that it was your money he was spending while he's partying hard, would you find his shenanigans quite so amusing? Sadly, I've met many a stockbroker who could be twins with this crazy guy whose better judgement gets blinded by the shiny light of fame and glamour.

Most financial firms or advisors wouldn't (couldn't and shouldn't) go the lengths that the Spencer Strasmore (Dwayne Johnson) does. For example we can't legally lend our clients money or borrow from them either. And while it may sound nice that Spence is paying off Vernon's (Donovan Carter) blackmailer, to be able to afford that $150,000 tab he is either dumb with money, or ripping his client off somewhere else.  

Takeaway: Do not expect your financial professional to bail you out of jail or pay off someone who is blackmailing you. (Why do these things always happen outside of market hours, BTW?) Furthermore, a trustworthy financial advisor is neither a dream merchant making promises the market can't possibly keep nor your partner in crime; he or she is your partner in helping you handle your money . . . legally.

Goals

The players of Ballers are far more interested in field goals than long term financial goals, no surprise since they're gifted young athletes at the height of their physical powers. If anything, their biggest goal seems to be getting through practice and back to the party. Living for the moment, and blowing every penny they make (and then some) may seem glamorous and fabulous in the moment, but a big headache after they come down from the fame high and the free flowing fortune that comes with it as Charles (Omar Benson Miller) selling cars can well attest.

Takeaway: Nothing lasts forever and the future will be here before you know it. Leverage Father Time, and his best friend Compounding Interest, and set financial goals for yourself while most importantly developing an active game plan to actually reach them. 

Best interests

The star defensive end Vernon has got himself into a real financial pickle by allowing his boyhood friend Reggie (London Brown) to 'manage' his money. While Reggie means well and thinks he has the athlete's best interests at heart, he doesn't really. In fact, being unlicensed, untrained, and unequipped to control Vernon's increasingly rapacious entourage of freeloaders, Reggie is bringing financial disaster down on the head of his buddy. 

Takeaway: Look for an Advisor who will tell you what don't want to hear. Your financial advisor is not there to be your best friend and the good ones won't back off from telling you painful truths--in ways a friend never could--if it'll help you financially in the long run.

Certification

I will give it to Spencer Strasmore who does go the extra mile for his clients which is nice. More importantly, he works hard to serve them, even when they have little interest in listening to his advice. That being said, he is just there to monetize his football connections. But the biggest red flag, and this is huge, is that he isn't securities licensed. 

The CERTIFIED FINANCIAL PLANNER™ designation means an individual has a CFP® Board-approved education, has successfully passed a rigorous CFP examination, has at least three years of financial planning experience and voluntarily ascribes to the CFP® Board's code of ethics. 

Takeaway: Who would you rather have handling your money, a licensed professional who is all of the above or someone whose claim to fame is knocking out his opponent unconscious while playing defense? Repeat after me, no license, no bueno, no deal-e-o.

This Content was originally posted on  David Rae 

Stock Market Selloff: Top Financial Advisers' Advice For Achieving More Income

Having Two Homes In China Is Not Enough

For the truly affluent Chinese, of which there are hundreds of thousands these days, having a home in Shanghai and one in Hong Kong is passé. You've made your neighbors jealous if you have a home in Malibu. In fact, according to the National Realtors Association, Chinese buyers accounted for 12% of all the non-American buyers of California real estate in March of 2013. That puts them only behind the Canadians, which accounted for 23%. Here's the kicker: China's home buyers spent more than twice what the Canadians spent, dishing out upwards of $425,000 for a piece of the California Dream. Forbes spoke with Andrew Taylor, the Aussie CEO of Juwai.com, China's biggest real estate source for those looking to buy overseas or connect to those who are on the prowl for property. Here's Juwai's top 10 most searched for destinations, along with comments from Taylor. Sales data not included.

Monday's stock market debacle stinks of a robot-driven flash crash

FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.

Paul Schatz, president of Heritage Capital, says Monday's stock market plunge looked a lot like the May 2010 flash crash. In an article for Investment News Schatz wrote, "I believe that high-frequency trading was responsible, not for the whole stock market decline, but for the quick acceleration and pricing dislocations or anomalies." He continued, "Remember, HFT thrives when markets are volatile and liquid. Not so much in quiet and less volatile markets." Schatz points to the big declines in the value of healthcare and biotech ETFs despite their largest holdings being some of the most liquid names in their respective industries as evidence of a HFT-driven flash crash. 

Ray Dalio says the Fed's next move is QE4 (Business Insider)

Ray Dalio, the founder of Bridgewater Associates, the world's largest hedge fund, thinks the Fed's next policy move won't be to raise interest rates. Instead, Dalio believes the central bank will embark on a new quantitative easing program. Dalio thinks "it should now be apparent that the risks of deflationary contractions are increasing relative to the risks of inflationary expansion because of these secular forces." He continued, "Our risk is that they could be so committed to their highly advertised tightening path that it will be difficult for them to change to a significantly easier path if that should be required."

The top advisor concerns (Eaton Vance)

Investment Management firm Eaton Vance surveyed 1,006 financial advisors about their biggest market concerns. The survey found advisors are most worried about market volatility, preparing for the possibility of rising interest rates and generating income in a low-return environment. Interestingly, 87% of advisors noted at least some of their clients were wary of equities.

Schwab fined $2 million for net capital deficiencies (Think Advisor)

Charles Schwab was fined $2 million by the Financial Industry Regulatory Agency for net capital deficiencies. Think Advisor reports, "The deficiencies arose because on each of those dates, Schwab had inflows of cash that exceeded the amounts it could invest with existing facilities, so instead, Schwab transferred $1 billion to its parent company for overnight investment," according to FINRA. Schwab says the transfer occurred because it was trying to avoid keeping too much cash at one institution and that the money was always safely with the company's parent. Schwab self-reported the matter, according to the settlement.

Savant Capital buys the Corcoran Group (Financial Advisor)

Savant Capital has agreed to buy the Corcoran Group, a firm catering to "high- to ultra-high-net-worth, senior-level corporate executives for publicly traded and private equity companies," according to Financial Advisor. The acquisition brings another $4.5 billion AUM to Savant Capital, which has offices in 11 states. Terms were not disclosed. 

This Content was originally posted on Jonathan Garber

Why Wall Street shouldn't get its way in the fight over financial advisers

This week’s showdown over whether your adviser can put his or her interests above yours hinges on the difference between legal and ethical standards

Mom, apple pie and the fiduciary standard. It’s really that simple – or at least it should be. Shouldn’t our financial advisers be legally required to put our interests before their own and not get any kind of financial incentive from folks who design financial products, some of which might not suit our needs?

As this week’s hearings at the Department of Labor drag their way to a close, it’s clear Wall Street, and a lot of people in Congress, feel it’s more complicated than that.

The battle over the “fiduciary standard” is pitting Wall Street against its critics and could end up making the fights over Obamacare and the Dodd-Frank Wall Street reform bill look like mild tussles by comparison.

In one corner stands President Obama, who sees an ongoing effort by parts of the investment industry, and the Department of Labor, to get all investment advisors to agree to a rule that would put their client’s financial interests before their own as being a part of his legacy. In the other corner is Wall Street, which sees the rule as having the potential to cost it billions of dollars in revenue, at a time when other sources of fees also are under pressure.

 In the eyes of the advocates of the fiduciary rule, there’s no question about who is wearing the white hat. It’s those advisers whose only compensation comes from the clients they advise, in the form of fees, and who clearly identify themselves as working as fiduciaries. If you ask your adviser, straight out, to whom she owes her first legal duty of care, and the answer doesn’t come promptly and clearly: “you, as my client”, then odds are that she isn’t required by law to resolve any conflicts of interest that arise in your favor. You can’t be a part-time fiduciary; it’s like being a little bit pregnant.

Does that matter? In practice, it may not; you hope it will never be put to the test. Most of the financial advisers who work for firms like Merrill Lynch or Morgan Stanley are just as honest and competent and thoughtful when they work with their clients. But they have a different set of responsibilities and duties. They may spend most of their time thinking about their clients, but their first legal duty is to the company that employs them. In practice, their work for you is covered by a looser “suitability” standard, which means that whatever investment they suggest simply needs to be more or less appropriate, given your broad financial circumstances.

If the lack of clarity in the “suitability” standard scares you, well, it should. There are many ways in which things can go very, very wrong.

One study by the White House calculated that financial advisers who steered clients into more expensive or less attractive investment products, in response to their financial incentives, ended up costing investors in IRA accounts alone somewhere between $8bn and $17bn in underperformance. The hearings underway this week have heard other tales of what happens when the suitability standard proves inadequate: brokers who design “plans” to generate certain levels of income each week (regardless of the needs of their clients); advisers who persuade their clients to roll over IRAs into accounts that the former can manage on a commission basis, and that then dwindle rapidly.

Nothing can stop an adviser from claiming that he won’t sleep until he has discharged his obligation to his client, or that she’ll work night and day to understand her client’s needs and meet them. But those are just words. They appear a lot in ads, like those of Ameriprise (“our advisers are ethically obligated to act with your best interests at heart”) and Wells Fargo (“a healthy relationship with your financial advisor should make you feel that your best interests are the top priority”). The key words that should trigger alarm bells there are “ethically obligated” and “should make you feel”. Ethically obligated isn’t the same as legally obligated, and feelings aren’t the same as legal requirements.

If anything goes wrong, and you end up facing off against the adviser (and his powerful firm) in an arbitration panel, those words don’t cut the mustard. Indeed, Wells Fargo has made that explicit claim in arbitration proceedings, while Ameriprise has disclosed: “There is an incentive for our financial advisors to sell a fund from a load fund family or a fund that pays a … fee over one that does not … which may influence your financial adviser to recommend certain funds or classes over others.”

Still think that there’s no difference between “suitability” and “fiduciary duty”?

The opponents of requiring all advisers, and not just independent fee-based financial planners, to adhere to this higher standard argue that the costs to both firms and advisers are prohibitive. The Department of Labor has estimated the costs of implementing the change at between $2.4bn and $5.7bn over the next decade, but the Securities Industry and Financial Markets Association (SIFMA) pegs it at $5m to start, plus at least another $1.1bn annually. 

 There are some who argue that the high costs of accepting the fiduciary rule mean it will become too costly to continue serving middle-class investors, pushing them into more costly kinds of investment accounts or meaning that they lose access to in-person investment advice altogether. They’re trading on fear, suggesting that advisers might end up firing their clients.

At least one of those who addressed the hearings, Raymond Ferrara, chairman and chief executive of ProVise Management Group, scoffed at the idea that that would be economically necessary. He pointed out that his firm hires individuals with the certified financial planner designation, all of whom, by definition, adhere to the fiduciary duty standard – and that his advisers all serve middle-class Americans. Then, too, there is the fact that many of the Wall Street firms likely to be affected by the move already have been cutting back on their willingness to provide financial advice to smaller clients: it has been nearly four years since Merrill Lynch advisers were told that they wouldn’t be paid for working with new clients with less than $250,000 in assets.

While critics of the fiduciary rule fret about the prospect of Americans ending up limited to websites and “robo advisers” – automated investment services – I’m less anxious. The “robos” have their own problems (one-size-fits-all rarely lives up to its pledge, and I’d watch out for automated providers marketed by companies that have proprietary products to market, like Schwab or Vanguard), but they have a low cost base, can reach and serve that segment of the market that doesn’t need a lot of specialized personal advice, and (with the exception of the caveat above) the potential for costly conflicts of interest is low.

The writing is on Wall Street, and the legions of critics of the fiduciary standard lining up to have their moment in the spotlight this week might want to bear in mind Senator Elizabeth Warren’s remarks to her Republican colleagues, in a very different context, earlier this month. “Do you have any idea what year it is? Did you fall down, hit your head, and think you woke up in the 1950s?”

Replace the 1950s with the 1990s, the last glory decade for Wall Street deregulation, and you could apply the same comment to the fiduciary standard debate. The whole bait-and-switch nature of the “suitability standard”, which allows financial firms to publicize their devotion to their clients in lavishly-produced advertisements, only to back away when those clients later claim in arbitration hearings or lawsuits that they were given conflicted advice and sold costly, inappropriate products, should go the way of the two-Martini lunch and Gordon Gekko’s suspenders.

This Content was originally posted on Suzanne McGee