With many Americans not saving enough for retirement, financial planners should consider putting a client's post-career savings on auto-pilot, Virginia-based adviser Canon Hickman tells WSJ's Wealth Adviser.
An automated savings and investing plan gives clients a well-thought-out plan that works despite life's other distractions, says Mr. Hickman. By having money automatically removed from the checking account and allocated toward retirement and other goals, that money is gone—and clients won't be tempted to spend it on something else.
Below, some of the best analysis and insight from WSJ writers and columnists, and beyond, on investing, the wealth-management business and more.
TALKING POINTS
Wednesday's markets. U.S. stocks slipped in quiet trade Wednesday, while the price of oil took a fresh fall, reports WSJ. The Dow Jones Industrial Average fell 66 points, or 0.4%, to 18481. The S&P 500 dropped 0.5% and the Nasdaq Composite declined 0.8%. The slight pullback came a day after major stock indexes flirted with all-time highs. The S&P 500 has hit new records 11 times since early July.
Buffett may start losing $8 per second. Since 2009, Dow Chemical has been on the hook for paying an 8.5% annual dividend on three million shares of preferred stock to Warren Buffett's Berkshire Hathaway Those shares have resulted in more than $1.5 billion for Berkshire. As Mr. Buffett likes to say, that amounts to $8 a second.
But the agreement has an escape hatch, writes WSJ. If Dow's shares exceed $53.72 for at least 20 trading days in a 30-day period, the chemical company can convert Berkshire's preferred shares into common stock, which doesn't pay out special dividends. Since then, Dow's stock has repeatedly flirted with that magic $53.72 level, and occasionally breached it, only to quickly retreat.
PLANNING & INVESTING
Munis keep on rolling. Municipal-bond funds dispelled any fears they'd lose steam this year, says Morningstar. Through June, funds in Morningstar tracks in its open-end municipal bond categories experienced nine months of net inflows totaling about $37.4 billion.
That is despite Puerto Rico's default on several large debt obligations, Morningstar notes. Municipalities are more broadly brighter. As the U.S. economy continues to grow, local and state tax revenues have largely rebounded, providing more stability for municipal budgets across the country, the researcher notes.
THE BUSINESS
Betterment hails Uber. Uber Technologies Inc. is partnering with robo advice provider Betterment Inc. to offer thousands of its drivers access to retirement accounts, according to WSJ Wealth Adviser. The popular ride-sharing network started notifying drivers in Seattle, Boston, Chicago and New Jersey on Wednesday that they could sign up for individual retirement accounts managed by Betterment's investing algorithm through their Uber app.
For Betterment, the partnership will put its services at the fingertips of thousands of would-be investors, giving it the potential to significantly boost the number of retirement accounts from the roughly 80,000 it manages now. Founded in 2008, Betterment recently surpassed $5 billion in assets under management.
LPL levels mutual fund fees. LPL Financial Holdings Inc. Chief Executive Mark Casady told InvestmentNews the Labor Department's fiduciary rule pushed the brokerage to start standardizing mutual fund fees to clients. By early next year, the firm plans to cap sales commission on mutual funds in a range of 3% to 3.5%, while also paying the broker a standard 0.25% trailing fee.
"If you standardize the pricing, it becomes much easier to defend the adviser's decision as it relates to compensation structures," Mr. Casady said while speaking at the firm's annual meeting in San Diego.
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