jacqulynfnxhenk-blog

[jacqulynfnxhenk-blog]

Big banks want your big bucks, but you have other options

Big banks just don’t want to sweat the small stuff. Despite receiving some $4.7 trillion in taxpayer bailout funds, the largest of them are moving more towards wealthy customers with assets to invest and away from low-margin checking accounts. That doesn’t mean you should invest with them, though. The banks side of things is that that want well-heeled wealth management or brokerage clients, not people who are writing small checks to pay bills. For instance, Bank of America, which recently announced a $5-a-month debit-card fee, said about two weeks later that it was planning to nearly double the number of “Financial Solutions Advisors” for its mass affluent clients. The growing array of banking fees — common at most big banks now — are a red herring for bankers’ larger agenda of generating more income from advisory and brokerage accounts, as brokerage accounts have the potential to generate hefty commissions and advisory fees. I suspect that BoA, which recently fell to the second-largest bank by assets, would rather get more customers into its Merrill Edge account. BoA is offering $100 plus up to 30 commission-free online trades to sign up. Just deposit at least $10,000 in cash or securities in their Merrill cash management account first. What if you have some serious retirement or discretionary money to invest? Are big banks giving you more bang for your investment buck? As you shop for new investments, keep in mind that big banks may continue to raise fees and charge high commissions. Here are some key questions to ask your bankers if they want your business: What’s their commission schedule for securities trades? If you’re an active investor, this is an essential question. Order execution is a commodity business now. Many online deep-discounters range from free trades (for introductory offers) to as low as $2.50 per transaction. Do they offer comprehensive financial planning? Many, if not most, of bank-lobby investment advisers are commissioned representatives who are paid when they sell products like mutual funds and annuities. Ask them if they are certified financial planners. If you need extensive retirement, tax, estate or portfolio planning, your local bank may not be the right place to go. You may need to ask for a “private” banker. What products do they recommend? While there’s certainly no sin in earning a commission, look at the overall cost of the products. Do they earn a commission plus management fees? Do they recommend their “house” brand of mutual funds? There are many cheaper, more diversified alternatives such as the DFA group of funds, which are sold through investment advisers and financial planners. Do they push products without detailed questions about your financial goals? This is a red flag that they want to earn a commission and not provide meaningful advice. Are they fiduciaries? This is a specific legal term than means they must put your interests above that of their employer. They can be sued for giving you bad advice. But if they’re solely registered as securities brokers, they fall under looser “suitability rules,” which means you would likely have to submit to industry-run arbitration and may not have access to the courts in the event of a dispute. Do they push annuities? You can buy fixed-rate and variable annuities direct from issuers and save on commissions. A bank is not a good place to buy an annuity. I know the inherent appeal of a bricks-and-mortar bank branch that sits comfortably in your neighborhood or in the center of a downtown business district. They are hard to resist. We’re still drawn to the idea of the friendly local banker.  George Bailey lives in our cultural imagination. Yet, when it comes to investing, you may be better served by seeking the services of a registered investment adviser, financial planner, certified public accountant or chartered financial analyst. They may offer more sophisticated and customized service and could save you a lot of money by avoiding high-priced, low-performing products.

[jacqulynfnxhenk-blog]

Arbitrage in Bordeaux

New York’s branch of Christie’s is auctioning a collection of 64 bottles of Mouton-Rothschild on Saturday that spans the years 1945-2007.  It’s Geneva branch is auctioning a collection of 315 bottles spanning the same 62 vintages, but from all five first growths including Mouton-Rothschild on Tuesday.  (See story “Mystery collector to sell rare wines” [ID: nN10231397]) Saturday’s lot is selling for between $100,000 and $150,000, while Tuesday’s is estimated to sell for $696,000 to $929,000. And the price difference presents collectors with an arbitrage opportunity. Assuming that the wines sell at the upper end of their estimates, buying Saturday’s lot for $150,000 would represent a $35,000 savings.  Granted, Tuesday’s lot has one more bottle of Mouton-Rothschild – the chateau produced two labels in 1978 and 1993 – and the Geneva lot has all four, while Saturday’s lot only has three. And unlike Tuesday’s anonymous French collector,  Saturday’s is  California attorney Allen Grossman, who has been collecting for 40 years and waxes poetic about Mouton-Rothschild, saying of the top Bordeaux, “I have tasted them all many times. They are all wonderful wines, but I’m  just partial to the Mouton.” $1=0.8608 CHF

[jacqulynfnxhenk-blog]

Rangers rout Tigers to reach World Series

The Rangers became the first American League team to reach the World Series in consecutive Major League Baseball seasons since the New York Yankees made four straight trips from 1998-2001.Texas will meet the winner of the NLCS, which the St. Louis Cardinals lead 3-2 over the Brewers. Milwaukee host Game Six on Sunday.

[jacqulynfnxhenk-blog]

UPDATE 1-Innkeepers, Cerberus in tentative sale pact

The parties are confident the deal will get done, though it is not official and could still fall apart, the person said.The agreement would avoid a trial scheduled for next week over a decision by Cerberus and Chatham to walk away from a previous agreement to buy Innkeepers for $1.12 billion.The discounted purchase price would still be higher than the initial $971 million baseline or "stalking horse" bid offered by Five Mile Capital Partners and Lehman Ali Inc, a non-bankrupt unit of Lehman Brothers Holdings Inc .Innkeepers declined to comment on Thursday. A spokesman for Cerberus did not return a call seeking comment.

[jacqulynfnxhenk-blog]

UPDATE 1-Buffett tells congressman he paid $6.9 mln taxes

By Ben BerkowitzOct 12 (Reuters) - Warren Buffett paid $6.9 million in federal income taxes in 2010, the billionaire investor said in a letter to a Kansas congressman that adds fuel to the debate over his proposal for higher taxes on the rich.The figure represent 17.4 percent of his $39.8 million in taxable income, a percentage he has repeatedly said is too low compared to what his own staff pays.Buffett caused an uproar in August when he said the wealthy should be subject to a higher rate of tax. The White House has co-opted his call into a "Buffett Rule" that would raise levies on the richest people.Following Buffett's suggestion, Republican congressman Tim Huelskamp of Kansas sent the "Oracle of Omaha" a letter in late September calling on him to release his tax returns.Huelskamp sent Buffett a second letter reiterating the request earlier this month, and promising to release his own returns if Buffett would as well.Buffett, the chief executive of the conglomerate Berkshire Hathaway , responded in kind on Tuesday, according to a copy of the letter. Buffett did not release his full return, though, as many have called for him to do.In the letter, Buffett reiterated what he saw as the inequality of his paying a rate in the teens when most people who work for him pay a rate in the 30 percent range.But what he told Huelskamp he also wanted was for other ultra-wealthy Americans to release their own returns -- in full, rather than the limited data Buffett himself shared."If you could get other ultra rich Americans to publish their returns along with mine, that would be very useful to the tax dialogue and intelligent reform," Buffett said. "I stand ready and willing - indeed eager - to participate in this exercise."Buffett went on to suggest a method to get reticent moguls to release their returns, among them Rupert Murdoch, whom he has repeatedly challenged on the subject."Having the 'favored 400' make their tax returns public - even if only code letters were attached to the various returns - would be a big step in informing legislators and the public of what needs to be done," Buffett wrote.Huelskamp, in a statement Wednesday, slammed Buffett's letter as inadequate and again called on him to either release his full returns or voluntarily give more tax money to the federal government."Mr. Buffett still refuses to release his tax returns. What he does disclose may be accurate, but it is incomplete and it fails to explain how he shelters millions of dollars in income from taxation," Huelskamp said.