insurancenews.net - The eye-popping $201 million life insurance policy — now dubbed the “most valuable life insurance policy” by the Guinness Book of World Records — may be a sign that the big case market is reviving.
Reinsurers are seeing an increase in jumbo cases as the economy improves. That’s significant, because reinsurers are the companies to which the direct writing carriers turn for help in writing the cases.
If reinsurers are seeing more cases than previously, that means money is moving at the primary level. That’s a good omen for agents and advisors in the big case market and for others whose business swirls around big cases.
It’s not as if the super-wealthy are popping up everywhere. “The trend was actually higher pre-2008, prior to the economic downturn,” said Nate Johnson, vice president and chief underwriting officer at SCOR Global Life Americas in Leawood, Kan.
But now, with the slow economic recovery, “the industry is beginning to see a slight trend upward again in larger/jumbo risks,” Johnson said.
Michael Pado, president and chief executive officer of Auigen Reinsurance Company of America, Red Bank, N.J., is seeing it too. The increase is tracking with the growth of the ultra-wealthy population, he told InsuranceNewsNet.
Growth of the ultra-wealthy
That growth spans all the high-net-worth categories. In 2013, for example, the number of billionaires in the U.S. rose to 443 from 334 in 2008, according to WealthInsight. The multimillionaire category (people with over $30 million in net assets, excluding principal residence) is up too — to 44,934 individuals from 30,807 in 2008, the researcher said.
For the $25 million and up category (excluding residence), Spectrem Group found there were 132,000 individuals in 2013 — up from 84,000 in 2008. For the $5 million and up category, the 2013 numbers hit a record high of 1.24 million, up from only 840,000 in 2008, Spectrem said.
The $201 million case now deemed “most valuable” by Guinness is clearly outsized.
Sold by Dovi Frances, managing partner of SG LLC in Santa Barbara, Calif., on the life of a well-known U.S. billionaire, it has unseated the previous Guinness record — a $100 million life policy sold in 1990 by Peter Rosengard from the United Kingdomon the life of a U.S. entertainment industry figure. STORY
New York, NY (February 19, 2014) – Forbes announced today the release of the third title in its 2014 e-book line, Wall Street’s Hottest Career, by Forbes Staff Writer Halah Touryalai. The new e-book, produced and distributed by Vook, describes the growing demand for financial advisors, and how the industry is in desperate need of young talent.
As Baby Boomers retire, the demand for financial advice is increasing. The financial advisor profession is expected to boom over the next decade, with a projected 27% growth rate.
To put this into context, the average growth rate for all U.S. occupations tracked by the Bureau of Labor Statistics is just 11%.
However, the average age of a financial advisor is 51 years old, and 43% of advisors are over 55.
The industry predicts that every year for the next 10 years, 12,000 to 16,000 financial advisors will retire each year.
To keep up with increased demand, the industry will need to attract 237,000 new financial professionals over the next decade.
This creates a huge opportunity for young people—from all backgrounds—to take advantage and score a long-lasting, rewarding career. At the moment, less than 5% of the existing 316,000 financial advisors in the country are under age 30.
Experts say you don’t need to have a financial background to be successful in the field, and that advisors come from all different backgrounds. They say the most important skill is the ability to learn new material and to work hard.
Scote Tobe, President and Managing Partner of Signature Financial, a $250M firm, said “I was a psychology and communications major. I don’t love math. What you need to do as a financial planner is understand the psychology of money; the fears people have around it and learn what motivates them. It’s not simply about money management, our job is to be a financial partner to clients and provide the sleep-at-night factor.”
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MARKETWATCH - Joseph Borg, state securities administrator in Alabama and a past president of the North American State Securities Administrators Association, says he plans to issue a consumer alert Tuesday, suggesting that if consumers and investors have trouble redeeming bitcoins or cashing out of their accounts, they stop trading—or adding to their holdings on account—until issues are resolved.
Borg has been involved in a wide range of high-profile cases in his 20 years on the Alabama Securities Commission perhaps most notably pushing for the formation of the multi-state task force that ultimately shut down Stratton Oakmont, the investment firm that was the basis for the recent movie “The Wolf of Wall Street.”
That’s particularly bad news for Mt. Gox, the largest bitcoin exchange, as Borg says his move was prompted by seeing a string of correspondence showing the frustrations some Gox customers have had in trying to get their money out.
After exchanging emails or chatting with about 60 crypto-currency traders (some have already moved away from BTC), it’s clear to me that issues related to making withdrawals from one’s accounts are all too common, with some describing the money being held in “Mt. Gox jail.”
Investors describe repeatedly being asked to provide information that any reputable financial company should not have had to request, such as linked bank account numbers, amounts on account with the exchange—both in bitcoins and in dollars—and more. Expedited requests—where customers were willing to pay fees of 5% to have withdrawals processed “manually”—wound up taking weeks and were going unfilled; Borg noted that, in this day and age, any suggestion that “manual processing” is faster is alarming.
Borg says he’ll cite recent reports from a survey from CoinDesk, a leading bitcoin news/information site, showing that nearly two-thirds of Mt. Gox users were still awaiting funds; some had waited as long as three months. He mentioned numerous examples—again, in some cases after looking at emails Mt. Gox users shared with MarketWatch—in saying, “If it was an investment we were talking about, we’d be moving to shut somebody down or to make them step up and take care of business properly.…If it took you a month or two or three to get your money out of a brand-name brokerage firm, you’d be worried that something bad is going on, and that’s with a firm where you really aren’t worried that your money is gone…Their experiences, honestly, look very bad.”
More than a dozen regulators I spoke with for this column said they saw issues exactly in line with Borg’s concerns, but felt that bitcoin exchanges were out of their purview, even if the customers—the theoretical victims if an exchange were to collapse—were in their state or region. It’s largely out of the regulators’ purview because most of the operators are located offshore.
“Dealing with these exchanges should be no different than dealing with your bank or your financial institution,” Borg said, “and we would tell you that you never do business with a bank that does not know you have money on account, or that is asking for your passwords or that doesn’t seem to remember the account links you established when you started the account. Now we are saying that you should never do business with a bitcoin exchange that has the same problems, or that has to ask you how much bitcoin you’ve got.”
Mt. Gox Halts Bitcoin Withdrawals
Bitcoin prices are falling sharply after Mt. Gox, the major exchange’s virtual currency, said it was forced to halt withdrawals for customers. Michael Casey reports on MoneyBeat. Photo: Getty Images.
Borg noted that the visible issues some investors have had with certain exchanges might have investors wondering if the entire crypto-currency world is a rip-off. But he stopped far short of that kind of warning, and said it’s entirely possible that investors’ experiences could vary entirely based on how they trade bitcoin, the same way stock investors would have different experiences using a respected brokerage firm and a boiler-room shop. Gox is arguably the biggest name, but it’s clear from my discussions with traders that it is also the operation that gets the least respect, particularly among veteran traders. Mt. Gox did not respond to a request for comment.
Borg did say—and suggest that his published warning will say—that the validity of any crypto-currency “is a matter of perception.”
The big issue is not the value of the currency so much as “execution” and “settlement” of transactions.
CNN MONEY – Home prices are showing signs of topping out: The S&P/Case-Shiller index posted its first month-over-month decline in 10 months on Tuesday.
The annual measure of home prices still increased 13.7% in November, but that was only narrowly better than the rise posted in October.
But with mortgage rates climbing steadily since hittingrecord lows in May, it’s clear the housing recovery is starting to lose some steam.
“While housing will make further contributions to the economy in 2014, the pace of price gains is likely to slow during the year,” said David Blitzer, chairman of the index committee at S&P Dow Jones Indices.
But housing experts say that more modest price increases are probably a good thing for the housing market. The rapid increases of the last year are not sustainable, they said.
“Sellers used to seeing huge price gains month after month may feel some whiplash as that slows down,” said Stan Humphries, chief economist for sales tracker Zillow. But more modest price increases mean “the housing market is still a long way from normal, but it’s getting there.” THE REST OF THE STORY
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CNN MONEY – Thanks to the fiscal cliff deal and the Affordable Care Act, the top 1% of taxpayers – and many in the top 3% as well – will have to pay a bigger tax bill come April 15.
That’s because those laws included four key tax measures that went into effect for tax year 2013.
Who’ll be hit hardest? Those who make 7-figures with substantial wage and investment income.
Households with incomes over $1 million could pay about $170,000 more on average than they did in tax year 2012, according to estimates from the Tax Policy Center.
Those making between $500,000 and $1 million would likely pay an average of $15,000 more.
Plenty of taxpayers with incomes between $200,000 and $500,000 also could be affected by some of the changes.
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CNNMONEY – Here are “the Dirty Dozen” schemes the IRS is warning about:
1. Identity Theft
The IRS continues to be overwhelmed by identity theft, which occurs when a fraudster uses someone else’s name and social security number to claim refunds.
While the agency has been cracking down on the issue — the number of identity theft-related criminal investigations surged 66% last year — it still paid out nearly $4 billion in fraudulent refunds last year.
Receiving a notice from the IRS saying that more than one return has been filed under your name is an indication that your identity may have been compromised. In that case, contact the IRS Identity Protection Specialized Unit at 1-800-908-4490.
2. Phone scams
A new scam is gaining popularity, where fraudsters call and pretend to be from the IRS. Some callers demand tax payments and even threaten arrest or other law enforcement action if the person refuses. They may even hang up and call back pretending to be the police. Others tell victims they are owed large refunds and ask for personal information in order to steal their identity.
If you believe you’re a victim of this scam, call 1-800-366-4484.
If you receive an e-mail that appears to be from the IRS and asks for personal information, it’s most likely a phishing scam that wants your identity and your money. The IRS does not reach out to taxpayers via e-mail, texts or social media, so relay any such messages to email@example.com.
4. “Free Money”
Be wary of fliers and ads promising “free money” from the IRS or anyone offering a refund that sounds too good to be true.
Some scammers target low-income and elderly people, often through churches, convincing them to claim credits they aren’t entitled to — and even Social Security rebates that don’t exist. These con artists often charge up-front fees and disappear without a trace before the IRS rejects the claims. The victims don’t just lose the scammer’s “fee” — they could also get hit with a $5,000 penalty for making intentional errors on their return.
5. Return preparer fraud
Make sure your tax preparer has an IRS Preparer Tax Identification Number (PTIN). If a preparer doesn’t put this number on your tax return as required, or fails to sign the form, that should raise a red flag. And watch out for preparers who base fees on the size of your refund.
Complaints about shady tax preparers can be submitted via Form 14157.
6. Hiding income offshore
Don’t let anyone convince you it’s a good idea to hide income abroad. The IRS has been cracking down on taxpayers who do this and has collected billions of dollars in back taxes and penalties from tax cheats since 2009.
If you have a legitimate account abroad, you won’t get in trouble if you properly complete the reporting requirements. But by failing to disclose assets held in offshore accounts, you risk huge penalties — including a fine of $100,000 or 50% of the account balance, whichever amount is greater.
7. Fake charities
It’s common for scammers to create fake charities to fraudulently collect money — especially in the wake of disasters. Before giving money to a charity, verify that the organization is legitimate and that your donations will be tax deductible by using the IRS’s Exempt Organizations Select Check. And don’t give cash — use a check or credit card so you have proof of payment.
8. Inflating income and credits
Boosting income or expenses to get bigger credits than you deserve can get you in big trouble with the IRS. If you get caught, you’ll have to return any fraudulent refund and pay interest and penalties on any amount owed.
9. Frivolous arguments
Trying to get out of paying taxes? Here are some arguments that will never work: Filing a tax return is voluntary, only gold-based money is taxable or your state isn’t part of the United States. Anyone who tries to tell you differently can’t be trusted. These are considered frivolous arguments and will be rejected, and you could face a number of penalties.
10. Falsely claiming no income
Taxpayers who fall prey to schemes convincing them to falsely report their taxable income as zero could face a penalty of $5,000.
11. Evading taxes
Some shady investment advisers and tax preparers are creating and promoting complicated tax structures and shelters that clients can use to evade taxes — often involving multiple entities and offshore accounts. If someone has tried to convince you to evade taxes, report the incident using Form 14157.
12. Abuse of trusts
Common schemes recommend you transfer money into trusts to reduce your income and avoid paying taxes. While there are appropriate uses of trusts, the IRS has seen a growing number of people improperly use them. The rules governing trusts can be very complicated, so to avoid getting caught up in an illegal arrangement, the IRS recommends consulting with a tax professional.
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Money - A high 61% of Americans say they will save or invest their refunds, while 21% plan to pay off debt and another 18% will spend the money on necessities, according to a new TD Ameritrade survey of 1,000 investors. Only 19% of respondents said they expect to make non-essential purchases with their refunds. Article
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Yahoo Finance – More than one in four people across the globe paid a bribe in the last 12 months when interacting with key public institutions and services, with the police and the judiciary seen as the two most bribery prone, according to a new report released on Tuesday.
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FORTUNE – Results are in for the sixth year of the competition sometimes called the $1 million bet, and Warren Buffett — once a piteous straggler in this 10-year wager on stock market performance — has opened up a sizable lead over his opponent, New York asset manager Protégé Partners. Buffett’s horse in the bet is a low-cost S&P index fund, and Protégé’s is the averaged returns to investors (after all fees) of five hedge funds of funds that the firm carefully picked for the contest.
At the end of 2013, Vanguard’s Admiral shares — the S&P index fund that’s carrying Buffett’s colors — were up for the six years that began Jan. 1, 2008 by 43.8%. For the same period, Protégé’s five funds of funds, on the average, gained only by an estimated 12.5% (a figure minutely uncertain because some of the funds lack final figures for 2013).
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