Fee Advisors Network News

SEC Fines UBS $8 Million for Bad Recordkeeping

UBS Securities has once again been penalized for its improper handeling of short sales. This fine from the SEC is for $8 million and a $12 million fine was imposed by FINRA less than two weeks ago.

FINRA Fines UBS $300,000

UBS Financial Services, Inc. was fined $300,000 by FINRA for failing to supervise and prevent excessive crosstrading of municipal securities between the customer accounts of one broker for a two-year period.

Wachovia Bank, NA, currently Wells Fargo & Co., has reached a tentative settlement of a class action suit with municipal issuers over antitrust charges of bid-rigging for municipal investment, derivatives and other contracts.

FINRA has fined Morgan Stanley Smith Barney $1 million and ordered another $371,000 in restitution and interest to customers for excessive markups and markdowns charged to customers on corporate and municipal bond transactions as well as other supervision violations.

The SEC has ordered Broker-dealer FTN Financial Securities to pay nearly $2 million for allowing a registered investment advisor, Sentinel Management, to defraud its clients through a reverse repurchase transaction.

Leaders of the Financial Services Institute expressed cautious optimism about their efforts to dilute or derail an initiative under way at the Department of Labor to broaden the scope of the term "fiduciary", a top policy priority for the advocacy organization.

The Chase unit recommended risky investments to unsophisticated investors with little or no risk tolerance, FINRA said.

“We wish to thank Joe for his presentation to our group of CPAs. He provided our group a very informative presentation from a fiduciary viewpoint concerning the risk management of life insurance. It became quite clear to us that he knows his subject area very well. We learned things about the structure and the mechanics of life insurance that will certainly assist us as we consult our clients. Many of the participants left the presentation with actionable ideas. Thanks again, and we look forward to other future opportunities to learn from his experience.”

“I have relied on Joe Maczuga as a resource for clients with estate and/or business succession planning issues that are more complex than usual. Joe's approach to life insurance planning is, if not unique, very rare. As a fee-only planner, helping clients save thousands of dollars in commissions on a life plan reinforces the value of the advice they pay me for. It would be hard to find anybody more knowledgeable than Joe Maczuga in the field who works this way."

There are numerous articles and discussions currently taking place with reference to retirement planning. This, of course, is due to the fact that our age wave is rolling into the late 50’s and early 60’s where retirement is becoming more of a reality than that of a distant future objective. The impact of this reality brings with it a major element of reconstructing a fee-venue practice, new product design, and planning methodology of properly liquidating assets (or an estate), as opposed to the experience we have all been accustomed to - creating the estate/net worth.

The following strategy can be very beneficial for an older client who: (1) has a need for stabilized or increased guaranteed cash flow, (2) has a desire to transfer wealth, (3) has charitable inclinations.

Capital Leverage

(1)
Client is in their 70’s and has been taking a 5% conservative annual income stream ($65,000) from their account that had been worth $1.3 million. This account has fluctuated downward and is now worth $1 million. This creates the dilemma of receiving a reduced cash flow of $50,000 or increasing the annual distributions to a 6.5% factor, which will also invade capital.