FINRA pushes for authority over investment advisers | U.S. revamp of rules for securities professionals hits snags | Labor Department is expected to ramp up enforcement
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November 21, 2012
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IPA concludes strong 2012 Annual Fall Conference with renewed enthusiasm for direct investments
More than 375 members of the Investment Program Association, a national trade association supporting the direct investments industry, convened in Washington, D.C., from Nov. 14 to 16, amid renewed enthusiasm for direct investment vehicles. The industry represents an estimated $100 billion in assets under management and 1.5 million investors who seek to diversify their portfolios primarily through investing in hard assets. Learn more.
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FINRA pushes for authority over investment advisers
Taking up the cause again after this year's elections, the Financial Industry Regulatory Authority is lobbying to be granted oversight over investment advisers. Speaking at the IPA 2012 Annual Fall Conference, FINRA executive vice president of regulatory policy Thomas Selman made the case by noting FINRA's record of independence while attending to business needs. Selman also noted something must be done about the fact that nearly 40% of investment advisers have never been examined by regulators. "The only disagreement has been the manner in which this problem should be solved," Selman said. Read Selman's full comments. Reuters (11/21)
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Policy Update
U.S. revamp of rules for securities professionals hits snags
An undertaking to simplify licensing for securities professionals is about 80% complete, but the remaining 20% is producing hard-to-resolve hang-ups, according to Robert Colby, chief legal officer for the Financial Industry Regulatory Authority. The attempt to refine and combine the separate rules of FINRA's predecessor organizations, the National Association of Securities Dealers and the New York Stock Exchange's member and enforcement functions, has dragged on for five years. Reuters (11/16)
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Labor Department is expected to ramp up enforcement
President Barack Obama's re-election means Assistant Labor Secretary Phyllis Borzi will remain in charge of the Employee Benefits Security Administration, and she is expected to enforce new disclosure rules for plan sponsors and plan participants. Industry experts also expect the Labor Department to continue scrutiny of improper or undisclosed pay by plan consultants and investment advisers. InvestmentNews (free registration) (11/18)
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Call for merger of SEC and CFTC divides Republicans
Republicans on the House Committee on Financial Services suggested in a report on the collapse of MF Global that the Commodity Futures Trading Commission and the Securities and Exchange Commission be merged. The suggestion has put the lawmakers at odds with Republicans on Congress' agriculture committees, which have jurisdiction over the CFTC. The Hill/On the Money blog (11/15), Politico (11/15)
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Industry News
Thompson cuts interest payments on note program
A lower-than-expected payout is in store for investors in a Thompson National Properties note program after a majority of holders voted to accept modified terms. Investors will see "significantly" lower interest payments than the promised 12%, although maturity is being extended to 2016, according to an SEC filing. The changes allow Thompson, which sponsors the nontraded REIT TNP Strategic Retail Trust, to avoid a default on the program. InvestmentNews (free registration) (11/18)
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Income Planning
Advisers warn against tax-driven decisions
Attention given to the U.S. "fiscal cliff" might tempt wealthy investors to make rash decisions that could end up costing more than the tax increases they fear, financial advisers warn. Appreciated stock that is performing well could continue to produce returns greater than tax savings from a hasty sale to avoid higher capital gains tax, advisers say. The New York Times (tiered subscription model) (11/16)
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Investing little-by-little vs. all at once
Calculations by Vanguard indicate that investors typically net larger returns if they invest a lump sum all at once instead of in smaller, regular installments, the way 401(k) plans tend to operate. Still, investing a little each month has benefits, Dan Kadlec writes, and for many, it's the only way they can afford to do so. (11/15)
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Retiring in 2013 might be a bad move, experts say
The expected "fiscal cliff" makes 2013 a difficult time to retire, in part, because of uncertainties about tax rates, experts say. It might be wise to postpone retirement until the tax picture is clearer. "It's kind of a perfect storm in 2013," said Jason Wheeler, CEO of Pathfinder Wealth Consulting. "With questions about taxes, spending cuts, the markets, health care ... the year could be a rough one when it comes to retirement." CNBC (11/16)
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Retirement planning gets short shrift from investors, survey finds
Investors are underestimating how much money they will need in retirement and are not devoting enough time to retirement planning, according to a BlackRock Investor Watch survey. One-third of respondents believe they will spend less than 15 years in retirement, even though chances are high of living longer than that. Retirement planning ranks third on a list of activities on which investors spend their free time. Financial Advisor online (11/15)
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If the only prayer you said in your whole life was 'thank you,' that would suffice."
-- Meister Eckhart,
German theologian and philosopher
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About IPA
The Investment Program Association (IPA) was formed in 1985 to provide effective national leadership for the direct investment industry. The IPA supports individual investor access to a variety of asset classes not correlated to the traded markets and historically available only to institutional investors. These investments include public non-listed REITs (NLREITs) and Business Development Companies (BDCs), Energy and Equipment Leasing Programs, and private equity offerings. For the last 28 years, the IPA has successfully championed the growth of such products, which have increased in popularity with financial professionals and investors alike. Direct investments are held in the accounts of more than 2 million individual investors, and the IPA's member companies operate or have properties in all 50 states. The mission of the IPA is advocating direct investments through education. Access the wealth of IPA educational materials here, or visit the IPA online for more information about becoming a member.
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