We often consider Roth IRA conversions a financial planning slam dunk. You pay tax on the converted balance now in exchange for tax-free withdrawals in the future. But sometimes they aren't a wise choice, guest columnist Jonathan I. Shenkman writes. A veteran financial planner, Shenkman offers six important questions that advisors should explore before they counsel affluent clients to sign off on a conversion.
Among other most-read wealth management articles this week:
Sketch your future . A picture may be worth a thousand words -- and maybe a thousand numbers. Advisors spend years learning about tax rules, income strategies, and Monte Carlo simulations to deliver expertly crafted advice to clients. Yet asking clients to imagine what their retirement might look like by providing them with financial projections isn't always effective, guest columnists Jamie Hopkins and Bonnie Treichel write. The co-authors of the book Your Retirement Sketchbook , Hopkins and Treichel explain how advisors can increase the effectiveness of the financial planning process by sitting down with clients and drawing together.
"Historic" fine . UBS got hit with $125 million in combined penalties from U.S. regulators related to anti-money-laundering regulations. The Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) said its fine against the Swiss bank is the largest it has ever imposed against a broker-dealer for violations of the Bank Secrecy Act and is an "historic action." As part of its resolution with FinCEN, UBS admitted that it willfully violated the Bank Secrecy Act.
Fidelity's assets swell . Fidelity Investments said this week that its assets under administration rose by 22% year over year to $19.9 trillion at the end of the second quarter. The financial services giant attributed the increase to stock market appreciation and a surge in investor activity. Managed assets jumped 23% year over year to $7.8 trillion, and daily average trades soared 31% to 5.7 million.
Wells Fargo alums score another recruiting win . Three years ago, several former Wells Fargo executives launched &Partners, and the relatively new firm has since recruited many financial advisors from the bank. The latest Wells Fargo team to join &Partners calls itself 32 North Wealth and is based in Meridian, Miss. It managed $1.8 billion of client assets at the bank.
Retail investors are feeling bullish . Some observers have expressed concern about the stock market's current valuations, but plenty of retail investors are feeling optimistic, according to a recent Charles Schwab poll. Schwab says 47% of retail clients are bullish on the U.S. stock market, a meaningful increase from 28% in the firm's second-quarter report.
Write to advisor.editors@barrons.com