MONEY Love and Money

Is Financial Responsibility a Turn-On?

MONEY's millennials talk about the importance of financial fitness in romantic relationships.

We may not put it in our Tinder profile, but millennials do care about a potential mate’s financial fitness. We care about it so much, in fact, we rank financial know-how higher than sexual prowess as an important factor in a long-term relationship. Millennials grew up with the 2008 financial crisis, so we know money doesn’t grow on trees.

 

MONEY Small Business

Brooklyn Entrepreneur Happily Works 7 Days a Week

Artist Sigal de-Mayo explains how she launched her business and opened her first store.

Sigal de-Mayo is the creative force behind Insiders1, a Brooklyn-based small business that creates wearable and usable art out of photo collages she shoots, designs and prints. After 16 years selling at street fairs and holidays markets, Insiders1 has just opened its first brick-and-mortar location in the Williamsburg neighborhood of Brooklyn. Wares range from leather gloves, bags, and wallets to silk scarves, clocks and puzzles. Her advice to other entrepreneurs: Make sure you have the passion necessary to dedicate all your time and energy to your company.

MONEY financial advice

Nobel Prize-Winning Economist Shares His Best Financial Advice

Nobel Prize winner Robert Shiller talks about the upside of financial advisers and the downside of compound interest.

Nobel Prize winner Robert Shiller tells investors to get a financial planner. He advises people to speak frankly and honestly with an adviser about their financial situation. Financial advisers are not always right, but Shiller says there is a lot to be gained by speaking to an adviser or fiduciary. He also warns that compound interest may not compound as much as you hope it will.

MONEY financial advice

NatureBox CEO’s Biggest Money Mistake

Gautam Gupta, CEO of healthy snack company NatureBox, shares his advice for entrepreneurs—and his biggest money mistake.

MONEY financial advice

CEO of World’s Largest Mutual Fund Shares His Best Financial Advice

The CEO of the world's largest mutual fund company shares the best financial advice he ever got and reveals his biggest money mistake.

MONEY Financial Education

The Surprising New Company Benefit That’s Helping Americans Retire Richer

chalkboard with graph showing increase in money over time
Oleg Prikhodko—Getty Images

Financial education at the office is booming—and none too soon.

Like it or not, the job of educating Americans about how to manage their money is falling to the corporations they work for—and new research suggests that many of those employers are responding.

Some 83% of companies feel a sense of responsibility for employees’ financial wellness, according to a Bank of America Merrill Lynch Workplace Benefits Report, which found the vast majority of large companies are investing in financial education programs. Among other things, companies are using the annual fall benefits re-enrollment period to talk about things like 401(k) deferral rates and asset allocation, and enjoying impressive results.

Workers are responding to other programs too. Another Merrill report found that retirement advice group sessions in the workplace rose 14% last year and that just about all of those sessions resulted in a positive outcome: employees enrolling in a 401(k) plan, increasing contributions, or signing up for more advice. Calls to employer-sponsored retirement education centers rose 17.6% and requests for one-on-one sessions more than doubled.

So a broad effort to educate Americans about money management is under way, including in government and schools—and none too soon. This year, Millennials became the largest share of the workforce. This is a huge generation coming of age with almost no social safety net. These 80 million strong must start saving early if they are going to retire. Given this generation’s love of mobile technology, it’s notable that Merrill found a 46% increase in visits to its mobile financial education platform. That means employers are reaching young workers, who as a group have shown enormous interest in saving.

“There is not a single good reason—none—that should prevent any American from gaining the knowledge and skills needed to build a healthy financial future,” writes Richard Cordray, director of the Consumer Financial Protection Bureau, in a guest blog for the Council for Economic Education. His agency and dozens of nonprofits are pushing for financial education in grades K-12 but have had limited success. Just 17 states require a student to pass a personal finance course to graduate high school.

That’s why it’s critical that corporations take up the battle. Even college graduates entering the workplace generally lack basic personal money management skills. This often translates into lost time and productivity among workers trying to stay afloat in their personal financial affairs. So companies helping employees with financial advice is self serving, as well as beneficial to employees. Some argue it helps the economy as a whole, too, as it lessens the likelihood of another financial crisis linked to poor individual money decisions.

 

 

 

 

MONEY financial advisers

Breaking Up Is Hard to Do…With Your Financial Adviser

broken $ candy heart
Sarina Finkelstein (photo illustration)—Ashley Jouhar/Getty Images

Firing a financial adviser can be uncomfortable, but certain circumstances make it necessary.

Ending a relationship is never easy. You nurture it, get comfortable with it, and you learn what to expect. Sometimes you think about walking away because you’re just not sure it’s what you want. You wonder if breaking up is worth the hassle — and you decide to stick it out, telling yourself that next year will be better. But will it? Maybe not.

Should I stay or should I go? It’s a question people regularly ask, not just about their significant other but also about their hair stylist, their personal trainer, and, yes, their financial adviser.

The idea of leaving your financial adviser — and having to find a replacement — can be daunting. It involves a lot of research, paperwork, meetings, and time. Lots of time. All that and still no guarantee that this new adviser will be any better than the old one.

But things are changing. Consumers with money to save and invest now have more affordable, higher-quality investment options to choose from. As a result, more and more people are rethinking their long-term relationships with their financial advisers.

Four percent to six percent of U.S. investors change financial advisers in a given year, according to a 2014 survey by Spectrem Group, a firm that researches investors. The reasons for these break-ups vary, but ranking high on the list are a lack of communication, frustration with complex or hidden fees, and major life events such as death, divorce, or inheritance.

It was the death of a parent that started the ball rolling for one of my clients. A smart, savvy, and accomplished woman in her mid-30s, she juggles a demanding career, marriage and motherhood. When her father, a successful real estate developer, passed away unexpectedly, she and her sisters inherited money and securities. They also inherited his long-time financial adviser.

For years, her father had trusted this adviser to work in the family’s best financial interests, and she had no plans to end the relationship. The emotional loyalty factor made it hard to jump ship. Besides, she was only paying the typical 1% fee for decent portfolio growth.

Then she did a little digging and some comparison-shopping, just for her own education, and discovered she was wrong. In fact, her adviser had invested her in an actively managed fund with significant fees. He also had recommended a new fund for her — one with a front-end load that took 5% off the top. When all was said and done, she was paying 2.3% in annual fees, not the typical 1%.

Not only was she surprised, she was furious. She felt like a trust had been broken, which is understandable. As she told me, if the financial adviser had disclosed all of the funds and fees up front, she might have reacted differently. But he didn’t, and that made it much easier for her to leave and take her retirement account with her.

So if you’re re-evaluating your adviser’s performance, consider what’s important to you and your financial goals. Do you want better communication, a lower risk factor, lower fees? Or is it just time to shake off the inertia? Whatever your reasons, if the relationship isn’t working for you, don’t be afraid to kiss it goodbye.

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Sally Brandon is vice president of client services for Rebalance IRA, a retirement-focused investment advisory firm with almost $250 million of assets under management. In this role, she manages a wide range of retirement investing needs for over 350 clients. Sally earned her BA from UCLA and an MBA from USC.

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