As if you didn’t have enough “competition” for serving wealthy dients, now comes another new entrant to the field: the wealthy themselves.
According to a January 17, 2007, article in the Wall Street Journal some wealthy individuals and families are going back to school to learn how to manage their own wealth, signing up for courses offered by universities and business schools, financial services companies, and independent firms. The article quotes a woman–who took a wealth management course at the Wharton School at the University of Pennsylvania, along with her two adult children, one of whom oversees the family’s investment portfolio–as knowing how to manage her late husband’s real estate business, but not having the background to manage liquid assets. Solution: go back to school and learn how to do it herself.
Programs that teach the wealthy how to manage their fortunes are also at New York University, the University of Chicago Graduate School of Business, and the University of Miami. The curriculum varies, but includes topics such as helping heirs prepare for an inheritance, hedge funds, asset protection planning, investment strategies and, of note to planners, how to choose a financial advisor. Also of note: some of these programs are open to advisors, too.
Archive for April, 2007
Learning How to Stay Wealthy: The Wealthy Go Back to School
Wednesday, April 18th, 2007Are Life Settlements a Security?
Wednesday, April 18th, 2007Given the extraordinary growth of the U.S. life settlement industry over the last decade, it is not surprising to find increased attention to and scrutiny of life settlements by academicians, the media and legal enforcement authorities including, among others, state and federal securities regulatory and self-regulatory organizations. The securities laws regulators argue that investments in all forms of life settlement transactions involve the sale of securities and that the full spectrum of security laws applies; for the most part they may be right.
Life Expectancy Calculator
Sunday, April 15th, 2007The Living to 100 Life Expectancy Calculator uses the most current and carefully researched medical and scientific data in order to estimate how old you will live to be. Most people score in their late eighties… how about you?
The calculator asks you 40 quick questions related to your health and family history, and takes about 10 minutes to complete.
In addition you will receive:
- Personalized feedback for each of your answers
- A Personalized “To-Do” list for you and your physician
- A list of things you can do differently and how many years you will add if you do so
- The option to sign up to take the calculator again so you can keep track of your answers and see if your calculated life expectancy gets better or worse.
Other Kinds of Life Insurance
Monday, April 2nd, 2007In general, there are two basic (and quite different) categories of life insurance: temporary and permanent.
Temporary life insurance, also known as term life, is a no-frills way of insuring yourself for a specific period of time—for example, one, five, or ten years. When the temporary life insurance can be automatically renewed every year at increasing rates, it is called annual renewable term (ART) insurance; when the premiums are constant for a longer term, it is referred to as level premium term insurance. In the latter case, as I explained earlier, your monthly premiums are guaranteed for the term of the insurance, and the insurance coverage ends at the end of the term.
How Much Life Insurance Do You Need?
Monday, April 2nd, 2007There are two approaches to determining how much life insurance a person requires. The first approach—the income approach—looks at how much money you can expect to earn over the course of your working life; this is your human capital, which can be viewed as an asset that you possess as a result of your natural and acquired skills and abilities. Then, you subtract taxes (since the death benefit is not taxable), subtract the expenses you would have incurred had you been alive, and set that as the amount of insurance you require.
The Impact of Health Status
Monday, April 2nd, 2007The insurance prices you pay actually depend on something we have not stressed before: your health status. For example, a 50-year-old male who is in exceptional health would pay only $23.85 per month for a 20-year policy whose death benefit is $100,000. In contrast, a 50-year-old male in only average health would have to pay $38.69 for the same contractual terms. As you can see, the 62% markup is quite a substantial incentive to prove you are in exceptional health (if you are) when purchasing life insurance. (more…)
Market Prices of Life Insurance
Monday, April 2nd, 2007Life insurance is the mirror image of pension annuities and is the subject and focus of this chapter. The word “life” insurance is a misnomer, since this type of insurance pays off only upon death. But then “death insurance” is a much tougher sell even for marketing specialists.