ICYMI: Fed Slashes; Americans Lacking; Raymond James Settles

In case you missed it:

Fed Slashes Interest Rates … Again

The Federal Reserve voted at its Wednesday policy meeting to cut interest rates for the second time this year. But stocks still dropped after the Fed didn’t provide investors with concrete clues about what the future holds.

The market expected the quarter-point cut to the federal funds rate, which influences many consumer and business loans. But three of the 10 voting officials dissented from the decision, and the Fed looks divided on what to do next. That ambiguity may have displeased Wall Street.

President Donald J. Trump was not happy with the decision, calling Federal Reserve Chairman Jerome Powell “a terrible communicator” on Twitter.  The president also added, “Jay Powell and the Federal Reserve Fail Again. No ‘guts,’ no sense, no vision! “

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Americans Leaving Legacy Decisions Up In The Air

Seventy-seven percent of Americans believe that estate and legacy strategies are important for everyone, not just wealthy individuals, yet only 24% of Americans are taking the most basic step of designating beneficiaries for all of their accounts, according to a recent survey by financial services firm Edward Jones.

“It’s encouraging to see that most people recognize how a properly planned estate or legacy strategy puts you in control of what happens to what matters most to you, such as minor children, dependents, financial assets, even your own health care decisions,” explained Edward Jones Client Services Group Principal Ken Cella. “What was startling is that even with this understanding, a majority of Americans still do not have a plan. Without a plan your assets could be subject to the time-consuming, expensive, and very public, probate process where relatives and creditors can gain access to records and even challenge your will.”

Additionally, the data showed a lacking sense of urgency in prioritizing legacy planning conversations. Of Americans who work with financial advisors, 64% reported never having discussed estate goals and legacy plans with their financial advisor. Furthermore, only 34% of millennials and Gen Xers have discussed their estate/legacy goals with their financial advisors, which increased only minimally for baby boomers (38%), the generation most likely to need estate plans in the near future.

Raymond James Settles SEC’s Excess Fee Case

Raymond James agreed to pay $15 million to settle Securities and Exchange Commission charges that three of its entities overcharged advisory fees on inactive retail accounts and charged excess commissions for brokerage investments in unit investment trusts.

“Raymond James Financial Services Advisors, Inc., failed to consistently perform promised ongoing reviews of advisory accounts that had no trading activity for at least one year,” the SEC said in a release. “According to the order, because they did not conduct the reviews properly, they failed to determine whether the client’s fee-based advisory account was suitable.  The order further finds that the entities also misapplied the wrong pricing data to certain UIT positions held by advisory clients, causing them to overpay fees.”

Dabney O’Riordan, co-chief of the SEC Enforcement Division’s Asset Management Unit said, “Investment advisers and broker-dealers have ongoing obligations to their clients and customers. Raymond James’ failures cost their advisory clients and brokerage customers millions that will be repaid as part of this settlement.”