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Getting good advice (finally) for your 401k — with Chris Costello
Why is it so hard to know what to do with your 401k? Why is it hard to understand what you’re invested in and get advice on how to improve it?
Chris Costello, co founder of Blooom, joins Zack Miller on the Tradestreaming Podcast to discuss retirement planning and investing and how his firm is addressing the problem with an easy-to-use, affordable investing tool.
Listen to the FULL episode
About Chris
A co-founder at Blooom, Chris has been working with clients and building portfolio allocations for almost two decades. He also co-founded and runs another investment advisory firm managing over $500 million for clients.
Resources mentioned in this podcast
- Blooom (Chris’s company)
- Blooom’s blog
Even more resources
Review: Get professional advice for your 401k from Kivalia
In a world without guaranteed pensions, responsibility for retirement planning falls on investors’ (not-wide-enough) shoulders.
Thankfully, the 401(k) account is a great way to save for retirement by delaying taxes and encouraging company matching programs (yep, that’s free money).
But, while investors have seen the options of what they can invest in improve over the past decade, it’s still somewhat hard to get professional advice for 401(k)s because your typical financial advisor doesn’t get paid for doing so (he can’t custody the assets and therefore, isn’t interested in helping).
So, where do you turn when you want more guidance on your assets in your 401(k)?
That’s where Kivalia comes in.
Continue reading “Review: Get professional advice for your 401k from Kivalia”
What happens to the value of online assets after death?
The Economist looks into what happens to our online assets after a user dies.
Photos and music files sit in a sort of nebulous limbo for the living and studies show the value of our digital property is rising quickly.
New business models and services are stepping to in make it easier to transfer this property.
Can we imagine a day when our iTunes collection can reside in our IRAs?
Source: Online Assets (The Economist)
Will the future of wealth management really be “virtual”?
I’ve been chatting with a few friends over the past couple of days about which model will prevail for wealth management in years to come.
2 sides to the argument
Essentially, there are 2 sides to the argument:
- virtualists: The virutalists are banking on a future where investment advisors will prospect, deliver advice, and service clients over virtual channels (Internet, phone, chat, video conference). This is a boundary-less marketing environment and doesn’t put a premium on marketing to a local clientele. That’s a world where there’s no tennis, no kids’ bar mitzvas, and certainly, no shoulder-crying on your advisor when markets go bad.
- ol’ skoolers: This camp doesn’t envision a world where the delivery of financial services changes very much from what it’s been traditionally. Advisors have adopted email and websites and yes, are beginning to use social networks but ultimately, it’s a face-to-face business. You may buy diapers online but you’ll never really buy financial services online.
It might be easy to dismiss the ol’ skoolers as just that — financial dinosaurs who just can’t face the digital future of the business. We’ve got plenty of analysis like this from kasina pointing to the future and it appears to be digital: Continue reading “Will the future of wealth management really be “virtual”?”
Making investing simpler – with Jon Stein
A lot of people don’t invest because it’s seemingly too complicated.
So many decisions to make, so much jargon, who to trust?
Jon Stein is the founder and CEO of Betterment which he describes as a mix between Apple and Vanguard. It’s extremely easy to design a fine portfolio.
By removing much of the noise that distracts investors, Betterment has developed a 95% solution for 95% of investors. Plus, the firm is rolling out some functionality for investors who want a little more flexibility.
Jon’s growing an online asset manager from the ground up. He shared with me that Betterment has almost 10,000 customers already with mid-$20M under management (AUM), with many of them using the goals and planning tools the site has developed.
Jon joins us for this week’s episode of Tradestreaming Radio.
Continue reading “Making investing simpler – with Jon Stein”
Should the government get into the insurance biz?
Well, Professor Terrance Odean, Professor of Finance at UC Berkley, thinks so.
From an Op-Ed in the NYT:
Anyone planning for retirement must answer an impossible question: How long will I live? If you overestimate your longevity, you might scrimp unnecessarily. If you underestimate, you might outlive your savings.
This is hardly a new problem — and yet not a single financial product offers a satisfactory solution to this risk.
We believe that a new product — a federally issued, inflation-adjusted annuity — would make it possible for people to deal with this problem, with the bonus of contributing to the public coffers. By doing good for individuals, the federal government could actually do well for itself.
Prof. Odean thinks the government could actually play the role of Ultimate Backstop. Annuity buyers pay a premium to an insurance company in return for a “guaranteed” payment stream. Of course, nothing is guaranteed and investors are subject to default by underwriting insurers.
The U.S. government doesn’t face the same default risk (though theoretically does face some risk). Here’s how it would work:
- investors would enroll in a qualified retirement plan (like a 401k) and choose an annuity option
- investors would receive payouts based on a variety of factors like mortality tables and interest rates
Proponents of this product (hey, roll-em up and issue an ETF that tracks them) believe that the Treasury would even benefit from such a plan as it decreases reliance on foreign lenders and expands the domestic investor base. While I don’t particularly like government meddling, it’s an interesting idea.
Prof Odean is a Tradestreaming favorite and his works have been incorporated into much of my book. He’s done great, insightful work on investor overconfidence-caused underperformance, overtrading (which is also caused in part by overconfidence), expenses and mutual fund flows.
Source
Paying for Old Age (New York Times) Feb 25, 2011