A Winter Sport For Mitt Romney?

If the former Governor of Massachusetts were not otherwise occupied this winter, he might enjoy ice fishing near his house on New Hampshire's Lake Winnipesaukee.                                                                                                                        

Fifty years ago, the trust pros at Chase Manhattan thought ice fishing upscale enough to feature in this nest egg ad. The setting is not Winnipesaukee but Connecticut's Lake Waramaug.

Let's Remember Pearl Harbor

Seriously. You'll feel better about the year ahead if you do.

On December 7 we commemorated the 70th anniversary of the attack that propelled the U. S. into World War II. Sadly, this year's gathering of veterans who survived the onslaught will be the last; their number is dwindling.

Seventy years ago, America was struggling out of the Depression. One out of five homes (and the great majority of farms) lacked electricity. The war brought shortages and gas rationing.

In the Pacific the Japanese wreaked havoc. (I later knew a couple of kids whose families had spent the war interned in the Philippines.)

In Europe, Germany had occupied most of western Europe and invaded the Soviet Union.

Today? Even poor American families have electricity. Most have air conditioning. Germany is helping keep the rest of Europe afloat financially. Japan sends us Sony flat-panel HDTVs.

This post is written by a blogger old enough to remember hearing FDR's "Date which will live in infamy" speech live. Believe me, by WWII standards, the problems and worries facing us in 2012 seem almost trivial. Many troubles are of our own making. Sobering up from a massive financial binge is no fun, but we're making slow progress.

Who knows? Even the Presidential election campaign could turn out to be entertaining. Not likely, though.

For fiduciaries both corporate and individual, 2012 will bring new investment uncertainties and who knows what tax puzzlements. Nevertheless, Happy New Year!

Gaining Business Through Social Networking

A Portsmouth, New Hampshire broker finds networking profitable: Tweets Are Good Business.

Why Congress Won't Tax Other Millionaires?

Adjusted for inflation, the net worth of members of Congress has more than doubled since 1984. The top 25 Congressional wealthholders are an interesting mix of New Money, Spousal Money and Old, Trusteed Money.

When Wealthholders Only Rang Once

Here's a list of CEO's headquartered here in New York and their phone numbers. Go see them. Ask how this airline's printed flight schedule could be improved.

That was my marketing assignment, circa 1957. My phone calls requesting appointments always got through, answered by the CEO's secretary or, once or twice, by the great man himself. Phone calls were serious business in those days.

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Phone calls were still serious business a few years later, when I began to learn how major trust companies worked. "One reason we assign each client to a team," I heard time and again, "is so that client phone calls will be answered, always." 

If the client's trust officer was not at his desk, I was told, the client was put through to the investment officer, or to one of the team's administrative assistants. Every call was answered by someone  – someone who knew the client and was familiar with the client's account. That, at least, was the goal.

Today? The number one complaint investors have about their brokers is that their calls are not returned, much less answered satisfactorily. 

I know, nobody considers phone calls serious business any more. (Now texting, that's important!) Nobody but the caller. Then and now, even unimportant clients want to feel like important clients. When you return a call promptly or take the time to send a newsletter article on a topic of interest to a client, you're practicing timeless good marketing.

H/T to The Trust and Estates Prof for calling attention to this survey. 

P. S. Speaking of those survey findings, why does anyone go to his or her broker for an estate plan? 

Huguette Clark Owed Millions in Gift Tax

For an eccentric recluse, Huguette Clark seemed to have had her affairs in good order, thanks to her lawyer and accountant. Now the accountant has resigned as an executor of her $400 million estate, amid charges that Huguette – and now her estate – owe the IRS some $90 million in gift taxes and penalties.

Obvious question: Who received those humongous gifts?

The new 2% recapture tax

One thing you think you know about Social Security, it's a flat tax that applies the same to all earners, up to the wage base. 

Not anymore.

A new recapture tax was attached to the extension of the 2% payroll tax holiday for two months.  Those over the wage base will lose that 2% tax break through a recapture tax.  At double the wage base, the 2% benefit will be gone.  In other words, we just added another bubble to the income tax, well below the $250,000 that "millionaires" earn.

HT: TaxProf Blog.

A One-Percenter Christmas

A Gilded Age one percenter, that is. Teri Tynes' tribute to Christmas in the New York City of the 1880's links to this report on the shocking commercialization of the Holiday. (How commercialized? Pre-stuffed Christmas stockings!)

The Vanderbilts, Astors and other one-percenters of the Gilded Age needed wealth management. Trust companies rose to meet the need. The United States Trust Company of New York, founded in 1853, "led all New York institutions in deposits" by 1886. 

When you visit Tynes' Walking Off the Big Apple, enjoy her Nighttime Stroll to See the Holiday Lights of Greenwich Village. You would need to be a current one-percenter to own one of those houses on W. 10th Street.

Seasons Greetings!

Photo: Walking Off the Big Apple

“I've left the country. You're Disinherited!”

English expats may find it more difficult to disinherit their relatives, The Telegraph reports. 

Wonder what rules apply to Americans domiciled outside this country.

Financial Reform: The "F" Word

Elaine Morgillo regularly contributes a personal finance column to our Sunday paper. Today she suggests that financial reform should extend beyond banks too big to fail and gamblers using financially-engineered products.

For years, the regulation of financial advice and financial advisers has been widely criticized, both from within and outside the industry. Numerous studies have concluded individual investors are confused about the differences between financial advisers. Many financial advisers, myself included, continue to be frustrated by the inconsistencies, gaps and contradictions in our regulatory environment. 

It continues to astound me that so little regulation currently exists to impose a set of standard qualifications or rules for everyone who provides financial or investment advice to consumers. Certain types of advisers are held to the highest fiduciary standards (the "f" word that many in my industry attempt to avoid) when providing advice to clients. The heart of the fiduciary concept is to always place the interests of the client above all others. This precept should be embraced by and required of all of us, but it isn't.

Efforts to impose a fiduciary standard on investing's sell side have experienced rough going. Could better labeling ("I'm a sales agent, she's an adviser") work better? Maybe not. What would you call those who offer advice for a fee but also act as investment brokers – and maybe sell insurance on the side?

Related posts
Is There a Fiduciary in the House?

Sell Like a Fiduciary, Quack Like a Pony?

Distributing Her Husband's Estate

A Christmas story.

The Pain Trade Is All About Down-Capture

Rich and ever-changing is the language of investing. Terms new to me include

The Pain Trade. That's how hedge fund managers refer to their work this year, Financial Times reports. Through November the average hedge fund is down more than 4 percent for the year.

Up-capture. Making money.

Down-capture. Losing money.

Too much down-capture means investors are falling out of love with hedge funds, according to Reuters.

That love affair may always have been more about sizzle than steak. By one reckoning, Dealbook notes, hedge funds averaged an annual return of 6 percent from 1980 to 2008. That's a mere 40 basis points more than Treasury bonds returned. Over the same period, stocks as measured by the S&P 500 did much better, averaging well over 9 percent per annum.

Don't count hedge funds out just yet. Some do achieve awesome returns, and picking winners may be easier than we realized. See A Bunch of Academics Think They've Figured Out How To Tell If A Hedge Fund Will Outperform The Market.

Taxes and economic growth

From Forbes: Obama is an Awful Economic Historian.

However, I'm less certain that additional tax rate cuts are needed today.  It would be better to get a semi-permanent tax code, instead of one riddled with expiration dates.

A good film for trust officers?

Scott Martin of The Trust Advisor has a rave review for George Clooney and the new film, "The Descendants."  However, I suspect that the film does not make a case for a corporate fiduciary.

About That Favicon

If Jim Gust's post resulted in identification of this blog's new favicon, It escaped me. So I'll explain.

In its early days, The Merrill Anderson Company was a little ad agency trying to look mature in the eyes of stodgy bankers. The company letterhead featured a discreet Merrill Anderson monogram, printed in brown ink on buff paper. The first rough sketch must have looked something like this:

By the 1960s, the company needed a mod look. The resulting abstraction of the monogram – twin peaks plus one – may not have been the art department's finest design solution, but it did inspire a welcome switch from buff to white stationery.

The new asset hoarders

Senator Grassley joins me in a key concern.

Coming, the Eternity App?

"Siri, according to Ben Kunz at Bloomberg Businessweek, this could be the beginning of an eternal friendship. "

Guess Virtual Me really will need a perpetual dynasty trust.

Apple Stores: The New Disneyland

Apple's fifth New York City store opens in Grand Central Station today. The WSJ offers a telling statistic:

More people now visit Apple's stores in a single quarter than the 60 million who visited Walt Disney Co.'s four biggest theme parks last year….

Marketing moral: The Secret of Sales is Service.

Our favicon

I have added a favicon to the blog, which is that tiny graphical element that appears to the left of the blog's name if you have it on a bookmark list, or on your toolbar.  It's rather small, so if you've had trouble making it out, here it is:

Can anyone explain why this favicon is appropriate for this blog?  Or, why I might think so, even if you disagree? You probably need to be an old-timer to get it.

Wealth Management: Suffering in Translation

A comment on a recent post linked to this money-management blurb. Fun reading.

According to its web site, Sphinx Asia actually is based in Panama.

Christmas Price Index

Once upon a time, a playful bank economist (oxymoron?) measured inflation by calculating changes in the cost of the gifts given in The Twelve Days of Christmas. Decades later, his whimsey has become quite a production.