Digital Wealth Management

Online investing is heating up.

Wealthfront just grabbed another $70 million in financing. Personal Capital raised another $50 million. Charles Schwab announced its own robo-advisory service.

Will the Boomers' children be the generation that abandons face-to-face investment services?

“The Father of Estate Planning"

Give a birthday shout-out to Charles Ives, the American composer born 140 years ago, October 20, 1874. Life insurance was Ives' day job, and when the federal estate tax came along, he realized there was a better way to sell insurance than to ask, "How much do you love your wife?"

The photo below shows Ives in 1913, the year the federal income tax was introduced. The federal estate tax followed in 1916, and two years later his most noted nonmusical work appeared: "Life Insurance with Relation to Inheritance Tax."

Paying Death Tax With Art

A beach scene by Winston Churchill

Winston Churchill's daughter Mary Soames died last June at age 91. To help pay her death duty, the estate has offered 38 paintings by her father.

Should our estate tax include a similar AIL (Acceptance in Lieu) scheme?

Mobile Video, Live-Banker Mortgages, Gunless Hunting

Fifty years is only yesterday or ancient history, depending on which ads from 1964 you look at.

Video on the run. In the 1950's Texas Instruments and an Indiana company developed a popular novelty: a little transistor radio. Sony took the idea and ran with it. Now Sony was taking the next step, a portable TV. (You thought mobile viewers didn't start falling off curbs until iPhones came along?)

Live-Banker Mortgages. Five decades ago, private banking aspired to meet the requirements of elite borrowers who didn't always fit the standard mold. Their needs would be evaluated and perhaps met by actual bankers wearing suits. Those days must seem long, long ago to Ben Bernanke, who couldn't talk a computer into refinancing his mortgage.

Gunless hunting. Men with guns were a staple of Chase Manhattan's nest egg ads. But times were changing. Wildlife needed conserving, some said. Chase responded by offering this new age hunter.

Slicing Up Art to Save Estate or Gift Tax

If a painting is worth, say, $4 million, what is a one-quarter interest in the painting worth?

$1 million? Not necessarily, at least not for transfer tax purposes. The Elkins case could prove a game changer, reports Paul Sullivan.

Taking advantage of deep valuation discounts for fractional interests isn't always easy. If you give each of your three children a quarter interest in your Van Gogh, each will be expected to take possession of the painting for one quarter of the year. An alternative method – spotlighted by Christies – might be to gift the art and rent back.

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Big wins by taxpayers in estate or gift tax cases have a potential down side. Pressure mounts to "close the loopholes." Senator Sander's bill calling for a 65% estate tax also takes aim at minority discounts.

"Treat customers like humans, not as transactions. "

Seems obvious, but it's being cast as the key take-away from the Comcast debacle last summer.  Does the need to become accessible to customers across all communication platforms apply to wealth managers?

I was interested to learn that no one likes 1-800 numbers any more, due to their association with telephone trees and long wait times.

Estate Surtax Spreads to Non-Billionaire Estates

That proposed 65% tax plus surtax on billionaire estates seems to have trickled down. The bill Senator Sanders has introduced in the Senate calls for the 10% surtax to apply to estates over $500 million.

Half a billion here, a quarter billion there , , ,

Art As Toxic Investment

Damien Hirst, “Moxisylyte” (2011)

Hundreds of dot paintings from Damien Hirst's workshop are are now on sale at galleries worldwide. (You may remember Hirst's shark.)

Peter Schjeldahl, The New Yorker's art critic, offers potential investors a cautionary comparison:

Just as no law forbids the sale of bundled credit-default swaps on bundled subprime mortgages, no agreed-on aesthetic principle invalidates paintings that are churned out by proxy and then bid up at auction as fungible commodities.

Before their clients plunge into Damien's dots, wealth managers may want to suggest a nice conservative hedge fund.