The longer clients stay with Ritholtz Wealth Management, the less they will pay. The 2-year-old firm, run by Barry Ritholtz and Josh Brown, announced this week that they were implementing a policy of lowering fees for clients invested with them for at least three years. The reasoning, according to Brown: "We constantly preach the message that behavior is the most important determinant of investment success over the long term. The ability to stick with a sensible strategy will have a greater effect on future outcomes than the state of the economy, level of interest rates, valuation of the stock market or fund selection." He said he read a recent Wall Street Journal article about a hedge fund lowering fees and got the idea there. In addition, a Personal Capital report recently looked at the combined management and advisory fees charged by 11 firms, discovering they ranged from 1.06 percent (USAA) to close to 2 percent (Merrill Lynch).
What is the peak age for a person to make financial decisions? The answer is about 50 years old, according to a recent study published by Texas Tech University. According to the report, one's ability to make smart financial decisions begins to suffer after 60, with a gradual decline continuing once someone hits 80. Michael Finke, a professor at Texas Tech and lead author of the study, says that the lack of financial knowledge among the elderly can contribute to poor decision making. For example, he notes that the elderly rarely take advantage of credit card rewards and rebates. His recommendation is that if an elderly household can afford a financial advisor, that they should do so, and if not, put a trustworthy family member in charge of finances. The decline was seen for both men and women in the study.
A court snafu has revealed a potential behind-the-scenes battle over financial interests in the Indiana Pacers basketball team according to The Indianapolis Star. Pacers owner Herb Simon is asking a court to declare that neither the estate of his late brother, Mel, nor Mel’s widow, Bren, has any financial stake in the team. The paper learned about this brewing controversy because sections of court documents filed by Bren Simon last month that were meant to be redacted, in fact remained visible. The documents also reveal that litigation between Bren Simon and Mel’s children over his estate has been ongoing since 2009. The motivation behind the timing of Herb’s request is unclear, as are the subjects of the litigation between Bren and Mel’s children. A hearing has been scheduled for Oct. 16 to determine whether the inadequately redacted documents should be sealed.