If you focus too much on getting the top prospect, you’re going to overpay and underperform, says Raife Giovinazzo, the director of research at Fuller & Thaler, and Richard Thaler, principal at the firm and economics professor at the University of Chicago. The two take some important lessons for investors from Thaler’s paper on behavioral mistakes NFL teams make in the draft. The short version? The best companies don’t always make the best stocks for investors, yet many overconfident managers will pay full price for them. Savvy managers go against the grain, and pick up neglected names that will perform better over time.
Adding wealth management or family office services is a great way for accounting firms to diversify their sources of revenue. But many accounting firms are shortchanging themselves in their partnerships with wealth management professionals, writes Russ Alan Prince on Forbes.com. First, accountants tend to take a smaller piece of the pie, while their partners take a larger share of the revenue. Bad for the accountant, good for advisors. And second, accountants tend to walk away and not get too involved in the process of providing financial products. “The hand-off approach whereby an accounting firm directs a client to a financial professional, with whom there is a fee sharing arrangement, and then walks away is just a bad way to do business,” said Joe Tarasco, CEO of Accountants Advisory Group.
If you're not looking at who's sitting court side at the NBA Finals for new potential clients, now is the time to start. With Game 1 being played Thursday night, you have at least three more chances to identify who's shelling out at least $8,000 to get a prime seat at Oracle Arena in Oakland, Calif., to watch Stephen Curry and LeBron James go toe to toe, at least according to USA Today and Ticketmaster. Might not be best way to boost your high-net-worth clientele, unless, of course, you're sitting in one of those front-row seats yourself.
A new study is taking a look at the reasons why college students drop out, and what it means for their financial future. According to research from the Federal Reserve, about 38 percent of respondents who dropped out said they did so because of family troubles. This was a huge factor especially among women, as 43 percent left college due to family duties. About 27 percent of those surveyed did not complete a degree because they wanted to work, while 25 percent said college was too expensive. A survey from The Federal Reserve Board in May noted that this could have a negative impact on students in the future, as 16 percent of borrowers who did not complete their degree were behind on loan payments.