Since 2003, the cost of trading stocks on retail brokerage platforms has continued to fall and reached a new low in 2017 of $7.56, according to a report from Corporate Insight. The decrease this year was driven primarily by the commission war between Charles Schwab, E*TRADE, Fidelity, TD Ameritrade and Wells Fargo Advisors—all of which responded to the fee cuts of competitors by cutting fees themselves, in a race to the bottom. The report also examines how online trading interfaces have changed, and what customers might expect in the future, such as more , and integration with other services, like Facebook Messenger.
Switzerland is facing the same retirement issues as the U.S. and there is a growing urgency to bring reforms to the system, according to a letter made public Nov. 21 by UBS Intellectual Capital. The country is one of only a few that have two mandatory pillars of contributions to retirement savings, both by employees and employers. The approach enables a person to retire in an urban setting (such as New York, London or Tokyo) with a pension income of 50 to 70 percent of their pre-retirement income, according to the letter. That’s well above what many in the U.S. will have when they retire. But like Social Security in the U.S., the Swiss contributions are pooled and then redistributed to current retirees. The threat? As in the U.S., it’s demographic. As more people age, the country’s smaller working population won’t be able to contribute enough to sustain the program.
Bitcoin: More clients are asking what it is, and the debate over whether it’s an investment or a currency is decidedly titled toward the former. As DoubleLine Capital’s Jeff Gundlach said at the recent Schwab IMPACT Conference, you can’t buy a car with bitcoin because the price will change in the 30 minutes it takes to sign the paperwork. But this blog post by Aswath Damodaran, Professor of Finance at the Stern School of Business at NYU, makes the opposite case. Damodaran argues it is indeed a currency, rather than an asset or commodity, and that it should be treated as such for valuation purposes. If so, advisors might approach bitcoin differently when considering whether it should be a part of a client’s portfolio and what role it should play.