FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors. Oil's Future Is Uncertain Following Crashing Prices (Advisor Perspectives) Since June, oil's price has dropped by 26%. The lower prices will help importing countries including Europe, Japan, China, and India, and will hurt oil exporters such as OPEC and Russia. The US is expected to possibly feel a neutral impact (oil-economy states will suffer, but the average consumer will be better off.) "Looking ahead, then, it is plausible that the current oil supply glut will lead to a shortage of oil, and higher prices, by the end of this decade, while actions that could have produced useful alternatives may not occur. The current oil price disruption has many possible causes, objectives, and effects, including challenges to the political stability of Russia and many OPEC nations, as well as the shape of the energy industry," writes Robert Vodra. Because there are many equally likely possibilities in the energy sector, Vodra recommends that financial advisors don't commit their clients to any one specific outcome. Baby Boomers Are Worried About Health Care Costs (Financial Planning) Many baby boomers are going to need financial advisors to help with the costs of health care in retirement. 64% need advisors to "play at least some role in discussions" about the health care, and 15% want advisors to "help create comprehensive health care financial plans" for retirement. "...it shows that clients are aware of the complexities of health care and are looking for advisors to be a resource," says Pat O'Connell, the executive vice president of Ameriprise Financial. Most of all, baby boomers are worried about affordability. A whopping 86% are worried about being able to afford health care during retirement. Anyone Who Wants To Retire Before 60 Should Check Out Roth IRAs (Wealth Management.com) Younger, financially-secure clients are thinking about retiring before 60. "But it's difficult for clients to tap at-work retirement accounts before during 59 1/2, and Social Security isn't available to most people under age 62. So most of these early retirees are going to need alternate funds to cover living expenses before traditional sources of retirement income kick in," writes Kevin McKinley. Roth IRAs are something to look at. Eligible clients will be able to defer taxes on investment earnings until they reach 59 1/2, "when distributions will ostensibly be tax-free." Plus there's no required minimum distribution at age 70 1/2, "an distributions aren't included when determining if Social Security benefits are taxable," writes McKinley. Additionally, younger retirees should look at Series I savings bonds, zero-coupon tax-free bonds, and tax-advantaged mutual funds. What's "Normal" Monetary Policy (BlackRock Blog) "'Normalization' refers to the two main components of the policy response to the 2008 financial crisis: quantitative easing (QE) and zero interest rate policy (ZIRP)," writes Jeffrey Rosenberg. Specifically, when the Fed talks about normalizing 'quantitative easing' it means that it will be returning its balance sheet to the pre-crisis size. Additionally, we will be seeing the end of the zero interest rate policy. Unfortunately, "history is not kind when it comes to the Fed's track record of exiting policy accommodation. ... Our biggest concern is around areas of the fixed income markets most exposed to where the exit from ZIRP will have the biggest impact: shorter maturity yields," adds Rosenberg. Greece's Problems Might Spill Over To Other Peripheral Markets (AllianceBernstein) Greece's early plans to exit its bailout program and the prospect of an early general election have gotten everyone nervous. Markets aren't reacting well, to say the least. Recently, there's been a huge sell-off in Greek sovereign bonds. "Against this backdrop, we are monitoring closely the potential for spillover to other peripheral markets. While in recent years there has been greater differentiation by investors between Greece and the rest of the periphery, the threat of an early election could reintroduce a degree of contagion," writes Darren Williams.Join the conversation about this story »
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