...The Changing Role of the Relationship Manager The relationship between wealth managers and their clients is not what it used to be. Public opinion of the financial sector, as a whole, has become sharply critical—people are outraged by the inability of the industry. Clients have become far less trusting and increasingly likely to jump to another wealth manager. But the relationship between RMs and their clients has actually changed well before the onset of crisis. Rise of the Product-Push Model before a Crisis At many wealth-management institutions, particularly the larger ones, the continuity of client relationships has— over time—been disrupted by organizational changes and the shuffling of client portfolios among RMs. In some cases, the goal was to bind the client more to the institution than to an individual advisor. In other cases, however, the institution itself simply could not maintain a consistent service model. At the same time, investors became more interested in diversifying their wealth across institutions. And as information about financial products became more accessible, some investors became self-directed. They tended to be less interested in holistic planning and more interested in specific types of support or investment recommendations. The role of the RM has also changed. Since the beginning of the decade, the RM has become less of a confidant and more of a salesperson. This shift was most apparent in the brokerage model, where RMs began providing targeted...
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...companies and households. There are two main ideas of the article which I will summarize in this paragraph. Stock price declines, especially those induced by profit warnings, increase shareholder pressure on managers to cut costs by laying off workers and scaling back investment. Second, a large stock price decline reduces the value of unexercised stock options, which falls as the gap narrows between a company’s stock price and the price at which workers can buy stock under an option. Third, the factors dragging down stock prices, such as a weaker or more uncertain profit outlook, may spur investors to demand higher risk premiums, which boosts the cost of financing business investment. A fourth way lower stock prices affect firms is that they will have less incentives to invest in new capital if there is a fall in the ratio (q) of the cost of buying existing capital to that of buying new capital. Lower stock prices are correlated with greater uncertainty and lower confidence, particularly because layoffs typically increase during such periods. Second, stock price changes affect consumer spending through a wealth channel. Some criticisms about these channels are that the stock market is merely to raise expectations about the future, another criticism is that the wealth is too concentrated in...
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...Bubble," Mariana Zanetti, an MBA graduate of IE Business School in Spain, argues that getting an MBA is a waste of time and money. The following has been excerpted from the book with her permission. The first thing I am going to say about wealth is that many authors who write about prosperity and wealth make it clear: A job will not make you rich. If you want to be wealthy, at some moment of your life, you will have to create a source of income other than your salary. This is an evident and crushing reality: If you sell your time to others, you will quickly reach a limit in your capacity to generate income. In his book "Rich Dad, Poor Dad," Robert Kiyosaki said that the rich do not work for money; they generate assets that work for them. If you want to learn how to work for money, go to school. If you want to learn how to work even harder, you should get an MBA. OK, some top managers earn millions (and they are therefore millionaires). Some people still think they can get to those positions with an MBA — as if the Businessweek study, which found an MBA does not have a causal relationship with professional success, was not convincing enough. Do you want some more proof that an MBA will not get you there? If you look at the degrees of CEOs of the CAC 40 (the main stock exchange index in France), you will see that the MBA is nothing but an "optional" degree. In some companies, it is still desirable to climb the corporate ladder. These companies represent a very low percentage...
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...Paragraph 1 Thank you for considering me for the position of Sales Manager at Einstein Furniture and Design in Dallas. Interior design has always fascinated me and after working at a small furniture store in my hometown, I fell in love with how creative one can be in this field. Cindy Wilbanks, my ninety-year-old manager at the time, was a true inspiration. Her knowledge and experience in interior design paved the way for my continued interest in designing spaces and creating one of a kind experiences for customers. Ms. Wilbanks’ fifty years of experience and her unique wealth of knowledge encouraged me on a daily basis. She worked her way up over the years and never gave up on her dream of owning her own store. She indeed opened and ran a successful store of her own and landed herself at the top of the industry. She eventually sold her legacy store, becoming one of the wealthiest women in Texas. Thankfully, she decided to train individuals like myself and worked in the industry with an undeniable passion all of her life. I’m excited that I now have that same passion for my career and I look forward to visiting with you to discuss what I can bring to your team. Paragraph 2 Like I told you before, there is a position open here at Schmaltz Bookkeeping Service. The position is as assistant to my boss, Glendora Brock. I know you feel like you don’t have the experience to be an assistant in the bookkeeping world, but I honestly feel like you would be perfect. I would...
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...professional managers (the agents). Modern corporations allow firm managers to have no participation (or only limited ownership participation) in the profitability of the firm. Because the manager-agents usually have less to lose, they often seek acceptable levels of profits and shareholder wealth rather than maximizing profits unlike the owner-principals. Owner-principals tend to pursue their own self-interests. For example, agents may have less interest in maximizing profits in order to focus on their own interests like long-term job security. This is known principal-agent conflict. To mitigate agency problems, the compensation committee of the board should concentrate on more long-term incentives in order to avoid financially crippling a corporation by distributing large sums of cash at a single time. It also allows for more capital to be available to the company to make more profits. In general, managers will be more motivated when receiving extra income in the form of higher salaries, cash compensation and bonuses. I’m not sure of anyone that doesn’t like this type of reward. Also, this type of compensation is usually immediate. So, a manager can see an instant result. On the other hand, long-term incentives can be a little less motivating because of the time constraint, but can prove to be just as lucrative. If an executive’s pay is tied to their performance, they will be more motivated to do well rather than slack off. The point is for the managers to have the...
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...MERGERS AND ACQUISITIONS LITERATURE REVIEW LUKE WALTON Table of Contents Abstract 3 Introduction 3 Background and motivation 3 Objective or aim of this literature review 4 Findings from current available literature 4 Issues from current research 5 Contribution to current literature and stakeholders 5 Section One 6 Motivation of M&A’s 6 Synergy 6 Agency theory 7 Hubris 7 Relationship between motives and financing 8 Section Two 9 Payment methods 9 Financing hierarchy vs. market conditions 9 Differing views on leverage 10 Valuation and the agency problem 10 Managerial ownership 11 Section Three 12 Performance of mergers and acquisitions 12 Performance indicators 12 Methodology 13 Profitability 13 Performance due to the motivation 14 Conclusion 15 Summary and findings 15 Areas of future research 17 Qualitative research in M&A’s 17 Decision making process for methods of payment 17 Unified methodology in determining M&A performance 17 References 19 Abstract Mergers and acquisitions have become a common practice for firms as a mean to expand and increase profitability. Existing evidence is still unable to strongly determine what factors make a successful M&A due to inconsistency in data and findings. This paper aims to provide an insight to the steps included in the M&A process by comparing existing literature and hopes to suggest key determinants of a successful M&A transaction. Evidence shows...
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...Praise for 8 Secrets of the Truly Rich “In this his latest book, Bo Sanchez preaches on wealth. He shows that as in all good things, the true value of wealth lies not in possessing it but in giving it away.” + Gaudencio B. Cardinal Rosales Archbishop of Manila “Bo Sanchez has done it again! This book is an excellent combination of personal experiences, well-researched investment information and sound spiritual guidance for all of us.” — Jose Concepcion, Jr. Chairman of the Board RFM Corporation “Bo says, ‘Money isn’t the most important thing in the world. But money affects every important thing in the world.’ Statements like these make Bo’s book — every chapter of it — very tempting to read. Catchy.” + Angel N. Lagdameo Archbishop of Jaro, Iloilo President, Catholic Bishops Conference of the Philippines “Bo Sanchez demolishes the myths that equate wealth with materialism, and having money with being rich.” — Gerry Ablaza CEO, Globe Telecoms “Bo Sanchez’s 8 Secrets of the Truly Rich balances our views concerning material wealth. It helps us appreciate God’s gifts as a means to multiply goodness in the world.” + Ricardo J. Cardinal Vidal Archbishop of Cebu “Bo’s book inspires us to work hard and aim high to be wealthy in the true sense of the word. Bo shows the way! A good read!” — Socorro C. Ramos Founder and General Manager, National Bookstore For Bo’s Truly Rich Newsletters, log onto www.iamtrulyrich.com ISBN 978-971-93671-2-3 What the Rich Know that the Poor Don’t Know ...
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...only did the crisis hit the economics of the industry by slowing net inflows and squeezing margins, it has also led to structural changes. Following a difficult year in 2009, when net inflows in developed markets were negligible and margins and profits hit record lows, a modest improvement was seen in 2010. It seemed at first that this recovery would continue in 2011. But, after a good start, the industry suffered from a difficult second half: markets fell and profits stagnated at low levels. The situation has not yet improved in 2012; another good start was wiped out in the second quarter. Given the continued growth in global wealth, this implies that private banks are failing to capture their fair share of the market. The longer-term structural changes caused by the crisis are creating a much more demanding environment for private banks. Slower wealth generation in developed markets means that the growth momentum on- and offshore is shifting to clients in developing markets. Offshore growth has stabilized thanks to ultra high-net-worth (UHNW) and emerging markets clients. To maintain their position, let alone embark on a quest for growth, banks will need to adapt...
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...1 Copyright © 2014 SuccessVantage Pte Ltd All rights reserved Published by Winter & Alvin No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopied, recorded, scanned, or otherwise, except as permitted under Canadian copyright law, without the prior written permission of the author. Notes to the Reader: While the author and publisher of this book have made reasonable efforts to ensure the accuracy and timeliness of the information contained herein, the author and publisher assume no liability with respect to losses or damages caused, or alleged to be caused, by any reliance on any information contained herein and disclaim any and all warranties, expressed or implied, as to the accuracy or reliability of said information. The publisher and the author make no representations or warranties with respect to the accuracy or completeness of the contents of this work and specifically disclaim all warranties. The advice and strategies contained herein may not be suitable for every situation. It is the complete responsibility of the reader to ensure they are adhering to all local, regional and national laws. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that neither the author nor the publisher is engaged in rendering professional services. If legal, accounting...
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...Conflict Theory Corey Ware The conflict theory was developed by Karl Marx in order to figure out what brings about civilization. Civilization is brought out by Marx as an aspect that is influenced by conflicts. According to Karl Marx, there are two social classes of people; capitalists and the working class. These two classes represent the ruling class as well as the subject class. Karl Marx explained that the subject class is always under the ruling class. The ruling class controls all the aspects of productivity. This can be further explained by what happened during the colonial period. During that time, the ruling class was more domineering and they used their influence to control the rest of the society. This group of individuals can also be defined as the capitalists. The capitalists control and have direct access to all the social and political positions. The working class is misused by the capitalists in order to produce and generate huge amounts of income for the ruling class (Shepard, 2009, p. 22). According to the theory, individuals are always involved in conflicts in order to control others. This means that individuals will always struggle to reach the ruling class in order to earn more money, to accumulate enough capital that might help them rule the rest of the community. There are many benefits that are associated to the ruling class. One of them is that these individuals have total control over many resources. This...
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...The conflict theory was developed by Karl Marx in order to figure out what brings about civilization. Civilization is brought out by Marx as an aspect that is influenced by conflicts. According to Karl Marx, there are two social classes of people; capitalists and the working class. These two classes represent the ruling class as well as the subject class. Karl Marx explained that the subject class is always under the ruling class. The ruling class controls all the aspects of productivity. This can be further explained by what happened during the colonial period. During that time, the ruling class was more domineering and they used their influence to control the rest of the society. This group of individuals can also be defined as the capitalists. The capitalists control and have direct access to all the social and political positions. The working class is misused by the capitalists in order to produce and generate huge amounts of income for the ruling class (Shepard, 2009, p. 22). According to the theory, individuals are always involved in conflicts in order to control others. This means that individuals will always struggle to reach the ruling class in order to earn more money, to accumulate enough capital that might help them rule the rest of the community. There are many benefits that are associated to the ruling class. One of them is that these individuals have total control over many resources. This means that the rest of the society has to depend on individual influence...
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...implications can it have on the world economy and businesses in general, and also what potential positive impact this can have on global warming and climate change. At the end of the report I make a reflection on the ethical and moral dilemma that I might face in future at my workplace. Introduction Our crude dependence on oil and the complete disregard for the environment has led us to this path of irreversible destructive impact on the planet and there is no less that 60 months left beginning in 2008 that climate change in the form of a 4C rise in temperature by the end of the century becomes irreversible. Also with the current economic crisis it has become apparent that the path that we are going forward in terms of value creation in terms of wealth and GDP output has not been efficient enough to target the real problems that we face today and most governments have been ineffective enough to give an optimal result. So the policy document shows us a process of this great transition that we need to undertake to create a sustainable ecological environment and also a growing viable economy. Great Revaluing In ‘Great Revaluing’ the policy suggests that the economic and social policies of the government should be directed at creating real value which is beneficial to the society...
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...economic, political, and socio-economic status. America is a place where all people are supposed to be equal, but social class has created divisions in our society. Unfortunately social class has become the backbone of American society and everyone is considered to belong to either the upper, middle, or lower class. First, we'll start at the top of the hierarchy. Individuals who are considered to be members of the upper class are the owners of the means of production and most of the country's private wealth. Many are important government officials, large business owners, or top executives that have a great deal of income and/or wealth. It is important to know the difference between income and wealth, as they are two distinct concepts. They are also a big part of determining social status. Income is salary and/or other money that is regularly received, where wealth is the total value of all assets, minus outstanding debts. In other words, income is what you make, and wealth is what you have. Someone can bring in a high income without being wealthy, and can also be wealthy without bringing in any income. For example, some people earn a large salary but spend it all on a large house, fancy cars, travel, etc. These individuals basically live from paycheck to paycheck, and if they were to stop working, they would quickly become destitute. On the...
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...ECO 550 Question 2 Shareholders want high long-term profits. Managers want job security and wonderful perks and amenities. Since risk and return tend to be positively related, managers may wish to avoid risks that shareholders want the managers to undertake. To encourage mangers to take on risks, compensation committees can place a greater weight of their compensation on long-term incentives such as stock, options to buy stock, and bonus based on surpassing the performance of comparable firms over several years. When all of the compensation is cash, managers wish to start only low risk projects to avoid making any mistakes and stay away from higher risk, potentially high-valued projects. Question 3 If Corporate profitability was to decline by 20 percent from 2008 to 2009. The shareholder wealth is used as an indicator to check whether it is increased or not. When the bonus is tied to the short-run earnings of the manager’s firm, then the bonus declines even if the manager did everything he or she could do in the midst of an economic downturn. The bonus is designed for managers that exceed their industry averages over the last several years. Issues such as experience, qualification, package would arise with hiring and retaining the best manager. Question 6 The following events would change shareholder wealth: A) More competition is likely to lower prices and thereby reduce the value of the firm. B) In general, higher costs on the firm is likely...
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...Globalization and changes of middle class essay Topic: Are middle class Victims or Winners of globalization The term ‘middle class,’ it is a vague word as the concept and the meaning of it has been changed over time. For example, in medieval era Europe, the classification of social classes was based on the descent such as nobles and peasants. The nobles in England were classified as high class even though they were lack of wealth. However, the peasants were not able to become high class no matter how wealthy they were, so the classification of peasants with wealth was classified as middle class. As the time flew and when the capitalism has taken place instead of hierarchy, the classification of middle class has changed once more which is mainly classified by the person’s occupation and the wealth the person has. For example of United Kingdom in 1911, the middle class was the class that falls between the upper class and the working class which are professionals, managers, and senior civil servants. However, nowadays, as the economy and technology has developed in fast pace, the definition of the middle class have changed once again that is determined according to the income level of a person. According to The Economics in February 2009, the definition of the middle classes is the people who have a reasonable income with stable job occupation. The Economics also pointed out that the number of middle classes has exploded from 1980s to 2000s. What can be the reason of such a...
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