Tag: financial topics
By Michael Green, Head of Derivatives and Structured Finance in the Treasury Department of the World Bank.
Surveying the available financing models in the Middle East for sustainable infrastructure projects, Sukuk appears as a viable option to match the regions growth.
Three trends are discernible in the current global financial market:
1. Banks are reluctant to commit long-term capital to infrastructure finance due to stricter capital requirements;
2. An increasing number of investors are interested in environmentally sustainable investing, in other words, investing to promote activities that are seen as being positive for the environment;
3. The market for sukuk, the Islamic financial instrument most similar to a conventional bond is growing significantly.
While these three trends are distinct and not obviously related, taken together, they create a market opportunity for sukuk to be used as a tool to finance environmentally sustainable infrastructure projects.
The need tor significant infrastructure spending is obvious in both developed as well as developing countries. From crumbling transportation infrastructure in the United States to inadequate power generation capacity in India, the evidence is clear that improving infrastructure is a global priority. At the same time, popular concern about climate change and the detrimental impact of increasing greenhouse gas emissions has made improving infrastructure in an environmentally sensitive manner a priority also.
Banks, the traditional providers of debt finance for infrastructure projects have been pulling back from this type of lending due to regulatory changes that have decreased bank appetites for longer dated risk. Capital markets investors are in theory, well-placed to replace banks as the providers of debt finance for infrastructure, given that many projects offer relatively high yields with low correlation with other types of fixed income instruments.
However debt financing of infrastructure projects would be an entirely new and unfamiliar asset class tor most capital markets investors. As a result, intermediaries will need to engage in considerable marketing efforts to interest capital markets investors in infrastructure and the investments will need to be packaged in a manner that appeals to such investors.
One potential means of attracting capital markets investors interest in infrastructure finance is to combine the two other trends described above — the expanding markets for both environmentally sustainable investing and sukuk. Although, to date these two markets have been geographically distinct – with environment-focused investors mainly found in Northern Europe, North America and Japan and sukuk investors concentrated primarily in the Persian Gulf and Malaysia — the two markets do share a strong commonality.
Both environmentally sustainable investors and sukuk investors aim to use their money in a manner that conforms to their values and beliefs. Whereas traditionally finance has been solely driven by the effort to maximise risk-adjusted returns, these types of investors have added an additional qualitative objective for financial market activity– compatibility with the investors ethics.
A sukuk in which the proceeds are used to fund a specific environmentally sustainable infrastructure project such as the construction of renewable energy generation facility, could appeal to both sukuk investors and conventional environment focused investors. Combining these two distinct investor bases would be a novel development for the capital markets.
While some conventional investors, mainly bank treasuries and hedge funds purchase sukuk, the vast majority of conventional investors [including virtually all environmentally sustainable investors] have no experience at all with these instruments. However, there is nothing intrinsic to sukuk that make them inappropriate for conventional investors. Although the structures and terminology will be unfamiliar at first sukuk should be attractive to conventional investors if they offer reasonable risk-adjusted returns and are properly marketed.
A sukuk that meets those criteria and provides funding for an environmentally sustainable project could be particularly attractive to environment-focused investors for two principal reasons. First, sukuk provide investors with a high degree of certainty that their money will be used for a specific purpose. In order to comply with the underlying Shariah principles, the funds raised through the issue of a sukuk must be applied to investment in identifiable assets or ventures. Therefore, if a sukuk is structured to provide funds for a specified infrastructure project, such as a renewable energy project, there is little chance the investors’ money will be diverted and used for another purpose.
Second, many more environment-focused investment products exist on the equity side of the capital markets than on the fixed income side. The reason for this lack of supply is that the majority of corporate and sovereign bonds are general unsecured obligations of the issuer, meaning the use of the proceeds of the bonds is not restricted to a particular purpose. Since most environmentally sustainable investors want to know precisely how their money will be used, bonds that are general obligations of an issuer have limited appeal unless all of the activities of the issuer meet the investors environmental standards.
Sukuk, which are most similar to a conventional fixed income securitie could help fill the fixed income supply gap for environmental investors to the extent the proceeds of a sukuk are earmarked for a particular environmentally beneficial purpose.
ln the conventional capital markets, environment-focused bonds have begun to appear in recent years. The World Bank, for example has issued since 2008 a type of bonds called World Bank Green Bonds’. Rather than funding all of the activities of the World Bank, the proceeds of World Bank Green Bonds only go to support certain projects that meet pre-determined criteria for low carbon development. These bonds have been very well-received by environmentally sustainable investors, and the structure has become a model for other supra-national, corporate and sub-sovereign issuers. Green sukuk have the potential to further broaden this market as well as to help to bridge the gap between the conventional and financial worlds.
ABOUT MICHAEL BENNETT
He is the Head of Derivatives and Structured Finance in the Treasury Department of the World Bank which includes responsibility for the World Banks transactional capital markets work in the area of Islamic finance. He is a graduate of Columbia University Law School in New York and has published numerous articles on financial topics including Islamic finance, structured products and derivatives regulation in Asia.
This article was originally published in the State of Energy Report, Dubai 2014 1st Edition, an initiative of the Supreme Council of Energy and co-sponsored by UNDP and Dubai Carbon.
Safe Money Resource has given its Safe Money Approval to another expert wealth planner who has a strong record of empowering people to achieve financial security through education.
Andrew Heese, a gifted professional with over 15 years of business experience, is the latest independent advisor to be recognized by Safe Money Resource for his lasting commitment to responsible advisement and investor education.
With deep roots in business, Andrew leverages extensive knowledge gained from prior experience as an institutional investment and private investment professional. He draws upon a diverse background, which includes work experience at some of the largest firms in the financial services industry over a five-year period. These distinctive professional experiences give him a rare, insightful perspective into the financial services space, which he taps into today for full client benefit.
At Safe Money Resource, we understand that theres no one-size-fits-all solution to peoples different needs. Instead, people should receive guidance from educationally-minded professionals who take time to explain all thats involved with different investor options. Andrew is the epitome of that philosophy, and were privileged to have such a capable, client driven professional as part of our team, said
Brent Meyer, President and co-founder of Safe Money Resource. He is truly a 100 percent investor advocate, in every sense of the word.
In line with his commitment to financial education, Heese offers a free, in-depth resource about annuities and other timely information on his website. This guidebook has been packed with up-to-date, easy-to-understand content on the different kinds of annuity options, as well as lots of other need-to-know information. This informative resource can easily be accessed at: http://www.safemoneydenver.com/.
Because of his commitment to professional integrity and expert guidance, Heese serves as President of Safe Money Denver. In addition to his professional experience, he has academic credentials which increase his bullion to investors. He is a proud graduate of
To qualify for Safe Money Approval, an independent advisor goes through a careful, in-depth vetting process for a track record of success and clients first minded service. Safe Money Approved wealth planners are known for their steadfast commitment to client needs, unconditional integrity, and respected professional record.
Andrew is a leader in the human side of financial advisement, in that he takes painstaking steps to ensure his clients understand the advantages and downsides of every financial strategy. At Safe Money Resource, we believe that financial prosperity begins with proper understanding of what different strategies entail and how they fit in with ones own objectives, continued Meyer. To that end, we have started a helpful website, SafeMoney.com, where enterprising individuals can quickly access helpful information on many important financial topics.
SafeMoney.com holds a plethora of helpful articles, detailed guidebooks, and other informative content, all accessible for free. There, information seekers can receive timely information on annuities, life insurance, long-term care insurance, and other vehicles for a guaranteed lifetime income. There are several articles and resources on other important topics as well, including
Were committed to partnering with our clients and helping them become knowledgeable about the various options available to them. People can count on our trusted team to equip them with the insight-fulness and financial savvy needed to make the right financial decisions, said Heese. Should you want expert financial guidance from non-biased professionals, were only a phone call away. It would be my sincere pleasure to help you however I can.
Read the full story at http://www.prweb.com/releases/2014/07/prweb12025455.htm
Asif Imtiaz worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and write on various tech and financial topics as a freelancer.
The volume of US Google searches about financial topics spikes in the beginning of the year; travel searches are most popular during the summer months; and retail searches start building for the holiday season in September; according to a recent report by WhosOn.
The analysis examined five years of US Google Trends data for four key industries—automotive, finance, retail, and travel—to determine how search volume and topics vary from season to season.
Below, key findings from the report.
- Automotive: Search volume about automotive keywords traditionally spikes and dips throughout the year, with the spring and summer months being especially volatile. Early May and July are when the highest search volumes occur, whereas the second-lowest is in early June.
- Finance: Searches about financial topics traditionally occur at the highest volume in the beginning of the year—ahead of tax season—and then steadily decrease after February. The lowest volume of searches usually comes in November.
- Retail: Not surprisingly, retail volume is highest in the fall, leading up to the winter holiday season. Traditionally, volume starts to rise steadily in September and reaches its peak from the end of October onward.
- Travel: The number of searches about travel topics historically spikes in the summer—with volume steadily rising beginning in April, peaking in early June, and slowly declining until November.
There is so much material available to Internet users that it seems literally endless, but there is still some reluctance to use the Internet for financial purposes.
In Spectrems Millionaire Corner study Using Social Media and Mobile Technology in Financial Decisions, investors from three different wealth segments were asked to list the financial services and information they would like to be able to access via computer, smartphone or tablet. What the study showed is that there is still some information investors prefer getting from their financial providers or advisors.
Given a choice of 12 topics they could see on the Internet, nine of the topics were of interest to less than 50 percent of investors in all of the wealth segments.
The investors were segmented by wealth level: Mass Affluent (with a net worth between $100,000 and $ 1 million Not Including Primary Residence), Millionaire (with a net worth between $1 million and $5 million NIPR), and Ultra High Net Worth (with a net worth between $5 million and $25 million NIPR).
Interest was highest among the UHNW investors, and 75 percent said they would be interested in a website that offered them access to personal account information. Seventy-four percent of Millionaires and 69 percent of Mass Affluent agreed that such a website would be useful.
Sixty percent of UHNW investors said they would access a website that allowed them to look at balances in one place from multiple providers, which is key to wealthier investors who often work with more than one provider or advisor. Sixty-three percent of Millionaires and 57 percent of Mass Affluent investors said they would use such a site.
While many investors let their hired professionals research products and services, 57 percent of UHNW investors said they would use a website that had articles or research on financial topics and products. Fifty-two percent of Millionaires and 43 percent of Mass Affluent investors agreed.
Interest in website advice from financial experts is below 50 percent, with 43 percent of UHNW investors, 39 percent of Millionaires and 30 percent of Mass Affluent investors looking for that kind of service. Of approximately the same interest is a stock market ticker tape online, with 40 percent of UHNW, 37 percent of Millionaires and 29 percent of Mass Affluent investors expressing interest.
MillionaireCorner.com offers ratings profiles of financial advisors, but only about a quarter of investors are interested in that service. There is similar interest in webinars, podcasts and videos with experts on financial issues and topics.
The NFEC has launched the Framework for Teaching Personal Finance to provide clear benchmarks to measure the performance of financial education instructors.
Los Angeles, CA (PRWEB) July 16, 2014
The National Financial Educators Council brought together a think tank of educators, financial professionals and personal finance experts to develop benchmarks for financial education instructors – Framework for Teaching Personal Finance. The Framework and report is made available complimentary by the NFEC.
While the education industry has established criteria that qualify teachers, until now the financial literacy industry lacked clear guidelines for financial educators. Financial education is typically taught by financial professionals, traditional educators and volunteers – each had unique problems. Traditional educators report lacking the confidence to teach financial literacy. Financial professionals often understand financial topics yet lack training on general teaching and presentation methods. And volunteers often lacked teaching skill sets and knowledge on personal financial matters.
The Framework for Teaching Personal Finance includes performance standards that provide professional development guidelines. This Framework was designed to assist organizations to set clear evaluation criteria, establish benchmarks for hiring educators and provide the public assurance that financial education instructors are held to the highest standards of practice.
To develop the Framework for Teaching Personal Finance, the NFEC selected to work with Charlotte Danielsons Framework for Teaching. The Framework for Teaching is the most widely-used teaching model in the United States, and has been adopted in over twenty states. With the support of their consultants the NFEC modified the Framework to meet the specific needs of Financial Education Instructors.
Studies demonstrate that a Framework for those teaching financial literacy topics is needed. Students of highly-qualified educators accomplish more positive outcomes than those taught by less-qualified instructors. The Dallas Public Schools’ Accountability System found that, the more effective the instructor, the greater the student gains. Studies conducted by researchers at the University of Tennessee demonstrate that teacher effectiveness has a cumulative, financially measurable effect on student achievement; those effects are long-lasting and sustainable. Researchers also found that teachers are the single most important variable contributing to student success, regardless of student age.
“Teachers are the single most important variable contributing to student success. The qualifications of financial educators directly influences both short-term student outcomes and long-term impact on their financial well-being,” states Vince Shorb, NFEC CEO.
Financial education is a unique subject that requires specialized expertise to teach effectively. Unlike other core subject matter typically taught in schools, the topic of money elicits emotional reactions in people. Each participant going through financial literacy curriculum brings his or her own experience, emotions, and relationship with money into the classroom. The Framework for Teaching Personal Finances outlines benchmarks for financial educators so they understand and respect these emotional reactions to succeed in improving the financial capabilities of the participants.
The National Financial Educators Council developed the Framework for Teaching Personal Finances to illuminate best practices to share with others in the financial literacy industry. The NFEC is a research and resource provider with the end objective of helping individuals improve their financial capabilities.
For the original version on PRWeb visit: http://www.prweb.com/releases/Framework-for-Teaching/Personal-Finance/prweb12008477.htm
A recent study by Genworth Financial found that while many Americans believe that there is a correlation between financial literacy and retirement readiness, less than half actively seek out the knowledge they need to make informed decisions. Whats standing in their way?
The complexity of financial products, uncertainty about how to even get started, and an apparent lack of time.
The gender split on this issue was even more striking. Only 34 percent of women said they would be willing to try to deepen their understanding of financial matters because of the complexity of the products. By comparison, 61 percent of men said they were willing to put in some effort.
At the core of these statistics is a very basic emotion: Fear. Fear of the unknown. Fear of appearing ignorant. Fear of making a mistake. Fear of taking the wrong step and losing hard-earned savings.
My more than 25 years in financial management have taught me that it is the emotions that often stand in the way of an individuals path to financial security and wealth. If we as an industry are to help individuals overcome these emotions and redirect their energy toward a healthy financial future, then we need to rethink our approach to financial education.
Education is part of financial management. That is a point that often gets lost in the conversations about asset allocation, retirement savings programs, and estate plans. In order to help clients, it is the job of a financial advisor not only to learn about and advise her clients on their investments and goals, but also to learn about each clients hopes and dreams.
Usually these hopes and dreams are related to family. It is important for an advisor to know if a client has children and how the family communicates. This is particularly important as financial education should often be designed with all major household decision makers in mind. Are there elderly parents that need support, either financially or emotionally (because the latter can wreak havoc on the former)? What risks, ranging from death and disability to changing jobs, is the client concerned about?
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When I meet with a client, most of my discussions are not about investment topics. Im a mother of four, a business owner, and a former first grade teacher. I also take care of my elderly father, and I understand first-hand the challenge of juggling all of these responsibilities and identities. When I work with someone, I know that Im not just working with one person, Im working with the whole family. I need to understand their pressure points so that I can walk them through the steps to creating cushions to relieve that stress.
And what about the complexity of the products cited in the Genworth study? If we take the patient approach and are willing to explain, often repeatedly, how something works, and then give our clients time to digest and practice the skills, they will learn. More importantly, they will feel empowered about the decisions they make. It is that empowerment that allows our clients to shift from a path of financial insecurity and fear to one of wealth. I tell my clients that my ultimate goal is for them to not need me to manage their money, because if I am not here, they could be knowledgeable enough to manage their investments themselves. Having educated and knowledgeable clients makes for a better relationship all around.
Financial education is not a gender issue. The different learning styles and concerns of each client, whether man or woman, requires financial advisors to meet their clients where they currently are. This generally means getting rid of the financial jargon and simplifying the discussion. As an industry we need to raise the financial literacy of both men and women. If, however, we are to close the gender gap in financial education and overcome womens hesitation to participate, then we must create learning environments that encourage women clients to ask questions in a safe, non-judgmental surrounding.
I have often said that women clients can be the toughest to get, but the best to have. They want to understand, and they invest more time and energy in really digging deeply into every topic put in front of them. Once they trust you, you cannot have a stronger advocate. Women clients who are engaged are great ambassadors. Empower them and, on their own, they will close the financial literacy gap.
Written by Susan McGlory Michel
Michel is the founder and CEO of Glen Eagle Advisors LLC,an independent, full service investment firm with more than $350 million in client assets, headquartered in Princeton. Shesbeen advising clients for more than 25 years.
As a certified Woman Business Enterprise, Michel is passionate about helping other women succeed as financial advisors and in working with other woman business owners.She is an active volunteer and member of many professional and community organizations, including the Womens President Organization (WPO), Entrepreneurs Organization (EO), Princeton Regional Chamber of Commerce, New Jersey Association of Women Business Owners (NJAWO), and more.
She is dedicated to improving educational opportunities for all students, with a particular emphasis on ensuring that financial topics are being incorporated into education curriculum and that young women are being encouraged. She was recently recognized with a 2014 Enterprising Women of the Year Award, a distinction that reflects her volunteer efforts and business success.
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It’s the conversation that many families put off. And then put off some more.
It’s the talk between elderly parents and their adult children about the parents’ finances. It’s a conversation that every family eventually must have — and it’s best to do it before a crisis hits.
“Money is a taboo subject for families, but we do find that silence can be costly,” said Lauren Brouhard, a senior vice president at Fidelity Investments.
The company recently released a study that found that when it comes to important but difficult conversations about finances, many families struggle with the timing.
The Intra-Family Generational Finance study showed that 64 percent of parents and their adult children differ as to when detailed conversations on key financial topics, including retirement preparedness, elder care and estate planning, should take place.
“While parents would prefer to wait until after retirement, their children want the conversations to take place well before their parents retire or experience health issues,” Brouhard said.
“The study found that the top reason cited by parents for not discussing their retirement plans or other matters with their adult children is that they don’t want them to count too much on their future inheritance.”
While I understand where parents are coming from, their reluctance is risky. Sooner or later, they will have to have that talk, and it most likely will occur during a crisis.
“It is a difference between destiny and certainty,” said Michael B. Cohen, an elder law attorney in Dallas. “A failure of the family to communicate will lead to mere destiny, whereas if there is a family discussion, then a plan can be discussed for certainty. If nothing else, there will be a better understanding of what is truly important to the parent and what risks they are willing to take, if any.”
So the best time to have that talk is now.
Adult children can broach the subject by using another person’s situation. Perhaps a friend recently had the discussion with his or her parents. You can use that as a bridge to ask your parents whether they have the proper estate planning and medical documents prepared, and whether they have spelled out their desires.
You need to know this so you can carry out their wishes.
On the flip side, parents can also initiate the talk. Knowing that they’ve communicated their wishes to their family can keep them from fretting.
“One of people’s big fears as they age is being a burden on others,” Brouhard said. “Taking the time to have more detailed conversations can really dramatically increase peace of mind and reduce anxiety for many families.”
“Short of having these discussions, there could be surprises about a parent’s wishes, what responsibilities a parent may be assuming a child may or may not be willing to take on — important matters that really impact everyone’s life in the family,” Brouhard said.
For example, the Fidelity study found a wide gap in expectations about who will care for a parent if they become ill. Of adult children surveyed, 43 percent expect they or a sibling will need to handle caregiving duties. Only 6 percent of parents expect this.
As an adult child, it’s important to remember that decisions about their finances are up to your parents, as long as they are capable.
“When it comes to finances, it’s not a democracy,” Brouhard said. “While different family members should have a role in the planning process, ultimately, it’s going to be up to the parents to make the important decisions that they have a right to make about their future, as well as how they disperse their assets and who’s in charge of what.”
Follow Pamela Yip on Twitter at @pamelayip.
AT A GLANCE: About the Survey
Fidelity’s Intra-Family Generational Finance survey was conducted online among US parents and their adult children March 3-April 9. The total sample recruited for the study included 1,058 parents and 159 adult children.
To qualify, parents had to be at least 55 years of age, have an adult child older than 30 and have investable assets of at least $100,000. Their children qualified if they were at least 30 years old and had money saved in an IRA, 401(k) or other investment account. In addition, they must have at least $10,000 saved.
The margin of error was plus or minus 3.8 percentage points.
HOW TO Get financial help
Have a financial question? Email firstname.lastname@example.org. Your question will be sent to a member of the Financial Planning Association of Dallas-Fort Worth. Then watch for the answer at dollarwiseblog.dallasnews.com. Your name will not be published, just your initials.
Asif Imtiaz worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and write on various tech and financial topics as a freelancer.
LAREDO, TEXAS (IBC) – IBC Bank is proud to present an interactive and entertaining initiative offering an online platform to assess financial knowledge while emphasizing the importance of financial literacy.
IBC Bank’s Financial Literacy IQ Game teaches general financial concepts through a free, easily accessible and interactive experience. The game officially launched July 21.
“IBC Bank is heavily vested in promoting financial literacy throughout the communities we serve so individuals have the tools necessary to make sound decisions about credit cards, mortgages, saving, avoiding predatory lenders, and more,” International Bancshares Corporation Chairman and CEO Dennis Nixon said. “The Financial Literacy IQ Game is expanding IBC’s outreach to an online audience and is an innovative way we are ‘Doing More’ to bridge learning and entertainment.”
The IBC Bank Financial Literacy IQ Game presents questions on general financial concepts to help individuals gauge their literacy levels concerning money management, credit cards, savings accounts, mortgages, and more. The game can be found at www.IBCFinancialIQ.com and is easily accessible with a brief registration.
One may also sign in using Facebook account information. Individuals can play the game on their own time, and challenge a family member or friend to see whose financial knowledge reigns supreme.
The IBC Bank Financial Literacy IQ Game is comprised of 11 modules, each with 10 unique questions concerning various financial topics. The level of difficulty of the game is automatically adjusted depending on the user’s response to each question. As the game is played, the correct response to each question is identified so players can learn while having fun.
Upon completion of the game, the player receives a printable certificate of completion with a percentage grade. Players are encouraged to challenge their financial literacy skills by taking the quiz multiple times to improve both their percentage score and general knowledge of basic financial concepts.
To learn more about financial literacy, players are encouraged to visit fdic.gov.