The Securities and Exchange Commission (SEC) has secured a temporary injunction and asset freeze against an Atlanta-based firm, Drive Planning, and its CEO, Russell Todd Burkhalter.
The SEC alleges that Burkhalter and the firm raised $300 million from investors by promising high returns on private real estate investments, despite lacking the capability to deliver on these promises. Instead, the commission claims that Burkhalter used the funds to support a lavish lifestyle and made Ponzi-like payments to early investors. Burkhalter's attorney has denied these allegations.
In other key wealth management updates this week:
Merrill Lynch has announced an increase in its payout schedule for advisors participating in its client transition programs. One of these programs is specifically designed for advisors nearing retirement, while the other is available to younger advisors looking to help junior partners build their client base and grow their equity stake in the practice. Merrill views these enhanced payouts as a strategic investment in the success of its advisors, aiming to foster loyalty across both senior and junior members of its workforce.
Donald Trump has called for the elimination of the federal tax on Social Security benefits, a proposal that has sparked debate among analysts. Experts from tax-focused think tanks across the ideological spectrum have analyzed the potential impact, warning that such a move could significantly increase the federal deficit and accelerate the insolvency of the Social Security trust fund. Additionally, one analyst pointed out that since the lowest-income Americans already pay no tax on their Social Security income, the proposed tax cut would disproportionately benefit middle- and upper-middle-class taxpayers.
As more Americans consider retiring overseas, financial planning becomes crucial. The Social Security Administration reported that it paid benefits to approximately 450,000 retirees living abroad in 2022, up from around 320,000 in 2009. We outline eight essential considerations for those thinking about retiring abroad, including tax planning, currency exchange issues, maintaining access to the U.S. financial system, and the potential implications of renouncing U.S. citizenship.
Edward Jones is facing challenges as asset growth slows. The firm reported $19 billion in net new assets during the second quarter, a 21% decline from the previous year. The company attributes this slowdown to increased asset outflows, although rising stock values have boosted the overall assets under management. Despite these challenges, Edward Jones continues to expand its advisor workforce.
Finally, Michael Schaffer, President of Schaffer Private Wealth Group at Wells Fargo Advisors, emphasizes the importance of maintaining a long-term perspective in financial advising. In a recent episode of The Way Forward podcast, Schaffer discussed the value of looking beyond daily news headlines to identify sustainable, long-term investment opportunities for clients. He highlighted the significance of investor temperament and the need to focus on companies with a durable competitive advantage.
