JPMorgan has built a program to keep track of rogue employees
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JP Morgan is monitoring its employees (Bloomberg)
JP Morgan has built an algorithm to keep track of rogue employees. The software will monitor a wide range of topics including whether "workers skip compliance classes, violate personal trading rules or breach market-risk limits." According to Sally Dewar, head of regulatory affairs for Europe, "It's very difficult for a business head to take what could be hundreds of data points and start to draw any themes about a particular desk or trader." She continued, "The idea is to refine those data points to help predict patterns of behavior."
4 reasons high-yield muni bonds warrant caution (Charles Schwab)
Charles Schwab warns high-yield muni bonds may look attractive with their juicy yields, but are probably not worth the risk. Schwab outlines four reasons why investors should take a cautious approach to the space. First, default risks are higher as nearly 25% of funds are invested in Puerto Rico. Second, the lack of liquidity could be a problem if everyone rushes for the exit at the same time. Third, the high duration of the space is likely to create a bigger drop than in other areas of the fixed income universe. Finally, investors may not be able to stomach the high volatility.
Things clients don't understand about taxes (Financial Planning)
The April 15 tax deadline is less than a week away. Financial Planning has provided a list of things clients get wrong about taxes. One common misconception clients believe is that if they got a refund it means they didn't pay taxes. Another is that if you are over 70 you don't have to pay taxes. Click the link above to read about other things clients get wrong when it comes to taxes.
Advisors are becoming too passive (Financial Advisor)
Putnam Investments President and CEO Robert Reynolds says advisors have become too passive. "Advisors are very risk adverse. They can't have any blowouts. Unless there is a major reason they are not going to move their money around," he told Financial Advisor.
Advisors are going to be using more Facebook (Think Advisor)
Bruce Milne, Executive VP of Socialware, attended the F8 Facebook Developer Conference in San Francisco, and he shared his takeaways with Think Advisor. Milne says Facebook's Messenger app will be a useful way for advisors to communicate with their clients. Another observation Milne made was that Facebook has expanded its video upload capacity to 40 minutes and built out its media platform. According to Milne, "The implications for compliance are clear for this one: Advisors will increasingly be using Facebook (or other social platforms if this trend continues) without even knowing they're doing it. 'Liking' media hosted on Facebook could easily be construed as an endorsement, even if an advisor didn't actually do it on Facebook or mean to post it on Facebook." Finally, Milne suggests soon you will be able to transfer large amounts of money through the company's commerce platform.
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