Millennials are on “FIRE”?

“Millennials are on ‘FIRE’?”

By Brook Ptacek, IAC Student Intern

The first myth this study debunks is that millennials are all of the “FIRE” type (Financial Independence, Retire Early). The general assumption, the study points out, is that millennials have “lofty” investment goals and want to retire before the age of 40.  According to FINRA and CFA Institute, however, categorizing millennials as the “FIRE” type may be much farther from the truth.

Rather, the study shows that millennial investment goals are on par with their GenX and Baby boomer counterparts. According to the study, millennials have “modest financial goals,” expecting to retire at the age of 65 years old.  Only 3% of the millennials surveyed with taxable accounts believe they will be able to retire before the age of 50.  In fact, what was most shocking was that of the segment of millennials investors surveyed who already had some sort of investment account about 9% said they will never retire because they could not afford to.

What’s worse, the study shows that millennial investors may also have a reduced incentive to invest. According the FINRA and CFA Institute, the research shows that there is a “lack of access” to employer-sponsored retirement plans. This is important because the study also shows that employer-sponsored retirement plans are also what help get a millennial’s foot in the door when it comes to investing. FINRA and CFA Institute note such retirement plans are “a key stepping stone to investing” because it is one of the “top influences” for getting millennials engaged.  However, as the next blog post points out, there are also other factors that influence millennial-investing behavior.

From Helping Farmers to Helping Investors: My Clinic Story

By Dowdy White, Spring 2018 IAC Student Intern

As an undergraduate student who studied Agricultural Communication at the University of Georgia, it seems weird that I would be a law student interning in the Investor Advocacy Clinic and working to help clients navigate through their complicated investing schemes and work through the FINRA arbitration process, right? Well, maybe not as much as you would think. Though these two academic areas of study seem wholly unrelated, they are more alike than you could ever imagine.

When I was an undergraduate student, I was often asked if my Agricultural Communication degree was real or if I enjoyed talking to plants and animals. No matter how many times I was asked these questions, I always found myself laughing and trying my best to explain to people what my degree did for me. I always told interested people that my degree was in the area of talking and communicating with people who needed my help. Yes, I took copious amounts of journalism and public relations classes on top of a rigorous agricultural curriculum, but I also spent my time helping and listening to people who had a problem. Continue reading

When the Private Impacts the Public

By: Esmat Hanano, Spring 2019 IAC Student Intern

On February 8, 2019, Amazon’s stock closed off from its opening price by $26. What could lead to such an usual drop? If you guessed it was external factors, such as continuing trade tensions with China, you’d be wrong. Surprisingly, the dip in Amazon’s stock is linked to Amazon’s CEO, Jeff Bezos. Bezos has been dealing with the fallout from a blog post he wrote accusing the National Enquirer of extortion. The post details the National Enquirer’s attempts to blackmail Bezos with threats to release salacious photos of the Amazon CEO. From a public relations standpoint, Bezos’s post is a shrewd tactic to get ahead of an embarrassing story. From a financial standpoint, however, the post could cause headaches for Amazon and its investors. Although the drop in Amazon’s stock price is relatively minor, the impact from Bezos’s behavior could become a distraction that further drives the price down. Continue reading

The Who?! The Me, Me, Me Generation. Talking ‘Bout My Generation…and Investing

“The Who?! The Me, Me, Me Generation. Talking ‘Bout My Generation…and Investing”

By Brook Ptacek, IAC Student Intern

Millennials get a lot of flak. I know, I know. You’re probably sitting at your computer and thinking, “oh no, here we go again.” But seriously. There are a lot of assumptions about us. So FINRA and CFA Institute decided to investigate whether common assumptions about millennial-investors were true. And guess what…they weren’t.

In the study, entitled Uncertain Futures: 7 Myths About Millennials and Investing, FINRA and CFA Institute “explore” the attitudes of investing of three millennial segments: 1) millennials with no investment accounts, (2) millennials with retirement accounts, and (3) millennials with taxable investment accounts.  Then it compared those investment attitudes of the three millennial segments “with their Gen X and baby boomer counterparts.” Continue reading

Tax Clinic Amicus Brief Argument Supported

The United States Court of Appeals for the Federal Circuit just issued an opinion in BASR Partnership, William F. Pettinati, Sr., Tax Matters Partner v. United States, in which the court determined whether a partnership was entitled to recover its reasonable litigation costs from the government when it submitted a nominal $1 qualified offer to the government in tax controversy litigation and subsequently prevailed at summary judgment.   On the surface, this does not seem like the type of case about which low-income taxpayer clinics would normally have a strong opinion.  However, during the litigation the government asserted an argument that, if successful, could have severely hindered a common litigation strategy that low-income taxpayers employ in frozen refund litigation.  Specifically, the government asserted that, in order to constitute a reasonable offer, a qualified offer must be of a minimal amount that would potentially depend on the amount of tax liability at issue.  In other words, the government took the position that nominal offers were potentially unreasonable solely because they were nominal offers, even if a taxpayer believed he or she was likely to prevail and subsequently did prevail.

Accordingly, the Philip C. Cook Low-Income Taxpayer Clinic of Georgia State University College of Law and the Harvard Federal Tax Clinic filed a joint amicus brief in this case solely on the issue of whether taxpayers should be denied reasonable litigation and administrative costs based on the dollar value of a qualified offer.  The clinics argued that none of the requirements of I.R.C. § 7430, which governs qualified offers, state that an offer must be of a minimum amount or of a minimum percentage of the taxpayer’s possible liability in order to be valid.  The clinics were particularly concerned with the potential impact that a rule requiring a minimum qualified offer amount would have on low-income taxpayers, which motivated them to submit the brief. Low income taxpayers who have had their refunds frozen often submit $1 qualified offers when they believe that they will prevail in a tax court case in order to shorten the time it takes for them to resolve their case and receive their frozen refund.  Obtaining these frozen refunds is of critical importance to these vulnerable taxpayers because they often need the tax refunds generated by the earned income tax credit to meet their basic living expenses.  Filing a qualified offer puts pressure on the government to consider the low-income taxpayer’s case more quickly than it otherwise would because of the risk that the government would have to pay fees and costs if the taxpayer prevails.

In looking at this issue, the Federal Circuit agreed that a nominal $1 qualified offer can be reasonable.  The court based its holding on the standard of review that it applied, which it determined should be abuse of discretion.  Under an abuse of discretion standard, the court determined that the trial court did not abuse its discretion when it determined that an offer does not have to be of a minimal amount to be reasonable.  While the court did not discuss the impacts to low-income taxpayers directly in its opinion, the clinics are pleased that the court reached this result and that nominal qualified offers will remain a viable litigation too to low-income taxpayers who rely on them to obtain improperly frozen refunds as quickly as possible.

The clinics are incredibly grateful for the hard work of Georgia State University College of Law student (now graduate) Reena Patel and Harvard Law School student (now graduate) Amy Feinberg, who did excellent work assisting in the preparation of this brief.

How Could the SunTrust and BB&T Merger Affect my Retirement Plan?

By Caleb L. Swiney, Spring 2019 IAC Student Intern

Mere minutes after SunTrust and BB&T announced their merger, the internet was flooded with articles discussing everything from how big the resulting bank will be to what the name of the Atlanta Braves home stadium might be changed to. At least one article has even considered the impact that the merger could have on retirement accounts.

So, how could this merger affect your retirement plan? If you don’t have any investment accounts with SunTrust or BB&T, that answer is simple; it won’t have any major impacts on your investments. If you do have a retirement or other investment account at either bank, however, there are some factors that you should consider moving forward. Continue reading

This is the Song that Never Ends… The More the Securities Industry Changes the More It Remains the Same

By G. Kevin Mathis, IAC Student Intern

A loveable little sock puppet sang this annoying song that replays in my head from time to time, This is The Song that Never Ends. The seems to be an appropriate refrain when it comes to FINRA and financial technological advances known as FinTech.  I mean we have been here before, in my original post about the meaning and origins of FinTech I spoke about how the financial securities industry adapted to earlier changes in financial technology and how FINRA adjusted accordingly. The same is true now FINRA is recognizing that rapid changes are occurring that are forcing FINRA, investors, and firms to adjust to the changing world of securities.  FINRA has launched a website and issued alerts on a range of FinTech issues.  FINRA also recently asked for comments on FinTech Innovation.

With FinTech, investors should remember that though things may change (and at this time the change seems to be going at breakneck speed.), it roughly stays the same. Investors must continue to educate themselves, as FINRA continues to be more vigilant in its protective regulations over the industry.