Tag Archives: Risk

Finance

How To Get Ready For Retirement With The Help Of Financial Planners Baltimore

Due to various circumstances, there is an increasing number of people who have to work well past the traditional retirement age. For some, it was because they failed to plan properly for the day they would retire. Others planned properly, but lost a lot of money due to stock market crashes, recessions and other catastrophes. You can avoid this same fate by enlisting the services of financial planners Baltimore.

Most employers offer IRAs or 401K plans to employees, often with a match of the funds. This means that for every dollar you contribute, they will contribute up to a 100 percent match. This is free money, and should definitely be taken advantage of.

Most Baltimore planners will tell you that you should practice something called asset allocation. This basically means moving your money around and investing in several types of programs, rather than just one. This can help you avoid financial catastrophe in case of another recession or crash.

A good professional will explain the wide variety of funds available, such as mutual and index funds, that you can take advantage of. They will also show you why these are good ways to invest, and how much money you can make. Certificates of deposit (CDs), bonds and stocks are other possibilities to discuss.

Early retirement may seem like a pipe dream to some people, but believe it or not, it could be a reality. Depending on your current investments and money situation, a finance pro may be able to map out an advanced plan that will yield high amounts and give you enough to retire early.

An oft overlooked aspect of all this is tax planning. If you own property, even if it’s paid off, you will have to pay taxes. You must have money set aside for this, so ask your planner about it.

Investments can be confusing for most people, but they don’t have to be. Talk to a financial planner to get on the road to retiring today. You may be surprised at how easy it all is when you have a seasoned pro on your side.

Find an overview of the benefits you get when you consult financial planners Baltimore area and more information about an experienced financial adviser at http://www.aspidaadvisory.com now.

Banking

Enterprise Risk Management in the Banking Industry

After the financial collapse in 2008 that was marked by the demise of some of the oldest financial firms in the banking industry, enterprise risk management has become a regulatory concern as well as a business concern. Assuring that the institutions which form the backbone of the country’s economic infrastructure are observing proper operation risk management practices is seen as benefiting all citizens, not just customers and shareholders. Regulatory form, which has been the subject of press coverage and congressional inquiry, will certainly take a central role in the upcoming presidential race. As such, understanding critical factors is an important part of being well informed.

The Terms

Enterprise risk management refers to practices that are specifically designed to protect the very existence of the business, or enterprise, for which they are implemented. Within the banking industry, this can refer to an ever-changing group of risks. In recent years, these have focused on practices that protect against allowing a financial institution from becoming over-leveraged.

The meltdown in 2008 was largely precipitated by banks over-extending credit which in turn impacted the real estate market as well as the very viability of the institutions which had issued that credit. When defaults began to occur, a cascading effect took place and the entire economy was put in jeopardy. Operational risk management refers to managing those risks which are directly related to the operation of the business in question. In most cases, these risks represent enterprise risks as well, but the overlap between the two terms is not absolute.

Regulatory Developments

Over the past several years, there have been a variety of developments that have had a significant impact on the market. The Dodd-Frank legislation, changes in margin requirements and alteration to reserve requirements are just a few of the regulatory changes that have been enacted and targeted at forcing sound enterprise risk management practices. The Federal Reserve, the Securities and Exchange Commission and others have all worked towards reforming Wall Street for the overall protection of the economy and tax payers in general.

An example of one of the operational risk management changes that has been imposed on the banking industry is the practice of regularly conducting stress tests to be sure that the assets of any financial institution that is deemed “too large to fail” are not over-encumbered. The specifics of each test are highly complex, but the purpose of the exercise is to assure regulators that the institution in question can manage its exposure. Practices like requiring any lender to keep a certain percentage of the loans they make on their own balance sheet also help to protect the long-term viability of the institution by trying to force good judgement.

The Big Picture

The issue that is likely to be debated going into the presidential race is the cost of imposing operational risk management practices on free enterprise. While it is hard to argue that protecting the economy as a whole is in the best interest of all citizens, any time the free market is restricted, there is a cost. Some argue that the cost is too high and has unseen consequences that cannot be risked, while others defend these practices as a balance to natural greed. In any event, the discussion is an important one that will have a deep impact on the global economy for the foreseeable future.

Enterprise risk management refers to practices that are specifically designed to protect the very existence of the business, or enterprise and which has seen operational risk management changes that has been imposed on the banking industry is the practice of regularly conducting stress tests.