What a price difference makes

Bank commissions shall regularly financial performance, breathing a sigh of relief when increased costs less revenues and revenue growth is more or less on target. If this is not the case, questions about performance and management is to maintain a chastened constant control on costs or not aggressive enough sales help. Pricing questions rarely seem to arise, though, although prices will inevitably have a significant impact on revenues. In corporate governance briefing this month, Richard Ketley explores how better prices can contribute to the bottom line.

Although banks compete in what are usually highly regulated markets, there is always room for manoeuvre as far as is concerned, especially when it comes to credit or bundled product offerings. And even a small improvement in average price can have a dramatic impact on the business.

The math is simple.

If prices can be increased without causing a significant reduction in the turnover and costs can be kept constant, accumulate the benefits directly to the bottom line. Although slightly lower volumes in response to higher prices, some variable costs are also likely to decline, then the overall impact is still likely to remain positive. The alternative strategy, to reduce prices, not only results in a reduction in revenue, but also in rising costs, such as increase in volumes.

Competitive banking markets in the Middle East, pressure to reduce, rather than increase prices is often intense. New traders with deep pockets capital are willing to offer huge discounts in order to win market share and regulators are increasingly defining or limiting transaction fees.

But before being pulled into a price war, bankers should be able to answer some basic questions about their markets, as well as the behavior of their customers.

For example:

• What role does actually play price chosen by the customer of the Bank, and how it differ between segments?

• We actively defend our customers against predatory pricing without dropping the general price level?

• We know from data on we accepted and rejected credit offers customers that are more sensitive to prices?

• Are the right policies and procedures in place to manage discounts through the network?

• We know the real costs of provision of our services, as these are influenced by the growth in our customer base?

• How to optimize our business when we operate in markets that are more complicated as the payments environment?

• We’ve exploited advances in systems and technologies to effectively channel in order to customize pricing for each customer?

Some banks in the Middle East have formal processes in prices or internal structures, the task of providing credible answers to these questions. It is much easier to accept a version of what is believed to be the market price, offer this to all customers and clamp down on discounted relationship managers.

This is, after all, advise the course of operational efficiency consultants more action.

But there is ample evidence to suggest that banks that invest in fixed price strategies and skills can improve their earnings.

For example, research has shown that family ties and life cycle events play a major role in choosing a bank that offers special prices. Even customers who “defect” because of a special offer you can recapture through proactive direct marketing.

Research has also demonstrated that, in almost all customer segments, less than 20% of the customers are able to select the most convenient option, choosing between a lump sum and a percentage discount. Equally important, many customers will not change a set of “default” options presented on a form, and then by selecting the appropriate default settings can play a key role in optimizing revenue.

In a culture in which individuals expect to be able to negotiate, enabling front line staff offer you a discount can strengthen the emotional bonds between the customer and the Bank, providing the process is properly handled. And to manage the risk involved, banks may use their credit application and data reviews, analytical methods to determine which customers are more likely to be price sensitive or even a higher risk.

Much of what we now know about pricing is based on the emerging science of behavioral economics, which criticises m

Things you need to consider when buying the best annuities

When you reach the retirement age is not only necessary to consider buying the best annuities now for your retirement income, but also in the future. Retirement may last 20 or 30 years and it is necessary to consider will have sufficient income right now to continue to live comfortably?

As for your employees?

You should also consider your employees and how they manage. You can find the best annuity for you today, but if you died how would they cope financially? It is vital to ensure that it is provided for your employees retire.

Some of the things you should consider when buying the best annuities are:-

Annuity rates. They are declining or are likely to rise in the future, is now a good time to buy annuities?
If you buy an annuity now will still be the right choice in 10 years or even 20 years time, what is the longevity of your financial solution choice?
Your employees. How you will support during retirement and what will happen to them, financially, to your death.
You need the flexibility to change your retirement income, to increase or decrease the income as life changes during retirement.
Wants absolute guarantees from your retirement income?
As you can, or want to, spend looking after investments or revise your retirement income?
How good is your health? Are you a smoker or do you take any prescribed medication that could qualify for enhanced annuity.
What happens to your money to your death?
The solution that you choose all of the above should be taken into account.

It is therefore necessary to consider the shape of the best annuities

You buy life together so your spouse may keep all or part of income after your death, or you buy the single life and maximize the income from day one. This choice will depend on whether your spouse has their own pension, if they do then this option may not be necessary.

Payment frequency

The annuity will pay a regular income, liabilities for the rest of your life. But can vary the frequency of these payments and the preferred option will depend on how to handle your finances. The most common options include monthly, quarterly, semi-annually or annually.

Enlist the help of an expert to choose the best annuities

There are so many things to consider and everything will be very confused, there will be words and jargon that have never heard of before. To make your life easier than might be the best option to seek the help and guidance of an independent financial adviser and preferably one that specializes in retirement income solutions. The consultant will go through a thorough search made by circumstances and questions about your medical history to see if you qualify for enhanced annuity that could further increase the retirement income that you will receive. After that the Advisor will make a product recommendation you feel will provide the best annuity income for your personal situation.

Government grant money – really?

To get free government grant money approved you must follow some very specific steps. The process is simple, but you have to be disciplined and have a good model and guidelines. In order to complete the process, you must obtain a Grant-writing package from one of the best companies that specialize in a database of available programs. There is a link in the paragraph below that will take you to a review of the best companies that specialize in this product. I suppose the first question anyone who is curious about a federal or State grant is what kind of categories are available. Some of the major categories are for: continuing education at all levels (undergraduate, graduate and doctoral programs also). There are programs for online study and technical schooling too.

There are programs for first time homebuyers, minority housing and home improvement. You need something to improve the liquidity of your business? Large bags and small enterprises are abundantly available in many forms. Stay at home Moms have many kinds of grants to small business funding, kindergarten, vocational training, etc. Once again, many types and categories of programs for your stay at the headquarters are available. A basic question that most grant seekers wondering is: subsidies should be paid back? Some do, many don’t. The database will indicate this important factor when you start looking for a perfect program for your needs. There are specific requirements and subsidies rules? Absolutely … Shall report to the Agency in specific terms with regard to the granting and uses that have been applied.

Why is your credit is important when applying for a mortgage?

Lenders look at a number of factors to decide whether potential borrowers qualify for their loan. Most look at your income, debt-to-income ratio, cash reserves and more importantly your credit score. Lenders weigh these factors differently, but almost all borrowers to consider your credit score.

Here is an overview of credit scores. The major rating agencies are Equifax, Experian and TransUnion. These agencies are responsible for calculating your credit score. You collect data regarding the history of debt and the payment of the claim by your lenders, who then goes in your credit report. Credit reports are what he sees on the lenders for a loan.

Fair Isaac Corporation (FICO) is the leading manufacturer of credit scores. Once the credit reports were arranged, FICO takes this information and calculates a score for you from 300 to 850. The higher the number, the more your credit score. There are dozens of alternatives, but FICO is the most popular.

If your credit score is high, typically between 760 and 850, lenders will offer lower interest rates and more loan options. With scores like these are considered to be “creditworthy”. However, if your score is below 620, you are considered a subprime borrower. This means higher interest rates and the very restricted loan choices. Subprime loans typically have a balloon payment penalties, payment penalties or both.

Scores from 500 to 520 are considered the lowest of the low. For most creditors is the minimum that will be subject to the approval of the loan. Anything less than this, the options are extremely limited and hard to find.

Some experts say that from your exact credit score, the interest rates and mortgage payments can be calculated. This is based on averages. Borrowers with scores above interest rates generally received about 760 4% on 30-year fixed-rate mortgages. Scores from 680 to 699 on average around 4.5% and so on.

What can you do?

Happen errors on credit reports. Poor errors on credit reports will hurt your score. Six months before applying for a loan, obtain a copy of your credit reports and FICO score. This is your opportunity to ensure that your credit report is completely accurate. Keep an eye our for information of other people’s credit and family members on the report. Sometimes information outsiders ‘ can sneak its way onto your relationship. Also look closely at the non-payments. If it can be shown that paid the Bill, your score will increase. You will need to contact the creditor if you find any of these errors.

Together to check the error report contains, should pay outstanding balances on credit cards as quickly as possible, especially those with higher interest rates. Do not close any credit account. This will not improve your score.

Six tips to get maximum benefits from credit cards

A credit/debit card is not rewarding ever until you make it advantageous for you. You can also ruin your financial health, if not used wisely.

Here are six tips for getting the most out of your cash credit.

Avoid annual fees

Make sure that the card is free from annual fees. Most credit card companies fee yearly. In that case, you should check your monthly statement to find out if the broadcaster has accused these charges. Why pay annual fees, when you already pay the interest rate on the card?

Payment by credit card of Miss ever

One of the most important ways to make your cash credit useful is to continue paying monthly bills. Also, avoid using your card if you can pay the balance. If you can’t afford the tab, avoid buying.

Remember, the credit balance accrues cash with debt. As a result, becomes unbearable and eventually ruin your credit score.

Use cash back rewards

Most people tend to use credit card rewards. However, it is relatively less rewarding than cash back rewards.

For example, you get free airfare, if you bought the same ticket for exactly the same price. But to get the $ 100 reward points, you must buy something worth $ 150.

Be familiar with the benefits of the card

It is essential to know all the advantages provided by the card-issuing Institution. While some cards offer free airline miles, others double guarantee of a product you want to buy. Therefore, knowing the benefits that provides. It will also help to avoid paying extra for something you can get for free.

For example, if the card offers free rental car insurance, you can avoid paying additional fees to take advantage of this opportunity.

Remember all of paper

If the memory cannot serve well, you better write all the benefits provided by your card company. It may seem difficult, but it’s rewarding in the long run.

For example, if you purchased a loan of money eight years ago, can remember every detail from then to now? Hence, it is gratifying to write everything on paper for future reference. Suppose you bought a 0% APR card five years ago. Introductory APR now is over. In that case, the card is just useless for your need.

Maximize your card

If you can pay the balance of your card, use it whenever possible. Whether it pays to buy small, you and the seller have both benefited.

For example, the small expense helps earn many points on your card. You can redeem to enjoy many privileges offered by issuers. On the other hand, the seller or merchant that accepts the card huge increase in turnover, cash flow and convenience from the boring process of payment transactions.

Six tips to get maximum benefits from credit cards

A credit/debit card is not rewarding ever until you make it advantageous for you. You can also ruin your financial health, if not used wisely.

Here are six tips for getting the most out of your cash credit.

Avoid annual fees

Make sure that the card is free from annual fees. Most credit card companies fee yearly. In that case, you should check your monthly statement to find out if the broadcaster has accused these charges. Why pay annual fees, when you already pay the interest rate on the card?

Payment by credit card of Miss ever

One of the most important ways to make your cash credit useful is to continue paying monthly bills. Also, avoid using your card if you can pay the balance. If you can’t afford the tab, avoid buying.

Remember, the credit balance accrues cash with debt. As a result, becomes unbearable and eventually ruin your credit score.

Use cash back rewards

Most people tend to use credit card rewards. However, it is relatively less rewarding than cash back rewards.

For example, you get free airfare, if you bought the same ticket for exactly the same price. But to get the $ 100 reward points, you must buy something worth $ 150.

Be familiar with the benefits of the card

It is essential to know all the advantages provided by the card-issuing Institution. While some cards offer free airline miles, others double guarantee of a product you want to buy. Therefore, knowing the benefits that provides. It will also help to avoid paying extra for something you can get for free.

For example, if the card offers free rental car insurance, you can avoid paying additional fees to take advantage of this opportunity.

Remember all of paper

If the memory cannot serve well, you better write all the benefits provided by your card company. It may seem difficult, but it’s rewarding in the long run.

For example, if you purchased a loan of money eight years ago, can remember every detail from then to now? Hence, it is gratifying to write everything on paper for future reference. Suppose you bought a 0% APR card five years ago. Introductory APR now is over. In that case, the card is just useless for your need.

Maximize your card

If you can pay the balance of your card, use it whenever possible. Whether it pays to buy small, you and the seller have both benefited.

For example, the small expense helps earn many points on your card. You can redeem to enjoy many privileges offered by issuers. On the other hand, the seller or merchant that accepts the card huge increase in turnover, cash flow and convenience from the boring process of payment transactions.

Yours, Mine and Ours: How Spouses Share and Transfer Property

For most married couples, the cornerstone of estate planning is the transfer of their biggest asset: their home. So it’s important that couples be aware of the many roads this process can take.

Married couples who own real property together have many options when deciding how to share the asset. Traditional approaches include joint tenancy, tenancy in common, tenancy by the entirety and community property. All have advantages and disadvantages.

Joint tenancy is a form of concurrent ownership where each owner has an equal interest in the property. It is available to unmarried couples as well, though I will focus on married couples in this article.

Arguably, the most useful feature of a joint tenancy arrangement is the “right of survivorship.” When the first spouse dies, his or her stake in the property passes directly to the surviving spouse, without the need for probate administration. During probate, a court determines the validity of the decedent’s estate documents and helps to settle any claims against the estate before the property is distributed to the heirs. Avoiding this process can save the beneficiary of an estate substantial costs and time. By foregoing probate, the surviving spouse also gains additional privacy, since the probate process is a matter of public record.

Tenancy in common usually does not have the right of survivorship. However, it allows other customizations, and offers greater flexibility. As in joint tenancy, tenants in common do not have to be married; unlike in joint tenancy, tenants in common may hold unequal interests in the property. Tenancy in common is not dissolved when one of the tenants dies, either. If John and Jane are tenants in common, each with a 50 percent interest in their property, John can bequeath his 50 percent to their son John Jr., and Jane’s interest will remain unaffected.

Tenancy by the entirety is available only to married couples, though Hawaii and Vermont offer options for domestic partners and those in civil unions, respectively. For legal purposes, it is as if the property is owned by a single entity (the couple) instead of two parties. Neither party can dissolve the tenancy without the other’s consent, except in cases of divorce or annulment. Like joint tenancy, tenancy by the entirety offers a right of survivorship, allowing the surviving spouse to avoid probate. It can also shield the property from creditors of one spouse only, though not from creditors to whom the couple is jointly in debt. Not all U.S. jurisdictions recognize tenancy by the entirety.

Community property laws exist in only nine states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. In Alaska, couples may enter into community property arrangements, but must do so by signing agreements or forming a trust. The validity of such arrangements is still untried on a federal level, though, and it is not clear whether the Internal Revenue Service will honor them for federal tax purposes.

Although the specifics of community property laws vary from state to state, the basic idea is the same. Like tenancy by the entirety, community property is an option only for married couples. Generally, any property acquired by either spouse during the marriage becomes community property, unless it is a gift or an inheritance. Property owned prior to the marriage is also excluded. Spouses may enter into agreements, such as prenuptial or postnuptial arrangements, that preclude otherwise eligible property from being subject to community property laws, or which convert separate property to community property.

Community property has no right of survivorship. Each owner can dispose of his or her interest individually. As a result, without additional estate planning, most transfers will be subject to probate, even if one spouse simply leaves the entirety of their interest to the other. Creditors can also generally reach the deceased spouse’s interest through normal estate administration rules. Community property offers the advantage of allowing a full step-up in basis upon the death of either spouse, which typically allows the survivor to pay taxes on a smaller capital gain should the property be sold.

This is illustrated in the example below, contrasting joint tenancy with community property:

John and Jane purchased a home for $1 million, and it is now worth $2.5 million. Jane has died and John inherited the home. If they owned the property as joint tenants with right of survivorship, John’s basis in the property is $1.75 million. This is because only Jane’s half of the interest is stepped up to the current market value ($1.25 million). The cost basis of John’s half of the interest continues to be based on the $1 million purchase price ($500,000). In contrast, both John’s and Jane’s interests would be stepped up to the current market value of the home if they had owned it as community property, and John would inherit the home with a cost basis of $2.5 million. This could mean a significant reduction in taxable capital gains if John were to sell the property after Jane’s death, even allowing for a potential reduction due to the home-sale exclusion rule. This would also be the case for other property, such as investment assets, owned by the couple.

All of these arrangements offer benefits and drawbacks, which may weigh differently depending on a couple’s situation. Joint tenancy and tenancy by the entirety allow the surviving spouse to avoid probate, but do not offer community property’s generous terms for a full step-up in basis in the property. Community property risks giving creditors access to the decedent’s portion of the property, but also allows more flexibility in the way that property is distributed. Tenancy in common offers the option of unequal interests in the property, but does not have a right of survivorship.

In certain states, couples have yet another option that is relatively new: community property with right of survivorship. In several states, the law has been on the books for less than 15 years. California – the state that has arguably received the most attention on the topic – first implemented these ownership rights in 2001. Of the nine community property states, Arizona, California, Idaho, Nevada, Texas and Wisconsin currently offer the right of survivorship option. Laws also vary by state regarding which property is eligible to be titled as community property with right of survivorship. For example, only real property may be titled this way in Idaho.

The states that offer community property with right of survivorship seek to make it easier for couples that have relatively simple estates to transfer property to a surviving spouse. Before the advent of community property with right of survivorship, married couples had to draft special agreements or use trusts to convert joint property into community property. Community property with right of survivorship allows married couples to take advantage of the full step-up in basis while avoiding probate administration, all without the need for more complex estate planning.

Like any estate planning method, community property with right of survivorship is not a cure-all. For example, should bankruptcy be a concern, joint tenancy or (in some cases) tenancy by the entirety would leave the non-debtor’s property out of the bankruptcy proceedings, while property held as community property, with or without the right of survivorship, would move entirely to the bankruptcy trustee’s control until proceedings were complete. Couples should carefully examine their situations before deciding which arrangement is likely to carry the most benefits.

Though this option is not prevalent nationwide, financial advisors should be aware of both its benefits and its potential drawbacks. Even if a couple does not currently live in a community property state, they may have once lived in such a state, or they may move to one in the future. If a client lived and purchased real estate in a state that offered community property with right of survivorship, the property may continue to be characterized that way, even if the owners have since moved elsewhere.