If you are interested in learning more about estate planning to grow your financial advisor business, you may be interested in estate planning courses. Estate planning courses should cover the basics, such as: defining the most commonly used terms in estate planning; establishing goals for estate planning clients; comparing different objectives of estate planning. One option that many estate planning clients may be interested in is an annuity – in this case annuity training can be helpful to give you a solid understanding of what annuities are and how your clients may benefit from investing in them. There are many other topics that could be covered in both annuity training and estate planning courses, such as long-short funds and different classes of shares. This intro will cover those two topics in particular!

Long-Short Funds [130/30 Funds]

“Market neutral” and long-short funds both have the objective of protecting investors when the market drops. Management typically engages in short selling (betting stocks are going to go down) coupled with traditional long-term investments. The typical expense ratio for this category is about 2%. There are significant differences between fund strategies.

Most long-short funds invest a majority of their assets in common stocks. They then short other stocks with the remaining 20-30% of the portfolio. “Market neutral” funds, by contrast, usually invest an equal portion of their assets in “long” (owning the stock) and “short.” Long-short funds do better than their market-neutral rivals when the market is rising (since the majority of their assets are “long” stocks). In down markets, investors should expect to make very little, if any. During negative periods, market neutral funds should hold up better because they have pretty much hedged everything.

Management skills and trading costs are magnified in long-short and market neutral funds. A bad long-short manager can consistently lose money; a bad long-only fund manager may lag his or her benchmark but will still make positive returns most of the time.

Class A, B, and C Shares

Commissions are commonly called “loads.” A number of publications question whether or not an investor should pay any kind of commission. These publications believe that anyone paying a commission is either foolish or ignorant. However, one must also ask what the investor receives in return. The periodicals that promote mutual funds are load publications-they charge a fee for their information. Yet, none of these services point out that the reader could go to the local library and get the same information free.

If someone is willing to pay for advice, the question then becomes which is best for the investor, A, B, or C shares? The answer depends on how the investor psychologically feels about commissions, the expected holding period, and the likelihood of finding a better investment opportunity while the mutual fund shares are owned.

Some investors strongly dislike having to pay an upfront commission. For them, B or C shares are preferable because the commission is not seen and the added expenses are taken out over the course of several years. Other investors expect to hold shares for a number of years and an upfront commission may be the best value, depending upon the amount invested, assumed rate of growth, and the actual number of years owned. Still other investors prefer the flexibility of being able to exit a fund family at anytime and use the money elsewhere; for them, C shares make the most sense.

Putting it all together

Learning about different investing strategies in estate planning courses can help financial advisors grow their business and expand to different areas. If you decide to take estate planning courses, you may want to make sure to get thorough specialist training as well, such as annuity training or training on specific funds and investment strategies (for example, long-short funds and the different share classes).

Author Bio: Cory Bowman is Director of Ops at the Institute of Business Finance. IBF has helped thousands of members of the financial services industry attain designations. For more information about IBF, estate planning courses, or annuity training, visit http://www.icfs.com

Category: Finances
Keywords: estate planning courses, annuity training