That Annuity Show
John Manganaro
March 20, 2023
Word emerged over the weekend that UBS Group AG had agreed to buy Credit Suisse Group AG in what commentators have already described as “a historic deal” brokered by the Swiss government aimed at containing a crisis of confidence in the global banking system.
The new development came less than two weeks after Silicon Valley Bank became the biggest U.S. lender to fail in more than a decade, following its now-tarnished leadership’s unsuccessful attempts to raise capital and an ensuing exodus of cash from the tech startups that had fueled the lender’s rise.
As of Monday morning, the share prices of other regional banks continued to slide, particularly First Republic Bank, although some midsize U.S. lenders began to see promising signs of renewed interest from investors.
According to Jamie Hopkins, managing partner at Carson Group, these rapidly unfolding and interrelated events have underscored a few foundational financial planning concepts that seem to have been forgotten by many investors (and advisors) in the wake of the Great Recession.
As Hopkins emphasizes in a video posted to his Twitter channel, the unfolding banking industry drama shows that investors must take greater care in the management of their cash and cash-like assets, and that inherent “conflicts” in the banking system can leave long-term investors exposed to excess risk.
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The discussion is not meant to provide any legal, tax, or investment advice with respect to the purchase of an insurance product. A comprehensive evaluation of a consumer’s needs and financial situation should always occur in order to help determine if an insurance product may be appropriate for each unique situation.
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