America’s wealthiest business schools-By Daniel J. Bonsoms

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In this Sunday, March 13, 2016, photo people walk near Memorial Church, behind, on the campus of Harvard University, in Cambridge, Mass. Amid scrutiny from Congress and campus activists, colleges across the country are under growing pressure to reveal the financial investments made using their endowments. (AP Photo/Steven Senne)

Republished with permission from Poets and Quants.

The most elusive yet revealing stat about a business school is the size of its endowment. Few schools disclose this number in any public way, though it’s fair to say that B-school deans put more focus on this one number than any other. After all, it’s the ultimate measure of a school’s true “wealth.”
And a wealthy school is more likely to attract and retain the best faculty and staff. It’s no surprise that business schools with the largest budgets devote at least half of their expenses to salaries and benefits. A wealthier school is also more likely to have better facilities, in the form of new state-of-the-art buildings or well-maintained historic buildings with the latest technology. Wealthy schools typically have more flexibility to fight for the best students in the form of scholarship money, which in turn improves the overall profile of an incoming class and ultimately the career outcomes of its graduates.
In fact, the size of a school’s endowment is far more important an indicator of a school’s power and impact than an individual ranking, location, facilities, acceptance rate, career prospects, network strength, or industry placement. Because a business school’s wealth typically comes from gifts and other donations from its alumni network, a school’s wealth is a good indication of the strength of its alumni base. So which schools lead and which institutions have some catching up to do?
THE GAP BETWEEN HARVARD & STANFORD: $2 BILLION
With painstaking research, Poets&Quants has produced the most complete and up-to-date list of business school endowments ever published, with more than 50 top schools sharing their latest data. (Only two top U.S. schools declined to provide this information: Notre Dame University’s Mendoza School of Business and the University of Pittsburgh’s Katz School). Not surprisingly, you’ll find a strong correlation between endowment and the rankings, the quality of a class profile, and career statistics. But the numbers pull back the curtain on overvalued and undervalued programs and provide a potential explanation as to why certain schools are climbing the rankings every year while others stay put or lose ground.

It won’t shock anyone to know that Harvard Business School is at the top of the endowment heap. More surprising is its lead over all its rivals. As of fiscal 2015, ended June 30th, 2015, HBS’ treasure chest totaled a whopping $3.3 billion, the size of many university and college endowments. The gap between Harvard and Stanford University’s Graduate School of Business is now $2 billion, given the GSB’s current $1.3 billion endowment. In the past four years alone, HBS has increased its endowment by 24.5%, or $658 million, from $2.7 million in fiscal 2012, when the Great Recession walloped all endowments.

After the big two, you’ll find a predictable set of schools at the top: the University of Pennsylvania’s Wharton School at $1.289 billion, Northwestern University’s Kellogg School of Management at $866.0 million, and MIT’s Sloan School of Management at $812.9 million. A big surprise is the endowment size of Yale University’s School of Management at $743.0 million, placing it sixth among the top business schools. And an equal surprise, in the other direction, might well be the University of Chicago’s Booth School of Business which has an endowment of $734.0 million. 

The Chicago Booth number, however, does not include investment manager David Booth’s $300 million naming gift in 2008 which can yield more annual income than the cash thrown off by the Booth endowment. If the grant from Dimensional Fund Advisors’ Co-Founder David Booth were included, the Booth endowment could be double its actual size, putting it behind only Harvard (see table for complete list). Explains Joe Buck, associate dean for the office of advancement, “The Booth gift is not part of our endowment because there was no transfer of assets. The gift is structured so that the school receives a cash flow each year based on the stock dividends of Dimensional Fund Advisors.”

It’s also fascinating to examine U.S. business school endowments compared to the funds raised by non-U.S. schools. INSEAD has the largest endowment of any of the top European schools, but at $206.6 million the size of that fund puts the institution just above the University of Wisconsin’s Business School and just behind Cornell University’s Johnson School. London Business School’s $65.2 million endowment places the school just above the University of Arizona’s business school.
By and large, the spirit of university giving in Europe and other parts of the world lags far behind that of the U.S. At one business school after another, the endowments are significantly lower for schools that have risen to prominence in global rankings by The Financial Times and The Economist. IESE Business School in Spain has an endowment of $56 million, while IMD in Switzerland boasts just $24.6 million and ESADE in Spain of $4.7 million.
ANOTHER WAY TO LOOK AT THE DATA: ENDOWMENT PER STUDENT
While the overall size of a school’s endowment is important, the size of the institution also matters. Larger programs have larger networks but they also require higher expenses and greater investments to stay on par with smaller rivals. That’s why we are examining the numbers not merely by overall endowment but also by endowment per student. We are ranking them by endowment and by endowment per student.

Looking at the numbers per student, Harvard may still rule the roost but things get switched up fast when accounting for the size of a school’s enrollment including undergraduate, graduate and doctoral programs. Harvard has nearly $1.7 million in endowment funds for each enrollment student, compared with No. 2 Stanford which sits at $1.0 million. Yale SOM is third with $968,709 per student, while Dartmouth Tuck is fourth with $585,538 per student, and Vanderbilt University’s Owen School is fifth with $527,915 per student. The highest public university is Virginia’s Darden School which has an endowment per student of $526,291, placing it sixth overall (see table here).

HOW MUCH CASH DOES A TYPICAL ENDOWMENT THROW OFF?

How does an endowment work? It’s like a treasure chest that throws off cash each year to cover part of a school’s operating costs. No school uses its endowment as a checking account, but rather as savings that throw off some cash each year while preserving the base capital of the fund. At Harvard Business School, for example, the targeted annual payout goal is between 5% and 5.5% of the total $3.3 billion endowment. So in 2015, when the payout was 5.1% of the endowment, this treasure chest produced $127 million, accounting for 18% of the school’s total revenues. The year-over-year increase in Harvard’s endowment from $3.2 billion a year earlier reflects a 5.8% net appreciation in the endowment’s market value, the subtraction of the year’s distribution of $127 million, offset by $69 million in endowment gifts received by HBS during the year.

How much a school taps into its endowment for cash is dependent on university guidelines, the market appreciation or depreciation of the funds, as well as a school’s needs. In 2015, HBS’ endowment took a hit on the appreciation side, with the market value of the fund increasing by only 5.8%, versus the 15.4% rise of a year earlier. But the $69 million increase in endowment gifts also was just part of the $166 million in gifts and pledges to Harvard Business School last year.

Ultimately, the size of a school’s endowment amplifies its ability to carry out its mission and to enable and support growth and development for the school and its community.
Daniel J. Bonsoms, a CFA, is undecided on which MBA offer he will ultimately accept. He’s worked in private equity for the past four years and currently lives in Los Angeles.
America's Wealthiest Business Schools
It's no surprise that Harvard Business School tops this newest list compiled by Poets&Quants. Among the big surprises is the lead HBS now has over its rivals, Yale's School of Management having the sixth largest endowment, as well as Babson College’s sizable treasure chest that places it ahead of such schools as Dartmouth, USC and Berkeley

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Poets & Quants

All numbers are fiscal 2015, ending 6/30/15, for endowment as defined by the National Association of College and University Business Officers. * The Chicago Booth number does not include David Booth's $300 million naming gift in 2008 which can yield more annual income in some years than the Booth endowment. If it were included, the Booth endowment could be double its actual size. A spokesperson for Booth, however, says that the annual outlays from the grant can vary considerable from year to year.

Source: Business schools reporting to Poets&Quants Get the data

Culled from yahoo finance

How stricter rules for brokers will affect retirement savers-By Marcy Gordon

How stricter rules for brokers will likely affect retirement savers

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WASHINGTON (AP) -- High fees. Conflicts of interest. Inappropriate investments.
The Obama administration is going after a host of perceived rip-offs with the new rules it's unveiling Wednesday for brokers who recommend investments for retirement savers.
No longer will brokers who sell stocks, bonds, annuities and other products be required just to recommend investments that are "suitable" for a client. They'll now have to meet a stricter standard that has long applied to registered advisers: They will be considered "fiduciaries" — trustees who must put their clients' best interests above all.
The new rules, to be phased in starting a year from now, follow intense lobbying by both consumer advocates and the financial industry. Full compliance will be required by January 2018.
At stake are about $4.5 trillion in 401(k) retirement accounts, plus $2 trillion in other defined-contribution plans such as federal employees' plans and $7.3 trillion in IRAs, according to the Investment Company Institute.
Too often, regulators say, brokers steer clients toward questionable investments for which the broker receives a fee, thereby acting in their own financial interest instead of the client's.
The problems often arise when people who are retiring "roll over" their employer-based 401(k) assets into individual retirement accounts. Brokers may persuade them to put those assets into variable annuities, real estate investment trusts or other investments that can be risky or otherwise not in the client's best interest.
The administration has said investors will save about $4 billion annually under the new rules. The industry has countered that investment firms will have to shell out more than that just to comply with the rules. Financial firms also argue that the stricter rules will likely shrink Americans' investment options and could cause brokers to abandon retirement savers with smaller accounts.
Americans increasingly seek guidance in navigating their options for retirement savings. Many professionals provide advice. But not all are required to disclose potential conflicts of interest.
"This is a huge win for the middle class," Labor Secretary Thomas Perez said Tuesday in a conference call with reporters. "We are putting in place a fundamental principle of consumer protection."
Here are some questions and answers:

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BROKERS? FINANCIAL ADVISERS? WHAT'S THE DIFFERENCE?
It's significant. Brokers buy and sell securities and other financial products on behalf of their clients. They also can provide financial advice, with one key stipulation: They must recommend only investments that are "suitable" for a client based on his or her age, finances and risk tolerance.
So they can't, for example, pitch penny stocks or real estate investment trusts to an 85-year-old woman living on a pension. But brokers can nudge clients toward a mutual fund or variable annuity that pays the broker a higher commission — even without disclosing that conflict of interest to the client.
Registered investment advisers, on the other hand, are "fiduciaries." In that way, they're more like doctors or lawyers — obligated to put their clients' interests even ahead of their own. That means disclosing fees, commissions, potential conflicts and any disciplinary actions they have faced.
Advisers must tell a client if they or their firm receive money from a mutual fund company to promote a product. And they must register with the Securities and Exchange Commission, thereby opening themselves to inspections and supervision.
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WHAT DO THE NEW LABOR DEPARTMENT RULES DO?
They put brokers under the stricter requirements when they handle clients' retirement accounts. The Labor Department has grappled with the issue for years. The department withdrew an earlier proposal in 2010 amid an outcry from the financial industry, which warned that it would hurt investors by limiting choices.
The rules update the Employee Retirement Income Security Act, known as ERISA, enacted in 1975. That was a far different time. Traditional company pension plans were still the dominant source of retirement income. Now, traditional pensions are increasingly gone. In their place are 401(k)-type plans, which require workers to set aside pre-tax money but also add a new layer of risk: Employees themselves must decide how to invest their retirement money, and many seek professional advice.
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WHAT ARE THE ARGUMENTS FOR AND AGAINST?
Consumer, labor and civil rights groups have pushed for the new rules. They say the current system provides a loophole that lets brokers drain money from retirement accounts in fees they receive that can tilt the investment advice they give clients.
Ordinary investors with relatively small balances in their retirement accounts could especially benefit from the changes, according to Barbara Roper, director of investor protection for the Consumer Federation of America. These are the people who are now most likely to get "a sales pitch dressed up as advice" from brokers, Roper says.
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AND THE OTHER SIDE?
Wall Street lobbying groups, mutual fund companies, life insurance firms and other industry interests have opposed the rules as proposed last year and pushed the Labor Department to revise them.
They say the stricter requirements could limit many people's access to financial guidance and retirement planning and their choice of investment products. They warn that that would fall especially hard on mid- and low-income employees with smaller retirement balances — say, less than $50,000 — who could be abandoned by brokers.

The new requirement to act in a client's best interest means, in many cases, that the practice of charging commissions on every trade would be replaced by a set fee for a broker as a proportion of a customer's assets. Some brokers may decide that the smaller fees aren't worth their trouble, opponents say.

Some financial companies and groups may take the government to court over the new rules.

Culled from AP

How to Rightsize Your Retirement US News By Tom Sightings

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About a third of Americans between ages 50 and 64 plan to move within the next five years or so, according to a survey by the Demand Institute. Some baby boomers -- especially those who have been renting all their lives or who never moved up from their starter house -- actually plan to spend more on their homes in retirement. But more often than not, the baby boomer move will involve downsizing. They will trade in the old family home for smaller digs, perhaps in a less expensive neighborhood.

[See: 10 Ways to Reduce Your Housing Costs in Retirement.]
Putting the old house on the market and clearing out decades worth of possessions can involve a lot of work and emotional unrest. Many people who do not plan to move actually cite their overwhelming amount of possessions as a significant reason they are staying put. But there are enormous benefits to cleaning out the clutter and changing to a simpler lifestyle. It helps to think of a move not as downsizing, which suggests sacrifice, but as a liberating choice that points us toward a less stressful and more rewarding lifestyle.
But whether we're moving across town, across the country or not moving at all, we shouldn't let our future lives be weighed down by our past commitments or former obligations. The best solution, for all of us, is not necessarily to downsize or upsize, but to rightsize. We should choose a home, neighborhood and lifestyle that allows us to pursue our true dreams in retirement.
Here are a few suggestions inspired by a new book by Kathy Gottberg, "RightSizing: A Smart Living 365 Guide to Reinventing Retirement". She also blogs at Smart Living 365 about making "conscious choices for a better lifestyle that more closely fits your new needs in retirement."
[See: 10 Best Places to Retire on Less Than $100 a Day.]
Step off the keep up with the Joneses treadmill. Some of us have our self-esteem wrapped up in the size of our house or how fashionable our neighborhood is. But at this point in our lives, we should be beyond such superficial comparisons. It's not what you have that's so important, but what you do. So stop trying to impress your friends and neighbors, and start enjoying life as you want to live it.
More freedom in your life. A smaller home brings lower house payments in terms of taxes, insurance, utilities and maintenance. It also means less clutter, less work and less stress. Maybe you can even get your new home without a mortgage. The money you save on your home can be used to finance the things you like to do, whether it's travel, a new hobby, helping out your children and grandchildren or shoring up your retirement savings.
More time to do the things you want. The bigger the house, the more maintenance you have to do. The more stuff you have, the more you have to clean, store, fix and find. Once you rightsize your life for your new stage -- with no kids, no job, no obligations -- you can spend your time doing the things you enjoy. You no longer take care of things for other people, but have the time and energy to pursue your own interests and passions.
A more friendly neighborhood. If you give up the big suburban yard for a little patch of cityscape, what you lose in lawn maintenance you gain in convenience. It saves time and it's more fun to walk to the corner to get your morning coffee and hook up to wi-fi, compared to climbing in the car and fighting traffic for 15 minutes to do the same thing. Also, many people benefit from a closer-knit community, and develop more friends when they're walking the dog in the neighborhood or frequenting a local restaurant rather than ranging over miles of suburban highways. One caveat: If you're sensitive to noise or bothered by the idiosyncrasies of nearby neighbors, maybe your smaller home should be in the country, not the city.
[See: 50 Affordable Places to Buy a Retirement Home in 2016.]

You have everything you need, and nothing you don't want. The key to rightsizing is to stop living for other people and to live for yourself. Stop putting off happiness for some later date, and start living the life you've always dreamed of right now. You are no longer tied to a job and an office, so you don't need to live within commuting distance to work. You can go to the seashore, the mountains, a small city or large metropolis, or even to a foreign country. Rightsizing means keeping the things that are important to you, shedding everything that has become a burden and focusing on the things that enhance your current and future life.

Culled from US News & World Report

Germany leads European shares lower after industrial orders

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Traders work at their desks in front of the German share price index, DAX board, at the stock exchange …

LONDON (Reuters) - European shares fell on Tuesday, led lower by German stocks after industrial orders unexpectedly dropped in Europe's biggest economy, suggesting a slowdown in the global economy was leaving its mark.
German industrial orders fell in February in a surprise for economists, due to weaker foreign demand, particularly from euro zone countries.
Germany's DAX <.GDAXI> fell 1.7 percent, underperforming a 1.1 percent drop for the FTSEurofirst 300 to 1,297.65.
Exporters and other globally-exposed stocks were hit across the region, with autos <.SXAP> down 2.7 percent and mining stocks <.SXPP> down 3.1 percent.

The top faller on the FTSEurofirst 300 was Peugeot , down 6 percent after the carmaker outlined plans on Tuesday to return to consistent sales growth.

(Reporting by Alistair Smout)

Culled from  Reuters in yahoo finance

Google Wallet is shutting down its debit card - By Ian Kar

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Amid a companywide effort to cull money-losing operations, Google is shutting down its Google Wallet debit card, the company confirmed in a blog post today.

The card, which is linked to the user’s Google Wallet account balance, launched in 2014 in an effort to help people make purchases in stores and also provide Google with data on what people buy offline. Sources familiar with the product told Quartz there are millions of active cards, and Google is telling customers that similar products are offered by Simple, a digital bank owned by Spanish bank BBVA, and American Express Serve, the credit card company’s prepaid division. The card will officially shut down on June 30th.

Google declined to comment beyond the blog post.

The closure comes as parent company Alphabet has focused on reining in its less profitable divisions. Google hired Ruth Porat as chief financial officer in May 2015, and the Wall Street Journal reported in July that the former Morgan Stanley CFO was leading an internal audit to trim the company’s non-revenue generating fat. Ex-executives said as recently as 2013 that Google Wallet loses money on each transaction because of the high fees it pays credit card companies.

Google Wallet was originally intended to make in-store payments with Android devices, but that function was split into another service, Android Pay, which launched in 2014 after Apple launched its Apple Pay mobile wallet. Google Wallet is now focused on peer-to-peer payments, which has gained a bit of traction.

Culled from Quartz