Knight Capital has “all hands on deck” and is in close contact with clients and counterparties as it tries to weather trading errors that cost it $440 million, Chief Executive Officer Thomas Joyce said. Joyce said it’s “hard to comment” on discussions with creditors as Knight stock extended a two-day plunge to 70 percent and the firm explored strategic and financial alternatives following a loss almost four times its annual profit. The problems were triggered by what Joyce called “a bug, but a large bug” in software as the company, one of the largest U.S. market makers, prepared to trade with a New York Stock Exchange program catering to individual investors. “Technology breaks,” Joyce said in an interview on Bloomberg Television’s “Market Makers” program with Erik Schatzker and Stephanie Ruhle today. “It ain’t good. We don’t look forward to it.” [Bloomberg]
Knight Capital CEO: “It Ain’t Good” When We Lose Four Times Our Annual Profit In A Matter Of Minutes
By Bess LevinComments (71)
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You know what they say: You can’t choose your family, but you can choose your financial planner. Or something like that. One of the great things of being in charge of your money is choosing who (if anyone) will help you manage it. The choice isn’t always an easy one. How will you know that your planner is reputable and trustworthy?
These five red flags may be good indications of whether the financial planner sitting across from you is someone you should trust with your money. LearnVest Planning also provides an innovative 7-step program for your money where you work one-on-one with a financial planner. To see if this program is right for you, start with a free financial consultation.
1. She Isn’t Certified
“There are a lot of good planners out there who aren’t Certified Financial Panners™,” says Samantha Vient, CFP®, of LearnVest Planning Services. “However, CFPs® are required to adhere to the CFP® Board’s standards of professional conduct.We believe it’s always a good idea to work with someone who has the CFP® designation, which is issued after completing a CFP® Board-approved personal financial planning curriculum, passing a rigorous exam issued by the Certified Financial Planner Board of Standards, meeting experience requirements and passing an ethics and background check.
2. He Offers to Manage Your Money for “Free”
Financial planners are usually paid in one of two ways: Either through fee-only, which can be a set fee, hourly, retainer or a percentage of the assets they manage for you, or through commission, which means the planner is paid each time he buys or sells an investment.Fee-only payment structures can be more desirable to some clients, as there’s no financial incentive based on assets under management for a planner to buy or sell, whereas working on commission encourages planners to make trades, rather than solely look out for your best interest—called a “fiduciary” duty. (You want to be sure that the planner you choose is a fiduciary.)
LearnVest Planning Services provides the services of fee-only Certified Financial Planners™. Get started for free with a 15-minute financial consultation.
3. She Says She Outperforms the Market
“If a financial planner tells you that she can outperform the market, that’s a major red flag,” Vient explains. “In fact, due to government regulations, it’s illegal to advertise statements that promise a specific return.”Outperforming the market—that is, getting better investment returns than the market average—is extremely difficult to do consistently, and requires taking a lot of risks with your investments. It’s rare to find a financial planner who can consistently outperform the market—and results are never guaranteed. Either way, in the pursuit of these high returns, she’ll be exposing your investments to much higher risk than you may be comfortable with.
Instead, look for a CFP® who, when looking at your portfolio, can advise on proper asset allocation based on your risk tolerance and time horizon, as well as through economic ups and downs.
4. She Doesn’t Ask About Your Financial Goals
“Your planner isn’t just there to crunch the numbers,” Vient advises. “She’s helping you make a plan for your money and your life. You should be looking for someone who has similar values to you.”Ideally, you’ll likely want to work with someone who is in a similar life stage. Are you a parent? A planner with children may be better able to understand your need to save for college. Does your CFP® have a specialty? Some planners have an area of expertise, like insurance, estate planning, divorce or retirement—a fact you might want to consider if that’s a particular need of yours.
When meeting a potential planner, remember that you’re allowed to ask questions about their experience and priorities: “Do you think it’s more important to save for retirement or pay off debt? How do you feel about supporting kids through college? How do you mitigate investment risk as your clients get older?”
The choices you make with your money are intensely personal. The person who helps you make these choices should be able to understand and accept your financial priorities, and help you use your money to meet them.
5. His Management Style Makes You Uncomfortable
Financial planners can manage your money for you or manage your money with you. As different people have different needs when it comes to money management, there is no right way to work with a planner—it’s up to you to decide how hands-on you want him to be.
When you sign on with a financial planner, there will be a written agreement of how the two of you will manage your money. Read this carefully, and ask questions if you’re unsure about anything. Are you signing your accounts over to this planner? Will he check in with you before making a trade, or when rebalancing your accounts? If you’re uncomfortable with anything in the agreement, bring it up immediately.Learn more about LearnVest Planning and our financial planners by visiting learnvest.com. To book your free consultation today, email FA_Support@learnvest.com or complete your request online.
LearnVest Planning Services is a registered investment adviser. The opinions expressed in this article are that of LearnVest Planning Services, a registered investment adviser. The advice provided may not be suitable for your individual situation and you should discuss your situation with a financial professional.
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Please define this word "profit".
-UBS Board of Directors
Misery loves company
-UBS
Drops 2 of the more cliched synonyms for "We're so fucked" with "All hands on deck" and "Hard to comment" and then comes in with a fresh, rural "It ain't good". Nice.
Knight needs to merge with Metro North to survive.
Oh well, it's summer time and there's usually a good renaissance fair going on somewhere.
Throwing VaR and somebody else under the bus would've made this much more easier on you.
–Jamie D.
"a bug, but a large bug."
I'M ON IT!
-The Orkin Man
I'd just deny it ever happened.
I love the irony in that he was on Market Makers.
Ah, fuck it dude, let's go bowling.
I think KCG makes that market too. $ROL
I'm in the business of misery. Let's take it from the top.
I…what?
They have to find and kill the brain bug. It's the only way to know for sure.
Did you eat a lot of twinkies as a kid?
Mixing your movies, dude.
Starship Troopers and Aliens Quant.
Put it in the error account, it'll come back.
Brain bug? Sounds delicious!
We need some new capital, and we swear we are not going to lose it all this time ok. seriously
Next stop, Knights of the Round Table selling their table to post collateral.
Bad day?
How big?
- Billy the Exterminator
I'd just work out of it.
http://www.knight.com/contact/emergencyInfo.asp
EH! Make a market…….fake a market its all good. Bernie Madeoffwithit
Wives
-Things that ain't good
UBS Capital CEO: " You know you get used to it "
Misery incorporated?
Just shut it down bro and start a new one.
Serious question – Whats Knight CDS at right now?
Capital? Like all capital letters?
5.2?
–Guy who was way off on the FB guess the close contest we had a while ago but likes these sorts of contests
All I have to say is AWESOME picture Bess, Bravo!
You know what I'm good at? One word: Bedazzaling. I could bedazzle the shit out of that knight's tunic and no one would even notice the $400MM loss.
Bess,
I bet Matt was hot in that armor. How long did you make him lay in the grass like that? I hope you at least bought him a Mr. Softee afterwards.
One of the most entertaining interviews ever, what was that guy thinking?
does FB have any debt ?
the bonds are at .70
With a slightly different name you can do at least 3-4 times. PalladinCap anyone?
Who wants a smoothie? I'm buying…
That is either impressive as hell (catching both movies) or scary (living in your mother's basement watching movies 24hrs a day).
I'll go with the impressive, feeling generous.
tomorrow, .40.
Paramore, brother, Paramore.
-another bad music fan.
Me too!
I'm pretty sure it's all in Starship Troopers.
Hey!
-Penn Central
I've got a pair of jordache jeans with your name on it….
I see the problem here, you've got yer culture of client focus and yer culture of compliance, but you forgot yer culture of not losing $440MM in 30 minutes. Get that and you're golden.
St. Louis, Misery
If they would have held on to the positions just 2 weeks longer they would have been profitable.
No you are not.
–Bernie
In Starship Troopers, why were the soldiers armed with weapons that fired thousands of rounds a minute but it took rockets to bring down the bugs?
Kansas City, Misery > Saint Louis, Misery…..plain and simple.
UBS It Ain't Good?
BATS > BUGS
hes got a point
just look at his vagina
"You're not good Noonan…you stink"
Hey !
spit out my red bull…lol…well done
Soon, they ain't gunna have no nuttin'
- UBS Honda Mechanic Quant
It was on in our var, get fucked
I'd just sue the NYSE. Actually, NASDAQ. Sue NASDAQ.
- UBS Equities
You heard me…I don't like losses sport. Nothing ruins my day more than losses
Can we get "Bonus Watch '12" for Knight Capital first year computer programmers?
In our experience, two is really the limit.
If I was Joyce I would have been chasing them around the building with a fire ax.
You need a system to do that for you ?
Watch your step – your throwing rocks at a legendary movie, friend.
misquote
HA HA
We're gonna need a bigger boat
-TJ