Learning to Launch: Financial Tips for Post-College Students

September 29, 2022
BBH Relationship Manager Laura Salibello and Associate Maddy Pellow provide financial tips for making the transition out of college more manageable.

College has come and gone and now it’s time to live on your own for the first time. There are a few simple steps that can make this new phase more manageable – at least when it comes to finances.

  • Open a checking account: If you do not yet have your own checking and savings account, this is a good time to start. Setting up a checking account in your name allows you to take responsibility and view the inflows and outflows of your money.
  • Build a budget: View the transition as an opportunity to consider your expenses while away from home. This can be as easy as taking a sheet of paper and drawing a table that includes the months along the top and expense types (for example, books, meals, and travel) on the left and then estimating the corresponding monthly costs. After totaling each month, you’ll have a good sense for what is needed.
  • Discuss money sources: Charting out expenses and determining what it costs you to live on your own informs everyone and opens a dialogue around what options are available and appropriate. Consider where your spending money will come from. For instance, you may have enough savings from your summer job, you may be starting your first full-time job, or you may realize you need some help from your parents.
  • Discuss an allowance with parents as needed: A budgeting exercise can illuminate a conversation with your roommates or enable you to live alone. By writing down real numbers, you can see what options  work best. It’s important to understand how your finances are calculated so you can visualize how you will allocate your allowance throughout each month.
  • Learn from your mistakes: If you spend your full allowance and/or monthly budget all in one weekend, it’s important to feel the consequences of these decisions rather than receive an additional stipend from your parents. For instance, this may mean you can’t spend on other items later in the month. Overtime, you should find your balance and will identify the best strategies for managing within your budget.

Transitioning to a post-college life can be full of unexpected changes, but money matters do not have to be one of them.  At Brown Brothers Harriman, we can help facilitate these conversations between you and your parents and help prepare you with the tools needed to develop financial independence as you continue your path into adulthood.

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Coniderations for Managers

These product structures may be ideal for an asset manager who is managing active strategies and is wary of publishing their holdings daily. When considering whether these products are right for their firm, managers should ask themselves:

  • Which product structure is right for my strategy?
  • How will I price these products alongside my existing investment menu?
  • Should I seek to replicate existing strategies or launch something new?
  • Will broker/dealer platforms support these products?
  • What are the operational nuances that are unique to these products?
  • How will I need to adjust my distribution strategy to support these products?
  • How should I structure my capital markets team to support these products?

 

Asset managers should consider what strategies may work in this wrapper and how a proxy-basket, semi-transparent active offering could be added to their capabilities. BBH is ready to discuss these products in more detail and welcome the opportunity to engage with firms in deeper dialogue about this development.

Over the past 15 years, Brown Brothers Harriman (BBH) has partnered with more than 40 asset managers and sponsors to bring ETFs to market in the US, Europe, and Hong Kong. BBH has worked with all four proxy product sponsors and other third-party providers to design an operating model to service these products. 

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On December 10, the SEC approved new proxy-based, semi-transparent active ETF structures from Natixis/New York Stock Exchange (NYSE), T.Rowe Price, Fidelity, and Blue Tractor Group. While each of the products is unique, they all use “proxy baskets” to avoid the possibility that investors will use disclosed information about an ETF’s holdings to front run the strategy. These structures may provide a compelling option for active managers to enter the ETF market without revealing their “secret sauce.” In this edition of Exchange Thoughts, we break down the different features of these active structures.

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