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    The next big career track at business schools: Family offices

    Top universities are tapping into the family office boom, with a growing number of programs and courses aimed at training the next generation of family office leaders.
    The University of Chicago Booth School of Business launched the Booth Family Office Initiative, a combination of research programs, courses and summits aimed at current and future family office executives.
    Talent is scarce, and family offices are battling for experienced investors, accountants, lawyers and estate planners.

    The University of Chicago Booth School of Business.
    Courtesy: The University of Chicago Booth School of Business.

    A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox.
    Top universities are tapping into the family office boom, with a growing number of programs and courses aimed at training the next generation of family office leaders.

    Last week, the University of Chicago Booth School of Business launched the Booth Family Office Initiative, a combination of research programs, courses and summits aimed at current and future family office executives. The initiative includes a council of 50 family office leaders and Booth alumni who will help steer the program.
    “If you think of the family office market, the amount of capital overseen, and the importance of family offices commercially, in investing and philanthropy, the growth has been significant,” said Paul Carbone, co-founder and vice chairman of Pritzker Private Capital and a member of the Family Office Initiative Steering Committee. “The challenges they face have only grown. Here at Booth we have a deep intellectual capital base that can be applied to these questions.”
    The Booth Initiative is part of a surge in family office programs at top universities. Business schools at Harvard, Columbia, Northwestern, Pepperdine and other universities have started offering courses aimed at family offices or family-owned companies.
    Yet the Booth program marks the biggest university bet on family offices in 20 years. In 2004, the Wharton School at the University of Pennsylvania and the CCC Alliance, the family office peer group, teamed up to form the Wharton Global Family Alliance. With research, roundtables, courses, special presentations and workshops, the Wharton Global Family Alliance has become a leading resource for family offices and the broader wealth-management industry.

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    For top universities, family offices offer a rich potential source of research funding and business school students, along with expertise in one of the fastest-growing fields in finance. For family offices, the programs can help train the next generation of family office leaders at a time when talent is scarce and family offices are battling for experienced investors, accountants, lawyers and estate planners.

    The number of family offices has grown to more than 8,000 from about 6,000 in 2019, according to Deloitte. Their assets are expected to top $5.4 trillion by 2030, up from $3.1 trillion today. As more wealthy alumni launch family offices or work for one, they’re becoming an important pipeline of donors and funding. Trust companies, private banks and consulting firms eager for family office clients are also potential sponsors for the programs.

    “It’s a great opportunity for Booth School, the students and the community,” said John C. Heaton, a finance professor at Booth who will start teaching a new MBA course next year called “The Family Office.”
    The core of the Booth and Wharton programs is research. Private banks and wealth management firms already publish a steady stream of family office surveys and analyses. Yet the universities say their research will be more rigorous and objective.
    Booth, for instance, said it’s working with software companies that provide back-office platforms for family offices to get anonymized, aggregated data on their portfolios and investment changes.
    “That’s real data, not filtered opinions about what people are doing,” Heaton said.
    The initiative will decide what to research based on suggestions from its family office council. When Booth asked family offices for research priorities, for instance, the top answer was behavioral economics. Booth is famous for its behavioral economics program, so helping family office professionals navigate the interpersonal relationships with families and their decision-making process will be useful, Carbone said.
    “It was surprising to us that the No. 1 issue wasn’t investing or risk management,” Carbone said. “It was about the human dynamics.”
    Wharton’s research is also driven by questions from family offices. Along with regular research papers, it produces an annual, 100-page “benchmarking study” covering a broad array of topics that’s only available to the participating family offices.
    Raphael “Raffi” Amit, professor of management at the Wharton School who founded and leads the Wharton Global Family Alliance, said one issue he looked at in this year’s benchmark study was the rise of direct deals. While more family offices are bypassing private equity funds to invest directly in private companies, for instance, few have the necessary expertise.
    “Most of these families don’t staff up with private equity professionals,” he said. “Those are professionals who know how to evaluate a transaction, structure a transaction, manage the exit, how to add value. They do club deals. But putting it politely, the jury is still out whether this strategy will actually work.”
    Universities can also offer an increasingly rare experience for family office professionals — non-commercial gatherings. With the majority of family-office conferences becoming overrun by sponsors, salespeople and vendors, family offices are turning to universities to convene more “pure” gatherings of peers.
    Wharton’s annual Family Office Roundtable Forum, a collaboration between Wharton and leading families, has become one of the most coveted events of the year for family offices, limited to 60 or 70 invitations a year. Last year’s roundtable was in Tokyo, while the 2022 meeting was in Zurich.
    “We have a lot of family offices that want to come, but we had to cap it at 76 families,” Amit said. “We want to keep it private and small enough so people are sharing ideas and perspectives. It’s a pure play. There is no commercial agenda.”
    Booth is planning its own Family Office Summit next May. It’s inviting around 200 attendees from families and multifamily offices, including members of its family office council.
    “Families can go to a family office gathering every week if they want to,” Carbone said. “But we’re creating a safe network — no commercial angle and no one selling a product or service.” More

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    McDonald’s tells U.S. restaurants it’s not a ‘political brand’ after Trump visit

    McDonald’s said it is not a political brand and is not endorsing a presidential candidate after former President Donald Trump visited a location in Feasterville, Pennsylvania.
    Trump often accuses Harris of lying about working at McDonald’s for a summer in her twenties but has offered no proof backing up the claim.
    Corporate America has grown more cautious about wading into politics, fearing backlash from customers.

    Republican presidential nominee and former U.S. President Donald Trump works behind the counter during a visit to McDonalds in Feasterville-Trevose, Pennsylvania, U.S. October 20, 2024. 
    Doug Mills | Via Reuters

    Though President Donald Trump visited a Pennsylvania McDonald’s location on Sunday, the fast-food giant is trying to stay neutral in the presidential race.
    “As we’ve seen, our brand has been a fixture of conversation in this election cycle. While we’ve not sought this, it’s a testament to how much McDonald’s resonates with so many Americans. McDonald’s does not endorse candidates for elected office and that remains true in this race for the next President,” the company said in an internal message viewed by CNBC and confirmed by a source familiar with the matter.

    Trump learned how to operate a fry cooker and work the drive-thru line during his short shift at a Feasterville, Pennsylvania, restaurant. He used the stunt as an opportunity to take more shots at his opponent, Vice President Kamala Harris.
    Trump often accuses Harris of lying about working at McDonald’s for a summer in her 20s, but has offered no proof backing up the claim. Harris has denied the accusation. McDonald’s and its franchisees don’t have all of their employment records for workers dating back to the early 1980s, when the 60-year-old Harris would have worked there, the company said in the Sunday memo.
    “Though we are not a political brand, we’ve been proud to hear former President Trump’s love for McDonald’s and Vice President Harris’s fond memories working under the Arches,” McDonald’s said.
    Both McDonald’s and the franchisee who operates the location emphasized that the chain opens its doors to “everyone.”
    “As a small, independent business owner, it is a fundamental value of my organization that we proudly open our doors to everyone who visits the Feasterville community,” franchisee Derek Giacomantonio said in a statement. “That’s why I accepted former President Trump’s request to observe the transformative working experience that 1 in 8 Americans have had: a job at McDonald’s.”

    Although McDonald’s publicly supported the Black Lives Matter movement in 2020, it has tried to portray itself as an apolitical brand to avoid alienating customers. It follows a broader shift in Corporate America away from politics or initiatives perceived as ideological.
    A number of companies, including Ford, Lowe’s and Harley-Davidson, have walked back their diversity, equity and inclusion policies and practices this year.
    And that’s a change that many Americans want; only 38% of U.S. adults believe that businesses should take public stances, down from 48% in 2022, according to a Gallup-University of Bentley study conducted this spring. 
    But McDonald’s has already been involved with another controversy this election cycle.
    In late May, several viral social media posts criticized the burger giant’s affordability, citing everything from an $18 Big Mac meal at a Connecticut location to charts that alleged the chain’s prices had more than doubled over the last five years. Republicans latched onto the controversy, tying a jump in McDonald’s menu prices to Biden’s economic policy in a bid to win over voters fed up with inflation.
    To quell the controversy, McDonald’s U.S. President Joe Erlinger wrote an open letter and released fact sheets about the company’s pricing.
    — CNBC’s Kate Rogers contributed reporting. More

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    KKM Financial’s Essential 40 stock fund is now an ETF

    The Nasdaq MarketSite in New York, US, on Monday, Sept. 16, 2024. 
    Yuki Iwamura | Bloomberg | Getty Images

    KKM Financial has converted its Essential 40 mutual fund into an ETF, joining the growing shift by asset managers to a more tax-efficient fund model.
    ETFs make it easier for investors and financial advisors with taxable accounts to choose when to create capital gains or losses. This differs from mutual funds, which can sometimes hit their investors with an unwanted tax bill due to withdrawals or portfolio changes.

    “When you look at the tax efficiency of an ETF compared to a mutual fund, it is much more advantageous,” said Jeff Kilburg, founder and CEO of KKM and a CNBC contributor. “A lot of the wealth advisors that I work with really have issues with the capital gain distribution typical to a mutual fund.”
    Many asset managers have been converting their mutual funds to ETFs in recent years, due in part to a 2019 SEC rule change that made it easier to run active investment strategies within an ETF. The number of active equity mutual funds has fallen to its lowest level in 24 years, according to Strategas.
    More broadly, many asset managers are pushing the Securities and Exchange Commission to allow ETFs to be added as a separate share class within existing mutual funds.
    The newly converted KKM fund will trade on the Nasdaq under the ticker ESN. The goal of the Essential 40 is to allow investors to “buy what you use” in one equal-weighted fund, according to Kilburg. Its holdings include JPMorgan Chase, Amazon, Waste Management and Eli Lilly, according to FactSet.
    “We believe without these companies, the U.S. economy would be hindered, or would be in trouble,” he said.

    The old mutual fund version of the Essential 40 had a three-star rating from Morningstar. Its best relative performance in recent years came in 2022, when it declined less than 11% — much better than the category average of about 17%, according to Morningstar.
    Equal-weighted funds can often outperform market-cap weighted indexes during downturns. They’ve also been a popular strategy this year, due in part to concerns that the market was too reliant on the so-called Magnificent Seven stocks. The Invesco S&P 500 Equal Weight ETF (RSP) has brought in more than $14 billion in new investor funds this year, according to FactSet.
    In 2024, the KKM fund was up about 16% year to date before its conversion, with roughly $70 million in assets, according to FactSet.
    The ETF will have a net expense ratio of 0.70%, equal to that of the old mutual fund. More

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    Boeing machinists to vote on new proposal with 35% raises that could end strike

    Boeing and its machinists’ union have reached a new contract proposal.
    The deal could end a more than month-long strike that has hobbled the manufacturers’ production.
    The new proposal includes 35% wage increases over four years, a higher signing bonus of $7,000, guaranteed minimum payouts in an annual bonus program and higher 401(k) contributions.

    People hold sings during a strike rally for the International Association of Machinists and Aerospace Workers (IAM) at the Seattle Union Hall in Seattle, Washington, on October 15, 2024.
    Jason Redmond | AFP | Getty Images

    Boeing and its machinists’ union have reached a new contract proposal, the union said Saturday, outlining a deal that could end a more than monthlong strike that has hobbled the manufacturers’ aircraft  production.
    The ratification vote is set for Wednesday.

    The new proposal includes 35% wage increases over four years, a higher signing bonus of $7,000, guaranteed minimum payouts in an annual bonus program and higher 401(k) contributions among other changes.
    Acting U.S. Secretary of Labor Julie Su met with both parties earlier this week. “With the help of Acting U.S. Secretary of Labor Julie Su, we have received a negotiated proposal and resolution to end the strike, and it warrants presenting to the members and is worthy of your consideration,” the International Association of Machinists and Aerospace Workers District 751 said in a statement Saturday.
    “President Biden believes the collective bargaining process is the best way to achieve good outcomes for workers, and the ultimate decision on a contract will be for the union workers to decide,” a White House spokesperson said in a statement.
    The strike began Sept. 13 after more than 30,000 machinists overwhelmingly rejected a tentative agreement that included 25% wage increases over four years. Boeing later made a sweetened offer but the union blasted it saying it was not negotiated.
    “We look forward to our employees voting on the negotiated proposal,” Boeing said in a statement.

    Boeing is working to stop bleeding cash as it grapples with a safety crisis stemming from a near-catastrophic door plug blowout on one of its 737 Maxes at start the year and challenges in its other programs.
    The company earlier this month said it will report a deep loss and take charges of about $5 billion in its commercial and defense units. A ratified contract on Wednesday, when Boeing also reports full results, would be a victory for new CEO Kelly Ortberg, who took the top job in August, tasked with reshaping the company.
    On Oct. 11, he announced job cuts of 10% of Boeing’s workforce and that the company will stop making 767s when orders are fulfilled in 2027.

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    Disney will name Bob Iger’s replacement in early 2026; James Gorman to become board chair next year

    Disney will name a successor to CEO Bob Iger in early 2026, the company said in a statement.
    Former Morgan Stanley CEO James Gorman will replace Nike Executive Chairman Mark Parker as chairman in January.
    Iger’s four direct reports — ESPN Chairman Jimmy Pitaro, Disney Experiences Chairman Josh D’Amaro, and Disney Entertainment Co-Chairmen Dana Walden and Alan Bergman — have all interviewed with the succession committee in recent weeks, sources said.

    Disney has tapped James Gorman to replace Mark Parker as the company’s next chairman, effective in January, as the media giant lays the groundwork to name a successor for CEO Bob Iger in early 2026, the company said Monday.
    Gorman joined Disney’s board less than a year ago and was named the head of the succession planning committee in August. He will continue to lead that committee after he takes over as board chairman from Nike Executive Chairman Parker.

    “The Disney board has benefited tremendously from James Gorman’s expertise and guidance, and we are lucky to have him as our next chairman – particularly as the board continues to move forward with the succession process,” Iger said in a statement. “I’m extremely grateful to Mark Parker for his many years of board service and leadership, which have been so valuable to this company and its shareholders, and to me as CEO.”
    Parker will step down after nine years on the Disney board “to focus on other areas” of his work, according to a Disney statement. That includes spending more time working on Nike-related matters, according to a person familiar with the matter. Elliott Hill took over as Nike CEO last week, replacing John Donahoe.

    Early 2026

    Disney had initially targeted 2025 to announce a successor, as CNBC reported last year. Pushing the date back to early 2026 will give the board more time to conduct due diligence on both internal and external candidates, according to people familiar with the matter, who asked not to be named because the discussions are private.
    Gorman has experience with succession planning: He oversaw the orderly transfer of power at Morgan Stanley, with Ted Pick succeeding him as CEO there at the start of this year.
    Succession hasn’t been smooth at Disney. The board fired Iger’s handpicked successor, Bob Chapek, in November 2022 after a turbulent tenure that lasted less than three years. Iger returned to the CEO job, and now, Disney shareholders are eager to see a succession plan stick.

    Iger’s four direct reports — ESPN Chairman Jimmy Pitaro, Disney Experiences Chairman Josh D’Amaro, and Disney Entertainment Co-Chairmen Dana Walden and Alan Bergman — have all interviewed with the succession committee in recent weeks, since Gorman took over in August, according to the people familiar.
    Gorman said in a CNBC interview in March, before taking over as the board’s succession chair, that Disney was running a “forward-looking, forward-leaning, incredibly disciplined process.”

    Bob Iger, CEO, The Walt Disney Company appears at the Disney Entertainment Showcase at D23: The Ultimate Disney Fan Event in Anaheim, California on August 09, 2024.
    Jesse Grant | Getty Images Entertainment | Getty Images

    Still, while putting a specific timeline on naming a successor adds a bit of clarity to the search, it also means the question of who will take over for Iger will continue to hover over the company for another year.
    Iger has pushed back his retirement five different times to continue to lead Disney as CEO. Activist investor Nelson Peltz focused on the board’s failure to name a lasting successor in his unsuccessful campaign to gain board seats earlier this year.
    Iger’s current contract as CEO runs until Dec. 31, 2026. He and the board haven’t decided if Iger will extend his board tenure past 2026, said the people familiar.

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    Chick-fil-A is releasing its own entertainment app, with family-friendly shows and podcasts

    Chick-fil-A will launch the Play app, which will host content aimed at families with children aged 12 and under.
    Research and conversations with customers found a connection between consuming content and mealtimes, according to Dustin Britt, Chick-fil-A’s executive director of brand strategy, entertainment and media.
    Chick-fil-A is the third-biggest U.S. restaurant chain by sales, trailing only Starbucks and McDonald’s, and growing rapidly.

    A sign hangs outside of a Chick-fil-A restaurant on May 06, 2021 in Chicago, Illinois. 
    Scott Olson | Getty Images

    Chicken sandwiches, waffle fries, milkshakes – and now TV shows and podcasts?
    Chick-fil-A plans to launch a new app on Nov. 18, with a slate of original animated shows, scripted podcasts, games, recipes and e-books aimed at families.

    While it’s an unusual move for a restaurant company to wade into the crowded media world, Chick-fil-A has been expanding outside of food for years already — with the ultimate goal of directing more people to its over 3,000 restaurants. Since 2019, Chick-fil-A has held the spot of the third-biggest U.S. restaurant chain by sales, trailing only Starbucks and McDonald’s, with many fewer locations than either. Last year, its revenue reached $7.89 billion, according to franchisee disclosure documents.
    As it tries to drive more restaurant sales, the company has sold branded merchandise, like a sleeping bag that resembles its chicken sandwich’s packaging, and created a spinoff brand called Pennycake, which offers family-friendly games and puzzles. And for the last five years, it’s released animated shorts on YouTube during the holiday season as part of its “Stories of Evergreen Hills” series.
    “We’ve been paying attention to some research and conversations we’ve had with families that are our customers, and insights bubbled up that content and games are both adjacent to mealtime,” said Dustin Britt, Chick-fil-A’s executive director of brand strategy, entertainment and media.
    “Our belief is, as we add value to their experience, then we’re giving them a reason to want to enjoy more Chick-fil-A with us,” he added.
    A preview of the app viewed by CNBC included the first 22-minute episode of “Legends of Evergreen Hills,” which continues protagonist Sam’s adventures in the fantasy world of Evergreen Hills; the first installment of “Hidden Island,” a scripted podcast about a family that shipwrecks on a deserted island; and a step-by-step cooking tutorial that uses a Chick-fil-A milkshake as a key ingredient.

    Customers can pre-download the free Chick-fil-A Play app for their iPhones, iPads and Android devices ahead of the launch next month.

    Why Chick-fil-A is betting on content

    People walk past a Chick-fil-A restaurant on 8th Avenue on December 30, 2023, in New York City. 
    Gary Hershorn | Corbis News | Getty Images

    Chick-fil-A decided to create the app following years of discussions with customers and as consumer behavior shifts away from prolonged visits to its restaurants.
    While many of Chick-fil-A’s customers still enjoy its in-restaurant playgrounds, more of its customers are now using its drive-thru lanes and ordering delivery, according to Khalilah Cooper, Chick-fil-A’s vice president of brand strategy, advertising and media. Rival McDonald’s has slowly been erasing its PlayPlaces, a change likely resulting from fewer children using the playgrounds, concerns about health and safety, and a shift away from marketing to children.
    “We’re looking at this app as a way to have a digital playground for the entire family to enjoy, whether they’re in our restaurants, in the drive-thru, driving to soccer practice or even relaxing at home,” Cooper told CNBC. “We want it to be an extension of our in-restaurant signature hospitality and generosity.”
    The content on the app focuses on themes like generosity, friendship, problem-solving, creativity and entrepreneurship, according to Cooper. Chick-fil-A designed the app’s content to appeal to children 12 years old and under and their parents.
    After the initial launch, new episodes of “Legends of Evergreen Hills” will release weekly through the holidays; “Hidden Island” will follow a similar drop schedule. Next year, the Play app will launch “Ice Lions,” another scripted audio series based on the true story of Kenyan teenagers who want to form the country’s first ice hockey team.
    Most of the content that will be available on the app was created with outside partners led by Chick-fil-A’s internal team, but some of it was licensed. The company didn’t disclose the names of its external partners.
    “We’re constantly thinking about what additional elements we can add into the app over time,” Cooper said.
    In August, media publication Deadline reported that Chick-fil-A has been working with outside production companies for content, including unscripted shows, like a family-friendly game show.
    “I’ll say that we’re exploring a variety of different types of content, and everything right now is a potential opportunity for us. We’re going to keep learning and exploring and figuring out what things work,” Britt said.

    Restaurants as media brands

    A Chick-fil-A meal is displayed at a Chick-fil-A restaurant on June 01, 2023 in Novato, California. 
    Justin Sullivan | Getty Images

    As legacy media players like Disney and Warner Bros. Discovery have found out, making content is expensive and attracting viewers is difficult, given the glut of available options on streaming services.
    For brands like Chick-fil-A, the calculus is a bit different. Rather than using content to make money from subscriptions or advertisements, they’re looking to sell more of their own products. That’s been the case since Procter & Gamble first sponsored daytime radio shows to sell its soap – creating the soap opera.
    “There’s a lot of content creation that happens from media houses for brands, and I think that brands want to tap into that because it feels more authentic. It feels more like content and not an ad,” said Stephani Estes, chief media officer for Goodway Group, a digital marketing agency.
    More recent entrants include Starbucks, which announced this summer that it will create original content through a partnership with Sugar23. And in January, Chuck E. Cheese said it’s working with “Top Chef” producer Magical Elves to create its own game show.
    “I think the biggest question I would have, as a marketing professional, is what is the business problem that you’re trying to solve? And is the dollar invested in that content creation or particular initiative going to pay out more than spending that dollar somewhere else in the marketing funnel?” Estes said.
    For Chick-fil-A, the branded content gives it a way to connect with kids – without the same stink as advertising directly to them – and foster goodwill toward the brand from their parents.
    And unlike Disney and Warner Bros. Discovery, Chick-fil-A has some flexibility to figure out if the investment is working. As a family-owned company, it isn’t beholden to shareholders who might push back against an expensive marketing endeavor.
    Chick-fil-A also has cash to burn, especially given its meteoric growth over the last decade. From 2018 to 2023, its systemwide sales nearly doubled. Last year, it raked in net earnings of $1.07 billion. Chair Dan Cathy, who served as CEO from 2013 to 2021 and is father to current CEO Andrew Cathy, has a net worth of $10.6 billion, according to Forbes estimates.
    Coincidentally, Dan Cathy owns Atlanta-based Trilith Studios, whose stages have acted as sets for many Marvel movies and TV shows, plus Francis Ford Coppola’s 2024 mega-flop “Megalopolis.” Tax breaks and cheap labor have helped Atlanta become the “Hollywood of the South” over the last decade. Cathy has previously drawn criticism for remarks he made in 2012 opposing same-sex marriage, and the company’s foundation donated to anti-LGBTQ groups during his time as chief executive.
    Dan Cathy was not directly involved in the development of the Play app or making decisions related to the content, according to Cooper. Chick-fil-A also hasn’t worked with his studio – yet.
    “We’ve not currently done any work directly with Trilith to date, but that’s something that we continue to explore, where it makes the most sense for both our businesses and brands,” she said.

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    Robinhood rolls out high-risk margin trading in the UK after getting regulator nod

    Robinhood launched margin trading in the U.K. Monday, allowing users to leverage their existing asset holdings as collateral to purchase additional securities.
    Margin trading where traders invest using borrowed cash to increase the size of their trades, is a risky investment strategy.
    Robinhood’s U.K. boss Jordan Sinclair said the firm had to get the local regulator “comfortable” with its approach to get the green light on launching margin in the country.

    Tthe Robinhood logo is displayed on a smartphone screen.
    Rafael Henrique | Sopa Images | Lightrocket | Getty Images

    LONDON — Robinhood said Monday that it’s rolling out margin investing — the ability for investors to borrow cash to augment their trades — in the U.K.
    The U.S. online investment platform said that the option would allow users in the U.K. to leverage their existing asset holdings as collateral to purchase additional securities.

    The launch of margin trading follows the recent approval of the product, after Robinhood held conversations with Britain’s financial regulator, the Financial Conduct Authority (FCA).
    Margin trading is a rarity in the U.K., where regulators see it as more controversial because of the risks involved to users. Some platforms in the country limit margin trading for only high-net-worth individuals or businesses. Other firms that offer margin investing in the U.K. include Interactive Brokers, IG and CMC Markets.
    The rollout comes after Robinhood debuted a securities lending product in the U.K. in September, allowing consumers to earn passive income on stocks they own, as part of the company’s latest bid to grow its market share abroad.
    The stock trading app touted “competitive” interest rates with its margin loans offering. Rates offered by the platform range from 6.25% for margin loans of up to $50,000 to 5.2% for loans of $50 million and above.

    Jordan Sinclair, president of Robinhood U.K., said that many customers feel they can’t access more advanced products like margin trading in Britain, as they’re typically reserved for a select few professional traders investing with the likes of heavyweight banks JPMorgan Chase, Goldman Sachs, Morgan Stanley and UBS.

    “There’s so many barriers to entry,” Sinclair told CNBC in an interview. “Ultimately, that’s what we want to break down all those stigmas and barriers to just basic investing tools.”
    He added, “For the right customer this is a great way to diversify and expand their portfolio.”

    A risky business

    Investing on borrowed cash can be a risky trading strategy. In the case of margin trading, investors can use borrowed money to increase the size of their trades.
    Say you wanted to make a $10,000 investment in Tesla. Usually, you’d have to fork out $10,000 of your own cash to buy that stock. But by using a margin account, you can “leverage” your trade. With 10x leverage, you’d only need to have $1,000 upfront to make the trade, instead of $10,000.
    That can be a lucrative strategy for professional traders, who can make even larger returns than on usual trades, if the value of the purchased asset rises significantly.

    It’s a riskier path for retail traders. If the value of the asset you’re buying on borrowed cash drops significantly, your losses will be dramatic, too.
    Robinhood announced it was launching in the U.K last November, opening up its app to Brits in March. At the time of launch, Robinhood was unable to offer U.K. users the option of margin trading, pending discussions with the FCA.
    “I think with the regulator, it was just about getting them comfortable with our approach, giving them a history of our product in the U.S., what we’ve developed, and the eligibility,” Robinhood’s Sinclair told CNBC.
    Sinclair said that Robinhood implemented robust guardrails to ensure that customers don’t invest more cash than they can afford to lose when margin investing.
    The platform requires users seeking to trade on margin to have a minimum of $2,000 of cash deposited in their accounts. Customers also have to opt in to use the product — they’re not just automatically enrolled for a margin account.
    “There are eligibility criteria. There is a way to review appropriateness of this product for the right customer,” Sinclair added. “Fundamentally, that’s a really important part of this product. We recognize it isn’t for the novice investor that’s just getting started on our customer.”
    Robinhood says that its customers’ uninvested cash is protected to the tune of $2.5 million with the U.S.’ Federal Deposit Insurance Corporation, which the firm says adds another layer of protection for users. More

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    Why I paid $95 to recycle a mattress — and you might, too

    Donating my old queen-sized mattress proved difficult. I recycled it and paid nearly $100 for the service in New York.
    More than 75% of mattress materials, like wood, foam, steel and fiber, can be recycled.
    The economics can be challenging for recyclers.
    Some states have enacted mattress recycling laws that make it cheaper for consumers. However, state programs are funded by a fee on mattress purchases.

    The author paid a company, Renewable Recycling, to pick up and recycle his queen-size mattress in New York City.
    Greg Iacurci

    I paid $95 to recycle a mattress.
    It may sound odd, silly even, to pay so much to dispose of a run-of-the-mill household item.

    But the economics of mattress recycling illustrate why it can be difficult — and costly — to be an eco-friendly consumer in the U.S.
    Americans discard about 15 million to 20 million mattresses each year, according to the Mattress Recycling Council. That’s an average of about 50,000 per day.
    Most end up in a landfill, experts said.
    Mattresses are “one of the hardest things to recycle,” said Alicia Marseille, a sustainability and circular economy expert at Arizona State University.
    “It’s a massive waste stream,” she said.

    ‘It’ll probably be there for hundreds of years’

    Mattresses at a garbage dump.
    Robert Brook | Corbis | Getty Images

    My mattress — a queen-sized hand-me-down from family and probably close to two decades old — was in desperate need of replacement. The average mattress has a lifespan of about 14 years, from manufacture to consumer disposal, according to MRC.
    But what to do with it?
    I live in Brooklyn, where residents can dispose of a mattress for free as part of routine trash pickup.
    As someone who meticulously tries to cut waste in everyday life — avoiding single-use plastics, composting food scraps — it was painful to think of mine wasting away in a landfill.

    “If you put your mattress in a landfill, it’ll probably be there for hundreds of years, just sitting there,” said Meg Romero, the recycling and litter control superintendent for Charles County, Maryland.
    Surely, I can find a new home for it instead, I thought.
    Wrong.
    After two weeks of unsuccessful dispatches to local homeless shelters, organizations like The Salvation Army and Goodwill, and community forums like Buy Nothing and The Freecycle Network, I’d exhausted my patience for a free-giveaway option.
    Individuals who donate a mattress to certain groups may be able to claim a tax deduction for its fair market value on their federal tax return. Taxpayers would need to itemize their deductions to benefit.
    Did I neglect to reach out to some interested parties? Probably. Might someone else have different results? Yes. But my personal cost-benefit analysis dictated that it was time to ditch donations.
    I researched some recycling options, and selected Renewable Recycling Inc., based in East Rockaway, New York. There are few other U.S. companies that do such work, experts said. A directory compiled by MRC lists just 55.

    How a mattress is recycled

    Mattresses are picked up and placed into a truck to be hauled to a recycling facility at the Prima Deshecha landfill in San Juan Capistrano, California, on March 10, 2022.
    Mark Rightmire/MediaNews Group/Orange County Register via Getty Images

    More than 75% of a mattress is recyclable, according to MRC. Some companies put it at closer to 90%.
    Recyclers strip them of materials like wood, steel, and various foams and fibers, and sell them into secondary markets.
    The materials are then re-purposed: Shredded foam and fibers as carpet padding, animal beds or insulation; wood as mulch and fuel; and springs as scrap steel, for example.
    “If you can recycle, it will give those materials another life to be used as something else,” said Romero of Charles County, which launched a mattress recycling program for residents on Aug. 1.
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    That re-use has other environmental benefits. For example, there’s a reduced need to extract or source new materials for manufacturing, which cuts greenhouse gas emissions and water and energy use, experts said.
    Unusually, the Charles County service is largely free for residents. They can bring two items a day — like a mattress and box spring — to the Charles County Landfill for recycling for no charge. Additional items cost $10 per piece.
    Residents recycled more than 900 mattresses in September, over double officials’ estimates, Romero said. The county contracts with a Baltimore-based company, Deco Solutions, to manage the process.

    Charles County’s motivations weren’t purely environmental, though.
    Mattresses are bulky, taking up precious real estate in the county landfill, Romero said.
    “A landfill is a limited, finite space,” said Peter Conway, the president of Spring Back Colorado, a recycler based in Commerce City. “They want to put things that break down, things that are easily compactible.”
    “Mattresses are kind of the antithesis of that,” Conway said. He expects to divert 8 million pounds of waste from Colorado landfills this year.

    Why mattress recycling can be expensive

    Shredded old mattress materials.
    Guillaume Souvant | Afp | Getty Images

    The $95 fee I ultimately paid to Renewable Recycling is “pretty standard” among mattress recyclers, Conway said.
    The expense covered mattress pickup from my Brooklyn apartment and transport to the company’s warehouse in Oceanside, New York. (I could have saved $55 by dropping off the mattress myself, but I don’t own a car.)
    Spring Back Colorado also charges $40 for each mattress and box spring that a consumer drops off. An additional fee of $60 or more applies, depending on the travel distance, if a consumer asks for home pickup.
    Mattresses are harder to recycle than other items like plastic bottles, aluminum cans and cardboard, said Romero, of Charles County.

    “They’re all made completely differently,” Romero said. “There’s no uniform construction, and there are several different types of materials used to make one mattress.”
    The process is more time- and labor-intensive, she said. Often, workers must break them down by hand.
    For example, cotton remnants must be picked off steel mattress springs before it can be shredded or baled for sale to scrap markets, according to the Mattress Recycling Council. Staples also need to be removed from wood frames before going to market, it said. Each coil in a “pocket coil mattress” is individually wrapped in fabric and must be separated, Romero said.

    ‘Razor-thin margins’

    Additionally, mattress materials yield only “modest revenues” when sold, Reid Lifset, a research scholar and resident fellow in industrial ecology at Yale School of the Environment, wrote in an e-mail.
    Those revenues often depend on fluctuating commodity prices.
    “We don’t set the price for a ton of foam or steel,” Conway said. “One day we might get 18 cents a pound and the next week only get 10 cents.”

    If you put your mattress in a landfill, it’ll probably be there for hundreds of years, just sitting there.

    Meg Romero
    recycling and litter control superintendent for Charles County, Maryland

    There must also be a market demand for those commodities — and sometimes those markets aren’t nearby, adding to shipping costs.
    For example, Spring Back Colorado used to send all its foam and ticking to a recycling center in California, Conway said. It cost the company about $2,000 to ship each truck load.
    About a year ago, that California partner stopped accepting shipments: Demand had dried up for material, Conway said. He called companies as far afield as Mexico, Canada, India and Egypt to find alternative placement, but ultimately found a new partner in Texas, he said.
    “It’s pretty razor-thin margins we operate on,” Conway said.
    Spring Back Colorado earns additional revenue from mattress pickups and drop-offs, and from partnerships with businesses and municipalities, he said.
    “Someone has to pay,” said Marseille, of Arizona State University. “It usually falls to consumers.”

    Consumer fees subsidize recycling efforts

    Kosamtu | E+ | Getty Images

    Some states and municipalities are making it more cost-effective for consumers to recycle their mattresses.
    For example, Charles County, Maryland, funds its fledgling mattress program largely with taxpayer money. About $150 of residents’ taxes are allocated to the county’s Environmental Resources division each year, for services like curbside recycling, disposal of yard waste, oil and anti freeze — and now mattress recycling, Romero said.
    Three states — California, Connecticut and Rhode Island — have enacted mattress recycling laws since 2013. A similar program in Oregon is launching Jan. 1, 2025.
    The laws require the mattress industry to develop and administer state programs to collect and recycle discarded mattresses for free.
    The initiative is funded by consumers, though.

    Someone has to pay. It usually falls to consumers.

    Alicia Marseille
    sustainability and circular economy expert at Arizona State University

    Individuals and institutions (like hotels and dormitories) in such states pay a fee each time they buy a mattress: $10.50 in California, $11.75 in Connecticut, $20.50 in Rhode Island and $22.50 in Oregon, said Amanda Wall, a spokesperson for the Mattress Recycling Council. MRC is a nonprofit created by the International Sleep Products Association, a mattress industry trade group, to build and run these state programs.
    Retailers forward those fees to MRC, which funds the consumer recycling efforts. Ultimately, the fees subsidize free mattress drop-off and recycling at any MRC-funded collection site in participating states, Wall said. (Recyclers can still charge a fee for mattress pickup, she said.)
    The mattress industry has pushed for similar legislation in New York, Massachusetts, Maryland and Virginia this year, and plans to keep working with these state legislatures in 2025, Wall said.

    The laws are an example of “extended producer responsibility” policies states have adopted more broadly, forcing companies to bear some end-of-life responsibility for their products, said Marseille.
    Some question whether consumers shoulder too much of the burden right now.
    “Companies aren’t making, for the most part, more easy-to-recycle products,” Conway said. “It’s on the consumer to figure out how to responsibly get rid of their items in a conscious way.”
    He thinks it needs to be easier and more affordable for consumers to recycle to promote that behavior.
    “At the end of the day, if you have two options, and one is throw it in a hole in the ground, and the other is recycle it, 95% of the people will go with that cheaper option,” Conway added. More