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fiduciary

Advice on Social Security Benefits

Gather your information together and know a few things about your Social Security benefits before you ask for advice.

401(k) – Good For Many, But Not Necessarily the Employee

The 401(k) plan is generally seen as a good thing – promoting retirement savings and providing incentives for saving. But it’s not all good.

What Can a Broker Do For You?

You have choices when it comes to investing. You can go directly to a mutual fund company (such as Vanguard or T. Rowe Price) and choose investments yourself, or you can use a fee-only financial advisor to assist you in choosing investments. One of the most common methods is to work with a broker. Brokers are companies like Edward Jones, plus many, many other companies, including insurance company brokerage divisions, banks, and the like. What’s the Difference? You’re probably wondering – what’s the difference between a broker and, for example, a fee-only advisor? You’re right to be confused, because until you start working with one or the other and you know what the difference is, they look pretty much the same from the outside. Here’s the difference: Brokers are salesmen. It is their job to sell you an investment product, and that’s how the broker gets paid. They are required […]

Noise

Every day we are bombarded with information. It can be difficult to wade through this sea of data and pick out the material that means anything to us. Of course, it doesn’t help that the existence of 24-hour news channels, social media outlets, and the scuttlebutt around the water cooler make it difficult to avoid. So how do we filter all the noise and get only the information we really need? I’ll offer a few suggestions that have worked for me. Perhaps they can help you. Turn off the news. This was one of the biggest mood lifters and time savers that helped me. I made this decision about 4 months ago and decided to make a conscious effort to not watch the morning and evening news. I also cancelled my newspaper subscription (it wasn’t that great anyway). Consider reducing or elimination your social media usage. This can be hard […]

Stressful Events

At times in our lives, we may be faced with sudden events, occurrences, or outcomes that we never expected to happen. Such events may cause us to react, even overreact out of emotion rather than taking time to think things through. Granted, this is easier said than done. The death of a loved one can take a huge emotional toll on us. Aside from coping with our loss, there’s the additional stress of taking care of things after the death. Wills, trusts, property transfers, and retirement accounts all need to be handled. Divorce is also a stressful event. Deciding on property division, living arrangements, parenting time, and legal aspects all take their toll. Feelings of fear, anger, sadness, and resignation can linger for a long time. Losing a job also adds stress to our lives. Our minds may reel with the sudden loss of income, what we’re going to do […]

Hidden Costs to 401k Plans and Who Pays These Fees

There are hidden fees in your 401k plan – and these fees can have a significant impact on your long-term results. Find out how to reduce these fees.

Fiduciary Standard for All Advisors?

Is your advisor held to a fiduciary standard, or a suitability standard? Do you know the difference, and what it can mean to your investments?

Problems and (proposed) Solutions for 401k Plan

The 401k plan takes the blame much of the time for the problems individual investors are facing. But maybe adjusting the 401k plan is the real

Reasons #12 & #35 That You Might Need A Financial Advisor

What are the reasons that you might need a financial advisor? They vary by individual, but there are common needs that many folks have.

Transitioning to a Financial Planning Career

Every once I a while I will be asked to give my opinion on some logical steps to take when pursuing a financial planning career. This post may be beneficial for individuals who are entering the financial planning profession right out of college or are looking to change careers. Some are steps to take and others are questions to ask yourself and others along the way. What is it about financial planning do/would you enjoy? It could be client-facing meetings, technology, back-office work, or a combination. And you may not know until you try your hand at several things. Ask some current planners or even your own. The point is to find an area that you enjoy and work to get better at it. Find the right firm. Will you work for an RIA or broker-dealer? What type of firm do you want to align with? This could mean starting […]

Life Moves Pretty Fast…

In the classic 80’s movie, Ferris Bueller’s Day Off, Ferris Bueller says, “Life moves pretty fast. If you don’t stop and look around once in a while, you could miss it.” In other words, life happens. That’s why it’s important to meet with your financial planner to see if anything has changed, and if there’s anything that needs to be done to assist with those changes. The reason it’s important to meet with your planner is that he or she can ask questions and propose situations that you might not even be aware of or think about. A recent example would be how the new tax law affects your situation. Another example would be a child that is going to college, a job change, death, divorce, or 2018 being the year you plan to retire. A financial planner will be able to provide another set of eyes to your situation […]

5 No-No’s for IRA Investing

It is generally well-known that in an IRA account you have a wide range of investment choices. These choices are typically only limited by the custodian’s available investment options.  However, there are specific prohibited transactions that cannot be accomplished with IRA funds. Often these prohibited transactions can cause your IRA to be disqualified, which can result in significant tax and penalty, along with loss of the tax-favored status of the funds. What’s Not Allowed for IRA Accounts? Self-Dealing.  You are not allowed, within your IRA, to make investments in property which benefits you or another disqualified person.  A disqualified person includes your fiduciary advisor and any member of your family, whether an ancestor, spouse, lineal descendant (child) or spouse of a lineal descendant.  It is important to note that this limit applies to both present and future use of a property. So if you purchased a condo and rented it […]

Comprehensive Financial Planning – Explained

Do you know what is involved in comprehensive financial planning? This post gives an overview of the components and how they all fit together.

Create Your Own Luck

“Luck is when preparation meets opportunity.” The other day I was eating lunch with my kids. After lunch was over I gave them a “treat” from the drawer that we normally house goodies of all sorts. I happened to grab a couple of gold-wrapped chocolate coins. These coins were renditions of the JFK half-dollars. My youngest grabbed her coin and said, “heads or tails?” I quickly said “heads” while she flipped the coin in the air. The coin landed on the floor. Tails. I said, “Well, we both lost.” My daughter quickly exclaimed, “I won daddy.” When I asked her how she won when the coin landed tails she replied to me, “I called both heads and tails.” Win-win. Essentially, my daughter had created her own luck. And I immediately thought, “This is excellent fodder for a blog post. So here we are. The reason why I mention this is […]

5 Questions to Ask Your Advisor

If you’re contemplating hiring a financial planner or advisor or if you’re currently working with one, here are some fair and important questions you may consider asking him or her. Are you a fiduciary? Being a fiduciary means that the adviser must legally act in your best interest. While not an absolute guarantee that the advisor will never act otherwise, most advisors who are fiduciaries embrace the responsibility – they want to be fiduciaries. Any other answer then yes to this question means you need to keep searching for an advisor who is. How are you paid? Generally, three different answers will follow. It will either be fee-only, fee and commission, or commission. If the advisor says fee-based or salary, you’ll want to dig deeper. These two responses don’t say how the compensation is derived. More importantly, you want to know how you will pay the advisor. And if you’re […]

Read the Fine Print

As I was reading the paper the other day I came across an ad for a pretty prominent mutual fund broker-dealer. The ad was touting the investment acumen and performance of its mutual funds and fund managers. It mentioned how many of its funds had outperformed category medians over a certain span of years. Then I read the fine print. The fine print stated the following: Rankings are based on total return and do not include the effects of sales charges The rankings were based on the funds’ Class Z shares. Past performance does not guarantee future results. In providing these materials the company is not acting as your fiduciary as defined by the Department of Labor. Let me summarize what these fine print statements mean. First, sales charges reduce returns. In other words, their rankings didn’t include the expenses associated with commissions earned by the salespeople that sell the […]

Sorry to Rain on your Parade

I wanted to take a brief moment to remind our readers of a fundamental investing truth that tends to get overlooked, forgotten, or deliberately disregarded during times of market euphoria. Think about this. If you had a million dollars at the beginning of 2016 to invest and I said that over the year that there would be a Supreme Court vacancy, the Cubs would win the World Series, interest rates would rise, and Donald Trump would become president – would you invest that million dollars in the market? I would bet that many people would not. They would guess that 2016 would be a dismal year for market returns. Yet, in 2016 the Dow returns 13.4% and the S&P 500 returned 9.5%! With all of that uncertainty and the improbable happening, the market still had a great year of returns. Those who stayed invested were rewarded. Those who sold (say, […]

Planning Without Assets

Many individuals, especially after graduating college have an enormous amount of human capital but very little when it comes to financial capital and investable assets. A common question or concern may be that they are of little interest to financial planners because they don’t have any investable assets or wealth. Let me say that this is both correct and incorrect thinking – depending on the financial planner – and just as important; how the financial planner is paid. Let’s start with the correct version first. Financial planners are paid in a number of different ways from commission, fee-only and fee and commission. Focusing on fee-only planners for a moment, these planners may be compensated by the hour, retainer, or as a percentage of assets the planner manages for the client. If a fee-only planner is only compensated by assets under management, then the planner may not be interested in helping […]

What to Expect After the Election

Now that the election has come and gone I wanted to send a note on what we should expect for the next four years and beyond. Really, these are no big predictions, but at times we may tend to forget our long-term goals in the hype and excitement of short term events. Expect volatility. Volatility is the norm, not the exception. Therefore, it should come as no surprise that markets will fluctuate, gyrate and generally have many ups and downs over the next four years and beyond. Think of it this way, would we expect any higher returns on our investments if markets were always calm and stable? No. Volatility is the price (risk) we pay for expected higher returns. We can diversify and maintain focus, but volatility will never go away. Expect change. As the saying goes, the only thing that is permanent is change. Do I know what […]