There are two segments to this issue. One is buying and selling consequences and the other is government programs for specifically tailored to retirement planning. Buying/Selling Will the sale of an asset cause a taxable event? Will that taxable event be classified as an ordinary income or capital gains occurrence? Will it create any illiquidity? Will the income necessary to fund retirement include RMDs (required minimum distribution). These are just a few of the visceral topics that can back … [Read more...]
Seniors Have Assets, But May Not Have Comprehension
In 2020 the baby boomers have the assets of America. The flower children of the 60s are now the power seniors in their 60s. The vast majority of financial professionals want to do business with the boomers. They may very well be the richest demographic that ever lived in the U.S. Their 401(k)s are stuffed with stocks, bonds, ETFs, Mutual Funds, REITs and perhaps even annuities. But they know nothing about the assets they own, the risk that they bare and rebalancing of portfolios. This is a … [Read more...]
Mistakes, Errors, Omissions of the Partners in Your Firm
For whatever reason you have a partner(s). Shockingly, most business people fail to do due diligence on their partners before the join their individual practices into one firm. Personal finances of a partner(s) are just as important as their business holdings. Their liabilities both personal and corporate could impact you piece of the pie. As an example, your partner has a teenage driver who is reckless and causes a major accident and even worse a death resulted in the mishap. Your partner … [Read more...]
Outsourcing: Be Careful Who You Recommend
There are a few geniuses out there that know everything about anything. They have deep knowledge in many subjects. But they’re few and far between. Most of us are general practitioners who outsource our weak areas to those with expertise in their fields. The financial industry is a macro metropolitan sector than has multiple disciplines, some significant and others secondary…but all necessary. Often insurance agents are licensed to sell securities, but not knowledgeable enough to manage … [Read more...]
Did You Clear Your FaceTime/Skype Video with Compliance?
Schedule a face to face appointment is fraught with problems, not to mention seminars which are near impossible. Often financial professionals don’t record appointments or seminars. The general rule of thumb is to submit an outline or power point to compliance before the scheduled event. But these days, during the pandemic, much of the unapproved communication to consumers and clients is via FaceTime, Skype and Zoom. Somehow these forms of video contact seem to escape oversight. But they’re not … [Read more...]
Fraud Alert: Pandemic Creating “Window Tracing” Signatures?
Financial professionals are in a tough spot. They generate fees and commissions to earn a living. Most marketing strategies call for face to face appointments or seminars. Right now, that’s on hold. Some have used Facetime, Skype or Zoom to continue meeting with clients and prospects, but the administration of new and existing business has been exacerbated by social distancing and the fear of exposure to susceptible seniors to potential infection from outsiders. During this time, securing client … [Read more...]
Exaggerating the Claims of Indexing
On the security side of indexing: There are many indices both foreign and domestic. The S&P 500 Index is the most popular in the U.S. It’s been called the poor man’s portfolio because of its diversity and low-cost fees. But diversity in and of itself is not a hedge against market losses. The index is comprised of 500 large cap companies that reflect equities and are subject to market gains and losses. So, it’s important to convey the risks involved with using indices. On the insurance … [Read more...]
Your Silence During a Black Swan Event is Deafening
Sometime silence is golden. Other times it’s just plain yellow. During turbulent times many advisers, money managers and insurance professionals go dark on the web and silent with their clients. Unreturned phone calls from financial professionals during unprecedented drops in the market only fuel client dissatisfaction, which can lead to legal action. Communication is best. Service is a cornerstone to the financial industry. Better to take a tongue lashing from your angry clients then to dive … [Read more...]
Time is No Longer a Cure All for Recovering Losses
The term long haul investor or long-term horizon is still a good benchmark to measure when assets will be used such as in retirement modeling. But the Ibbotson mountain chart that highlights long term gains could be misleading if the clients are unaccustomed to experiencing losses. Again, a risk tolerance test can help determine your client’s disposition towards market exposure. A young conservative couple may have time on their hands, but not the heart to go through down markets, bear … [Read more...]
Risk Tolerance Test is a Part of a Client’s Profile
A risk tolerance test may not be scientific, but it can indicate your client’s psychological disposition towards money and help you draw some conclusions. There are several online examples that use scenarios to reveal your client’s psychonomics, their mindset on money. Consumers actually appreciate taking the test to discover insight on how they may feel during a down market, a bear market or black swan event. Married couples should take the test as individuals. This can demonstrate the … [Read more...]
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