Average is not good enough … Our goal at Family Investment Center is excellence. We find excellent investment products and supervise an excellent service package. We maintain a library of excellent research materials and financial planning resources. We also demand top safety and security for our clients.
We won’t settle for average. We continually seek top managers or securities and meld them into superior custom portfolios. Each palette of investments is carefully tailored to personal or family goals. We enlist excellent managers, research, resources, and effort for our clients. Don’t settle for average. You deserve excellence.
Please search our blog posts for answers to common investment questions, and we look forward to sharing our knowledge and experience with you first-hand.
Those Working With an Investment Advisor Have a Better Understanding of Financial Terms and Concepts
When it comes to working with an investment advisor, many Americans say that they feel they don’t need to work with an advisor. Getting to the reasons behind this decision, respondents in a recent survey from Plan Adviser were asked why they preferred not to work with an investment advisor and 44 percent responded that their assets didn’t warrant any planning.
Among the respondents that reported not having enough assets to bother with an investment advisor, 28 percent had an income of at least $75,000 a year. These individuals could see many benefits by working with an advisor and planning for their financial future.
Overall, those Americans that reported working with an investment advisor were more comfortable with their understanding of financial terms, including “long-term care insurance”, “Roth IRAs,” and “annuities.” Among those respondents that were working with an investment advisor, there was a high rate of confidence that they understood these terms, at a rate of 41 percent, 69 percent and 49 percent, respectively.
For those not working with an investment advisor, there was a significantly lower level of comfort with financial terms. Using those same terms, only 31 percent felt confident they understood the term “long-term care insurance,” 42 percent understood “Roth IRAs” and 28 percent understood “annuities.”
Of those who did not have an investment advisor, the reasons were varied. As noted above, many didn’t feel that they had the kinds of assets that warrant seeking out a professional opinion. Still others said they preferred to manage their own finances (38 percent) or felt that an investment advisor would cost too much (36 percent). Some don’t know what kind of professional to hire (14 percent) or don’t understand the value of engaging these types of services (10 percent).
Yet in addition to the value of having an investment advisor help you plan for your future and work with you in creating a strategic investment plan, working with an investment advisor positively affects other aspects of your financial life outside of your investment or retirement planning. For instance, those that hired an investment advisor were also more likely to have an emergency fund and a retirement plan. Seventy-seven percent of those working with an investment advisor had an emergency fund or a retirement plan, versus 46 percent of those that had never worked with an investment advisor.
If you’re looking for ways to take some of the guesswork and the emotions out of your investment future, make an appointment with an advisor at Family Investment Center. We can take a look at your current financial picture and help you develop a plan in a client-first, commission-free setting.
Solid Strategies for Building Wealth ... Avoid These Mental Pitfalls
Careful and diligent planning over time is a reliable strategy for building wealth, but did you know that your mind may be working against you and your long-term plans? There are a number of mistakes that people make in their financial decisions that can throw off their wealth strategies. Here’s a quick guide to ways that your mind can trick you into making poor financial decisions:
Anchoring: Don’t fall into the trap of relying too much on the first piece of information you learn about something. For instance, pretend you are interested in hiring a housecleaning service and you begin to call around to check rates. The first company you call quotes you $75 per hour. The second company gives you a rate of $90 per hour.
You may dismiss the second company because they are charging $15 more per hour and go with the first company instead. In fact, though, the going rate in your community is $60 per hour, but you overpaid because of the anchoring fallacy.
How do you get past anchoring if you don’t have endless hours to call cleaning companies and compare every rate out there? Some experts recommend that, instead of trying to get a true average rate, you estimate how many hours you’d have to work to cover the cost of a service or product, or what else you will have to give up to purchase it. This might help you get a truer sense of your cost.
One particularly strong anchor in investing is a stock’s price. Investors tend to keep their purchase price at the forefront when making trading decisions. For example, if you buy a stock at $10 per share and it’s currently trading at $8 per share, you may hesitate selling the stock because it’s lower than your initial purchase price. But what if the stock was overvalued when you bought it? Anchoring is often responsible for investors selling winners too soon or holding losers for too long.
Availability Heuristic: In this financial misstep, you pay more attention to more publicized events over those that are most likely to actually happen. For instance, you may have an outsized anticipation of winning the lottery because instances of lottery winners shown on the news stand out in your mind.
This concept carries over to other areas in life, too. You may have sweated a little on a trans-Atlantic flight, but probably not on your drive to the grocery store. Despite the fact that traffic accidents are far more likely than a plane crash, you brain latches on to news stories you’ve seen about flights that ended in crisis.
Likewise, an investor tends to overreact to the “talking heads” on the radio or television who warn of doom and gloom in the markets.
Hedonic Adaptation: When you purchase something new, you often feel a rush of satisfaction and excitement. In some cases, such as with a new car or a dream home, you may feel unable to contain yourself as you bask in the glow of acquisition. Even a new pair of shoes or a weekend trip can make you feel like you could never ask for anything more.
The trouble is, you always do, and it’s keeping you from building wealth. The hedonic adaptation principle says that no acquisition is capable of satisfying you forever. What’s more, you become less willing to go back to your previous lifestyle, even though your new purchase isn’t satisfying you like it did when it was new.
Overconfidence: Overestimating your own ability, at choosing investments, for example, can be detrimental to your financial strategy. If you don’t have the time, expertise and experience to handle an investment portfolio, consider hiring an investment advisor to help.
Hindsight: We’ve all heard it: “hindsight is 20/20.” When analyzing past events, it’s easy to hinge on information that hadn’t been available at the time, believing that the event was predictable (and perhaps preventable) when it really wasn’t. For example, after a stock market crash, you suddenly think of many reasons why youshould have adjusted your portfolio more conservatively, when in reality, there was no way of knowing it was coming. (Interestingly, hindsight can lead to overconfidence, as well.)
Building wealth over time takes a lot of discipline, but it also takes an awareness of the tricks your mind might play on you as you make financial decisions. No matter how solid your wealth strategies are, be careful that you aren’t derailing your goals by buying into these fallacies.
To learn more practical ways to think about building wealth, make an appointment to talk with the advisors at Family Investment Center. Always commission-free and client-focused, we help you develop strategies that are clear-minded and designed to help you plan for a solid future.
Dan Danford Explains 5 Surprising Investing Myths in “Money is Freedom” Podcast Episode
Much of our financial knowledge comes from trusted sources – friends, coworkers, colleagues, family members. But a lot of this information requires a serious update. In fact, it may be holding you back from the success you want.
Today, ask yourself this: Are you believing the five common myths (mistakes) about DIY money management? These mistakes include relying on the “special knowledge trap,” “soapbox time” and “vacuum investing.”
Listen to this brief, jargon-free and value-packed podcast today. It might change your thoughts on DIY investing, and, more importantly, it might change your future.
Listen to the “DIY Mistake” here on Sound Cloud:
Listen to Dan Danford on “Money is Freedom” on iTunes.
Do You Know What to Look for in Portfolio Management Fees?
The Beatles said in their hit song, “Money,” that the “best things in life are free,” and they definitely have a point. However, when it comes to managing your money, paying fees to a portfolio management professional can help that money grow, and it’s certainly worth it.
However, due to industry complexities and varying degrees of customer “service,” investment management fees can often be obscure. This can lead to mistrust and poor decisions on behalf of the investors. While the most trustworthy investment advisors use fee structures that are completely transparent, following the tips in a “fee triangle” can assist you in understanding exactly what you’re paying for.
Don't be the victim of unfair or elevated pricing schemes. You can avoid this by shining the light in the right places.
The first layer of fees is often tied to local investment management fees. This is usually a percentage of the portfolio size, AKA assets under management or AUM. Your investment advisor, broker, bank, or trust company or department will charge this first layer of fees.
Portfolio manager fees are the second layer, and although they’re the most common, they’re often less obvious. These are fees that the underlying managers of the mutual funds, hedge funds, exchange traded funds, unit trusts, REITs and other managed products charge to manage the fund. It’s how the manager of the underlying investment is paid. Although it’s difficult to rid your portfolio of these altogether (unless you buy only individual stocks), your advisor should aim to find investments that minimize your expenses while maximizing your investment potential.
Transaction fees are the most insidious of all these fees, which are often hidden from you in trades. For instance, if you buy a thousand shares of stock, a trade fee or commission may be paid on that trade, which should be reported on a trade confirmation. However, you may not see it if your custodian reports the trade at “net” prices. Even scarier is that there is often a huge disparity among the level of transaction fees that are charged to clients.
Not all investment portfolios will include all three fees. Some might only have one or two. A stockbroker might have a recommendation for you, and if you follow through on that, they will take their payment through a commission. If a mutual fund is recommended, there could be a sales commission involved, as well as ongoing portfolio manager fees, which means you could be getting hit with all three layers of fees.
Remember - it’s the total fees that matter to performance, not the particular fee scheme. Investment performance should be tied to broad market averages, not individual stocks and bonds. There are too many instances out there today where investors are getting hammered by layered fees, most often in the hidden fees.
At Family Investment Center, we remain totally transparent about our fee structure and communicate it clearly. We never take a commission – the only way we get paid is through a percentage of assets under management. That way, there’s a direct incentive for us to keep clients’ expenses low and their balances growing over time. We follow core investment principles and practices that go above and beyond the definition of a fiduciary. Contact us today and let’s discuss how we approach portfolio management differently.
Why Fiduciaries are Looking Out for Your Investments … and Your Future
Money. It’s a lot of things, but most importantly, it’s a tool. When it comes to investments, money is a tool that helps people reach their goals. Maybe that goal is to have freedom in retirement, or to go to school, or to travel. Perhaps money is the tool that assists a family legacy. Regardless of the goal, making smart investment decisions can leverage your tools and make those goals a reality.
The investment process can be made difficult by the massive volume of information available today through sources that include television, books, magazines and the Internet. Sorting through all of it can lead to confusion andpoor decision making that can have a negative impact on investments and end goals, which is why it truly pays to have an expert on your side in the form of a fiduciary.
A good investment advisor will explain these complexities in layers, presenting the easiest-to-absorb information first. Some investors are more comfortable taking a hands-off approach and letting their advisor take control. Others have a more vested interest and want to drill down on specifics, which often require a custom dashboard that simplifies the important and complex points.
Dan Danford, CEO of Family Investment Center, is often quoted as saying his firm can provide as much depth as a client wants.
“I’m glad to answer questions and provide detail,” Danford said. “However, just because we follow all the details doesn’t mean clients need or want all that information to get to their goals. We tailor our conversations toward each individual’s preferences. A fiduciary can follow a client’s path through life; looking out for their best interests and helping them achieve their goals along the way.”
For an investment advisor operating as a fiduciary, these end goals might include establishing a fund for a child’s college account, for example. Ultimately, the child graduates from college utilizing that fund, and go on to establish a career and perhaps even begins to save for their own child’s college fund.
Danford says investment advisors feel a special kind of attachment when their client reaches their goals. The relationship that a good investment advisory team forms with a client and their family can span for years – and is often marked by life events and milestones along the journey.
“There is a wonderful sense of friendship and camaraderie among our team and the clients we help,” he says. “In that regard, our clients’ stories, their phone calls, or visits to our office remind us that we are creating brighter futures for families each day.”
Additionally, Danford seeks to remind investors that fiduciaries offer their services based on fees only - not commissions. This allows them to truly focus on the outcomes of the client’s portfolio, rather than their own benefit. This is especially important today when pending national industry changes mean many firms will say they are client-focused - but may not have true experience in this area. (Note: A 2015 report from the White House and Department of Labor indicates investors lose roughly $17 billion a year due to brokers offering conflicted advice. Read more about the report here.)
At Family Investment Center, we have always operated as a fiduciary and always in a commission-free, jargon-free and client-focused setting. Schedule a meeting with us today.
Investment Advice for the Middle Class
If you are like most middle class investors, it may seem as if there are a million things that separate you from millionaires. In reality, the way the middle class and the wealthy handle investments can be quite similar; investment advice can be founded on the same principles – and the same misperceptions.
One misperception about wealthy investors is that they are geniuses when it comes to the stock market. Some investors believe they “play” the market every day and take great risks, but enjoy massive rewards. Typically, this isn’t true on many levels. Most experts agree, not many successful investors “play” the stock market. Instead, they focus on consistency over time and planned risk. Additionally, less than one percent of millionaires make daily trades on the market. Instead, they’re likely doing what you might consider for your own investments – thinking long-term and owning a variety of investments for the purpose of diversification.
In fact, the heart of wealth management science, according to Dan Danford, CEO of Family Investment Center, “is the idea of a thoughtful long-term diversification. This scientific basis for portfolio theory won a 1990 Nobel Prize in Economics.” Danford explains that, in essence, an investor’s risk is reduced and performance of investments is enhanced when investors own a wide variety of investments.
If you’re getting investment advice from friends, family, or colleagues telling you that you should put your money in government bonds and bank deposits, this may not align with the strategies of professionals who work with both the wealthy and the middle class. Putting your money in these “safe” places offers low interest rates, but if you consider inflation and taxes, your investment there is nothing more than a shelter where compound interest doesn’t stand a chance.
Wealthy investors seem to understand the difference between price and value. Dr. Tom Stanley’s book titled The Millionaire Mind brings up an issue that many investors fall victim to: they don’t make enough distinctions between price and value. Millionaires tend to look at investment products through the lens of a long-term situation. For instance, Stanley offers up the analogy that they’re purchasing their furniture and shoes based on the lifetime cost of ownership. Are they buying better quality products? Yes. But they last longer than the cheap stuff. When you put yourself in that mindset for your investments, you’re on the right path.
Finally, if you’re a DIYer when it comes to your investments, rethink what your efforts are actually getting you. You might spend hours studying various investments, shopping around to find something that is only marginally better than the previous product you researched. Let an investment advisor who has experience working with a variety of investments help guide you with your investing strategy.
At Family Investment Center, we believe in practical, jargon-free and client-focused service – and always within a commission-free environment. Contact us today to learn more.
Experts Suggest Investment Advice May be Best Left to the Professionals
Most people who invest money and are purposeful about their retirement plans believe they have the basics of investing down. They may even consult with well-meaning friends and family when they are seeking outside guidance. However, some of the most common mistakes in investing may be related to taking investment advice from someone other than a professional – along with not keeping up with investing innovations and relying on outdated information. Read on for some other challenges that may be holding you back from the success you want.
Some investing mistakes date back to early family experiences. Ideas about money are often shaped by what a person saw and heard growing up. In reality, what many people are taught growing up is very different now as the landscape of investing has changed, particularly in the financial products, services and fees under which investors operate today. These family experiences may mean an investor follows and seeks advice from friends, neighbors, coworkers and family members; but these people are not likely to carry professional investment experience. Seeking advice this way can also lead to a strong emotional connection instead of a neutral, strategic approach to investing – and this can cost an investor significantly over time.
Another common investing mistake can be connected to changing an investment strategy when feelings or emotions change. Today, you may want to ask yourself, “Is my investing driven by feelings and emotions?” This can manifest from watching media headlines and wanting to make quick changes rather than staying the course through the natural ups and downs of the markets.
It’s human nature to follow the crowd. However, when it comes to investments, giving in to that urge to follow the crowd can lead to investment setbacks. Everyone’s situation is different. What amounts to an excellent decision for one person might be a wrong move for the next, depending on life situations and goals. Most investors with long-term success are operating on a consistent plan that is tailored to their situation, not everyone else’s. Also note that many professional investment advisors suggest caution around making decisions for short-term gains in favor of long-term growth. It’s vitally important to stick to a long-term plan, even and perhaps especially during times when the market is volatile.
Performance is an easy metric to measure, but it’s not the one that matters most. Value and convenience, both of which are metrics more subjective and harder to measure than performance, carry just as much weight as pure performance.
Some people fail to reach success because they think the investments are boring. Investment advisors reject that notion; they see investing as a path to key lifestyle benefits that are definitely not boring. They also know that it’s one of the biggest reasons people fail – or a reason they never get started. A visit to an investment advisor who truly cares about helping clients should not be boring, but instead, should help you feel excited and confident about the direction you’re headed.
At Family Investment Center, we have observed investors time and time again come in with reservations and leave with a sense of confidence they didn’t know they could have toward their long-term goals for investing. We know that many people have an outdated view of money practices, and we are here to listen. Contact us today and let’s get started with a plan that makes sense for your situation.
Listen to jargon-free insights from the Money is Freedom podcast, produced by Dan Danford, founder/CEO of Family Investment Center, at Sound Cloud and iTunes. Enjoy more about advice from friends and family on the episode titled “Free Advice is Poor Advice.” https://soundcloud.com/money-is-freedom/102-free-advice
For many it’s a labor of love. For others, it’s overwhelming to think about what it takes to start and finish the writing of a book. This is something Dan Danford, CEO of Family Investment Center, knows quite well. Danford will relay the experiences he gathered while writing his book, “Stuck in the Middle” at two KC-area Lunch and Learn Events.
Danford, who has worked for decades in investing, wrote the book to highlight the mistakes investors make that jeopardize their financial success. The book also offers tips on how to fix those mistakes. The 20 chapters in the book cover everything from how paying off a mortgage can hurt retirement, investment mistakes endorsed by the media, the stock market (why/how it’s not a casino), how banks are for managing cash (not investing) and many other topics.
Danford says the book is a valuable way to share insights and knowledge gained across his career. He began his career in business in 1984 as a bank trust officer, where he was responsible for managing tax-qualified retirement plans and IRAs. He has since visited with thousands of people who are planning for retirement. He is now sharing his knowledge in the book that asks the question “What if your middle class background is holding you back from the financial success you want?”
Danford will speak at two “Lunch and Learn” events with the topic – “What’s your truth? Using your story to write a book, and using that book to grow your business.”
The events are:
· Friday, December 9, at the Northland Regional Chamber of Commerce office, 634 NW Englewood Rd, Kansas City, MO. Click here for more information. 12 p.m. to 1:30 p.m.
· Tuesday, December 13, at the St. Joseph Chamber of Commerce, 3003 Frederick Avenue, St. Joseph, MO. Click here for more information. 11:30 a.m. to 1 p.m.
Danford will also share information about investing that he covers in his book, largely written for middle class investors. Danford said he has been surprised, quite often, at the mistakes he encounters, which are mostly ideas that conflict with what professional investors know to be true today. He said many people haven’t kept up with innovations in investing, which could lead them to decisions based on outdated information.
“For many investors, their ideas about money come from early family experiences, which leave a powerful imprint on them that makes change difficult to achieve. However, it’s easy to see that the world we live in today is far different from what our parents experienced at the same point in their lives. Everything from fees to financial products and services – they’ve all evolved, and investors need to evolve as well,” says Danford.
Listen to insights on “Money is Freedom,” a new podcast available on iTunes and Sound Cloud.
As the U.S. Department of Labor fiduciary rule moves closer into the spotlight, more investment firms are making changes to shift their service to a “nonconflicted” setting – meaning they will no longer charge commissions on products they sell to investors.
A few months prior to the Department of Labor rule, the White House released their own report outlining the millions of dollars in lost potential revenues investors could see if they receive conflicted advice in a commission-based setting. By the start of 2018, financial brokers who sell retirement products must become "fiduciaries" and act in clients' best interests, instead of choosing products that line brokers' own pockets. Some national entities are putting changes into place, now.
Recent headlines have outlined challenges with this process. What should you know?
1) Family Investment Center has always – and will always – operate in a commission-free, client-focused and nonconflicted setting. It’s how we have always believed your interests as an investor are best served. These changes nationwide mean business as usual for us.
2) Some firms will begin to use terms like “nonconflicted” and fee-only as they make the shift over to these models … but this doesn’t mean they have a genuine client-focused perspective.
3) National responses to the fiduciary rule will be varied. LPL Financial Holdings Inc., the largest independent broker dealerand registered investment advisor in the UnitedStates, is exploring a potential sale – according to an articlein Financial Advisor – as it lowers commissions on high-feeinvestment offerings and looks at higher regulatory costs. Inanother example, Merrill Lynch is among the first to institutechanges and stop its commission for its IRA business. This could trigger brokers who rely on commissions to go elsewhere – as well as push a surge of other giant firms to do the same.
We welcome any discussion or questions as the biggest shift in the investment industry has seen in decades begins to take shape … and we’re proud to say we’ve been helping families reach their goals in a nonconflicted setting since the first day we opened our doors.
If you think you’ve heard every investment advisor start-up story, think again. The story of Family Investment Center reflects a passion to be true to their core values and remain steadfast in a client-first approach (even when no one else was doing it).
Dan Danford, founder of Family Investment Center, had 15 years’ experience as a bank trust officer before striking out on his own, establishing Family Investment Center in 1998, just in time for a big technology boom. He had a “million dollar idea” to marry the safety of fiduciary investing with the benefits of a client-focused, commission-free atmosphere and the perks of a tech-friendly world. Nearly 20 years later, Danford and his team continue to bring investment services that cater to each individual client.
Danford’s solid background working with investments coupled with his desire to avoid the sales-driven mentality – a driver for many professionals in the investment field today – brought him to an important question: “What do I need to prosper?” It’s that question that drove a philosophical change from seller to buyer, and it “rocked our marketplace,” Danford said.
He began working for clients under a textbook approach to investing and analyzing portfolios. Ultimately, what he lays in front of clients is a plan that they would devise if they knew as much about investing as Danford does. In fact, it’s a plan that he uses for his own family’s investments.
Here are the five key concepts applied by the Family Investment Center team to each individual:
· World class managers and products
· Total transparency at every level
· Portfolios that are tailored to fit individual needs
· Deliberate diversification
· Ongoing monitoring and evaluation
At Family Investment Center, commissions have never been accepted (and never will be) for any investment product. The only source of revenue is a modest management fee charged to clients. Another key difference is jargon-free conversations. The Family Investment Center team of professionals are competent, confident, have excellent communication skills and make clients comfortable talking about their ideas.
The families that partner with Family Investment Center enjoy extra safety measures, including custodial, professional liability, and employee dishonesty insurance, plus ERISA bonding. Family fee schedules are scaled for large portfolios, and the investment products selected are already scaled for large portfolios as well.
Family Investment Center has always believed that investing really isn’t about the money itself - but rather how a person can share that wealth with those they love. Even so, it’s a team where investment advice offered comes from a place of logic – not emotion - which is crucial to succeeding in the investment space.
Find out all the reasons Family Investment Center maintains a unique approach - and why the team is interviewed by sources like the Wall Street Journal, U.S. News and World Report, Forbes, and many others. Visit www.familyinvestmentcenter.com today - or listen to the podcast “Money is Freedom” at Sound Cloud and iTunes.
Danford’s Free Podcast Offers Expert Investment Advice
“Money is Freedom” is a new podcast series by Dan Danford, CEO of Family Investment Center. The latest podcast in his series, “Free Advice is Poor Advice,” covers how too many investors take advice from friends, relatives and colleagues (or FRCs for short) for their investing strategies.
While on the outside it might seem to make sense to take advice from someone who has experience with investments, the advice often doesn’t take into full account an individual’s unique situation. In essence, what might have worked for a colleague or family member may not work for you.
“FRCs only tell you half the investment story,” Danford said, “the good half. They have little knowledge about your financial situation.”
Danford founded Family Investment Center in 1989. He and his team are licensed and certified to give investment advice, unlike friends, relatives and colleagues who don’t possess the same insights that investment advisors have gleaned over years of experience and specialized education courses.
“Money is Freedom – Season 1” is the title of Danford’s two-part podcast where he discusses the importance of establishing an investment portfolio using the right tools.
The blueprint of any investment project, Danford explains, is based on compound growth over time, and this should involve a variety of investment vehicles that take into account risk, reward, fees and taxes.
“You put in little amounts (of money) fairly painlessly,” Danford said, “and over time, compound growth grows them into something pretty spectacular.”
However, as an investor, you need to be wary of fees, but not so wary that you avoid pulling in third parties to assist you in your investments. It’s important to realize that everybody involved in your investment project is getting paid through layers of fees. Sales and distribution fees, Danford said, are the highest, which is why he urges you to look into this aspect of your investment projects.
The more personalized the service, the higher fees you’ll pay. Again, if the services are of value, you shouldn’t be offended by these fees.
“It’s fine to pay fees for convenience,” Danford said. “Some people get so wrapped up in fees they stop thinking about what they are getting in return for those fees. Sometimes what you’re getting is convenience – everything in one place.”
The “Money is Freedom” podcast is Danford’s sounding board to voice his experiences that he has gained after decades in the investment industry. As a fee-only advisor, Danford and his team act as fiduciaries and never take a commission on a product they sell to clients. It’s this objective stance that makes the advice he offers through his podcast all the more valuable as you educate yourself on investing.
Take some time to listen to Dan’s podcast which is offered through SoundCloud free of charge and share it with your friends. For a more comprehensive strategy, contact Family Investment Center and speak to an investment advisor. We’re ready to assist you with your earnings and build a stronger financial future for you and your family.
Market Volatility and Investment Strategies: How Should You React?
If you’ve been watching the market since the first day of 2016 you’ve gotten a reminder of how volatile it can be. However, given factors such as the drop in crude oil prices and fears regarding the Chinese market, it’s not a complete surprise that the market has been so volatile recently. When it comes to investment strategies for retirement, what’s the appropriate reaction to the market?
First, note that you’re not alone if you’re wondering what could happen next. According to a survey by the American College, around 60 percent of clients of retirement income certified professionals said they were “concerned” about the volatility. Let’s look at some tips for dealing with that anxiety.
· Don’t make drastic changes. In other words, stay the course. Too many investors, including those who are in retirement, are motivated by volatility to make changes that have negative outcomes all too often. When the market drops, don’t overreact. With a properly diversified portfolio, you’re more likely to see those temporary losses bounce back when the market swings back upward.
· Look to other resources rather than making big changes in your portfolio. For example, you might look to a low-interest home equity line of credit as a resource when the market goes south. However, before you jump into this or other options, make sure to seek guidance from an investment expert.
· Secure guaranteed income. Some retirees can’t be flexible with their income needs. Therefore, “flooring” is an option, which basically is the process of securing enough guaranteed income sources to cover your needs. You can do this through using investment and insurance products, like bonds and annuities. However, many insurance products come with high costs, stringent terms, surrender penalties, and pages of fine print (annuities are notorious for this), so be sure to consult an investment advisor before making a purchase.
· Reduce market withdrawals. Many retirees sell their investments to generate cash. However, doing this during market volatility puts you in the “sequence of returns risk,” which is not good when you sell investments right after a market downturn. You may want to avoid selling stock when markets are volatile.
Fortunately, retirement income related to pensions aren’t as often impacted by market volatility. However, 401(k) plans and IRAs can be hugely affected by market volatility. With so many investment strategies related to the 401(k) and IRAs, it’s easy to see how anxiety is spiking right now. However, the basic investing principles – such as consistency over time and not letting emotions rule your actions – have shown their worth over time across market highs and lows.
The advisors at Family Investment Center are here to listen and help guide you. We offer an experienced team in a commission-free environment, and we can help address your anxiety and concerns about the market to help positively impact the potential of your investments. Contact our team today and let’s start moving forward.
More Americans Want Their Investment Portfolio to Line up With Their Values
Today more retirees are looking at sustainable, responsible investing in their portfolios, but they don’t want to take a loss. Striking the balance between investing in the causes you believe in and consistent, goal-oriented investment portfolio management is possible – and it’s something more Americans are considering. Here are some surprising facts to consider:
According to data from Calvert Investments, 87 percent of people saving for retirement say they want their investments to align with their values. Furthermore, 82 percent said they look for their employee-sponsored retirement plans to include investments that are considered socially responsible.
Despite the market volatility, as many as 66 percent of people surveyed said their retirement investments linked to responsible investing will be just as good and perhaps better than the other mutual funds that don’t quite fit the “responsible investing” definition that is important to them.
Sustainable, responsible and impactful investing among investors has been a growing priority for many in recent years. There has also been an increasing number of products to support this type of investing. Many investors have used exchange-traded funds (ETFs), which keep expenses low but also support the values and ethics of the investor. The options for investors are quite varied. There are investments that can be made based on focused religious values, for example. On the other side, some investors will seek to avoid investing in stocks that go against their beliefs, such as corporations known for their carbon emissions or other polluting infractions.
Finding that balance between smart planning for retirement while expressing ethics and personal responsibility takes research and an intentional strategy. When you hire a professional investment advisor to help guide you, they can help you match your values with your investment portfolio.
Take note, however … when your investment portfolio is aimed at socially responsible products, it sometimes limits your ability to see the biggest returns because you’re limiting your options. This can increase the risks associated with investing in the market. The advisor that assists you with your investment portfolio can research to find stocks that meet your code of ethics, but also have the desirable risk levels.
Family Investment Center advisors track over 31,000 mutual funds, 20,000 common stocks, 1,700 ETFs, and dozens of investment indices. We can assist you in finding the investment options that will meet your definition of “socially responsible” while creating a well-diversified portfolio. Regardless of your ethics or feelings about social responsibility, we can identify solutions that meet your standards. Contact us today and let’s discuss your investment future.
A Letter From Dan Danford, Founder, Family Investment Center
Investment advisors share similarities with healthcare professionals. We do a lot of work in the background that helps keep you comfortable and reduce your aches and pains. After many years of experience, I’ve watched people come to my company, Family Investment Center, after too many sleepless nights due to their worries over retirement and other financial issues. Family Investment Center advisors are here to take away those pains. Here is what we work to provide:
We provide expert guidance. After decades in the business, we’ve learned many ways to save and pay for education. Our advisors’ knowledge covers issues regarding long-term care or medical expenses. Lately, Family Investment Center advisors have worked with clients worried about market volatility. We know how to minimize risks without sacrificing success.
We ease clients’ pain. Some clients come in worried by a lack of diversification. Maybe you’re one of the many working or retired Americans stressed out over how much you’re paying for investment services or advice. We know what everything costs, as we use research software that tracks over 31,000 mutual funds, 20,000 common stocks, 1,700 ETFs, and dozens of investment indices– and we are totally transparent about our fees, which are never based on commissions or involve hidden costs.
We provide comfort. It’s a quality that our clients find extremely valuable. As fiduciaries, we have a legal obligation to work for your best interests. We take the burden of making decisions off of your hands while looking out for your best interests. Decision fatigue is a real problem for many investors, and we’re here to make it a non-issue.
We work exclusively for our clients. It’s something that comes as a shock to many who are burned by previous relationships they’ve had with brokers or investment advisors from other firms. One of the ways we reduce that anxiety is by being a fee-only advisor, which is unique in the marketplace as it puts the interests of the client first. We never take a commission, and we never push a product that may not be fully in your best interests. In fact, we don’t sell products at all. Clients pay a small percentage of the assets that we manage for them. Nothing more. That way, you can see the direct inventive for us to grow clients’ accounts.
We cut through the noise. Are you inundated with noise about the market and various investment products? You can do hours of market research, but chances are your knowledge of diverse situations and market fluctuations won’t reach the level of a professional advisor with education, credentials, and experience. We have invested in our team’s advanced degrees and certifications to develop a thorough understanding of the investment process and the ability to put it into action for the benefit of our clients. (And, we have the passion to accompany that knowledge.)
Don’t burden yourself. Are most investors with basic investment and finance knowledge capable of making small investment decisions on their own? Sure. However, the subtleties are often hidden in distant shadows, but we know how to see them. Risks, costs, performance claims, etc. are aspects of the business that are lost on most investors, but it’s where we prove our worth. There’s no need to suffer from decision fatigue – leave these decisions to us.
Our price is right. Family Investment Center offers our services for a comparatively low price. Attorneys charge hundreds of dollars per hour, with often a settlement awarded at the end. Architects can bill clients for 15 percent of a project’s total cost. Our modest investment fees pale by comparison.
Specialized knowledge about IRA withdrawal strategies might save thousands in taxes, or add thousands in tax-deferred growth. How much is that worth today? Think how much suffering that much money might save thirty years down the road.
Simply put, we eliminate pain for a fair and reasonable price. A major aspect of our job is to know about products, fees, strategies, and options in the marketplace. We ease decision-making and simplify life, and that investment is worth every cent.
Indexed Annuities and Structured Notes as Part of Your Investment Strategies
Tony Robbins, the square-jawed guru of self-help who dominated the airwaves in infomercials for years, now has a best seller about investment strategies. Money, Master the Game: 7 Simple Steps to Financial Freedom came out last fall and has already garnered more than 1,500 reviews on Amazon.com. Nearly 70 percent of readers give it five out of five stars. Financial advisors are also singing its praises. Specifically, Robbins addresses two products that he feels are an important part of investment strategies: indexed annuities and structured notes.
· What are indexed annuities?
Indexed annuities are widely known and sold. They are essentially an insurance company investment product with a portion of stock market returns that are protected from losses.
· The devil in the details
The logical question is – to what are they indexed? Dozens of investment indices exist and it matters which one is chosen. For example, what is the participation rate? How much of the index return will the owner accrue? Some annuities cap the return at 60 to 80 percent of the index’s growth each year. Does the growth include dividends?
· Other questions to ponder
How long do you have to invest? What is the penalty for early redemption? What is the insurance company’s financial rating? Remember – a guarantee is only as good as the company offering it.
Many insurance companies will offer indexed annuity products, but different rules apply to each of the companies and each and every contract, and they can be extremely complicated. Investment strategies for indexed annuities should include finding an agent who fully understands (and can easily explain) all of the rules regarding indexed annuities.
Robbins also touches on structured notes, which is something corporations and other groups use to borrow money without using a banker as a middleman.
· What are structured notes?
Structured notes are used as a package with a loan as a security, which is sold directly to investors. Cutting out the banker’s profit means the borrower gets a better deal.
· How banks make money
Banks will judge the economy, industry sector, management, competition and any other relevant information. They decide to make a loan and make price adjustments (interest rates) to compensate for the risk involved. They demand collateral and might require life insurance of key managers.
· The structured note buyer
The note buyer faces the same lending issues, but the consumer usually isn’t in a good position to evaluate the risks or make pricing adjustments. There are distribution fees to consider, and when involved with retail products, the higher those fees tend to be.
Call us today at Family Investment Center and find out more about creating an investment portfolio that can help you reach your financial goals. Our investment advisors follow philosophies developed in a similar way as Tony Robbins, and we’ve always been commission-free and investor-focused since our founding in 1998.
As part of a team who strives for continually learning and growing to better serve clients, Dan Danford was recently interviewed by Forbes for a story about the books investment professionals. You may want to consider Dan’s recommendation for summer reading if you’re packing your own poolside bag – or just want to know what industry professionals find valuable.
Published onMay 24, 2015, titled “Personal Finance Books Financial Experts Say Will Change Your Life,” Dan talks in the article about how the release of Tony Robbins’ new book “MONEY Master the Game: 7 Steps to Financial Freedom” is pivotal for firms that are fee-only and investor-focused because it highlights in a very public way the philosophies Family Investment Center has used for years. Danford also says in the article that “an informed public will demand some revolutionary changes in investing – and that the investment industry has historically been in favor of the seller, not the average investor. This is something investors need to know so they can work around the obstacles.”
He also notes in the interview that Robbins’ conversations with Warren Buffett, John Bogle, Charles Schwab, Carl Icahn, Boone Pickens, David Swensen and others sheds light into how valuable it can be for investors to “know the rules” before they become involved in investing. In fact, these are the same concepts Family Investment Center was founded upon as a commission-free, fee-only firm nearly 17 years ago.
Addressing several myths and truths toward investing, Robbins helps make clear, says Danford, some of the core values of investor-led services that Family Investment Center holds close.
Avoid Conflicts of Interest by Choosing a Fee-Only Advisor
Not all investment advisors are alike. In fact, some are quite different, but in a good way, and it’s these fee-only advisors with whom you want to associate.
A quality investment advisor thinks about how they can help their clients meet their goals, not about how they can make money for themselves. This can be a problem with those who charge a commission on the products they sell to their clients. A conflict of interest potentially arises when commission is charged: how can an advisor think about what’s in your best interest when they know they have something to gain if they sell you specific products?
This isn’t to say that all advisors who take a commission aren’t making money for their clients, but statistics show us that when investors get conflicted advice, they could see a 12 percent loss in potential growth in their IRAs over a 30-year period. This is key information laid out clearly in a report from the White House earlier this year.
When looking for an investment advisor, consider working with one that is a fee-only advisor, not fee-based. The terminology sounds similar, and that’s by design from those who take commissions. A fee-based advisor wants you to believe they are only making money from the fees they charge you, but they could actually be charging fees and commissions.
One of the “pioneers” founded as a fee-only investment advisor is Family Investment Center. It was a decision made by the president and CEO of the company long before fee-only advisors were the norm. The year was 1998, and Dan Danford knew he was taking a risk, but he would not waiver from the importance of being a commission-free business because this philosophy enables truly client-focused service.
Since Family Investment Center opened its doors, the country has gone through two recessions and a housing crisis. It has become even more apparent across the industry as a whole that accountability is paramount, and this is something Family Investment Center has always offered – total accountability and transparency.
What the professionals at Family Investment Center have provided day after day since the company’s founding is a place where clients can walk in and have clear communication about their investments. The team has the education and experience to listen and evaluate your options from a commission-free perspective. In fact, Dan Danford and his team are often called upon by media sources for investment insight, including the Wall Street Journal and U.S. News & World Report.
Contact Family Investment Center today to find out how your story can become part of ours.
When it comes to investment decisions, outcomes are rarely good when led by fear. If quick decisions, market fluctuations, or media hype are part of the mix, investment strategies may bring the long-term success you’re looking for.
Here’s a quick summary related to investment “promises” to help as you make decisions:
Just because it’s registered with the SEC doesn’t make it a sure thing. The U.S. Securities and Exchange Commission documents proper disclosure and paperwork, not investment appropriateness or prospects.
If an advisor tells you they get a commission if you buy, it may be time to walk away. Your investment advisor should be asking what they can do for you, not what you can do for them. If you’ve entered into a conversation with a broker that makes you feel like you need to buy a product to help them make a commission, they may not have your best interest at heart. Consider looking for a fee-only (commission-free) advisor.
Promises should not be offered and are not guarantees. The market is not a game, and nobody knows exactly what it’s going to do. Anyone’s guarantee of high returns would be followed by a contract Of course, brokers won’t sign such an agreement, because they can’t legally promise a return.
Be wary of “specialists.” According to a study on fraud by FINRA, advisors who tell clients they are specialists in conservative investments for seniors are able to pull in about 46 percent of people to whom they make that pitch. In reality, what they’re probably selling is a high-priced investment that may not perform as you expect.
Just because your investment advisor belongs to a group you’re involved in doesn’t mean they share the same ethics. Many people are more trusting of those who share similar interests, social circles, and affiliations. You still need to do your research and make sure the investment advisor has a strong record of experience and professionalism. Look for membership in NAPFA, which is for financial professionals who meet quality standard requirements and operate on a fee-only basis.
Trust a fee-only (commission-free) advisor. Your best opportunity for objective advice may come from an advisor who doesn’t take commission for selling investments to you. Family Investment Center operates on a fee-only business model. In fact, it’s been at the core of our philosophies to serve the investor first since we started the business in 1998. Contact us today.
For many Americans, a college degree could mean a million extra dollars earned over the life of a career. However, with the student debt load surpassing that of credit card debt, it’s easy to see why the prospect of a college career can put a great amount of fear in those who are trying to figure out which financial planning steps to take.
Private or Public – College is Still Expensive
If you think applying to public schools only will keep you (or your child) out of debt, that may not be the case. The average four-year state school will cost $18,000 a year to attend, which means you have to consider grants and scholarships as well as starting your savings plan early.
Don’t Rely on the Financial Aid Office to be Your Investment Advisor
Financial aid can be a confusing process, and one that leaves students with a poor understanding of the debt they will be responsible for when they leave the university. This debt is forcing more and more college graduates to put off getting married, buying a house, having children, and starting a retirement account. Financial planning isn’t usually something most young college students think about until it’s too late, which is why more colleges are offering financial planning courses to first-year students.
To get a better handle on the situation, know where your bottom line is – whether you’re helping your child with college or they’re handling it on their own. You’re probably not going to find your bottom line on your financial aid letter, unfortunately, so you’ll have to make calculations yourself. Don’t forget that nearly all schools have tuition and fees. Tuition might be $280 per credit hour, but there are also various fees attached to each credit hour that you have to factor in. And that’s only part of the equation: you also have to consider the costs for books, food, housing, and other miscellaneous expenses.
Saving Money on the First Two Years of College – It’s Possible
Community colleges saw a massive influx of students during the recession as everyone scrambled to make ends meet. Now that we’re out of the recession, saving money by attending a community college for the first two years still makes sense and it’s something that many more students are doing to offset the crushing debt that many others find themselves in once they begin earning “real” paychecks. Also note that attending a high-status school may mean thousands of dollars more in debt – and may not mean higher-paying jobs after graduation.
Experts advise families to match the student’s career goals with a school whose tuition matches their projected income. For example, maybe Harvard isn’t the most ideal choice for a student who will enter the workforce projected to earn $35,000 a year. In this case, a student might attend a community college or less prestigious university and start investing for their future early in their earning years -- instead of paying off huge loans.
Seek Out the Advice of an Investment Advisor
Saving for college while also trying to sock away money for a comfortable retirement can be a difficult task, but there are ways to do both. At Family Investment Center, we’ve helped many families navigate these decisions and achieve more confidence toward their futures. Talk to us about what concerns you have and we’ll work together to make a plan.
Americans get together across the country every week or every few weeks either at a library, someone’s living room or a local bookstore to discuss their latest reads. Yet, there is a lot more to book clubs than just reading books, and Americans are taking note and joining clubs.
There are virtual book clubs popping up on the Internet, but the more popular choice is to host a small gathering of like-minded individuals while discussing books and any other topic that might come up, perhaps something as light as new recipes or as serious as family and business. Members get a sense of empowerment as they share their opinion about a book. They feel a sense of community, often with people they’re meeting for the first time. For some, it’s simply a break from the norm – an activity that breaks up the monotony of everyday life.
To give St. Joseph and North Kansas City residents an opportunity to get everything they can out of a book club, Family Investment Center Founder/CEO Dan Danford is hosting two new community book clubs beginning in May. The club is named You, Me and Zuck: A Community Book Club Based on Mark Zuckerberg’s Year of Books. The club seeks to bring the community together with the goal of building relationships while sharing knowledge. Zuckerberg said that he “found reading books very intellectually fulfilling. Books allow you to fully explore a topic and immerse yourself in a deeper way than most media today. I'm looking forward to shifting more of my media diet towards reading books.”
Danford said he’s looking forward to his club’s members sharing valuable insights and information with each other, starting with The End of Power by Moises Naim, which looks at former powerful leaders and the newer, smaller powers that are helping to change the landscape of leadership.
“As a business, we believe it’s part of our responsibility to interact with the community and help foster new ideas and inspiration. That’s what we do here at our company every day, and it’s natural to want to share that,” says Danford.
The “You, Me and Zuck” Book Club Titles Are:
· The first book the club will read is The End of Power by Moises Naím. The book discusses the shift in power from West to East and North to South, and from traditional power platforms like presidential houses and palaces to public squares.
· The second is from Sudhir Venkatesh, Gang Leader for a Day, a book that comes out of nearly a decade living in a notorious housing project in Chicago where gangs rule the neighborhood. Venkatesh sheds light on the “morally ambiguous, highly intricate, and often corrupt struggle to service in an urban war zone.”
· The third month of the book club features Creativity, Inc.: Overcoming the Unseen Forces that Stand in the Way of True Inspiration by Ed Catmull. Readers will see into the mind of one of Pixar Animation Studio’s founding members and get his take on managing employees to get the most out of them.
· The fourth book on the list is The Better Angels of Our Nature by Steven Pinker, who is a cognitive scientist investigating our violent past and how brutal practices are now declining in society.
· For the club’s fifth meeting, members will read On Immunity by Eula Biss. The author, who is a National Book Critics Circle Award winner, talks about her fears as a parent. She discusses fear of the medical establishment, government, and what’s in the air children breathe, the food they eat and in their vaccines.
· For the sixth and final meeting for this round of readings is The Structure of Scientific Revolutions by philosopher Thomas Kuhn. This book, published in 1962, examines the process of discovery and challenges idea of normal scientific progress.
Kansas City Meeting Dates:
St. Joseph Meeting Dates:
The first meeting in Kansas City will be held at 7p.m., Thursday, May 14, 2015, at Barnes and Noble at Zona Rosa. These gatherings will recur on the second Thursday of every month through October. St. Joseph members will attend their first meeting on Thursday, May 28, 2015, at the East Hills Library Conference Room. Meetings will recur here every fourth Thursday of the month through October.
We invite you to join us, either in-person or online and share your opinions. For more information, contact us at Family Investment Center.
It’s something that the average American worker might have thought about for many years – how Social Security plays into a retirement strategy. Rather than jumping on benefits the day you are able to receive them, consider talking through your options with an advisor.
Once you reach age 62, which is the age at which you can start withdrawing benefits, you have a decision to make (actually, several decisions) about your Social Security. In fact, you may not know that the decisions you make for claiming your Social Security benefits could mean receiving hundreds of thousands of dollars in additional benefits over your lifetime.
Some areas you may want to ask a professional investment advisor about include:
· How to receive a larger, inflation adjusted lifetime payment by suspending benefits
· The process involved in waiting to collect your benefits
· Spouse or widow benefits, even if you’re divorced
· How to choose options when one spouse receives benefits early and the other decides to wait until a later date
· Benefits of discussing your choices with an advisor rather than making your Social Security decisions on your own
Should I wait? In most cases, there is a benefit to waiting on collecting your benefits because you could see an increase of about six to eight percent for every year between 62 and 70, plus cost of living adjustments. That can add up to thousands of extra dollars you’ll receive later.
I started collecting early and want to reverse that decision. For those of you who have already filed, it’s not too late to reverse your filing decision. For instance, let’s say you started collecting your retirement at age 62 and want to suspend the benefits until you turn 70. You can, but to change your election strategy you only have 12 months from the time you file to make a change.
What should we do if we are each eligible for benefits? Advisors often recommend collecting from the smaller benefit early and holding on to the larger benefit for collection later. If you’re married and you each were to take your own benefits at the same time, you may lose the opportunity to draw a little now and more later.
I’m divorced. Does that mean my benefits are negated? If you were married for at least 10 years, it’s highly likely that you’re eligible for spousal benefits on the earnings of your ex-spouse. You have to be proactive with this benefit because Social Security is not allowed to give financial advice or suggest case-by-case recommendations – you must reach out to them. However, if you’ve remarried, these benefits disappear.
I know my way around finances – shouldn’t I just make these decisions on my own and save money? The Social Security system is not just a “file and done” decision-making process. There are hundreds of options to be aware of that most people are not aware of to maximize their lifetime payments. An advisor should help you sort through the hundreds of Social Security income claiming possibilities to help you get more lifetime income. (It’s true that some couples have seen benefit increases of $150,000 and higher over their lifetime by delaying their benefits and finding out all their options.)
In addition to investment management, Family Investment Center offers both expertise on Social Security options and access to dedicated software. We can sit down with your family and move through various scenarios so that when it’s decision-making time, you can do so with confidence. Contact us today to schedule a meeting.
The idea of sitting down together to pour over a spreadsheet about your financial health may not sound totally appealing at first – but sometimes couples need a new approach to financial planning, as shared recently by Money magazine.
The topic remains popular, and author Jonathan Rich recently wrote a book about couples and how they can approach money topics in a more romantic fashion. The psychologist says money talks are about long-term plans, which involve both partners and should be considered a romantic situation. Here are a few things couples can consider when they approach the conversation:
· Start with identifying shared values. If you have children, you’ll likely begin with them – their education, trusts for them after you and your partner have passed on. Take into account your religious affiliations and any social causes you are passionate about. Most couples can find common ground in these areas.
· Next, come up with a list of goals related to your shared values. Write each goal on individual pieces of paper. These will include goals for your children, vacation goals, retirement goals, etc.
· Your goals might differ slightly (or by a large margin) from your partner’s goals. Compare and contrast these goals now by putting each individual goal on the table for the other to see and rank them and list how much money you believe should be attached to each goal.
You will probably find out when you go through this scenario that you can make compromises more easily when everything is laid out on the table and everything is ranked, with some dollar values presented. You’ll discover where you need to start cutting back on spending, how much you need to direct toward savings and investments, and how you can reach your financial planning goals in a more timely manner.
This is excellent groundwork to lay down before visiting with a trusted investment advisor for feedback. When you’ve aligned your goals, you can take them to an advisor who can help you tweak various investments and offer advice on how you can reach your goals quicker. Maybe you’ve still got some unresolved issues on the table. Not every goal will be met with total acceptance from the other partner. In some cases, it’s simply a matter of preference, but when it’s a matter of what makes more sense as an investment, an advisor can bring a qualified, unbiased viewpoint to the table, which can help resolve ongoing issues. After all, this is what they are experienced and trained to do; professional advisors help individuals and couples make these decisions daily. Let one take the hassle off your mind so you can carve out time for other tasks you might be the expert at.
Choose your advisor wisely. Pick one that has experience dealing with family matters and can bring an objective viewpoint to the financial planning discussion – including one that doesn’t overtly favor one opinion over another unless it makes the best financial sense. It may also be helpful to consider if you’re looking for a commission-free investment advisor, because if so, this means the advisor’s motivations to “make the sale” are set aside.
Family Investment Center is a team of experienced, professional advisors who know how to communicate with each member of the family, from young adults just starting out to retired investors who continue to seek advice on growing their nest eggs together. Contact us today to learn more about our unique education and experience.
Balance…we’re all looking for it. But have you considered what it means to your retirement and your financial future?
If you’re looking for long-term performance, you’ve probably considered that you can’t put all your eggs in one basket, as the old adage goes. Many professional investment advisers have watched balanced portfolios outperform those that are focused on limited products. Instead of trying to determine what might be the next big performer, consider more diversified asset allocation strategies and consider these suggestions as you ponder what balance means to you:
Know your investment goals going in; this may include developing a long-term look at your investments. For instance, you know the stock market ebbs and flows. You may see periods of losses while reaching goals. However, you also know that in the long term, people who stick with their choices through the good and bad likely have a better chance of coming out on top in the end.
However, the long-term strategies don’t always work for short-term goals, which means you have to be flexible in your thinking. For instance, you wouldn’t want to invest in volatile stocks if you’re building a college savings account for your children who will start college in just a few years. You might see an upswing from time to time, but what if the market falls drastically just as your child is nearing enrollment? He or she won’t have the luxury of waiting for the market to recover.
The strategy in your investment portfolio should consider variables such as inflation, especially when you’re on a fixed income. Your buying power can be significantly reduced by inflation as your regular payment through annuities and bonds remains the same over the years. You may want to consider owning securities that can help to offset the impact of inflation.
Don’t forget investments aren’t all about stocks and bonds. Consider investing in more asset types to help reduce the volatility of your investment portfolio. Commodities can counteract inflation because as inflation goes up, commodity prices may rise in accordance. You can also look into market-neutral funds if you’re investment style is more in line with the risk-averse. Furthermore, what you currently own is also an investment, particularly if it is art, property, rare items, or collectibles. These are items that won’t appear in your quarterly report but could be considered part of your overall portfolio.
Finally, it is important not to follow fads. Maybe you learned the hard way or watched it happen to a friend or colleague. By the time you’ve heard about a so-called “miracle” investment, it’s probably already peaked and you’ll simply be catching it on the way down.
Keeping up on the possibilities is something many investors are interested in, but not necessarily professional skilled at. Protect what you’ve earned by consulting a professional investment advisor. They are experienced in researching, watching the markets, managing portfolios, and learning about ways to help their clients reach their individual goals. (And wouldn’t it be nice to have someone who does this for a living investing their workday time and experience into the process, for you, so you don’t have to?)
At Family Investment Center, we’ve got a team of advisors ready to assist you in balancing and diversifying your portfolio, all without the pressure of sales commission. Contact us today and find out how we can devise a strategy that’s custom-built for you – so you’re free to work toward balance in other areas of your life.
Men and women invest differently, says recent research – but some of the findings may surprise you. One set of statistics (shown below) regarding women and their financial stability can be especially thought-provoking. Where do you fit into the research numbers?
Statistics from the U.S. Census Bureau show:
· 42 percent of women in the study said they aren’t financially secure
· Around two-thirds of women said they can’t cover their basic needs
· Of families headed by single mothers, only 18 percent are financially secure
· Older women living in poverty outnumber older men by 50 percent
· The annual income for older women is $14,000; for men, it’s $24,300
· Only seven percent of women are very confident in their ability to retire comfortably
These facts may be alarming, but they also point to the unique needs and opportunities many women have when it comes to investing, such as the needs that arise from living longer than men.
One reason investing for women is different than for men is lifespan. Women, according to Census data, work an average of 27 years to men’s 40 years. However, they live about six year longer than men, which means they need more money for retirement. Social Security benefits can help women ease the shortfall, especially if they wait to start drawing down benefits until later in life (something a financial advisor can explain in more detail).
Sound investments also need to be part of the mix when you are looking at investing for women. One barrier may be an uneasiness or lack of confidence toward investing. In fact, Forbes reported on the subject recently in an article titled “Closing the Confidence Gap: Women and Investing.” The article touches on something called the “female financial paradox.” This is about women growing into an economic force, contributing $6 trillion in income across the world in the next five years. However, some women who have large sums of money sitting in a low-earning savings account say they don’t have the time to figure out how to get started on a smart investment strategy. Others say they are limited by their thought patterns toward being risk-averse or lack confidence in choosing an investment strategy. Women may also be more likely than men to preserve their wealth, which means they may give up an opportunity for higher returns from investing.
Another difference involves how men and women view the role of making investment decisions. In the Forbes article, a financial advisor at Northwestern Mutual said that women have more power and earning potential than they’ve ever have, but many are placing others in the position as head of the household and relegating investment decisions to that person, often the husband. Taking a more team-based approach on the discussions regarding investments could open more doors in the future.
One area that many women could devote more focus toward is the rate at which they participate in company retirement plans. While they are as likely as men to sign up for the plan, they are putting less into it than are men, according to a report by Aon Hewitt. Advisors often say that if you’ve got a retirement plan at your company, participate fully and take advantage of the company match – and never invest less than the company is willing to match.
Regardless of gender, talking with an investment professional with real-world experience managing investments can impact your investment behaviors and attitudes and how you’ll reach your goals. Family Investment Center has an experienced team ready to discuss strategies that fit your family. Contact us today to find out how we can work with you toward maximizing the opportunities that may already exist for you… or those that may come your way.
Fidelity Investments surveyed more than 5,000 physicians about their portfolios and looked at where they allocate their assets in 401(k) plans. The report revealed that physicians often show too much confidence in their investments, affecting how they allocate their funds.
There are other factors at play that could negatively affect physicians’ investments. First, after more than a decade in school, many enter the workforce at a more advanced age, which means their portfolios can be quite small when people choosing professions requiring less school have seen a decade or more of growth in their investments.
After all of those hours studying, some doctors will come into their profession ready for a few nice things…such as a nice car, nice home, and memberships that come with a heavy price tag. Financial planning for physicians should include steps to plan for a variety of situations.
Professional advisors may recommend that physicians max out their 401(k)s, but the Fidelity research shows that many don’t. (Instead, they may opt for nicer purchases). Utilizing the $18,000 maximum contribution (in 2015) for 401(k) could make a tremendous difference in retirement and could help make up for all of those years finishing a professional medical education.
The Fidelity study also looked at stock investments physicians made compared to the target-date funds that were recommended for people in their age group. Some investment advisors may recommend the target-date funds because they start off investing aggressively and then move to less aggressive investments later in life, but physicians make more money than many other professionals, which means their involvement might not be as heavy in target-date funds. Fidelity found that nearly 40 percent of physicians have around 77 percent of their investments in equities while they’re in their 30s.
Financial planning for physicians may require more direction from trusted sources that know the risks, the flexibility, and the course that investments should take over a lifetime. For many doctors, this plan includes investing more aggressively at an older age and working part-time in retirement. However, they can’t be too risky, which is another fact Fidelity discovered in its study – many doctors aged 60 to 64 have nearly 65 percent of their portfolio in equities, which could be too aggressive.
Regardless of your profession, knowing exactly what to do with your money is a difficult task, which is why financial planning for physicians should include bringing a professional investment advisor into the mix. Family Investment Center is experienced in this area. In fact, Dan Danford, Chief Executive Officer, was twice named to the Medical Economics magazine list of "150 Top Financial Advisors.” Medical Economics accepts nominations from doctors, medical organizations, and other professionals, then spends six months screening the candidates on a variety of criteria including education, expertise, experience, compensation, recommendations, and service to the medical community.
Third-party rankings do not guarantee future investment success or that you will experience a higher level of performance. Rankings are based on information supplied by the advisor and should not be construed as an endorsement by any client. Not all advisors apply.
Just because an advisor wears the right clothes and talks the talk doesn’t mean they are the best advisor for making smart moves with your money. Many investors have made the error of working with a close friend or family member on investment decisions, only to find out later that the relationship is strained or the results just aren’t there.
Your financial goals are so important to how you’ll live now and in the future. Don’t feel guilty about changing advisors if needed, because in the end, it’s your retirement and your nest egg that matters most. If this means not leaning on friends or family as your key go-to advice for investments, rest in the knowledge that working with an experienced, professional advisor means you may be closer to the future you want (and this could mean you’re able to bless your loved ones even more down the road).
Some advisors promote relationship marketing, but be careful of what this means about the true experience level of the individual or firm. Be watchful of commission-based sales that may leave you feeling stressed or guilty. A reputable advisor will not require you to have a lunch date or be swayed by commission-based sales; they’ll simply invite you to their office where they’ll explain exactly what it is they do and how their unique experience may be helpful to you. Also watch for too much industry-specific jargon. An experienced advisor should be able to communicate about the tools they use in a clear-cut, uncomplicated way. It’s their job to understand all the complexities of terms…not yours!
How can you ensure that you’re going to be partnered with the best advisor? First, consider choosing fee-only advisors. A fee-based advisor is not the same thing as a fee-only advisor. Note: A fee-based advisor can charge commissions, too. Fee-only advisors, on the other hand, are committed to helping their clients understand the issues involved with their portfolios and focus on customer needs since they are completely commission-free. Because you’re paying a fair and ongoing fee, it’s just part of the service. You’ll find resources at National Association of Personal Financial Advisors (NAPFA), an association exclusively for fee-only advisors.
At Family Investment Center, our team of investment professionals uses clear and direct language to explain concepts and tools, and we operate on the side of the investor. This has been our philosophy since we opened our doors in 1998. Contact us today to get started with a new view of your investment future.
Now that your 2015 resolutions and plans have started to take shape (or maybe shake out), are you including investment goals as part of your plans for the upcoming year?
Unfortunately, most resolutions are an attempt at self-improvement, but less than ten percent of people actually follow through with their goals. This is evident at your local fitness club, which is bursting at the seams during the first part of January. By February, the place is less crowded. Don’t make the same mistake with your investment goals. Here are some points to consider as you get started:
What are you worth? It’s a loaded question, but an important one. Let’s make it easier: calculate your net worth by looking at all your assets and liabilities. This will help you get a clearer picture of where to begin setting your goals for the coming year.
Setting priorities is not that difficult; sticking to them is. You’ll need to begin your planning by prioritizing spending and saving. For people looking to increase their investments in the coming year or years, this involves changing habits, which is why so many people fail at their resolutions – they aren’t ready to accept these changes. (If it were easy, everyone would follow through.) For people who seek the advice of professional investment advisors, the chances of making good on a goal can increase dramatically.
Automation can also assist you in sticking to your goals. For instance, you may be enrolled in your company’s 401(k) plan, which automatically takes money out of your check before it’s deposited into your checking and/or savings account. There is so little required of you; all you need to do to increase the amount you want to put into your retirement account and the company takes care of the rest. For those of you who are 50 or older, you can take advantage of “catch-up contributions,” which allow you to put more than the maximum amount into your 401(k) every year.
You may want to consider if you’re putting all your investment hopes and dreams into your 401(k); investment advisors are also keen to point out the value of IRAs and other investment tools. You can contribute to a traditional IRA or a Roth IRA, or both. There are parameters limiting how much you can contribute, but investment advisors will be able to assist you with this.
Navigating the pathways you’ll find when it comes to investments is difficult, but not for professional, experienced investment advisors. Come to Family Investment Center and let us help you map out your New Year’s investment resolutions.
Have you heard about Tony Robbins’ new book and the “revolutionary” power it has to change investing? You probably will.
The path to the financial future you want may not always be about gaining wealth. For many investors, it can mean gaining financial freedom on their own terms, which includes steps that aren’t overcomplicated or overly stressful. Recently, the nation’s media attention has turned toward the topic of simplicity and freedom when it comes to investing, spurred on in part by the release of Tony Robbins’ new book, MONEY Master the Game: 7 Simple Steps to Financial Freedom.
The concepts people can’t stop talking about in Robbins’ book have especially hit close to home with our team at Family Investment Center. Back in 1998, we deliberately modeled our client investment policies after institutional investors like Yale University, using similar principles as David Swensen – a.k.a. the $24 billion man and manager of the Yale University endowment.
Swensen was interviewed for the new Tony Robbins book, MONEY Master the Game: 7 Simple Steps to Financial Freedom. Read his interview on pages 468-475 for an overview of his – and our – philosophies on the investment process. In fact[LP1] , these principles are the basis of my 2002 book “Million Dollar Management: Simple Lessons to Use Wealth Management Principles for Your Family Investments” (co-authored with Gary Myers).
The release of Tony Robbins’ new book is pivotal for firms like Family Investment Center, because it highlights in a very public way the philosophies we’ve used for years. In a recent Amazon review of the Robbins book, I wrote, “This book has the power to change investing forever. Robbins explains for readers what I've taught clients for over three decades …. This means some revolutionary changes in investing.”
These revolutionary changes have been part of our vision and landscape for many years, which is why we are so excited about the positive response to Robbins’ book. You’ll see that many of Robbins’ concepts are similar to those found in my book, Million Dollar Management, even though they were published a few decades apart.
One of these important concepts is that the investment industry has historically been in favor of the seller, not the average investor, which is something investors need to know so they can work around the obstacles. Both books help individuals cut through investment myths and find better paths to progress.
Robbins' book covers this disparity and addresses asset allocation, fiduciary advice, and fees for trading or mutual fund management. Robbins also includes interviews with investment titans such as Warren Buffett, John Bogle, Charles Schwab, Carl Icahn, Boone Pickens and David Swensen. Certain chapters speak to the very essence of simplicity and freedom in investing, including "Becoming the iInsider: Know the rules before you get in the game".
The Tony Robbins book is truly a pivotal development for firms like Family Investment Center. We have already received calls because people read the book and found us in their search for investment management, because they're interested in a personal blueprint that is easy to understand and follow. It's even more exciting to know that what's being talked about today in the investment world includes the core principals of simplicity and investor-focused freedom that we have always applied to the families we serve.
Stop by today and talk with our team about the new Tony Robbins book and how it applies to the work we do for families here at Family Investment Center.
The statistics are alarming when it comes to Americans and their rates of planning for retirement. According to the Federal Reserve Board, 31 percent have not saved for retirement and haven’t put a plan in motion to get them on track for investing for their golden years.
What’s holding everyone back?
Good old-fashioned fear. The answer, it would appear, is fear. The markets fluctuate, sometimes sharply. Often, this doesn’t work well for the risk averse who let their emotions dictate their financial future. While they think they’re doing themselves a favor by staying out of the market, they miss opportunities to allow their money to work for them.
Reluctance after the recession. Many thousands of potential retirees had to put off their retirement plans in 2009 after 401(k) and IRA accounts took a hit. When the market takes huge hits like it did during the recession, it only fuels a general fear of the market. However, for investors who ride out the bad times and leave emotion out of their investment decisions, they can typically accept the good with the bad and come out on top -- especially if they have a professional advisor on hand to assist.
Lack of education from an experienced (and unbiased) investment planner. Dr. Michael Guillemette, a professor at the University of Missouri and a certified financial planner™ professional, looked into how emotions play into investment decisions and financial planning. He found that advisors who focused their discussions on value-added aspects of the investment process can often assist their clients in easing the emotions related to the market.
Emotions related to spending habits can be a real barrier. Emotions often play into decisions regarding what you spend your money on and how much you put into your investments. For instance, let’s say to meet your retirement and financial planning goals, you should put another $200 a month in your retirement account(s). You can free up $200 a month by simply cutting out that cup of premium coffee you stop to purchase before work every morning. It makes sense to cut out this expense because the numbers are glaring at you from your spreadsheet. However, what if that stop in the morning is about more than just the caffeine? What if that stop is part of your morning routine that gets you in the work mindset? The coffee suddenly becomes worth more than what you spend on it.
Professional investment advisors will work through these decisions with clients and find areas that pit emotional costs against financial costs, ultimately working out some new strategies or an “amendment” to help a person achieve their financial planning goals. A trusted, experienced advisor might explore new solutions for spending habits, and few will allow fear, emotions, and other aspects of investing to get in the way of a client moving forward.
The professionals at Family Investment Center have worked with clients through the attitudes, habits, and patterns that are often part of the investment process. Our team can look beyond the spreadsheet and help you work through the emotional decision-making processes that have merit and those that don’t have merit. Contact us today and we’ll discuss your concerns and your options, which can equal a brand new, confident perspective for 2015.
(Let Financial Advisors Guide You)
Think about the last disagreement you had with your partner or spouse. Was it money related? If you answered “yes,” you are like many couples that say their most frequent arguments are centered on the subject of money. A survey in SmartMoney magazine said that around 70 percent of couples talk about money on a weekly basis, which means if they’re not reading from the same playbook, there will be plenty of opportunity for disagreement. Creating a strategy with financial advisers can help lessen money disagreements and relates stress about these choices.
In fact, one of the areas many financial advisors are paying closer attention to is emotions and money. Many professional advisors suggest never making an investment decision based on an emotion. Approaching finances from an objective, strategic view is likely to result in a positive experience and help boost your confidence.
When it comes to banking together, what works for one couple might not work for the next, but a majority of couples in the survey (64 percent) have all their money in a joint account. Only 14 percent go with completely separate bank accounts. The remaining percent do a mixture of both. Whichever style you choose, when it comes to investing for the future, it’s smart to keep each other well-informed – especially as life savings and retirement planning are involved.
Another area of interest in the survey pertains to responsible spending and saving. Often, the problems start when what’s important for one person seems frivolous to the next. Statistically, men and women actually spend about the same amount of money, but on different things. Setting up a budget that works for both parties and includes a solid strategy for retirement is key to success in this area. A financial advisor can help you make decisions about which amounts are best for your lifestyle and even help with life expectancy predictions. (You may not know that today, many people live 10 to 15 years longer than they think they will!)
Finally, the area of secrets when it comes to investing can be a major roadblock to success for some couples. SmartMoney stated that men are almost 40 percent more likely to take an investment risk than their spouse, but on either side, the topic of risk may never come up in an investment conversation. Experts recommend couples sit down together and look at all their investments at least once per year, especially if one of you is more likely to seek a higher level of risk than the other.
The family dynamic is different with just about every situation. At Family Investment Center, we’ll sit down with you and help you walk out with a plan that puts you on the same page, keeping your joint goals as the focus. Our team has nine advanced degrees and certificates, plus decades of experience to draw from. Schedule a conversation with us today and see how we can help you build a plan that works --- all in a commission-free setting.
Even people who never procrastinate may suddenly find other things to do when the subject of financial planning, especially retirement planning comes up. Developing a strategy for a point in your life that is still decades away is just too easy to put off for most people. Plus, the intricacies found in the planning process can be intimidating, especially for people who have math anxiety or are afraid of making the wrong decision. Here are some tips to help guide you as you move forward:
Don’t focus too much on market fluctuations. If history has taught us anything, it’s that the economy will ebb and flow, and investments follow that trend. However, many advisors will tell you that being fearful or overly risk-averse creates a situation where money situated in a savings account doesn’t reach the potential it could have with wise investing.
The sooner you start the process, the sooner you can sidestep your anxiety about financial planning for retirement and the brighter your retirement will look. Remind yourself that when you’re looking at the big picture, you’re involved in an ongoing process -- your goals could, and perhaps should, change from time to time.
Another way to approach the process is to look at the finish line. How do you want to live in retirement? Do you expect to have the same comforts then as you do now? Start with a number based on what you’re earning now and how much you’re spending every month to get by. Armed with this number, you can start the process of determining exactly how much money you may want to invest out of every paycheck so that you can maintain the same lifestyle in retirement. Professional advisors can help you look at things like inflation and cost of living estimates to create an even clearer picture.
Of course, there can be many technical decisions to be made, and this is where some investors feel intimidated and fearful. Investment advisors need to be part of your planning strategy for this reason. They know which strategies and tools that can significantly improve your financial outlook – resources you might not have known existed. For example, did you know you may have a significant amount of control over taxes related to investments? An investment advisor can guide you through the process every year to make sure you’re not missing out on earnings and that you’re minimizing your tax liability.
For people who have moved past their fears toward financial planning and their fear of retirement planning, it’s often after their first visit to an investment advisor that the wheels of change really begin to turn. They suddenly gain an extra team member, one that sheds light on all the fine details and can provide the guidance that proves exceedingly valuable.
As your financial situation changes and as you move closer and closer to your retirement date, your financial advisor will be with you every step of the way to help you make the changes that impact your ability to stay in line with your goals.
When you sit down with an advisor at Family Investment Center, you’ll be met with an experienced professional whose primary focus is investment management. Our team can help offer you the peace of mind and confidence you may not be able to obtain on your own. Plus, we aren’t commission-driven, but operate on a client-first, fee-only philosophy. Contact us today to get started.
The most popular reason for making year-end decisions is so that you have the potential to save money on taxes if you make informed choices, which means you should consult with an investment advisor before the end of the year.
When you talk to your investment advisor you’ll find out that the strategy most people employ is all about timing: getting your timing right on tax planning can give you the option to control how you report your income and claim your credits and deductions. Most advisors will try to work a strategy in which you’ll be taxed less. One note to consider is that if investment planning decisions are made so that the bulk of your money is going into capital assets, you may have a stronger advantage in timing related to gaining from more lucrative tax rates.
An investment advisor can help you figure out how to use capital gains tax to give you a break on your taxes. For instance, your capital gains and losses get a special tax treatment. If the ordinary income tax rate maxes out at 39.6 percent and capital gains taxes are a maximum of 20 percent, it would make sense to convert your income into long-term capital gain income, which could lower your taxes by 19.6 percent.
Timing is important, but so is recognition of your capital gains. For those in the higher marginal tax bracket this year that foresee a lower one next year, it may be wise to wait on selling assets until you are in that lower bracket. So if you had plans to sell at capital gains before the end of the year, you may want to consider waiting until January.
How did your investments do in 2014? Take a look and try to determine what your capital gains are going to be. Now, look at your capital losses. You can offset your gains with those losses. There is also something called capital loss carry-forwards (up to an annual limit), which you can also use to your advantage. If you have gains that exceed your losses, you can put yourself in a better position by selling property that have built-in losses to offset those gains.
There are any number of situations where an investment advisor can research and identify gains and losses to give you more confidence as the year comes to a close. Don’t wait too long. Contact Family Investment Center now and let our team help review your investment portfolio for areas that may need immediate attention.
Too many Americans today don’t seek out the help of a financial advisor. As a result, their savings typically do very little for them, especially when compared to resources placed with a professional investment advisor. Some people have already made the decision to seek out professional help in this area, but they are simply stuck on how to find a financial advisor. If that’s the case with you, consider a few tips to help you in your search.
1. Trust is Everything
You’re going to put your goals and retirement plans in the hands of someone else. In some cases, it’s a whole team of people. You need to be able to trust that they’ll offer you the best advice, which means you’ll have to do some homework to determine if they are indeed trustworthy. If you’ve got a handful of firms picked out, glance over the bios and try to get a sense of whom these people are. Look at the firm’s track record and try to talk to some former and/or current clients. Also look at their education to find out if they’ve pursued continuing knowledge in the field. (Aside from building competence, it also shows they are passionate about what they do).
2. A Background Check is Certainly an Option
How many complaints have been filed against the firms you’re considering? Look at the nature of each complaint, what was decided and how the firm responded. Court records can be quite revealing, so if you see a pattern of issues that compromise your ability to trust them, walk away. Asking these types of questions in an informational session shouldn’t be awkward; if they’ve got nothing to hide, that will be evident.
3. In What Companies do They Invest
It’s much easier to get a feeling for whether or not an investment firm will be a good match for you if you know where they’re putting investments. Are these well-managed products? Have they shown success in the past? Are they projected to in the foreseeable future? Go in and talk to the advisors about why they making the decisions they make, which is actually the best way to get a true sense of what the firm is about. If they talk over your head or seem in a rush to get you out the door, make it easy for them and don’t go back. An education-based advisor will take the time to explain everything, in as much or as little detail as you prefer.
4. Fee-Based Vs. Commission-Based; There are Differences
You don’t want your investment advisor swayed one way or another because they stand the chance to make a commission based on where they’re investing your money. You need an unbiased opinion when it comes to reaching your financial goals, which is why you want to go with a firm that doesn’t give commissions to advisors based on the products they sell. A fee-only advisor will likely be your best option. (Note: Some claim to be fee-only, but in reality, it’s only in name. Look for those associated with groups like NAPFA, the National Association of Personal Financial Advisors).
5. The Family Investment Center Difference
If you’re looking for an investment advisor that specializes in large portfolios, Family Investment Center invites you to come in for a visit or a call and see for yourself what we have to offer. Simple, honest, and direct communication is what our clients have come to expect from us. As a fee-only firm, we’re free from commission-based sales and can fully focus on your goals. We know that many individuals struggle with how to find an investment advisor, and we’re making it easier for many each year.
Americans love taking the do-it-yourself (DIY) approach. Plenty of reality television programs document the lives of people in the process of DIY projects, some meeting with success and others with failure. When it comes to managing your investments, how smart is it to go the DIY route?
Given the sheer number of investment “experts” offering advice on television, magazines and in books, you’d think there is plenty of information out there to give you a head start on the process. So, you spend a few hours a month reading up on investing, loosely following the market and think you’re ready to jump in with both feet and put all of your money to work for you. It could be a big mistake.
Financial planning is not something most successful investors want to take up as a hobby. It’s something best left to the real experts – the ones who do it for a living. Despite all of your research, you’re probably not capable of watching over your money as well as a professional investment advisor. (According to a survey by Charles Schwab, around 33 percent of people who need investment advice don’t seek it from a professional, so you’re not alone). But you do have a chance to change the situation, starting now.
Maybe you’re thinking you don’t need financial planning advice because your bank account doesn’t match that of a wealthy person. Not all rich people were born that way. Some of them worked hard for their money and consulted an advisor long before they could be considered wealthy. Financial planning assistance and investment advising services are there for anybody, and it doesn’t have to be overpriced. In fact, a fee-only advisor will work with you on a range of “nest egg” sizes without the added pressure of the advisor working on sales commission.
Maybe you’re thinking you don’t need financial planning advice because you have a very simple financial situation. Qualified, experienced financial advisors are capable of unleashing a wealth of information, even for people who think their finances are simple. Thinking this way could keep you from realizing your potential as an investor, and it could keep you stuck in some old patterns of thought that aren’t based on reality. A financial planning expert can unlock these complexities for you and they work hard to stay on top of the knowledge to do so.
Once you consult with an investment advisor your work is only just beginning when you sit down for your consultation. You might learn that you need to adjust your spending or saving habits to create a larger window of opportunity when it comes to Social Security benefits later. As you age and your life changes, you’ll need to make adjustments and financial decisions that protect and/or enhance your investments. A financial advisor will be there to provide guidance on your options.
The professionals at Family Investment Center are investment advisors specializing in large portfolios. Our team knows the process of investment advice can be intimidating, which is why we are careful to fully explain everything and to listen to your needs. We focus on wealth “wellness,” which means your investments can be one part of the total picture of confidence as you look toward your future.
There are many benefits to establishing a good line of communication between couples, and being financially more secure is one of them. Most incompatibility issues between couples often are compounded by a lack of communication. It seems that many wealthy American couples have figured that out; nearly seven out of every 10 collaborate on their financial planning decisions, according to a study by Morgan Stanley Wealth Management.
What are Wealthy Couples Doing to Collaborate Financially?
The study, which focused on couples with a net worth of $100,000 or more, found that 66 percent were looking at their retirement and making financial planning decisions together instead of letting just one of the pair make all the decisions. A researcher with the company said the days when only one partner made all the decisions regarding finances is a bygone era.
The study found that 80 percent of those surveyed said their financial advisor was in touch with both partners instead of choosing just one to contact about investment planning. In fact, couples make it easy on the advisor as most said they visit their advisor together. Researchers also said it appears advisors are making it a priority to schedule their consultations when both partners are available.
When couples meet with their advisor, it’s retirement that gets the bulk of the attention. Couples want to talk about and plan having enough money in retirement to enjoy their lives when their careers are completed. The study shows they also want to talk about finances related to health, planning for sudden and serious illness, paying for their grandchildren’s education and seeing their wealth extend into the next generations.
Planning for retirement isn’t something most couples can do alone. They need the assistance of an investment advisor because there are far too many speed bumps that can put a hitch in the seemingly well-laid plans. Advisors are expertly-trained to handle an assortment of financial topics that can be frustrating for many and slow down progress.
After a career of working hard for your savings and your investments, you want them in places where they can do the most good for you. A fee-only investment advisor could be a great option for you and your family. Fee -only advisors don’t work on commission, which means they won’t offer you products you don’t need, and they can take the time to really find out about your individual plans.
At Family Investment Center, we are a team of fee-only advisors who can work with your assets and help you with a retirement plan. We will walk you through your options and explain the tools that can help you make more confident decisions regarding your financial future. Contact us today and let’s see how a collaborative spirit could open new doors for your future.
If you’re volunteering on the board of a non-profit, you’re not only a civic-minded member of the community – you’ve got experience in knowing that non-profits need to keep their money invested in the right place(s). You and other members are in charge of the financial decisions. Sometimes, the decisions in investing for non-profits can be tough, which is why working with a professional advisor can boost your confidence and your success.
The New York Times recently outlined the issues board members of one non-profit organization in Alabama faced as they jumped out of equities and into a fund for “operating expenses in advance of a future correction.” One board member asked why they would do such a thing before deciding for himself that it actually would be a good idea. He changed his mind after an adviser told them the money would be put into bonds that would be short-maturity and low risk.
Regardless of what the members of this board in Alabama finally decided to go with, the issue is brought up because it outlines something every non-profit board may face at one time or another – making decisions on investing for non-profit organizations that could negatively affect them in the long term, despite their good intentions.
While board members are often individuals who have years and years of business experience, they likely are not investment advisors and can’t know everything there is to know about making long-term strategies on their investments. Investment advisors are constantly reading up and staying informed on the latest investment news. Keeping their pulse on the industry, they can help you make informed decisions.
Professional investment advisors are keen to weigh the risk and go after products that are more secure for non-profit organizations. Board members can place their confidence in a professional investment advisor who can offer experience-based options and recommendations before final votes are placed.
It might be difficult for a board member of a non-profit to keep their emotions in check, perhaps because they have a strong belief in the mission of the organization and have funneled a large amount of their own money into the endowment. It’s easy for important decisions to be made under emotional circumstances. For this very reason, it’s important to have a cool head at the ready – a person who makes experience- and education-based financial decisions as a professional career, and can help guide decisions without having emotions enter into the equation.
At Family Investment Center, our name suggests that we are focused on family investment issues, but we’re actually extremely active in our own community. We serve on boards, some of which have large annual budgets and work with non-profits on a regular basis. We know how important it is to be good stewards of the public’s money and we’re making decisions daily that affect the long-term stability of our clients’ financial futures. If you’re part of a board that needs direction, contact us today.
There are plenty of “experts” out there willing to provide you with costly advice or sell you a book about where to put your money. These “experts” make bold statements that rarely work out, yet many people hang on their every word. Television personalities, radio talk show hosts, and numerous magazines are available to offer advice on choosing a financial advisor, yet the advice offered is often less than helpful.
Many people may join the “investment game” because they are feeding off of a rush, which could feel similar to gambling. However, investing in its truest sense is not a game at all, and most investment advisors are aware of this above anything else. Certainly, reward comes with some level of risk, but balancing the risk with reward to help you achieve your goals is where an investment advisor’s area of expertise comes into play.
When you finally decide that maximizing your hard-earned money is much more than an investment game, it’s time to work with a financial advisor to assist your decision-making. Choosing a financial advisor takes a little homework, a little research, and a touch of interviewing. Here are some tips to consider when choosing a financial advisor.
Your first option might be to make a list after talking to your peers about who they choose as their advisor, and then do your homework. Start a list of professionals suggested by friends and/or family, then start crossing off. Research advisors’ credentials to gain perspective on their financial planning knowledge and scope. To do more research about fee-only professionals in your area, check with an organization such as the National Association of Personal Financial Advisors (NAPFA). A NAPFA advisor search will yield only fee-only advisors in your area.
Mark off the advisors who try to guide you into making decisions that are only good for their commission, but aren’t so good for your financial wellbeing. Be careful, because there are many advisors who work in this capacity. Sometimes their guidance works, but sometimes it doesn’t. One of the biggest downsides for commissioned salespeople is that they must use products offering commissions. It’s a limited palette of investment options because some of the best stuff today is commission-less. No-load mutual funds, ETFs, and even discount brokerage products aren’t available through commissioned salespeople. Instead, when choosing a financial advisor, consider one that is truly fee-only. This will help to ensure that they remain completely objective when it comes to guiding you in one direction or another, and they are truly interested in growing your investments.
Once you have your list whittled down to just a few advisors, examine their records. Have they ever been convicted of a crime? Has a regulatory body ever put them under investigation? If the answer is yes to either, walk away. This is also a good time to ask for a casual, sit-down interview where you determine if their philosophies and their personalities are a good fit for you.
We hope your list, when all is said and done, will lead you to us here at Family Investment Center. We are fee-only professionals who are ready to help you plan your financial future. We are also able to help anyone in your family, from children planning for college to senior citizens with questions about their Social Security benefits. Call us today and find out how we can assist.
You want to find a financial advisor Northwest Missouri but you're not sure where to start. First, you should know the difference between advisors who are fee only and those who work on commission. The commission advisors are selling you something and make a commission on their trading. They are legally required to inform you of their compensation rates. Fee only advisors are paid only by you and are not swayed to make a commission by selling you something you don't need. Your investment advisor should adhere to a strict code of ethics. Trust matters because money doesn't grow on trees and you worked too hard for your money to have in squandered away.
If it's transparency you're seeking in a financial advisor Northwest Missouri, come to Family Investment Center where you'll work with professional, fee-only investment advisors who operate on a strict code of industry standards and are part of the National Association of Personal Financial Advisors (NAPFA).
See more reasons why Family Investment Center is different here.
You’ve come to a pivotal point in your life when you have made the decision to bring a financial advisor into your future plans. You’re making the right decision. Now, you’ve got some work to do; it takes a lot of research to know how to find a financial advisor that will fit your needs.
Most people find their investment advisor by talking to friends and family about where they put their trust. Perhaps the best advice comes from people who are in a similar position in life, like age, income, and investment goals.
Once you get feedback that you know you can trust, take it a step further and look up your friends’ and family’s finalists online. Checking them out on LinkedIn (or simply doing a Google search) could give you a fairly good sense about their firm. You can also go to the websites of Financial Planning Association and the National Association of Personal Financial Advisors (NAPFA) to profile advisors that could fit your needs.
Obviously, cost will be an issue in determining whom you will choose. Not all rates are available online, which means you’ll want to put a call in to the office. Make sure to ask about any possible hidden fees. Many times, a reliable and consistent advisor will be a fee-only advisor, which means they don’t earn commissions. This compensation method allows your advisor to approach investments with a completely objective opinion and won’t be swayed by a healthy commission on an investment that does little for you.
When interviewing potential advisors, ask for their credentials and their certifications. Look for CERTIFIED FINANCIAL PLANNER™ (CFP®), as this type of certification is one of the mostrigorous to obtain. Also look for Chartered Financial Consultants, registered investment advisors, and certified public accountants. A certified public accountant who also helps people manage their financial affairs, including investments, should also have a personal financial specialist certificate.
Ask your prospective advisor what specific services their firm provides. Most have a specialty area, based on the experience of their team. Some firms will offer a team approach that can handle insurance, estate planning, retirement planning, and tax planning all in one shop. It’s okay to ask several questions; you can’t be expected to know how to find a financial advisor that you can trust without asking for the specifics. You may want to look for a professional investment manager that focuses solely on investments and related portfolio activities, rather than splitting time in many other areas.
You should get a fairly decent perspective on what type of clients your prospective advisory firm deals with primarily by looking at their website. If you notice that they have a niche that doesn’t quite fit your profile, it probably won’t be a good fit.
Finally, consider your communication style and needs. Everyone is different when it comes to the support they need from their advisor. Some people want an advisor who is open to frequent contact, which means they’d be really uncomfortable with an advisor who meets with them only once a year. Some advisors will meet their client for the initial contact and then only go over investments with them once a year. This is great for some and not-so-beneficial for others.
Family Investment Center is staffed with professionals who are fee-only advisors. We will not make decisions based on commissions, and there are no hidden fees for their services. Call us today.