NAPFA

Asset Allocation + Annuities and Three Questions You Should Ask

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This week we kicked things off with Robert from the Bay Area who wanted to chat about his asset allocation. In his early 60s, with a couple homes and 800k in retirement savings, Robert is now wondering if he's invested too aggressively. At this point in his life is it time to scale things back a bit? Such a great call. 

In hour two, my old pal Gary Schatsky is in the house to talk about the industry, the state of fiduciary and one of the most oversold/misunderstood products, annuities. Gary is a practicing financial advisor who was way ahead of his time by championing comprehensive fee-only services for individuals, which at the time was almost unheard of.

As the founder of ObjectiveAdvice.com, Gary and his team share a simple, three-pronged professional philosophy approach:

  • TRUST - Whether you're saving for college or retirement, Gary and his team believe in confidence and peace of mind, and that trust is the bedrock of all client relationships.
  • COMPETENCE - Being able to utilize years of technical expertise, investment experience, and ongoing training to offer realistic financial solutions for all areas, such as investment, tax, estate, retirement and insurance planning.
  • OBJECTIVITY - In order to avoid conflicts of interest in product sales, Gary and his team refuse any commissions or other compensation from client transactions based on their recommendations.

Trust, competence, objectivity...that’s basically what this conversation was all about as we jumped into various topics including annuities and everything you need to know before purchasing one, FINRA, and the always popular topic of what it means to uphold the fiduciary standard.

Have a money question? Email me here.

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Annuities and Three Questions You Should Ask

We may need to create a subcategory called “Personal Finance 101” for those episodes we have that deal with the financial services industry in general.

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Today, my old pal Gary Schatsky is in the house to talk about the industry, the state of fiduciary and one of the most oversold/misunderstood products, annuities. Gary is a practicing financial advisor who was way ahead of his time by championing comprehensive fee-only services for individuals, which at the time was almost unheard of.

As the founder of ObjectiveAdvice.com, Gary and his team share a simple, three-pronged professional philosophy approach:

  • TRUST - Whether you're saving for college or retirement, Gary and his team believe in confidence and peace of mind, and that trust is the bedrock of all client relationships.
  • COMPETENCE - Being able to utilize years of technical expertise, investment experience, and ongoing training to offer realistic financial solutions for all areas, such as investment, tax, estate, retirement and insurance planning.
  • OBJECTIVITY - In order to avoid conflicts of interest in product sales, Gary and his team refuse any commissions or other compensation from client transactions based on their recommendations.

Trust, competence, objectivity...that’s basically what this conversation was all about as we jumped into various topics including annuities and everything you need to know before purchasing one, FINRA, and the always popular topic of what it means to uphold the fiduciary standard.

“Better Off” is sponsored by Betterment.

Have a money question? Email me here or call 855-411-JILL.

We love feedback so please subscribe and leave us a rating or review in Apple Podcasts!

Connect with me at these places for all my content:

https://twitter.com/jillonmoney

https://www.facebook.com/JillonMoney

https://www.instagram.com/jillonmoney/

https://www.linkedin.com/in/jillonmoney/ 

http://www.stitcher.com/podcast/jill-... 

https://apple.co/2pmVi50

"Better Off" theme music is by Joel Goodman, www.joelgoodman.com.

Congress Throws Consumers Under the Bus

Congress Throws Consumers Under the Bus

Last week, House lawmakers passed a bill that threw consumers under the bus. The Financial Choice Act would gut the Dodd-Frank financial reform legislation of 2010 by giving the president the power to fire the heads of the Consumer Financial Protection Bureau (CFPB) and the Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, at any time for any -- or no -- reason. It would also provide Congress with sweeping power over the CFPB's budget, which means that lawmakers could defund the agency entirely. That’s a shame, because in the six years since the CFPB was established, it has provided nearly $12 billion in relief for more than 29 million consumers. The CFPB was created out of Dodd Frank in order to create a single point of accountability for enforcing federal consumer financial laws and protecting consumers in the financial marketplace. The agency’s main goals are to:

Comey Steals Spotlight from Reg Reform

Comey Steals Spotlight from Reg Reform

While most Americans were glued to former FBI Director James Comey’s testimonybefore Congress last week, two financial regulatory measures dropped below the radar. House lawmakers passed a bill that would gut the Dodd-Frank financial reform legislation of 2010. If passed under its current form, the Financial Choice Act would give the president the power to fire the heads of the Consumer Financial Protection Bureau and the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, at any time for any -- or no -- reason. It would also give Congress power over the CFPB's budget, which means that lawmakers could defund the agency entirely. That’s a shame, because in the near six years since the CFPB was established, it has provided over $12 billion in relief for millions of consumers.

Fiduciary Fallout: Ten Questions to Ask a Financial Pro

Fiduciary Fallout: Ten Questions to Ask a Financial Pro

Now that the Trump Administration has declared its intention to delay and potentially roll-back the Department of Labor’s fiduciary rule, which would force financial professionals and their firms’ overseeing the nearly $3 trillion in retirement savings, to work in their clients’ best interest, it may be a good time to review your relationship with your current advisor, stock broker or insurance salesperson. Here is an updated list of my “Ten Questions to Ask a Financial Pro”:

Fiduciary Under Fire

Fiduciary Under Fire

Shame Definition, according to Merriam-Webster:

  1. a :  a painful emotion caused by consciousness of guilt, shortcoming, or impropriety b :  the susceptibility to such emotion <have you no shame?>
  2. 2:  a condition of humiliating disgrace or disrepute :  ignominy <the shame of being arrested>
  3. 3a :  something that brings censure or reproach; also :  something to be regretted :  pity <it's a shame you can't go>b :  a cause of feeling shame

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#281 Does your Financial Advisor Put You First?

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The fiduciary duty entails asking an important question: Does your financial advisor put you first? That's what our guest Mary A. Malgoire, CFP helped explain. Mary is the founder of The Family Firm Inc, a fee-only financial advisory firm in Bethesda, Maryland and believes in the client-first, fee-only model, because there are “too many conflicts that exist.” As the past President and Chairman of the Board of the National Association of Personal Financial Advisors (NAPFA), she is fee-only true and blue!

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Mary joined the board of the Institute for the Fiduciary Standard in January 2015 and has been instrumental in developing the Campaign for Investors website. The Institute is a not-for-profit organization that formed to advance objective and competent financial advice, by educating investors about their rights and promoting best practices among financial advisors. In short, the Institute seeks to change the financial services industry and improve investor outcomes. The web site has lots of resources for investors including: How to find out if your current advisor is a fiduciary, how to calculate your investing costs and to know your rights as an investor.  The six duties of a Fiduciary are: Serve the client’s best interest; Act in utmost good faith; Act prudently -- with the care, skill and judgment of a professional; Avoid conflicts of interest; Disclose all material facts and Control investment expenses

 Callers/Listener E-Mails/References:

Here's the article I referenced: Financial Threats you CAN Control

We fielded retirement account questions from Henry, Dev, Shirley; debt issues from Matt and Jean (check out the NYT and ProPubica NJ Loan Program article that outlines some of the ridiculous rules around education debt); and investment strategy questions from Pete and Beatrice.

Thanks to everyone who participated this week, especially Mark, the Best Producer/Music Curator in the World. Here's how to contact us:

  • Call 855-411-JILL and we'll schedule time to get you on the show LIVE 
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#264 Fiduciary: The F-Bomb About to Hit Retirement Plans

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As the Department of Labor prepares to roll out new rules, which would require investment companies, brokers and advisors to put the interest of retirement savers first, our guest Ray Ferrara, former Chair of the CFP Board, joins us to discuss the fiduciary standard and why the financial services industry should embrace, not fight it. Ray has been one of the key players involved in the national debate surrounding the rules that should govern financial advice and was one of the experts who testified before The Employee Benefits Security Administration, the DOL division responsible for spearheading the change. We began the conversation with an explanation of the proposal, which would require that retirement investment professionals not only be held to a higher standard of putting clients first, but they would also have to fully disclose and eliminate conflicts of interest that exist.

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The Financial Planning Coalition, a collaboration of the Certified Financial Planner Board of Standards (CFP Board), the Financial Planning Association (FPA) and the National Association of Personal Financial Advisors (NAPFA), strongly supports the DOL’s proposed rule and notes:

"Retirement investors face a perfect storm in the financial services marketplace. With ever-increasing responsibility for their own retirements and the need to choose from an increasingly complex set of financial products and services, retirement investors more than ever need competent financial advice that is in their best interest. Yet the current regulatory framework allows advisers’ interests to be misaligned with the interests of retirement investors; it does not require advisers to clearly and openly disclose the standard of conduct under which they operate or their actual or potential conflicts of interest; and it permits market practices under which retirement investors are simply unable to distinguish advisers who provide fiduciary-level services from those who do not."

This rule could be a game-changer for the industry. No longer will companies be able to sell opaque, expensive products that once were deemed "suitable" but will not pass the fiduciary smell test. And if you hear complaints from the industry, saying that the rule will mean that they will no longer be able to serve the middle class, I say, THANK GOODNESS! That means that they can no longer peddle their expensive, clunky products, like variable annuities or non-traded real estate investment trusts. And if they choose to raise minimums or fees, consumers have plenty of choices, like services offered by Betterment or Rebalance-IRA, which offer ease and simplicity at a fraction of the cost that those big firms charge.

Thanks to everyone who participated this week, especially Mark, the Best Producer in the World. Here's how to contact us:

  • Call 855-411-JILL and we'll schedule time to get you on the show LIVE 
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#254 Talking Bout My Generation, File and Suspend

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Cam Marston, a leading expert on the difference among generations in the workplace, joins the show to help us become better co-workers, bosses and employees. Marston’s books, articles, columns, and blog describe and analyze the major generations of our time: Matures (born before 1946), Baby Boomers, (born 1946-64), Generation X (born 1965-79), and Millennials (born 1980-2000).  He explains the basic characteristics  of each generation and their differences, some of which may surprise you.

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We also answered some questions on the soon-to-defunct Social Security claiming strategy, file and suspend. Here's a great synopsis from Money Magazine.

How can you determine the correct amount to save for a specific goal? Easy--just use EBRI's Choose To Save Ballpark Estimate...

And if you are worried about your savings habits, one way to cut to the core is to create a financial plan--it will open your eyes as to how your spending patterns today may be robbing you of the ability of achieving your long term goals.

Thanks to everyone who participated this week, especially Mark, the Best Producer in the World. Here's how to contact us:

  • Call 855-411-JILL and we'll schedule time to get you on the show LIVE 
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Financial Thanksgiving 2015

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Thanksgiving is a time when we count our blessings. In addition to the big stuff, I like to use the opportunity to give thanks to the resources and organizations that improve our financial lives. The Financial Planning Coalition, a collaboration of the Certified Financial Planner Board of Standards (CFP Board), the Financial Planning Association (FPA), and the National Association of Personal Financial Advisors (NAPFA) has provided a strong and unified voice promoting the recognition and regulation of financial planners and increased investor protection. The big task that the Coalition has been trying to tackle is to educate policymakers and consumers about the importance of advice that is in the best interest of the client—the so-called fiduciary standard.

The coalition’s tireless efforts may soon pay off…next on my list of thanks goes to the United States Department of Labor, which is expected to finalize rules that would require financial advisors of all retirement accounts to put customers first. Although the industry has fought hard to thwart the initiative, most believe that it will survive. Its enactment would amount to the biggest changes to the Employee Retirement Income Security Act (ERISA) since that law was drafted more than 40 years ago.

Thanks too must go to technology, which has greatly enhanced the ability to better manage personal finances. Mint, You Need A Budget (YNAB) are among the many free apps that help you keep track of your money, while Acorns and Level Money help you budget and then find even the smallest dollars that you can save or invest.

And a tip of the hat goes to the innovators of financial technology, like the folks at Betterment, Wealthfront, Motif investing and MarketRiders, who have introduced a cost efficient way for investors to better allocate and manage their investments and retirement accounts.

There are also plenty of terrific tools available to help people with their financial lives. The EBRI Choose to Save Ballpark Estimate is an easy to use calculator to help quantify retirement savings needs, FinAid is the go-to site for students and their families to help understand the various ways to pay for college; and LifeHappens helps families understand their life and disability insurance needs.

I am often asked about which financial blogs that I use to augment the multitude of publications that I need to do my job. I am thankful for the terrific work of Bill McBride of the Calculated Risk blog. In addition to his wise insights about the housing market, Bill has a wonderful way of providing much need context to a world of economic numbers. I am also grateful for Barry Ritholtz’ “The Big Picture”, with its great mix of information, humor and a healthy dose of skepticism. Although a bit wonkier, I always learn from economics professors James D. Hamilton and Menzie Chinn, who are the brains behind Econbrowser and Mark Thoma of Economist’s View.

What would I do without economic resources, like the Federal Reserve Bank of St. Louis’s Reserve Bank FRED blog, with its nifty charting features; the Federal Reserve Bank of New York’s research on Household Credit; the Bureau of Labor Statistics’ historic databases; the Bureau of Economic Analysis’ interactive data; and the IRS’ rich web site? The people at these organizations have also been incredibly generous with me.

On the research front, the folks at Pew Research Center, the Center for Retirement Research at Boston College and the Georgetown Center on Education and the Workforce are producing some of the most interesting and useful publications, which help me in my job every day.

And finally, the greatest thanks goes to you—the readers, listeners and viewers, who take time out of your days to absorb my content and who generously provide commentary, both and good and bad. To quote Alice Walker, the words thank you “expresses extreme gratitude, humility, understanding.” On this Thanksgiving, thank you.