ADVISERS DON'T MAKE ANY DIFFERENCE

Well, according to a recent survey by John Hancock Retirement Plan Services (as reported by the American Retirement Association) there is "an impressive retirement preparations gap among those who use the services of a financial advisor"(sic) and those who do not.

Here are some stats:

• Regarding 401(k)s, those with advisers were more than twice as likely to be saving the maximum (28% vs. 13%) as those without advisers.
• Those with advisers were more than twice as likely to be ahead or on track in retirement savings (70% vs. 33%).
• And the same for those who knew how much they needed to save to be on track:  33% vs. 14%.
• And yet again with saving for emergencies:  58% with an adviser had emergency funds.  Only 26% of those without advisers did.

The sample size was a very statistically valid 2000.

I take these results with a grain of salt, mostly because they are what I would like to hear.  Based on my own clients, those who are doing well already are also more likely to seek, and follow, my advice.  So it's possible the same is true of the 2000 folks studied by Hancock:  They already suspected they were doing OK but just wanted to be sure that was true, and, to avoid any mistakes.  That is the most often repeated explanation when I ask new clients why they came to see me.  So I don't think we advisers can take all the credit for the better results our clients achieve.

But see how I can make a difference for you:  http://garyduell.com/services/

Your Constructive Comments are Welcome!

ADVISERS DON'T MAKE ANY DIFFERENCE

Well, according to a recent survey by John Hancock Retirement Plan Services (as reported by the American Retirement Association) there is "an impressive retirement preparations gap among those who use the services of a financial advisor"(sic) and those who do not.

Here are some stats:

• Regarding 401(k)s, those with advisers were more than twice as likely to be saving the maximum (28% vs. 13%) as those without advisers.
• Those with advisers were more than twice as likely to be ahead or on track in retirement savings (70% vs. 33%).
• And the same for those who knew how much they needed to save to be on track:  33% vs. 14%.
• And yet again with saving for emergencies:  58% with an adviser had emergency funds.  Only 26% of those without advisers did.

The sample size was a very statistically valid 2000.

I take these results with a grain of salt, mostly because they are what I would like to hear.  Based on my own clients, those who are doing well already are also more likely to seek, and follow, my advice.  So it's possible the same is true of the 2000 folks studied by Hancock:  They already suspected they were doing OK but just wanted to be sure that was true, and, to avoid any mistakes.  That is the most often repeated explanation when I ask new clients why they came to see me.  So I don't think we advisers can take all the credit for the better results our clients achieve.

But see how I can make a difference for you:  http://garyduell.com/services/

Your Constructive Comments are Welcome!

Banks Have Quotas for Filing SARS & CTRs Reports with FinCen.

First, we need a glossary to deconstruct this myth that has been circulating among various conspiracy websites:

CTR- Currency transaction report
FinCEn- Financial Crimes Enforcement Network
SARS- Suspicious Activity Reports

FinCen was created by the Bank Secrecy Act and Anti-Money Laundering legislation.  Obviously, it was designed to prevent criminals from hiding ill-gotten gains.  (Just little annoying criminals, that is.  Criminals that might crimp the style of the really big criminals, like Wall Street banks.)

FinCen does not have quotas for banks to report Suspicious Activities that force the banks to cast about for fresh victims.  Examiners do look for patterns:  why would one bank in the same neighborhood have far fewer suspicious activities than another?  Are they maybe a little too friendly to local drug dealers?  But there is no quota system.


Your Constructive Comments are Welcome!

THE DEVIL IS IN THE DETAILS

This blog heading is colloquially true, especially when it comes to Investment Adviser contracts.  A recent review of compliance violations found- first of all- that 22% of advisers didn't have contracts with their clients.  A contract isn't required unless a fee of some kind is collected from or owed by a client.  So if you are paying a fee of any kind- flat, hourly, percent of assets, performance based -a contract is required.

So what devilish details should you watch for in an advisory contractual relationship?  Here's a short list:

• First and foremost:  The absence of a contract altogether!  Do you really want to work with and pay someone without formalizing rights and expectations on paper?
• Any provision that compensates the adviser based on "a share of capital gains upon, or capital appreciation of, the funds- or any portion of the funds -of the client. (Sec. 205(a)(1) of the Investment Advisers Act).  I see these so-called performance fees in contracts all the time.
• Mandatory arbitration clauses.  These have become so common that the average person doesn't blink an eye signing them.  By doing so, you're giving up- in most cases -the right to sue individually or to be party to a class action against the adviser.  My contract only has a voluntary mediation clause; we agree to sit down and talk about a dispute before consigning our souls to the lawyers.  Never had to use it.
• Be aware of with whom it is you're actually contracting.  Is it the adviser himself or some obscure LLC or other obfuscatory entity that your adviser can hide behind?  My clients contract with me, and only me, directly.

Your Constructive Comments are Welcome!

I CAN'T AFFORD TO SAVE ANY MONEY THIS YEAR

The heading of this post is, as usual, a myth.  You can save money this year.  Thanks to WealthManagement.com for some of these tips:

1. I think all parents of college-bound kids are aware of the FAFSA.  There is no charge for this application for student aid.  And the early bird gets the worm; funds are limited.
2. Start or increase your 401(k) contributions, especially if you're not taking full advantage of  company matching.
3. Consider Traditional or Roth IRA contributions, especially for non-working spouses and your kids.  If your kids have earned income, the full amount (up to $5500) can be shunted into a Roth IRA.  IRA planning is complex and the best strategies depend on a careful analysis of your retirement expectations.
4. Max out Health Savings Account contributions ($3350 for singles, $6650 for couples and families).  As with IRAs if you're over age 50 you can kick in an extra $1000/yr.  This money can be triple tax free!:  Contributions are deductible, earnings are tax-deferred, and withdrawals are tax-free if used for legitimate medical expenses (see IRS pub. 969).
5. If you did a Roth conversion at the peak of the market in 2015, you have until 10/15/2016 to re-do it.  If your Roth is worth less than when you converted, you un-convert or "recharacterize" it, and then reconvert at the lower value thereby reducing your tax bill accordingly.
6. Have a neutral, unbiased, fiduciary adviser (like me) analyze the fees and expenses in your portfolio.  This is especially important in the later years when you should be conservatively allocated because taxes and fees from excessive turnover can consume your earnings. 

Your Constructive Comments are Welcome!