Financial Advisers Keep Their Clients From Procrastinating

Well, all know this isn't true.

But it isn't your fault.  This last year Gary Duell was the procrastinator.  None of the smartest people in the room (not including yours truly) could agree on what was going to happen and what to do about it.

 

Now that a major source of craziness will largely be out of the picture, I'm more comfortable with recommendations for this year:

 

1. Focus on Goals and Cash Flow-  block out the massive media intrusions into your lizard brain, the eat, lust, fight, flight instincts.  Focus on your goals and the plans in place- or that we're working on -to achieve them.  Review your budgets and determine which expenses are in your control and which don't contribute to your goals.  Then eliminate them.
2. Manage Risk- note that I don't say avoid risk, commonly defined as volatility.  As I say repeatedly in my classes, when you're accumulating savings volatility is your friend due to dollar cost averaging.  When you're spending, or on the cusp of spending, your retirement funds then volatility is your enemy.  Manage where and to what degree you allow volatility in your portfolio.  This usually consists of either algorithm-based risk managed ETF and/or third party backed guarantees.
3. Remember Taxes!  Taxes, not healthcare, will be your largest retirement expenditure (on average).  Do you have a plan for future [higher] taxation?
   
4. Be a perpetual student.  Recent studies have shown investors procrastinate 5-10 years before implementing our advice.  That hasn't been my experience.  But I get chagrined if my clients wait 5-10 months!  Especially now.  So never stop listening and learning.
   
5. Seek good returns but follow evidence and ethics.  As data becomes easier and easier to collect and analyze, the bad actors in our economy will be taken out of the game.  It's inevitable.  I am really encouraged by the surge in ESG, SR & Impact investing.  Most of us know without being told that lying, cheating and stealing never work out well in the end.  Companies that foist their costs onto the environment or other people will either evolve or die.  Don't invest in them.
   
6. Take care of your physical, mental and social health.  Without a mind and body it's tough to enjoy anything.  Keeping connected to others, to nature and things outside yourself, your odds are improved!
   

Your Constructive Comments are Welcome!

You Can't Get Decent Returns Without Risk

This could, or could not, be a myth depending on how we define "decent" and "risk".

My definition of "decent" is a rate of return that exceeds the "risk-free" rate plus inflation.   The risk-free rate is typically the T-bill rate or long-term government bond yield.  The current long-term composite (>10yrs) is 2.12, down from 2.35 a week ago.  The current long term projected inflation rate is 1.9%.  So a ROR of 4.02 would be decent, according to my definition.

Take a look at the private wealth portfolios below, from FTA Wealth Advisors.  The grayed out columns are the benchmark indexes.  Look, for example, at the Foundation Strategy column.  Worst historical drawdown was -9.47%  while the S&P500's was -50.95%!  And since inception- including both recessions -it averaged 6.22% vs. 5.5% for the S&P.  The bottom row shows median monthly returns.   Then take a look at the next chart.

This shows year by year performance.  Wouldn't it have been nice to have made money during the last two recessions instead of losing it and needing almost 10 years to recover?

Strategy Disclosures
Disclosure applicable to all strategies:
Performance prior to 9/30/16 has been independently verified by Alpha Performance Verification Services. Please ask your financial advisors for a copy of the performance verification
report.
Performance presented is hypothetical (back-tested). The back-test calculations are based on the same methodology used when product was/is launched. The actual strategy invests in index and
bond funds and/or ETF’s which may be similar but different from the instruments used in the model. Prospective application of the methodology used to manage the basket may not actually result in
a performance commensurate with the back-test returns as shown. The back-test period does not necessarily correspond to the entire available history of the basket or any individual instrument. No
ETF expenses, trading costs or custodial fees are accounted for in the hypothetical data. Hypothetical model results have inherent limitations due to the fact that they do not reflect actual trading and
may not reflect the impact that material economic and market factors might have had on the advisor’s decision-making if actual client funds had been invested in the strategy. No matter how positive
the model returns have been over any time period, the potential for loss is always present due to factors in the future which may not be account for in the model.
The investment strategy that the back-tested results were based upon can theoretically be changed at any time with the benefit of hindsight in order to show better back-tested results and
theoretically the strategy can be adjusted until desired results are achieved. Therefore back-tested or hypothetical data must be approached with caution because it is constructed with hindsight and
may not reflect material conditions that could affect a manager’s decision process, thus altering the application of the discipline. There is no assurance that these back-tested results could, or would
have been achieved by FTA during the periods presented.
The data used to construct the back-tested results were obtained from third-party sources. While FTA and outsourced providers believe the data to be reliable, no representation is made as to, and
no responsibility, warranty or liability is accepted for the accuracy or completeness of such information. The information and opinions expressed in this document are for informational purposes only.
Any recommendation or opinion made in this document may not be suitable for all investors. The information contained herein does not constitute and should not be construed as investment advice,
an offering of investment advisory services, or an offer to sell or a solicitation to buy any security.
Past performance does not guarantee future performance. While FTA believes that the factors which have historically affected the markets over time will continue to do so, there can be no guarantee
that these effects will persist or that they will have the same intensity as past time periods.
Disclosures to Country Rotation Strategy
Third Party Model Creation: The Logical-Invest Country Rotationi Strategy is developed by and licensed from Logical-Invest.com. Logical-Invest.com is not a registered investment advisor and does not
provide financial investment advice. Logical- Invest solely creates and maintains models that it licenses to other firms. Software provided by Logical-Invest.com is solely responsible for the
performance described herein. Financial & Tax Architects, LLC (“FTA”) receives trading signals for this investment strategy from software provided by Logical-Invest.com. From time to time FTA
utilizes these signals as a part of this strategy. Execution of trading signals, performance, and allocation may differ from what is displayed described herein. Thus, FTA’s future performance using the
signals provided could materially differ from described performance.
The Country Rotation Strategy (CRS) is a strategy created by Logical-Invest.com and licensed by Financial & Tax Architects. It seeks to add geographic diversity through the rotation of a wide variety
of individual countries ETFs by blending the mix of risk adjusted growth. This strategy offers significant non-US global exposure and allows for the harvesting of returns from those outperforming
countries even in a sideways market. The strategy uses momentum and relative strength indicators to choose between countries. When risk is high, it invests in fixed income ETF's. The strategy
pursues a rule-based investment process that allocates between Long Duration Bonds and the four top ranked countries or regions to try to achieve an optimal risk/return profile.
Disclosures to Global Sector Strategy
Third Party Model Creation: The Logical-Invest Global Sector Strategy is developed by and licensed from Logical-Invest.com. Logical-Invest.com is not a registered investment advisor and does not
provide financial investment advice. Logical- Invest solely creates and maintains models that it licenses to other firms. Software provided by Logical-Invest.com is solely responsible for the
performance described herein. Financial & Tax Architects, LLC (“FTA”) receives trading signals for this investment strategy from software provided by Logical-Invest.com. From time to time FTA
utilizes these signals as a part of this strategy. Execution of trading signals, performance, and allocation may differ from what is displayed described herein. Thus, FTA’s future performance using the
signals provided could materially differ from described performance.
The Global Sector Strategy is a strategy created by Logical Invest and offered by Financial & Tax Architects. The strategy is based on seeking an optimum allocation between the Global Equity Sectors
and Long Duration Treasuries market. Equity Sectors present well-defined, long lasting cycles along the overall economic cyclical development of global markets, therefore allowing the strategy to
receive returns from the outperforming sectors even as the market goes sideways. Simultaneously, the strategy benefits from the long term inverse correlation between equity markets and long
duration bonds while capturing value from the money flows into safe havens of US treasuries in crisis times.
Disclosures to Sleep Well Bond Strategy
Third Party Model Creation: The Logical-Invest Sleep Well Bond Strategy is developed by and licensed from Logical-Invest.com. Logical-Invest.com is not a registered investment advisor and does not
provide financial investment advice. Logical- Invest solely creates and maintains models that it licenses to other firms. Software provided by Logical-Invest.com is solely responsible for the
performance described herein. Financial & Tax Architects, LLC (“FTA”) receives trading signals for this investment strategy from software provided by Logical-Invest.com. From time to time FTA
utilizes these signals as a part of this strategy. Execution of trading signals, performance, and allocation may differ from what is displayed described herein. Thus, FTA’s future performance using the
signals provided could materially differ from described performance.
The Sleep Well Bond Strategy is a bond rotation strategy licensed by Logical-Invest.com and offered by Financial & Tax Architects that seeks, through optimum allocation, to achieve superior returns
while attempting to offer a risk profile similar to that of the broader based US bond market. The strategy pursues a rule-based investment process that uses ETF's to allocate between long term US
treasuries, High Yield Corporate Bonds, Emerging Market Bonds and Convertible bonds to try to achieve the appropriate risk/return profile so that the allocation among the asset classes is
optimized. Cross-correlation and volatility of asset classes are accounted for to try to achieve lower overall portfolio volatility. The strategy is designed as an all-weather, diversified, multi-asset
strategy generating optimal performance while attempting to mitigate downside risk.
Disclosures to US Prime Dividend Strategy
The U.S. Prime Dividend Strategy invests in leading American dividend paying stocks and/or ETF's to expose the investor to companies with increasing, sustainable dividend payouts. The strategy
employs an intermediate tactical overlay in order to determine when the strategy should have a bullish or bearish stance. When the strategy has a bullish stance, it is fully invested in an array of
American dividend paying stocks and/or ETF's. When it is in a bearish stance, it is invested in an ETF designed to track the Barclays Capital US Intermediate Aggregate Bond index.
The performance is prepared using the following methodologies: (i) by a hypothetical model portfolio to which an investment methodology is applied on a current and on-going basis; (ii) at the
beginning of each annual period, the model begins with $100,000 invested in exchange traded funds (iii) all securities are priced at month’s end and all securities held are valued at the closing price as
of the last business day for each month; (iv) the cost basis and proceeds for individual security purchases and sales are based on the day and time a trade was entered into and the price is recorded as
of the time the decision was made; (v) on a monthly basis, performance is calculated using a holding-period return; (vi) annual performance for the model is computed by linking the monthly
performance results for the indicated number of months; (vii) the total investment performance includes both realized and unrealized gains and losses, as well as dividends but does not take into
consideration any interest on cash; (viii) all performance results are net of management fees; (ix) net of fee performance has been reduced by the management fee but is gross of all other fees and
transaction costs; (x) net of fee performance is calculated using an annual management fee of 2.00% applied quarterly, in arrears; and (xi) the U.S. Dollar is the currency used to express performance.
The performance represents hypothetical model results for U.S. PRIME DIVIDEND STRATEGY during the measurement time period. As such, these results have limitations, including, but not limited to,
the following: (i) U.S. PRIME DIVIDEND STRATEGY results do not reflect actual trading by specific FINANCIAL AND TAX ARCHITECTS clients, but were achieved by means of the calculation
methodologies described above; (ii) model performance may not reflect the impact that all or any material market or economic conditions would had on use of U.S. PRIME DIVIDEND STRATEGY by an
individual client; (iii) for differing reasons FINANCIAL AND TAX ARCHITECTS clients would have experienced investment results, either positive or negative, during the measurement period that were
or may have been materially different from those reflected by the U.S. PRIME DIVIDEND STRATEGY model performance. For Example, variances in client account holdings, investment management
fees incurred, the date on which a client began using U.S. PRIME DIVIDEND STRATEGY, client account contributions or withdrawals and general market conditions, would have caused the performance of a specific client’s portfolio to vary substantially from the U.S. PRIME DIVIDEND STRATEGY model performance results; and (iv) different types of investments and investment strategies involve
varying levels of risk, and there can be no assurance that any specific investment or strategy will be either suitable or profitable for a prospective client.
The model performance does not reflect other earnings, brokerage commissions, and custodian expenses. It is important to note that actual portfolios would be charged other fees and transaction
costs and performance would be lower. Hypothetical past performance is not indicative of future results. Therefore, no client should assume that future performance will be profitable, equal the
hypothetical performance reflected for U.S. PRIME DIVIDEND STRATEGY, or equal the corresponding historical benchmark index. The historical index performance results for the index reflect
reinvested dividends, but do not reflect the deduction of transaction and custodial charges, or the deduction of an advisor fee, the incurrence of which would have the effect of decreasing the
historical index performance results. The historical index performance results are provided for comparison purposes only, so as to provide general information to assist a prospective client in
determining whether the index performance meets the client’s investment objectives. Historical index performance results do not reflect the impact of taxes. It should not be assumed that portfolios
will correspond directly to any such comparative benchmark index. Further, the comparative index may be more or less volatile than U.S. PRIME DIVIDEND STRATEGY.
Disclosures to Foundation Strategy
The Foundation Strategy attempts to emulate, as best as possible, the diversified investment style practiced by leading endowments, specifically that of Yale University. The strategy invests in ETF's
designed to track the performance of large domestic stocks, large foreign stocks, 10-Year Treasury Notes, the Goldman Sachs Commodity Index, and the NAREIT Real Estate Investment Trust
Index. Each asset class is separately graded on a technical score designed to move into bonds when that asset class is in a prolonged downturn.
The performance is prepared using the following methodologies: (i) by a hypothetical model portfolio to which an investment methodology is applied on a current and on-going basis; (ii) at the
beginning of each annual period, the model begins with $100,000 invested in exchange traded funds (iii) all securities are priced at month’s end and all securities held are valued at the closing price as
of the last business day for each month; (iv) the cost basis and proceeds for individual security purchases and sales are based on the day and time a trade was entered into and the price is recorded as
of the time the decision was made; (v) on a monthly basis, performance is calculated using a holding-period return; (vi) annual performance for the model is computed by linking the monthly
performance results for the indicated number of months; (vii) the total investment performance includes both realized and unrealized gains and losses, as well as dividends but does not take into
consideration any interest on cash; (viii) all performance results are net of management fees; (ix) net of fee performance has been reduced by the management fee but is gross of all other fees and
transaction costs; (x) net of fee performance is calculated using an annual management fee of 2.00% applied quarterly, in arrears; and (xi) the U.S. Dollar is the currency used to express performance.
The performance represents hypothetical model results for FOUNDATION STRATEGY during the measurement time period. As such, these results have limitations, including, but not limited to, the
following: (i) FOUNDATION STRATEGY results do not reflect actual trading by specific FINANCIAL AND TAX ARCHITECTS clients, but were achieved by means of the calculation methodologies described
above; (ii) model performance may not reflect the impact that all or any material market or economic conditions would had on use of FOUNDATION STRATEGY by an individual client; (iii) for differing
reasons FINANCIAL AND TAX ARCHITECTS clients would have experienced investment results, either positive or negative, during the measurement period that were or may have been materially
different from those reflected by the FOUNDATION STRATEGY model performance. For Example, variances in client account holdings, investment management fees incurred, the date on which a
client began using FOUNDATION STRATEGY, client account contributions or withdrawals and general market conditions, would have caused the performance of a specific client’s portfolio to vary
substantially from the FOUNDATION STRATEGY model performance results; and (iv) different types of investments and investment strategies involve varying levels of risk, and there can be no
assurance that any specific investment or strategy will be either suitable or profitable for a prospective client.
The model performance does not reflect other earnings, brokerage commissions, and custodian expenses. It is important to note that actual portfolios would be charged other fees and transaction
costs and performance would be lower. Hypothetical past performance is not indicative of future results. Therefore, no client should assume that future performance will be profitable, equal the
hypothetical performance reflected for FOUNDATION STRATEGY, or equal the corresponding historical benchmark index. The historical index performance results for the index reflect reinvested
dividends, but do not reflect the deduction of transaction and custodial charges, or the deduction of an advisor fee, the incurrence of which would have the effect of decreasing the historical index
performance results. The historical index performance results are provided for comparison purposes only, so as to provide general information to assist a prospective client in determining whether
the index performance meets the client’s investment objectives. Historical index performance results do not reflect the impact of taxes. It should not be assumed that portfolios will correspond
directly to any such comparative benchmark index. Further, the comparative index may be more or less volatile than FOUNDATION STRATEGY.
Disclosures to High Yield Corporate Bond Strategy
he High Yield Corporate Bond Strategy (HYCB) uses a blend of High Yield Corporate Bond mutual funds and/or ETF's overlaid with sell triggers designed to attempt to minimize downside risk. This
strategy seeks to take advantage of the well-documented return premium available in the High Yield Corporate Bond universe while attempting to minimize drawdowns through security-specific risk
tolerance limits.. Securities are subject to risk mitigation designed to prevent prolonged downturns.
The performance is prepared using the following methodologies: (i) by a hypothetical model portfolio to which an investment methodology is applied on a current and on-going basis; (ii) at the
beginning of each annual period, the model begins with $100,000 invested in exchange traded funds (iii) all securities are priced at month’s end and all securities held are valued at the closing price as
of the last business day for each month; (iv) the cost basis and proceeds for individual security purchases and sales are based on the day and time a trade was entered into and the price is recorded as
of the time the decision was made; (v) on a monthly basis, performance is calculated using a holding-period return; (vi) annual performance for the model is computed by linking the monthly
performance results for the indicated number of months; (vii) the total investment performance includes both realized and unrealized gains and losses, as well as dividends but does not take into
consideration any interest on cash; (viii) all performance results are net of management fees; (ix) net of fee performance has been reduced by the management fee but is gross of all other fees and
transaction costs; (x) net of fee performance is calculated using an annual management fee of 2.00% applied quarterly, in arrears; and (xi) the U.S. Dollar is the currency used to express performance.
The performance represents hypothetical model results for HYCB STRATEGY during the measurement time period. As such, these results have limitations, including, but not limited to, the following:
(i) HYCB STRATEGY results do not reflect actual trading by specific FINANCIAL AND TAX ARCHITECTS clients, but were achieved by means of the calculation methodologies described above; (ii) model
performance may not reflect the impact that all or any material market or economic conditions would had on use of HYCB STRATEGY by an individual client; (iii) for differing reasons FINANCIAL AND
TAX ARCHITECTS clients would have experienced investment results, either positive or negative, during the measurement period that were or may have been materially different from those reflected
by the HYCB STRATEGY model performance. For Example, variances in client account holdings, investment management fees incurred, the date on which a client began using HYCB STRATEGY, client
account contributions or withdrawals and general market conditions, would have caused the performance of a specific client’s portfolio to vary substantially from the HYCB STRATEGY model
performance results; and (iv) different types of investments and investment strategies involve varying levels of risk, and there can be no assurance that any specific investment or strategy will be
either suitable or profitable for a prospective client.
The model performance does not reflect other earnings, brokerage commissions, and custodian expenses. It is important to note that actual portfolios would be charged other fees and transaction
costs and performance would be lower. Hypothetical past performance is not indicative of future results. Therefore, no client should assume that future performance will be profitable, equal the
hypothetical performance reflected for HYCB STRATEGY, or equal the corresponding historical benchmark index. The historical index performance results for the index reflect reinvested dividends, but
do not reflect the deduction of transaction and custodial charges, or the deduction of an advisor fee, the incurrence of which would have the effect of decreasing the historical index performance
results. The historical index performance results are provided for comparison purposes only, so as to provide general information to assist a prospective client in determining whether the index
performance meets the client’s investment objectives. Historical index performance results do not reflect the impact of taxes. It should not be assumed that portfolios will correspond directly to any
such comparative benchmark index. Further, the comparative index may be more or less volatile than HYCB STRATEGY.
Disclosures to International Prime Dividend Strategy
The International Prime Dividend Strategy invests in leading Foreign dividend stocks or ETF's designed to expose the investor to foreign equities that show continually increasing, sustainable, dividend
payouts. The strategy employs an intermediate term tactical overlay in order to determine whether to be in a bullish or defensive posture. When in a bullish posture, the strategy is invested in
European dividend stocks and/or ETF's. When bearish, the strategy invests in an ETF approximating the Barclays Pan-European Aggregate bond index.
The performance is prepared using the following methodologies: (i) by a hypothetical model portfolio to which an investment methodology is applied on a current and on-going basis; (ii) at the
beginning of each annual period, the model begins with $100,000 invested in exchange traded funds (iii) all securities are priced at month’s end and all securities held are valued at the closing price as
of the last business day for each month; (iv) the cost basis and proceeds for individual security purchases and sales are based on the day and time a trade was entered into and the price is recorded as
of the time the decision was made; (v) on a monthly basis, performance is calculated using a holding-period return; (vi) annual performance for the model is computed by linking the monthly
performance results for the indicated number of months; (vii) the total investment performance includes both realized and unrealized gains and losses, as well as dividends but does not take into
consideration any interest on cash; (viii) all performance results are net of management fees; (ix) net of fee performance has been reduced by the management fee but is gross of all other fees and
transaction costs; (x) net of fee performance is calculated using an annual management fee of 2.00% applied quarterly, in arrears; and (xi) the U.S. Dollar is the currency used to express performance.
The performance represents hypothetical model results for INTERNATIONAL PRIME DIVIDEND STRATEGY during the measurement time period. As such, these results have limitations, including, but
not limited to, the following: (i) INTERNATIONAL PRIME DIVIDEND STRATEGY results do not reflect actual trading by specific FINANCIAL AND TAX ARCHITECTS clients, but were achieved by means of
the calculation methodologies described above; (ii) model performance may not reflect the impact that all or any material market or economic conditions would had on use of INTERNATIONAL PRIME DIVIDEND STRATEGY by an individual client; (iii) for differing reasons FINANCIAL AND TAX ARCHITECTS clients would have experienced investment results, either positive or negative, during the
measurement period that were or may have been materially different from those reflected by the INTERNATIONAL PRIME DIVIDEND STRATEGY model performance. For Example, variances in client
account holdings, investment management fees incurred, the date on which a client began using INTERNATIONAL PRIME DIVIDEND STRATEGY, client account contributions or withdrawals and general
market conditions, would have caused the performance of a specific client’s portfolio to vary substantially from the INTERNATIONAL PRIME DIVIDEND STRATEGY model performance results; and (iv)
different types of investments and investment strategies involve varying levels of risk, and there can be no assurance that any specific investment or strategy will be either suitable or profitable for a
prospective client.
The model performance does not reflect other earnings, brokerage commissions, and custodian expenses. It is important to note that actual portfolios would be charged other fees and transaction
costs and performance would be lower. Hypothetical past performance is not indicative of future results. Therefore, no client should assume that future performance will be profitable, equal the
hypothetical performance reflected for INTERNATIONAL PRIME DIVIDEND STRATEGY, or equal the corresponding historical benchmark index. The historical index performance results for the index
reflect reinvested dividends, but do not reflect the deduction of transaction and custodial charges, or the deduction of an advisor fee, the incurrence of which would have the effect of decreasing the
historical index performance results. The historical index performance results are provided for comparison purposes only, so as to provide general information to assist a prospective client in
determining whether the index performance meets the client’s investment objectives. Historical index performance results do not reflect the impact of taxes. It should not be assumed that portfolios
will correspond directly to any such comparative benchmark index. Further, the comparative index may be more or less volatile than INTERNATIONAL PRIME DIVIDEND STRATEGY.
Disclosures to Strategic Mid-Cap Strategy
The Strategic Mid-Cap Strategy (SMC) is a strategy which seeks to exploit two seasonal influences on the stock market. These seasonal forces have historically “skewed” returns in certain months of
the year and specific sub-periods in the final three months of the year. Each year, the SMC Strategy holds an S&P MidCap 400 Index ETF from late-October to the end of May and then invests in
intermediate-term bond ETF's from June to late-October. During the third and fourth quarters of each year, the strategy raises the leverage of the midcap exposure by 100% during certain subperiods
totaling less than 25 days. These sub-periods are influenced by end-of-month and holiday seasonal forces.
The performance is prepared using the following methodologies: (i) by a hypothetical model portfolio to which an investment methodology is applied on a current and on-going basis; (ii) at the
beginning of each annual period, the model begins with $100,000 invested in exchange traded funds (iii) all securities are priced at month’s end and all securities held are valued at the closing price as
of the last business day for each month; (iv) the cost basis and proceeds for individual security purchases and sales are based on the day and time a trade was entered into and the price is recorded as
of the time the decision was made; (v) on a monthly basis, performance is calculated using a holding-period return; (vi) annual performance for the model is computed by linking the monthly
performance results for the indicated number of months; (vii) the total investment performance includes both realized and unrealized gains and losses, as well as dividends but does not take into
consideration any interest on cash; (viii) all performance results are net of management fees; (ix) net of fee performance has been reduced by the management fee but is gross of all other fees and
transaction costs; (x) net of fee performance is calculated using an annual management fee of 2.00% applied quarterly, in arrears; and (xi) the U.S. Dollar is the currency used to express performance.
The performance represents hypothetical model results for STRATEGIC MID-CAP STRATEGY during the measurement time period. As such, these results have limitations, including, but not limited to,
the following: (i) STRATEGIC MID-CAP STRATEGY results do not reflect actual trading by specific FINANCIAL AND TAX ARCHITECTS clients, but were achieved by means of the calculation methodologies
described above; (ii) model performance may not reflect the impact that all or any material market or economic conditions would had on use of STRATEGIC MID-CAP STRATEGY by an individual client;
(iii) for differing reasons FINANCIAL AND TAX ARCHITECTS clients would have experienced investment results, either positive or negative, during the measurement period that were or may have been
materially different from those reflected by the STRATEGIC MID-CAP STRATEGY model performance. For Example, variances in client account holdings, investment management fees incurred, the
date on which a client began using STRATEGIC MID-CAP STRATEGY, client account contributions or withdrawals and general market conditions, would have caused the performance of a specific
client’s portfolio to vary substantially from the STRATEGIC MID-CAP STRATEGY model performance results; and (iv) different types of investments and investment strategies involve varying levels of
risk, and there can be no assurance that any specific investment or strategy will be either suitable or profitable for a prospective client.
The model performance does not reflect other earnings, brokerage commissions, and custodian expenses. It is important to note that actual portfolios would be charged other fees and transaction
costs and performance would be lower. Hypothetical past performance is not indicative of future results. Therefore, no client should assume that future performance will be profitable, equal the
hypothetical performance reflected for STRATEGIC MID-CAP STRATEGY, or equal the corresponding historical benchmark index. The historical index performance results for the index reflect
reinvested dividends, but do not reflect the deduction of transaction and custodial charges, or the deduction of an advisor fee, the incurrence of which would have the effect of decreasing the
historical index performance results. The historical index performance results are provided for comparison purposes only, so as to provide general information to assist a prospective client in determining whether the index performance meets the client’s investment objectives. Historical index performance results do not reflect the impact of taxes. It should not be assumed that portfolios
will correspond directly to any such comparative benchmark index. Further, the comparative index may be more or less volatile than STRATEGIC MID-CAP STRATEGY.
Disclosures to Strategic Enhanced Bond Strategy
The Strategic Enhanced Bond Strategy (SEB) is an asset allocation strategy that combines conservative intermediate-term and inflation-protected bond funds with Financial & Tax Architects' fourth
quarter "prime period" trades. The strategy determines, in advance, when to be invested in bond funds and when to be invested in equities. The investment components of the strategy are: Jan 1 to
late-October: 70% intermediate-term bond funds/ 30% inflation protected Treasury bonds (TIPS); late-October to Dec. 31: 40% intermediate-term bond funds plus three prime period trades using the
S&P 500 index leveraged by 100%. Investors should be aware that the use of leveraged funds in the fourth quarter of each year increases the risk and volatility of the equity component of the
strategy.
The performance is prepared using the following methodologies: (i) by a hypothetical model portfolio to which an investment methodology is applied on a current and on-going basis; (ii) at the
beginning of each annual period, the model begins with $100,000 invested in exchange traded funds (iii) all securities are priced at month’s end and all securities held are valued at the closing price as
of the last business day for each month; (iv) the cost basis and proceeds for individual security purchases and sales are based on the day and time a trade was entered into and the price is recorded as
of the time the decision was made; (v) on a monthly basis, performance is calculated using a holding-period return; (vi) annual performance for the model is computed by linking the monthly
performance results for the indicated number of months; (vii) the total investment performance includes both realized and unrealized gains and losses, as well as dividends but does not take into
consideration any interest on cash; (viii) all performance results are net of management fees; (ix) net of fee performance has been reduced by the management fee but is gross of all other fees and
transaction costs; (x) net of fee performance is calculated using an annual management fee of 2.00% applied quarterly, in arrears; and (xi) the U.S. Dollar is the currency used to express performance.
The performance represents hypothetical model results for SEC STRATEGY during the measurement time period. As such, these results have limitations, including, but not limited to, the following: (i)
SEB STRATEGY results do not reflect actual trading by specific FINANCIAL AND TAX ARCHITECTS clients, but were achieved by means of the calculation methodologies described above; (ii) model
performance may not reflect the impact that all or any material market or economic conditions would had on use of SEB STRATEGY by an individual client; (iii) for differing reasons FINANCIAL AND
TAX ARCHITECTS clients would have experienced investment results, either positive or negative, during the measurement period that were or may have been materially different from those reflected
by the SEB STRATEGY model performance. For Example, variances in client account holdings, investment management fees incurred, the date on which a client began using SEB STRATEGY, client
account contributions or withdrawals and general market conditions, would have caused the performance of a specific client’s portfolio to vary substantially from the SEB STRATEGY model
performance results; and (iv) different types of investments and investment strategies involve varying levels of risk, and there can be no assurance that any specific investment or strategy will be
either suitable or profitable for a prospective client.
The model performance does not reflect other earnings, brokerage commissions, and custodian expenses. It is important to note that actual portfolios would be charged other fees and transaction
costs and performance would be lower. Hypothetical past performance is not indicative of future results. Therefore, no client should assume that future performance will be profitable, equal the
hypothetical performance reflected for SEB STRATEGY, or equal the corresponding historical benchmark index. The historical index performance results for the index reflect reinvested dividends, but
do not reflect the deduction of transaction and custodial charges, or the deduction of an advisor fee, the incurrence of which would have the effect of decreasing the historical index performance
results. The historical index performance results are provided for comparison purposes only, so as to provide general information to assist a prospective client in determining whether the index
performance meets the client’s investment objectives. Historical index performance results do not reflect the impact of taxes. It should not be assumed that portfolios will correspond directly to any
such comparative benchmark index. Further, the comparative index may be more or less volatile than SEB STRATEGY.
Disclosures to Strategic Hedged Income Strategy
The Strategic Hedged Income Strategy (SHI)attempts to maintain a conservative, diversified portfolio of ETF's that strives to protect your assets on the downside while attempting to achieve
consistent and steady growth on the upside. This diversified portfolio invests in instruments designed to track the performance of Spot Gold, T-bills, 10-Year Treasury Notes, 30-year Treasury Bonds,
and the NAREIT Real Estate Investment Trust Index.
The performance is prepared using the following methodologies: (i) by a hypothetical model portfolio to which an investment methodology is applied on a current and on-going basis; (ii) at the
beginning of each annual period, the model begins with $100,000 invested in exchange traded funds (iii) all securities are priced at month’s end and all securities held are valued at the closing price as
of the last business day for each month; (iv) the cost basis and proceeds for individual security purchases and sales are based on the day and time a trade was entered into and the price is recorded as of the time the decision was made; (v) on a monthly basis, performance is calculated using a holding-period return; (vi) annual performance for the model is computed by linking the monthly performance results for the indicated number of months; (vii) the total investment performance includes both realized and unrealized gains and losses, as well as dividends but does not take into
consideration any interest on cash; (viii) all performance results are net of management fees; (ix) net of fee performance has been reduced by the management fee but is gross of all other fees and
transaction costs; (x) net of fee performance is calculated using an annual management fee of 2.00% applied quarterly, in arrears; and (xi) the U.S. Dollar is the currency used to express performance.
The performance represents hypothetical model results for SHI STRATEGY during the measurement time period. As such, these results have limitations, including, but not limited to, the following: (i)
SHI STRATEGY results do not reflect actual trading by specific FINANCIAL AND TAX ARCHITECTS clients, but were achieved by means of the calculation methodologies described above; (ii) model
performance may not reflect the impact that all or any material market or economic conditions would had on use of SHI STRATEGY by an individual client; (iii) for differing reasons FINANCIAL AND TAX
ARCHITECTS clients would have experienced investment results, either positive or negative, during the measurement period that were or may have been materially different from those reflected by
the SHI STRATEGY model performance. For Example, variances in client account holdings, investment management fees incurred, the date on which a client began using SHI STRATEGY, client account
contributions or withdrawals and general market conditions, would have caused the performance of a specific client’s portfolio to vary substantially from the SHI STRATEGY model performance
results; and (iv) different types of investments and investment strategies involve varying levels of risk, and there can be no assurance that any specific investment or strategy will be either suitable or
profitable for a prospective client.
The model performance does not reflect other earnings, brokerage commissions, and custodian expenses. It is important to note that actual portfolios would be charged other fees and transaction
costs and performance would be lower. Hypothetical past performance is not indicative of future results. Therefore, no client should assume that future performance will be profitable, equal the
hypothetical performance reflected for SHI STRATEGY, or equal the corresponding historical benchmark index. The historical index performance results for the index reflect reinvested dividends, but
do not reflect the deduction of transaction and custodial charges, or the deduction of an advisor fee, the incurrence of which would have the effect of decreasing the historical index performance
results. The historical index performance results are provided for comparison purposes only, so as to provide general information to assist a prospective client in determining whether the index
performance meets the client’s investment objectives. Historical index performance results do not reflect the impact of taxes. It should not be assumed that portfolios will correspond directly to any
such comparative benchmark index. Further, the comparative index may be more or less volatile than SHI STRATEGY.
Disclosures to Value Discount Strategy
The Value Discount Strategy is a relative value strategy applied to tradable asset class proxies. The Strategy uses ETF's to invest in Stocks, Treasury Bonds, Corporate Bonds, or cash. The
strategy chooses which asset class to invest in by examining which is the most undervalued compared to the equity risk premium for stocks, the credit risk premium for corporate bonds, and the term
risk premium for treasury bonds. If no asset class is undervalued the strategy invests in cash.
The performance is prepared using the following methodologies: (i) by a hypothetical model portfolio to which an investment methodology is applied on a current and on-going basis; (ii) at the
beginning of each annual period, the model begins with $100,000 invested in exchange traded funds (iii) all securities are priced at month’s end and all securities held are valued at the closing price as
of the last business day for each month; (iv) the cost basis and proceeds for individual security purchases and sales are based on the day and time a trade was entered into and the price is recorded as of the time the decision was made; (v) on a monthly basis, performance is calculated using a holding-period return; (vi) annual performance for the model is computed by linking the monthly
performance results for the indicated number of months; (vii) the total investment performance includes both realized and unrealized gains and losses, as well as dividends but does not take into
consideration any interest on cash; (viii) all performance results are net of management fees; (ix) net of fee performance has been reduced by the management fee but is gross of all other fees and
transaction costs; (x) net of fee performance is calculated using an annual management fee of 2.00% applied quarterly, in arrears; and (xi) the U.S. Dollar is the currency used to express performance.
The performance represents hypothetical model results for VALUE DISCOUNT STRATEGY during the measurement time period. As such, these results have limitations, including, but not limited to, the following: (i) VALUE DISCOUNT STRATEGY results do not reflect actual trading by specific FINANCIAL AND TAX ARCHITECTS clients, but were achieved by means of the calculation methodologies described above; (ii) model performance may not reflect the impact that all or any material market or economic conditions would had on use of VALUE DISCOUNT STRATEGY by an individual client;
(iii) for differing reasons FINANCIAL AND TAX ARCHITECTS clients would have experienced investment results, either positive or negative, during the measurement period that were or may have been materially different from those reflected by the VALUE DISCOUNT STRATEGY model performance. For example, variances in client account holdings, investment management fees incurred, the date on which a client began using VALUE DISCOUNT STRATEGY, client account contributions or withdrawals and general market conditions, would have caused the performance of a specific client’s
portfolio to vary substantially from the VALUE DISCOUNT STRATEGY model performance results; and (iv) different types of investments and investment strategies involve varying levels of risk, and there can be no assurance that any specific investment or strategy will be either suitable or profitable for a prospective client.
The model performance does not reflect other earnings, brokerage commissions, and custodian expenses. It is important to note that actual portfolios would be charged other fees and transaction
costs and performance would be lower. Hypothetical past performance is not indicative of future results. Therefore, no client should assume that future performance will be profitable, equal the hypothetical performance reflected for VALUE DISCOUNT STRATEGY, or equal the corresponding historical benchmark index. The historical index performance results for the index reflect reinvested
dividends, but do not reflect the deduction of transaction and custodial charges, or the deduction of an advisor fee, the incurrence of which would have the effect of decreasing the historical index
performance results. The historical index performance results are provided for comparison purposes only, so as to provide general information to assist a prospective client in determining whether
the index performance meets the client’s investment objectives. Historical index performance results do not reflect the impact of taxes. It should not be assumed that portfolios will correspond
directly to any such comparative benchmark index. Further, the comparative index may be more or less volatile than VALUE DISCOUNT STRATEGY.
Disclosures to Economic Cycle Strategy
By utilizing employment and housing indicators in a manner unique to Financial & Tax Architects, The Economic Cycle Strategy attempts to mitigate the downside risk associated with investing in the
stock market. When employment and housing indicators are bullish, this strategy is long the US equity markets using various equity instruments. When the indicators are bearish, the strategy invests
in instruments that attempt to track the Barclays Aggregate Bond Index.
Performance presented is hypothetical (back-tested). Prospective application of the methodology used to manage the strategy may not actually result in a performance commensurate with the
hypothetical returns as shown. The hypothetical period does not necessarily correspond to the entire available history of the back-test or any individual instrument. The actual strategy invests in
index and bond funds and/or ETF’s which may be similar but different from the instruments used in the model. Model results have inherent limitations due to the fact that they do not reflect actual
trading and may not reflect the impact that material economic and market factors might have had on the advisor’s decision-making if actual client funds had been invested in the strategy. No matter
how positive the model returns have been over any time period, the potential for loss is always present due to factors in the future which may not be account for in the model.
The investment strategy that the results were based upon can theoretically be changed at any time with the benefit of hindsight in order to show better results. Therefore, hypothetical data must be
approached with caution because it is constructed with hindsight and may not reflect material conditions that could affect a manager’s decision process, thus altering the application of the discipline.
There is no assurance that these results could, or would have been achieved by Financial & Tax Architects (FTA) during the periods presented.
The performance is prepared using the following methodologies: (i) by a hypothetical model portfolio to which an investment methodology is applied on a current and on-going basis; (ii) at the
beginning of each annual period, the model begins with $100,000 invested in exchange traded funds (iii) all securities are priced at month’s end and all securities held are valued at the closing price as
of the last business day for each month; (iv) the cost basis and proceeds for individual security purchases and sales are based on the day and time a trade was entered into and the price is recorded as
of the time the decision was made; (v) on a monthly basis, performance is calculated using a holding-period return; (vi) annual performance for the model is computed by linking the monthly
performance results for the indicated number of months; (vii) the total investment performance includes both realized and unrealized gains and losses, as well as dividends but does not take into
consideration any interest on cash; (viii) all performance results are net of management fees; (ix) net of fee performance has been reduced by the management fee but is gross of all other fees and
transaction costs; (x) net of fee performance is calculated using an annual management fee of 2.00% applied quarterly, in arrears; and (xi) the U.S. Dollar is the currency used to express performance.
The performance represents hypothetical model results for ECONOMIC CYCLE STRATEGY during the measurement time period. As such, these results have limitations, including, but not limited to, the
following: (i) ECONOMIC CYCLE STRATEGY results do not reflect actual trading by specific FINANCIAL AND TAX ARCHITECTS clients, but were achieved by means of the calculation methodologies
described above; (ii) model performance may not reflect the impact that all or any material market or economic conditions would had on use of ECONOMIC CYCLE STRATEGY by an individual client;
(iii) for differing reasons FINANCIAL AND TAX ARCHITECTS clients would have experienced investment results, either positive or negative, during the measurement period that were or may have been
materially different from those reflected by the ECONOMIC CYCLE STRATEGY model performance. For Example, variances in client account holdings, investment management fees incurred, the date
on which a client began using ECONOMIC CYCLE STRATEGY, client account contributions or withdrawals and general market conditions, would have caused the performance of a specific client’s
portfolio to vary substantially from the ECONOMIC CYCLE STRATEGY model performance results; and (iv) different types of investments and investment strategies involve varying levels of risk, and
there can be no assurance that any specific investment or strategy will be either suitable or profitable for a prospective client.
The model performance does not reflect other earnings, brokerage commissions, and custodian expenses. It is important to note that actual portfolios would be charged other fees and transaction
costs and performance would be lower. Hypothetical past performance is not indicative of future results. Therefore, no client should assume that future performance will be profitable, equal the
hypothetical performance reflected for ECONOMIC CYCLE STRATEGY, or equal the corresponding historical benchmark index. The historical index performance results for the index reflect reinvested
dividends, but do not reflect the deduction of transaction and custodial charges, or the deduction of an advisor fee, the incurrence of which would have the effect of decreasing the historical index
performance results. The historical index performance results are provided for comparison purposes only, so as to provide general information to assist a prospective client in determining whether
the index performance meets the client’s investment objectives. Historical index performance results do not reflect the impact of taxes. It should not be assumed that portfolios will correspond
directly to any such comparative benchmark index. Further, the comparative index may be more or less volatile than ECONOMIC CYCLE STRATEGY.
Index Information
S&P 500:
The Standard & Poor's 500 composite index is an American stock market index based on the market capitalizations of 500 large companies having common stock listed on the NYSE or NASDAQ. The
S&P 500 index components and their weightings are determined by S&P Dow Jones Indices. It differs from other U.S. stock market indices, such as the Dow Jones Industrial Average or the Nasdaq
Composite index, because of its diverse constituency and weighting methodology. It is one of the most commonly followed equity indices, and many consider it one of the best representations of the
U.S. stock market, and a bellwether for the U.S. economy.
Barclays US Aggregate Bond Index:
This index is a market-cap weighted index that is representative of the overall US bond market. It includes most traded investment grade bonds including corporates, treasuries, agency, and
mortgage backed bonds, but does not include TIPS or munis.
EAFE:
The MSCI EAFE Index is designed to represent the performance of large and mid-cap securities across 21 developed markets, including countries in Europe, Australasia and the Far East, excluding the
U.S. and Canada. The Index is available for a number of regions, market segments/sizes and covers approximately 85% of the free float-adjusted market capitalization in each of the 21 countries.
Barclays US Corporate High Yield Bond Index:
This market capitalization weighted index if representative of the non-investment grade corporate bond market. Securities are classified as high-yield if the middle rating of Moody’s, Fitch, and S&P is
Ba1/BB+/BB+ or below.
Definitions
Drawdowns/Maximum Drawdown: This is a measure of the peak to trough percentage loss in a given period. The maximum drawdown is the largest drawdown in the time period.
Median Return: This is the median monthly return of the strategy or index over a time period.
Months Positive: This is the percentage of months that a strategy or index had a positive monthly return in a time period.
Standard Deviation: This is a statistical measure of dispersion from a set of data. For the purposes of FTA marketing materials it measures the dispersion of monthly returns of a strategy or index.

Your Constructive Comments are Welcome!

THE TWO MOST IMPORTANT FINANCIAL TOOLS FOR 2017

This post heading is NOT a myth, for once.

Think about common risks in your life and the tactics you use to minimize or avoid them.

• If you're trying to lose weight then you burn more calories (read: Exercise) and consume fewer or at least better calories (quality proteins, greens, fruits & oils versus sugars, carbs & artificial or saturated fats).
• If you're taking a trip and worried about your car breaking down, you can take it in for service, check the tire pressure, top up the tank and other fluids.
• If you're worried about passing a class then you can burn the midnight oil, get help from your teacher and fellow students, search for tips and tricks online.

And so on.  We counterbalance risk with compensatory actions and strategies.

In my practice, most of my clients are concerned about two possibilities:

1. Outliving their income and assets
2. Inflation ballooning their living costs to unmanageable levels.

How can we compensate for these two very real risks in retirement?  We have two great tools (and I have Tom Hegna to thank for these concise ideas:

1. Risk pooling
2. Longevity credits

Let's review Longevity credits first.  I don't know if this is a true story or not but there were five elderly women who like to travel together in the Summer.  On New Year's day they would each put $100 in a box and save it for fun money on their trip.  One year, before their trip, one of them passed away.  The surviving four then had $125 each to spend on their trip.  They each received a 25% longevity credit.  

Is this a way to counteract inflation?  Of course!  (To be sure, in real life much larger groups are formed, but to similar effect.)

Cojoined with Longevity Credits- and making longevity credits possible, is Risk Pooling.  We've all seen schools of fish, flocks of birds, herds of wild animals.  There is great survival value in pooling the risk of predators.  By gathering together, more of them are likely to survive.  It's the same with house insurance.  If the risk were 1 in 1200 that a house would burn down in your neighborhood each year, you could band together with your neighbors to create a fund sufficient to replace that house every year.  (Ideally, it wouldn't be the same house.)  So instead of having to come up with, say, $500,000 to replace your house if it burned down, you would only have to pay 1/1200 of that each year, or $416, otherwise known as a Homeowner's Insurance Premium.

Aside from being a perfect hedge against outliving one's income (we'll get to that) Risk Pooling is a relection of our better nature, like the Amish coming together to build a barn for a neighbor.  Unfortunately, Risk Pooling is an insurance process and must be conducted by insurance companies under most state and federal laws.  I say "unfortunately" because insurance companies get a (mostly) undeserved bad rap.

Social Security is the best current example of both these concepts.  Millions of people participate and the law of large numbers, the larger the Risk Pool, means the system works more predictably the greater the number of participants.  Social Security is an insurance program, it is not a federal entitlement.  But wait, you say, how is that so many beneficiaries will take more in income out of the system than they put in?  The answer is Longevity Credits from the funds of those who die prematurely.

Much maligned annuities are similar tools for privately pooling risk and receiving longevity credits.  And they are much more flexible than Social Security:  you can design cash flow just about any way you like, level, increasing with inflation, for certain period of years,just for your lifetime or for the lifetimes of you and your spouse.  Annuities are like the vacation box.  And that's how we account for a lot of the "too good to be true" features they provide.  For example, let's take a couple with $250,000, he's 68 and she's 62.  The cash flow they desire is joint, lifetime income beginning in 10 years to give them an inflation bump up.  Their lifetime payout at that time would be over $25,000/yr.  no matter how long the last surviving person lives.  And in the meantime, unlike with Social Security, they have access to their principal if they need it.

So.  The two financial pillars for 2017, the year of unpredictability (to say the least) are:

• Risk Pooling and
• Longevity Credits

Your Constructive Comments are Welcome!

Follow Your Gut

I want to profusely thank Brian Love for his excellent Behavioral Finance article in the latest issue of Financial Advisor IQ (The Incredible "Shrinking" Advisor).  Love's article reiterates why the most important aspect of our profession is not securities analysis or projecting rates of return.  So I title this post with the myth that you should follow your gut when choosing investment options.  To the contrary.
Shown in the graphic below are the six primary mental and emotional biases investors suffer.  Which cause them to experience worse returns than unmanaged indices.  Wall Street & the financial media primarily exploit these biases rather than curing them.
Personally, I think the most destructive is the 5th one, a preference for Lotteries.  Just look at the billions that flow into national & local government sanctioned lotteries, for example.  Like any other bias-subject commodity on the market, this bias causes lotteries to be way over-valued.


Your Constructive Comments are Welcome!

Caveat Venditor

We're all too familiar with the doctrine of "caveat emptor", or buyer beware, which places all responsibility for a bad deal on the shoulders of the consumer.  Caveat venditor reverses that responsibility, placing all responsibility upon the seller.  With financial products and services, both are true, as the case below shows.  A quick check with http://brokercheck.finra.org/ would have saved these investors a lot of hassle and heartache.  They would have discovered that these thieves were not registered to advise about nor sell investments.  And the perpetrators, or sellers, should have been mindful of not only enforcement actions but also their clients' best interests.

SEC Obtains Asset Freeze in Case of Investor Funds Stolen for Shopping Sprees

FOR IMMEDIATE RELEASE

2016-153

Washington D.C., July 28, 2016 —

The Securities and Exchange Commission today announced an asset freeze it has obtained against three men who aren’t registered to sell investments and allegedly went on lavish shopping sprees with more than $5 million raised from investors to purportedly develop a resort.

In an emergency action filed in federal court in Atlanta, the SEC alleges that Matthew E. White, Rodney A. Zehner, and Daniel J. Merandi fraudulently issued $1 billion in unsecured corporate bonds out of a shell company they own and claimed the money would be used to fund the resort project.  But they never came close to raising the funds necessary to start the project, and meantime they pocketed the $5.6 million they did raise and used it for personal purchases at Saks Fifth Avenue, Gucci, Louis Vuitton, Prada, and Versace.

“We allege that these men stole millions of dollars from investors for personal use and orchestrated sham transactions to prop up the price of the worthless, expired bonds at the center of the fraud,” said William P. Hicks, Associate Director of the SEC’s Atlanta Regional Office.

The SEC encourages investors to check the backgrounds of people selling them investments.  A quick search on the SEC’s investor.gov website would have shown that White, Zehner, and Merandi are not registered to sell investments.

The SEC's complaint filed yesterday alleges that White, Zehner, Merandi, and their companies violated the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Exchange Act of 1934 and Rule 10b-5. The SEC seeks permanent injunctions, disgorgement, and penalties against all of the defendants.  The court order obtained late yesterday freezes defendants’ cash held in a brokerage account and freezes the bonds held in a separate brokerage account.   

Your Constructive Comments are Welcome!

Financial Abuse of Seniors Isn't Really a Problem

I want to remind you again, especially with this title, that the titles of these posts are myths.

A recent article in Financial Planning Magazine detailed the red flags that regulators look for to catch and prevent financial abuse of seniors.  Here they are, summarized by me:

• Taking too much risk with the senior client's money & income.
• "Churning" the account, that is, excessive trading for the purpose of generating fees and commissions.
• Exaggerating benefits and/or falsely minimizing risks
• Failure to disclose fees.  I would also add, failure to justify them.
• Offering "forbidden" inappropriately risky, expensive or complex products to older clients.  Elder law attorney Carolyn Rosenblatt mentions non-traded Real Estate Investment Trusts (REITs) and variable annuities.
• Failure to include- or even consider -family members in recommendations

In my experience, the worst offenses I've come across with new clients are all of the above.

Your Constructive Comments are Welcome!