Rhoads Lucca in the Financial Press

In Part I, we covered the first 5 ways of learning more about a Wealth Advisor before hiring them. Here are the first 5 ways:

• Wikipedia Biography
• Linked In Profile
• Books and Publications
• The Companies They Keep
• Financial Press Features and Quotes

To read about these often overlooked sources of information, read Part I of this series at: Choosing Wealth Advisors Part I.

In Part II, we finish the final sources of overlooked sources that you should examine.

6. Securities and Exchange Commission

In the internet age it is easy to go right to the source and do an Investment Advisor search at the SEC Website. By clicking on that link, you can enter the name of the advisor or the firm and review the SEC information. In keeping with this article, here is a link to my own information and the information about Rhoads Lucca Capital Management. Click here to view what the SEC says about us.

7. Social Media – Facebook, Twitter, etc.

Many people participate in social media, which typically includes Facebook.com, Twitter.com and MySpace.com. By searching the name of the advisor, you may find a personal webpage with information that does not appear on their company website, but which may give you insight into the type of person he or she is. I do not participate in online social media, but millions of Americans do.

8. Pay for a Full Background Check on the Advisors You Are Considering Hiring

There are not online background check services that will give you extensive history and criminal background checks. You could also do the full-blown background check by hiring an agency that specializes in this type of work. Is it necessary? No. It is available, if you have unanswered questions. To my knowledge, no one who ever approached our firm did a background check before hiring us. This is usually because our reputation is well known and they were referred to us by a trusted source. Still, it is a resource to use if you believe it to be necessary.

9. Finally, One of the Best Sources of Information is to Ask Existing Clients

Most reputable firms will make arrangements for you to speak with an existing client or two, after protecting the privacy of their clients by asking them for permission to use them as a reference first. Almost all are agreeable. Some do not want their identity revealed to anyone else. This is why we always ask first and not presume. Since most existing clients know what it is like to be in the position of making a decision about hiring a wealth advisor, they are more than happy to help by answering a few questions.

What can you ask? Be reasonable. Do not violate their personal privacy. It will be up to the client to decide what he is willing to reveal about his own situation. Generally, you are trying to determine if the advisor is trustworthy, true to their word, etc.

Again, if you’ve not read Part I of this Article, you can read it at: Choosing Wealth Advisors – 9 Ways to Learn More First – Part I

Choosing Wealth Advisors – 9 Ways to Learn More First – Part II is a post from: Independent Retirement Advisors | Wealth Advisors | Fee only Advisors | independent financial advisors

Wealth Advisors - Higher Standards

Wealth Advisors Higher Standards

Here are examples of higher standards Rhoads Lucca Capital is committed to as wealth advisors:

Compensation of Wealth Advisors:

• Objective, fee-only compensation – we are paid in only one way and only by our clients.
• Our long-term financial success as a firm depends entirely on our client’s financial success. Our interests are aligned with theirs in this way. Just the way we like it.
• We reject the conflicts of interest from commissions, sales charges, etc. We never accept any form of payment other than client fees for managing investments.

Fiduciary Standards of Wealth Advisors:

• We accept Fiduciary Responsibility and willingly accept a higher standard of care – acting in our clients’ best interest, even above our own interests.

Higher Strategy Standards of Wealth Advisors:

• We reject passive allocation of our clients’ portfolios. Being passive means you do not have a defensive strategy. We all know there are dramatic times in every market that require a robust defense to preserve gains.  Accepting passivity in the face of a falling market would be dereliction of duty. Unfortunately, the passive approach, based on a misunderstanding of research, has gained ground and left the clients of other firms unprotected. If you search the internet and view the websites of the Top 100 Wealth Advisors, unfortunately you will look long and hard to find any that are anything but passive. This is because those rankings are based on the size of the firm and not the effectiveness of their investment strategy.
• Every model portfolio we develop and offer to our clients is a complete strategy. Each offers both an offense and a defense. Both are needed for true financial security.
• We follow a highly disciplined approach that is objective and tested and not based on opinion or emotion. You can read more about our commitment to great investment management and portfolio livability on this website

Higher Standards of Client Care of Wealth Advisors:

• We are always available whenever you have questions or concerns about your money. We exist as a firm to serve our clients wholeheartedly.

The world of investing has changed dramatically over the past 12 years. To continue meeting these challenges requires a different way of thinking, built on a higher standard for wealth advisors.

Wealth Advisors Must be Commited to Higher Standards is a post from: Independent Retirement Advisors | Wealth Advisors | Fee only Advisors | independent financial advisors

I was going through some old email exchanges between partners at Rhoads Lucca Capital and came across an exchange about what we believe about investing:

• We believe that insight, wisdom, experience and applied intelligence are the keys to success as investors. As such, we believe smart and wise people have an advantage.
• We believe investments should be managed instead of drifting into danger  – ultimately, someone has to steer the ship.
• We believe it is just as important to have an defensive strategy as it is to have a offensive investment strategy.
• We believe there are seasons to plant crops and seasons to harvest  your gains – both in the physical world and the investment world.
• We believe the more stable the investment strategy, the greater likelihood that investors will stick to it in difficult times. And there will be difficult times.
• We believe that avoiding large losses in the markets is a key to success as an investor. Small losses can be made up quickly. Large losses require very, very large gains to get back to even.
• We believe that investing is not only about making money, but about the part no one talks about – keeping it.
• We believe that consistency of investment return is the unheralded hero of investing.

We believe the only way to measure the success of any investment strategy is over a complete cycle of a rising and a falling market. If you want to talk about “beating the market”, then measure over a complete market cycle that lasts for years.
• We believe investment discipline and strategy are the antidote to emotional decisions

.
• We believe that the most valuable things command the highest prices – including superior money management. Where else can you buy dollars for 1-2 cents each?

What do you believe?

Investing Money: What Do You Believe? is a post from: Independent Retirement Advisors | Wealth Advisors | Fee only Advisors | independent financial advisors

In the investment markets, our entire system starts with the premise that things will get tough and job #1 is to “have your back”.

As I look around the competition, I see lots said about the asset allocation and the efficient frontier, but almost nothing about  the effective frontier. Efficiency is great, as far as it goes, but it doesn’t cover your back. Smooth running machines are only good when they accomplish a task you want done. If they run efficiently, but never “get ‘er done”, than they are interesting theories, at best. When things get tough, theories don’t cut it. Someone has to “have your back.”

Try stock investing, etf investing, mutual fund investing or retirement investing without someone “having your back” and  it doesn’t take too long to realize you left out the most important principle of investing – someone has to have your back.

“We’ve got your back” is a post from: Independent Retirement Advisors | Wealth Advisors | Fee only Advisors | independent financial advisors

The decisions of our government has always had a large effect on the investment markets. These decisions include government spending, government borrowing, government regulation of markets and business, taxation – in short, fiscal policy and monetary policy.

Increasingly, they have one thing in common: they’ve shifted from billions to trillions. It has reached a point where the average person doesn’t understand the magnitude of these decisions.

Just how much is a trillion?

Maybe this will put it in perspective:

• One million seconds is about 1½ days.
• One billion seconds is almost 32 years.
• One trillion seconds is more than 30,000 years!

When you see the word trillion used, realize the immense magnitude of what is being said. Here are some recent examples in the news:

• The President’s budget for 2010 totals $3.55 trillion. [You can view the details in a Wikipedia article here]
• Total Federal debt outstanding as of 12/31/10 was $14.0 trillion [You can view the details in a Wikipedia article here]
• Social Security unfunded liability: approximately $17.3 trillion [You can view the details in a Forbes article here]
• Medicare unfunded liability: approximately $36.4 trillion [You can view the details in the same Forbes article here]

What can anyone do about the growing size of these numbers? Obviously, if you care about this, vote for fiscal restraint.

In your investment strategy, equally obviously, choose a full strategy – one that includes both and offense to make money and a defense to protect your money.

March of the Trillions is a post from: Independent Retirement Advisors | Wealth Advisors | Fee only Advisors | independent financial advisors

As you work to make a great decision about choosing wealth advisors, here are sources of information most people never think of – most accessible right from your computer. In each instance, I will illustrate how you can gain value from these sources by linking to my own information. Grab your detective hat and let’s go.

1. Wikipedia Biography

Wikipedia includes biographies of noteworthy people. There are strict standards that are enforced by a very large open-source community. If someone’s biography is included in Wikipedia, you can know they take their professional field seriously. You can also rely on what is written there because every statement and accomplishment must rely on an objective citation, which is listed at the bottom of each Wikipedia article. It is also very revealing to see which categories the biography is included in at the bottom of the page. Wikipedia is a very overlooked source of objective information that has already been gathered into one place. Perhaps you’ve never used Wikipedia before? You can start by reviewing my own Wikipedia biography as an example of the information you can find there:  David Lucca’s Wikipedia biography.

2. LinkedIn Profile

The universe of professionals with profiles on LinkedIn has now surpassed 50 million! If LinkedIn were a country, it would have a larger population than all but 24 other countries in the world! And it is all at your fingertips by computer.

If you’ve never viewed someone’s LinkedIn profile before, it is divided into sections – everything from professional positions held to background, etc. It is worth noting that the each person makes a decision about what is listed and not listed in their own profile. Still, this is a quick source of information for you as you search for wealth advisors.

While the profile items themselves are informative, do not miss examining the connections the wealth advisor has to other professionals. Are there just a few connections? Many? What kinds of other professionals have agreed to be connected to this person – staking their own reputation on that connection? This will help you form an impression about the reputation this wealth advisor has in the professional world. Obviously, you would not allow your profile to be connected to someone you do not like or trust.

[It is worth noting that LinkedIn allows a person to be "recommended" by someone who has worked with them in the past - essentially, a testimonial. Registered Investment Advisors are not allowed to include testimonials. Since you are looking for qualified wealth advisors, this section should not appear in their profiles. If it does appear, it raises questions.]

Again, if you’ve never viewed a LinkedIn profile before, here is a direct link to my own LinkedIn profile: David Lucca’s LinkedIn profile.

3. Books They’ve Published

Developing thoughts into ideas, writing them down and then organizing those ideas into a book is something that a majority of the population says they would like to do, less than 1 percent accomplish this achievement.

I’ve learned that writing a book requires thought, discipline, good communication skills, and a focus on successful processes – exactly what is required to successfully represent clients as a wealth advisor or retirement investment advisor. In short, it is a way to get inside the author’s mind and understand more about who the author is and how they think. What they know, think, believe and how they organize themselves is on display when you read a book they’ve published. Unfortunately, I do not have a link to share here as an example. I will provide a link on this page when my book, The Great Retirement Formula™ is published in the Spring.

4. “The Companies They Keep”

You know the saying, you can know someone by the company they keep? The same is true about wealth advisors. It is impossible to be involved in wealth management without being associated with other companies to conduct implementation tasks. For example, what company serves as a custodian for client funds? Which other companies have relationships with this investment advisor?

As a sample of the company we keep, here is a short list of some of the companies we have formal relationships with:

Charles Schwab – Rhoads Lucca Capital is a Schwab Advisor and all client funds are held in accounts at Schwab. Charles Schwab carries out trades, settlement, independent reporting to our clients and is the custodian that holds their money.

Insperity – Insperity, Inc. (NYSE: NSP) is the nation’s leading professional employer organization (PEO), serving as a full-service human resources department for small and medium-sized businesses throughout the United States.

Rydex SGI – trading desk support

Northern Lights Distributors – fund distribution, advertising compliance & mutual fund trust series

External IT – cloud computing, core IT infrastructure, that allows us to be prepared for disaster recovery

FrontBridge – Frontbridge technologies provides electronic messaging with security services for email and IM archiving, spam filtering, virus scanning, encrypted email, policy enforcement and disaster recovery.

5. Financial Press Features or Quotes

Rhoads Lucca in the Financial Press

Here, you are looking for how the members of the financial press view  the advisor and their firm. Are they viewed as an investment authority? Have they been featured? Are they relied upon to add depth and insight to stories by the media? Local or national press?

The members of the financial press have long and deep experience with the financial community. They do not prominently quote or feature those who they do not respect. Any advisor you choose should be authoritative and credible.

Again, as an example, here is a summary in logo form of sources of financial press that have featured or quoted John Rhoads or David Lucca – or written about Rhoads Lucca Capital Management.

Most of these names you will recognize immediately. The internet has made it possible to locate this information simply by Googling the name of the wealth advisors and reviewing the results.

Which of These Most Important?

It is important to note that none of these sources of information are themselves the final answer. Together, they do serve to give you a much broader perspective of the advisor and their credibility as seen by a wide variety of other people, institutions, etc.

In the next post, we will wrap up the remaining 4 overlooked sources of information you can use when your are choosing wealth advisors or retirement investment advisors.

You may also enjoy the following related posts:

Be a Client – not a customer

Choosing a Financial Adviser: 10 Questions to Ask First

Choosing Wealth Advisors – 9 Ways to Learn More First – Part I is a post from: Independent Retirement Advisors | Wealth Advisors | Fee only Advisors | independent financial advisors

It is worth remembering where our  National Thanksgiving Holiday originated. Here is the first national proclamation, signed by President Abraham Lincoln. Have you ever read it?

As you read this brief proclamation, may you be reminded of all the blessings in your life – despite the challenges you surely face.

In 2010, our challenges as a country are great. Perhaps not greater than during the years Lincoln presided over our country. Yet even today, our blessings are greater than our challenges.

We are grateful for our relationship with you!

Dave, John, Peter and the Rhoads Lucca Family

Washington, D.C.
October 3, 1863

By the Abraham Lincoln, President of the United States of America.

A Proclamation

The year that is drawing towards its close, has been filled with the blessings of fruitful fields and healthful skies. To these bounties, which are so constantly enjoyed that we are prone to forget the source from which they come, others have been added, which are of so extraordinary a nature, that they cannot fail to penetrate and soften even the heart which is habitually insensible to the ever watchful providence of Almighty God.

In the midst of a civil war of unequaled magnitude and severity, which has sometimes seemed to foreign States to invite and to provoke their aggression, peace has been preserved with all nations, order has been maintained, the laws have been respected and obeyed, and harmony has prevailed everywhere except in the theatre of military conflict; while that theatre has been greatly contracted by the advancing armies and navies of the Union. Needful diversions of wealth and of strength from the fields of peaceful industry to the national defense, have not arrested the plough, the shuttle or the ship; the axe has enlarged the borders of our settlements, and the mines, as well of iron and coal as of the precious metals, have yielded even more abundantly than heretofore. Population has steadily increased, notwithstanding the waste that has been made in the camp, the siege and the battle-field; and the country, rejoicing in the consciousness of augmented strength and vigor, is permitted to expect continuance of years with large increase of freedom.

No human counsel hath devised nor hath any mortal hand worked out these great things. They are the gracious gifts of the Most High God, who, while dealing with us in anger for our sins, hath nevertheless remembered mercy. It has seemed to me fit and proper that they should be solemnly, reverently and gratefully acknowledged as with one heart and one voice by the whole American People.

I do therefore invite my fellow citizens in every part of the United States, and also those who are at sea and those who are sojourning in foreign lands, to set apart and observe the last Thursday of November next, as a day of Thanksgiving and Praise to our beneficent Father who dwelleth in the Heavens.

And I recommend to them that while offering up the ascriptions justly due to Him for such singular deliverances and blessings, they do also, with humble penitence for our national perverseness and disobedience, commend to His tender care all those who have become widows, orphans, mourners or sufferers in the lamentable civil strife in which we are unavoidably engaged, and fervently implore the interposition of the Almighty Hand to heal the wounds of the nation and to restore it as soon as may be consistent with the Divine purposes to the full enjoyment of peace, harmony, tranquility and Union.

In testimony whereof, I have hereunto set my hand and caused the Seal of the United States to be affixed.

Done at the City of Washington, this Third day of October, in the year of our Lord one thousand eight hundred and sixty-three, and of the Independence of the Unites States the Eighty-eighth.

By the President

Proclamation of Thanksgiving 1863 is a post from: Independent Retirement Advisors | Wealth Advisors | Fee only Advisors | independent financial advisors

What’s the difference?

• A customer is someone who makes a purchase from a business one or more times. The business views them as the source of transactions.
• A CLIENT is under the ongoing care and guidance and protection of an expert.

We only have clients at Rhoads Lucca Capital – never customers.

We don’t accept any form of compensation that involves commissions, kickbacks, front end loads, back end loads or any other conceivable form of payment from a third party. In the end, we are only paid by our clients and our compensation is fee-only.

The advantage to you is obvious.

Our interests are aligned with yours. Your success is our success. We both benefit when your account grows.

We want to work with you to grow and protect your money as an independent financial adviser.  Our ongoing relationship involves care, guidance and protection of your investments and your future.

Choose being a client over being a customer.

You’ll be glad you did.

Choosing Investment Advisors 101: Be a Client is a post from: Independent Retirement Advisors | Wealth Advisors | Fee only Advisors | independent financial advisors

Here are seven ways you can prepare now for your retirement.

1. Define What Your Great Retirement Will Look Like

Yes, that same old question you’ve grappled with your whole life — What do you want to be when you grow up? Form a clear picture in your mind of what you’d like your life to be like in retirement. Start with the goal in mind.

What does retirement mean to you? Do you want to travel? Take up a hobby? Work a retirement job? Talk with your spouse to develop some realistic goals for your retirement. What you decide to do will have a major impact on how much money you need to support your retirement lifestyle.

2. Decide How Much Money You Will Need

In general, the consensus is that you will need approximately 70% of your pre-retirement income to maintain a similar financial position. This is because your expenses in several areas will go down or even be eliminated. Child care, commuting expenses and work clothes are just a few of the expenses that you will no longer have.

However, if you want to travel, pay off your mortgage or make other high-ticket expenditures, you will need a proportionately higher retirement income. In fact, in my experience working with retirees for almost 20 years now, I’d say that most see their expenses equal what they lived on before retirement — all based on their choices. The good news is that those choices are under your control.

It is pretty near impossible to determine how much you will need in retirement — whether you will have enough — without using a good financial calculator. There are many free online calculators that can help you work through the numbers. Take advantage of them and calculate how much you will need in retirement.

A good retirement advisor can help you with understanding how much you will need. Whether you have enough to reach your retirement goals depends both on how much you start with and the strategy underlying your retirement investing.

3. Check Out Your Social Security Benefits

The Social Security Administration pays an average of 40% of pre-retirement income to recipients. However, your exact benefit amount may be higher or lower depending on a variety of factors. Click the following link to the Social Security Administration’s website at Social Security Online to determine your exact benefit amount. The site also has a wealth of information to help you decide at what age you should take your retirement benefits. Social Security, despite being a political punching bag for decades, does put a foundation under your future cash flow. Find out now how much that will likely be.

4. Learn the Details of Your Pension Plan — Assuming You Have One

Just a generation ago, a Defined Benefit Plan (Pension Plan) was considered the third leg of the retirement stool. No more. A massive movement has occurred away from these “guarantee the benefit plans” — to a guarantee the contribution approach (401k Plans and other Defined Contribution Plans). If you happen to work for a company that still has a Defined Benefit Plan, you are in rare company these days.

A brief explanation here… the reason for this is simple to understand, though disappointing for most of us. A Defined Benefit Plan is based on actuarial assumptions. Expected rate of return, life expectancy, etc. Most of those underlying assumptions have changed dramatically, leading to more and more Defined Benefit Plans being under funded. The Bear Market of 2000 was the final nail in the coffin for many plans, when the administrators had to wrestle with losing 25-40% of their plan assets (because they had no defensive strategy!) and realized that making these contributions to again be fully funded would never happen. It was too much money. What they were left with was an unfunded liability that they could not meet. Some were dumped on the Pension Benefit Guarantee Corporation (PBGC) — a government sponsored corporation. If your plan is one of those, you can get more information at Pension Benefit Guarantee Corporation. Other Defined Benefit Plans were converted into Defined Contribution Plans so that the companies were not stuck with open ended commitments. For better or worse, that’s where we are today.

Call your employer’s benefits office and request written information on your pension plan. Read through the information that you receive, then call back with any questions that you have. Each plan is slightly different, so it is important that you understand your personal plan.

Don’t forget any pension plans from previous employers you have worked for – and don’t forget employers your spouse worked for.

This will be easiest, if the company is still in business. If so, don’t start by calling, just go online and find the company website and then the email address of the Benefits Department. Include your name, social security number, dates of employment and location where you worked. They may have to research this and get back to you.

Here’s what to ask for:

• The summary plan description that was in effect when you left the job — and the current one if it is different
• The most recent individual benefit statement.

Employers must provide this information to you within 30 days of your request. Once you initially hear back from your email, get a physical address and send a certified letter (it can be a copy of your original email in order to document the date you made the request. Obviously, you want to save the receipt of this certified letter.)

Most companies are happy to help. If you don’t hear back within the 30 days from the date of your request, you can complain to the Department of Labor’s Employee Benefits Security Administration (call 866-444-EBSA to be connected to your regional office).

What if your old employer is dead and gone? Your new name is officially now “Sherlock Holmes.”

You may be able to find the current plan administrator by looking up the company at FreeERISA’s database FreeERISA . The basic search is free, but you’ll have to register (also free). If you can’t find the plan’s filings, FreeERISA charges $50 to search through older plan documents, or you can request the information from the EBSA’s public disclosure room (call 866-444-EBSA for information).

Next Step: try to contact the plan administrator. You should also try to contact the service provider or trustee — also listed on the forms — who could point you in the right direction.

You also may be able to get help from the Pension Information and Counseling Project, which provides pension help in 25 states.

5. Contribute the Maximum to Your 401(k)

If your employer offers a 401(k) or other tax-sheltered retirement savings plan, contribute as much as you can afford. If you are over age 40 and have little savings, try to contribute as much as 30% of your monthly income. Most employers offer contribution matching, which can grow your account quickly. Make this contribution a priority. You absolutely will need this money in retirement.

A lifelong habit of saving money in your retirement plan AND living within your means AND saving some money each month outside your plan, will give you the best future position.

6. Consider Your Health

The goal is to reach retirement in both physical and financial condition to enjoy it. All of the retirement income in the world is meaningless if you are too tired or ill to spend it. Quit smoking, start an exercise program and reduce stress. Work with your doctor to identify and manage any chronic health conditions such as high blood pressure or diabetes.

I suggest you decide how long you want to live now. Then plan for it. Once you have a goal, it is more motivating to take action to achieve it.

7. Be Realistic About Your Goals

No matter what your current financial position, there are steps that you can take toward building a better retirement. You will need to work together with your employer, insurance agent, physician, financial planner and other experts to gain practical advice that you can implement. Set reasonable goals and actively work toward them.

Retirement is one more stage in life you will go through. For some this will mean never working again. For others, it will mean a second part-time career doing something they’ve always wanted to do. And for some others, it will mean a time devoted to serving in a cause they believe in strongly. There isn’t just one definition of retirement anymore. Baby Boomers in particular are redefining what retirement means. Extended life spans mean that there are many more productive years ahead of most of us. Figure out what that will mean to you and your spouse and start to move toward it.

Retirement Financial Advisor – 7 Keys to Retirement Investing is a post from: Independent Retirement Advisors | Wealth Advisors | Fee only Advisors | independent financial advisors