Your Trusted Financial Advisor

Holiday Hosts Need To Be Wary Of Liability

noreply@blogger.com (Tim_Shanahan) — Tue, 16 Dec 2014 14:45:00 +0000

Holiday Hosts Need To Be Wary Of Liability

Want to Bring Your Idea to Life?

noreply@blogger.com (Tim_Shanahan) — Tue, 27 May 2014 11:00:00 +0000

I've served on a judging panel for a few prior years at the Suffolk University Competition for Innovative Ideas which is run by Dr. Sushil Bahtia who is the Executive in Residence at Sawyer Business School, Suffolk University in Boston. Dr. Sushil Bhatia is president of JMD Manufacturing and has always been an innovator, developing products like Glue Stic, DeCopier, labels of different kinds etc. It has always been a passion of his to help others bring their ideas to life. Two of the competition's categories are open to everyone (see http://www.suffolk.edu/innovativeideas ). You can enter and win up to $100K in cash and services to start developing your product and help you go from Idea to Execution. So put on your thinking cap and send in your ideas. "Your ideas can change your life."

Award categories:

Freshman Student
Sophomore Student
Junior Student
Senior Student
Graduate Student
Alumni Award
Frugal Innovation (Bottom of the Pyramid) Award: Recognizes inexpensive and useful products designed to help 4+ billion people who earn roughly $2 a day.
Urvashi Bhatia Green Product Award: Given to ideas that meet environmental needs.

The Urvashi Bhatia Green Product Award and Frugal Innovation Award are open to the general public. All other awards are only open to Suffolk University students and alumni.

Contest Rules

Your idea should be well-formulated. You don't need to physically create the product, but illustrations are encouraged and should be included in your application.
The idea can be inspired from an existing product or service, as long as it does not a replication.
You may apply individually or as a team.
Submissions will only be accepted online.

Judging Criteria

Boldness/freshness
Persuasiveness and coherence
Fulfillment of customers’ needs?
Idea feasibility
Compelling benefits
Environmental (green) benefits
Competitive advantage
Risks and related mitigation

Deadline

December 31, 2013

Prizes

A team of business professionals will decide on finalists. The finalists then create development plans to compete for a Seed Capital Award of up to $100,000 in cash and professional services to help with fundraising, IP protection, incubator space, legal issues, prototyping, licensing, and product development.

Where's the Beef?

noreply@blogger.com (Tim_Shanahan) — Tue, 20 May 2014 11:00:00 +0000

It’s likely you’ve noticed some creeping up of food prices while digging for extra dollars at your local supermarket checkout counter. According to the latest Bureau of Labor Statistics report, the average retail costs of such staples as fish, poultry, and eggs have climbed by double digits over the last twelve months, and items like beef have skyrocketed.

Beef is now at its highest price in almost three decades at $5.30 per pound — up more than 25 cents since January. With punishing droughts and rising global demand, it’s unclear if and when prices will begin to fall. It may be time to make some adjustments to our eating habits or at least a few changes to our summer grilling plans.

*** NBC / LINK

Source: NBC

Are You Smart About the Management of Your Retirement Income?

noreply@blogger.com (Tim_Shanahan) — Tue, 13 May 2014 11:00:00 +0000

When you retire, you have more control over your time, and finally have enough leisure to do what you want. While taking control of your time may not require a lot of advance planning, taking control of your retirement finances does. Whether retirement is years away or already here, these tips from FINRA Investor Education can help you manage your retirement income.

Getting Ready for Retirement

Introduction

You need income you can count on, year in and year out for a very long time. This resource will help you manage your retirement income wisely.

Getting Ready for Retirement

Whether your retirement is fast approaching or years away, there are actions you can take now to maximize retirement when the time comes. It’s never too early or too late to start.

Sources of Retirement Income

Managing retirement income starts with knowing what your sources of income will be—from Social Security to an employer-sponsored retirement savings account like a 401(k)—and the rules that govern each income source.

Selecting Payout Methods

When you retire, you begin to take income from your defined benefit pension or defined contribution plan. You may also take income from a Social Security account. You should learn about the payout options from each source and what each means for your personal situation.

Managing Investment Portfolios

Retirement income management is all about making sure your retirement savings provide enough income for your needs, and that you don’t outlive your assets. This starts with setting up and managing a portfolio that's right for you.

Taxation of Retirement Income

When you retire, you leave behind many things—the daily grind, commuting, maybe your old home—but one thing you keep is a tax bill. In fact, income taxes can be your single largest expense in retirement.

Working in Retirement

You're retired, but you may want to go back to work. You should, however, understand exactly how working after retirement might affect your Social Security, pension benefits, and other retirement income.

Long-Term Planning

Once retired, you may have questions about the future—particularly about how your spouse and family will cope financially if you become disabled or die and what will happen to the assets in your estate after your death. These valid concerns underscore the importance of solid long-term planning.

Health Care Costs

Your plans for the future shouldn't just be about what happens to your property or financial affairs. The longer you live in retirement, the greater the likelihood that you will need to use health insurance or arrange for long-term care.

Download the print version:

in English
(PDF 521 KB)
en Español
(PDF 543 KB)

Imagine that You (or your parents) Want to Age in Place

noreply@blogger.com (Tim_Shanahan) — Tue, 06 May 2014 11:30:00 +0000

Actually you may not need to imagine it for long- if you wait long enough it will happen anyway. So why are we having this conversation? The American dream is to own our own home and most of us do. If you are approaching your elder years – or have elderly parents – who have decided to age in place, it's important to discuss how to best reconfigure your homes to accommodate your new or changing needs. Why would that matter to you?” As you're trusted financial advisor, we know that re-configuring a home can be costly and that impacts your financial plan.

A smart first step toward sound, long-term, eldercare planning is to focus on the safety of the home to prevent accidents that can be life-changing and potentially wipe out your savings.

Working in partnership with The Center for Innovative Care in Aging at the Johns Hopkins University School of Nursing, Legg Mason developed a Home Safety Assessment Checklist – a guide to the features of a home that may be unsafe for you or their parents as they age.

Here is just a snap-shot of the important questions seniors aging in place should consider:

•Is there significant lighting all around your house?

•Are your driveway and walkways smooth and evenly paved and is the slope low enough?

•Are your steps even and in good condition, and are there hand rails at all steps?

•Does your porch have a railing?

•Does your decking have secure floorboards with no nails sticking up?

•Is there a clear pathway (devoid of clutter) through the entry hall and hallways?

•Are there grab bars in the bathroom?

•Is furniture stable and do throw rugs have anti-skid backing?

•Do windows and doors open easily?

•If necessary, is the entryway wide enough for a wheelchair/ walker?

While there are many easy and inexpensive improvements that can be made to help improve safety such as grab bars in bathrooms, handrails and wider entry ways, other changes might be substantial. It's important to keep in mind:

• If you have Medicare you can ask your primary doctor for a prescription for a home safety evaluation from an occupational therapist who has the skills and knowledge to evaluate the safety of the home.

• Any home modifications made should be conducted by licensed and bonded contractors that are familiar with Universal Design principles.

For further information: Download "Aging clients and their families", a new whitepaper by Legg Mason in collaboration with The Center for Innovative Care in Aging .

As Billy Crystal said in the movie "The Grandparents": "I look ten years younger than my age and I feel ten years younger than that!"

American Lifestyle the Magazine Celebrating America #63

noreply@blogger.com (Tim_Shanahan) — Wed, 30 Apr 2014 13:07:00 +0000

We thought you might enjoy a look at the May issue #63 of American Lifestyle Magazine. It's a gift that we send to clients and we'd like to share with you in "soft" form. We hope you like it.

Did you know that there is an e-Delivery Gap?

noreply@blogger.com (Tim_Shanahan) — Mon, 28 Apr 2014 12:00:00 +0000

Closing the e-Delivery Gap

The slow adoption of e-delivery is well known and of concern to most custodians and financial organizations. Pershing LLC ( one of the largest prime brokerage firms is owned by BNY Mellon) joined with Beacon Strategies to conduct the 2013 e-Delivery Survey

Pershing measured this gap by comparing the industry’s current reality to its expectations for e-delivery adoption. On average, survey respondents said they expect 53.1% of investors to enroll in e-delivery of at least one type of communication. Keep in mind that 88% of respondents also indicated that e-delivery is an important initiative. The real e-delivery gap is the difference between the expectation level of 53.1% and actual adoption of e-delivery for different types of communications, as expressed by survey participants.

Investors, advisors and brokerage home offices rely increasingly on technology, and e-delivery is an important component in this strategy with benefits such as convenient anytime, anywhere access. This growing reliance on technology, however, is at odds with levels of adoption that are often less than 20%. See the infographic below.

Consider saving a few trees, speeding up your statements and turning your recordkeeping into "soft copies".

Getting Paid Not to Work

noreply@blogger.com (Tim_Shanahan) — Tue, 22 Apr 2014 12:00:00 +0000

According to David A. Rosenberg Chief Economist & Strategist for the wealth management firm Gluskin Sheff :

The social safety net is supporting a record number of Americans. In fact, the Cato Institute published a controversial study last summer, concluding that in 39 states, those individuals astute enough to tap the myriad of government benefit programs at all levels got paid at least as much as an administrative assistant (in 11 states, as much as a school teacher)! Now not everyone is lazy, but at the margin, when governments create disincentives to work, some will choose not to. From 2010 to 2013, the data show that individuals leaving the labour force due to disability accounted for an unprecedented 28% of the overall tally — this compares to 18% who were classified as “disabled” from 2007 to 2010.

The Graduate - Supply vs. Demand

noreply@blogger.com (Tim_Shanahan) — Tue, 15 Apr 2014 12:00:00 +0000

According to David A. Rosenberg Chief Economist & Strategist for the wealth management firm Gluskin Sheff : Firms are reporting difficulty in finding qualified applicants for the job openings they have available. The latest Fed Beige Book highlighted labour shortages in health care, technology, transportation services, engineering and construction.

Perhaps part of the problem is that the U.S. education system is churning out graduates that are not really in great demand by the private business sector — we didn't read much about the demand for social scientists and psychologists in the Beige Book. We've reached a state where more people are graduating with expertise in homeland security than in either computer science or math.

As a side note I've always thought it was interesting that we let 18 year olds make one of the largest financial decisions that a family will ever encounter- a $200k+ decision about which college to attend and what major to pick. College guidance and admissions people say it's all about the "fit" and "following the passion". Interesting and maybe true but I think the law of supply and demand is a more important factor to consider.

Economic Outlook Q1 2014- An Economic Thaw, but a New Cold War

noreply@blogger.com (Tim_Shanahan) — Mon, 07 Apr 2014 14:14:00 +0000

An Economic Thaw, but a New Cold War
By: James R. Solloway, CFA, Managing Director SEI Investments Management Corporation , Senior Portfolio Manager

The Portfolio Strategies Group recently released its first-quarter 2014 Economic Outlook. A summary of its conclusions is provided below:

 Equities have turned a bit more volatile this year—and for good reason. Disruptive cold and snowy weather during the first quarter has made recent economic data coming out of the U.S. statistics mills about as reliable as those that are made in China. The invasion of the Crimean peninsula by Russian troops has raised the specter of a renewed cold war. Throw in the longer run worries surrounding the political, economic and financial health of several emerging countries, and one might expect investors to go into permanent hibernation.

 Global stock markets bounced higher following a brief dip in the latter part of January, with the U.S. leading the way. The ability of equities to quickly overcome periodic stumbles (in the U.S. and other developed markets, at least) underscores investors’ willingness to assume risk even when economic and geopolitical uncertainties are on the rise. The fact that pullbacks in developed equity markets remain brief and shallow suggests that the rotation out of cash and fixed-income assets and into stocks is still very much in play.

 Emerging-market equity, however, continues to underperform. Although emerging-market valuations are attractive versus the U.S. market (near decade-long lows), both political and economic factors have reduced our conviction that
the value in emerging-market equities will be realized over the near term.

 Geopolitical concerns and a further easing of inflation pressures around the globe sparked a stronger rally in sovereign debt than we expected at the start of the year. However, performance has been good in the fixed-income areas our managers have been emphasizing, especially high-yield and dollar-denominated emerging-market debt. Since the yield on Treasury and investment-grade corporate bonds remain low relative to their own history and to inflation, we continue to expect more volatile assets (including equities) to outperform less volatile ones.

 In equities, the excessive investor enthusiasm in developed markets at the start of the year has eased; the negative sentiment toward emerging-market equity has not abated. Momentum strategies were quite successful in January and February but hit a road block in March. We are mindful that momentum-focused markets can become dangerous as participants crowd into the same trade and leverage up in an effort to improve returns.

 Stocks in Europe are well bid despite the tepid growth we mentioned earlier. There has been a shift in relative performance, with more domestically oriented sectors outperforming those that are export dependent. Our managers think this convergence play has more to go. With the exception of low-volatility strategies, our U.K. and European managers favor industrials, technology and consumer discretionary sectors and are underweight consumer staples. Valuations are not stretched, and there is conviction that global growth will accelerate.

 In alternative strategies, managers are adding to their equity exposure as the environment improves for bottom-up stock picking. Short positions, however, are not hurting performance this year because the market is less directional. Activist investing and mergers-and-acquisition strategies also are contributing to performance. Opportunities in the event-driven space are expanding and transactions are getting bigger. In fixed income, alternative strategies are more
balanced, with yields and spreads not offering any big opportunities, in our managers’ opinions. Most of the emphasis is on structured credit, such as commercial and residential mortgage-backed securities.

A full-length paper is available here if you wish to learn more about this timely topic.

This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice. This information is for educational purposes only. There are risks involved with investing, including loss of principal. Current and future portfolio holdings are subject to risks as well. Diversification may not protect against market risk. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Narrowly focused investments and smaller companies typically exhibit higher volatility. Bonds and bond funds will decrease in value as interest rates rise. High yield bonds involve greater risks of default or downgrade and are more volatile than investment grade securities, due to the speculative nature of their investments. Information provided by SEI Investments Management Corporation, a wholly owned subsidiary of SEI Investments Company. Neither SEI nor its subsidiaries are affiliated with your financial advisor.

Get to Know Us--Robert Fogarty, Compass Capital Trusted Financial Advisor

noreply@blogger.com (Tim_Shanahan) — Fri, 28 Mar 2014 11:00:00 +0000

Get to Know Rob Fogarty

by Guest Blogger, Susan Scheide

When I came back to work at Compass Capital in the year 2000, the only person I knew well was Tim Shanahan. When I first worked for Tim in 1984, there were only three of us; Tim, Ken Smith, and me. By 2000, the company had grown and there were lots of new people for me to get to know.

One of them was Rob Fogarty. Rob was working out of his Bridgewater home at the time, so I didn’t know him well at all. I remember that when he called, if I happened to answer the phone, he’d always say, “This is Rob,” to which I would reply, “Rob who?” You see, I have a brother Rob, and at the time my landlord’s name was Rob. Rob thought it was strange I didn’t recognize his voice I think, and I thought it was strange he would think he was the only Rob I knew!

That all changed on September 11, 2001. I was sitting in my little corner of the hallway (which was my domain in that particular office space) and the phone rang. I happened to be the one to answer it. It was Rob. Calling to tell us that a plane had just crashed into the World Trade Center. I think I said something like, “You’re kidding?” and I remember that I was imagining a small Cessna type craft with a pilot woefully off course, not a jumbo jet deliberately steered into the tallest building in New York.

The rest of that day was stressful for us. We had no television in the office, so we were glued to our computers reading everything we could as it unfolded. Fighter planes were flying over Boston that day. It was very frightening. A simple twist of fate, that I picked up the phone when Rob called, guarantees that as long as my mind is sound, I will never forget Rob Fogarty.

Rob will be celebrating 20 years with Compass Capital this year, so we decided to feature him in our series of “Get to Know Us” profiles. Rob was good enough to write out a lot of interesting stuff, and I hope you enjoy reading it as much as I did.

Rob and Inky

Born the same year as me, 1961, in Walpole, Massachusetts, Rob describes himself as a, “Typical all around American boy growing up, played most sports, rode my bike everywhere including to my baseball games with my mitt and bat across my handlebars.”

Rob loved to draw, build models, and create things with his hands using just about any kind of tool. The Fogarty family lived next to a town forest where Rob and his friends played for hours, camped, built forts and skated the local pond in winter.

Rob says that, “Money was more than tight in a large Irish family, so I knew growing up If I wanted to get anyplace I had to make college happen on my own… with good grades and hard work.” That’s the kind of work ethic we really appreciate at Compass Capital.

Rob and his wife Kim have been married for 21 years. They have two teenage boys, and two cats. Rob is a devoted family man, involved with his boys in their activities and sports. He continues to enjoy the great outdoors, working out, eating right, and also an occasional game of chess.

Rob graduated in the top 10% of his high school class, and put himself through college. He paid for 100% of his tuition and expenses, working at building houses all summer, and taking full credits 3 days per week so he could work the other days. That’s certainly an accomplishment to be proud of!

After college, Rob broke into the financial field working several years for a large national firm, became securities licensed; and eventually moved on to start his own independent advisory firm.

His first year in business he purchased a home, married his wife Kim, started his own RIA, and passed 3 CFP courses. It was quite a year!

He later complete his educational Diploma from the College of Financial Planning, and also joining Compass.

Rob had this to say when asked about being a Trusted Financial Advisor:

As Financial Advisors we literally guide people through their financial lives: From early marriage and houses, to parenthood, college funding, marrying off children, retirement, grand parenting, and yes; unfortunately to the sometimes harsh realities involved with winding down life.

We navigate people through the simple and the complex. I consider myself a very insightful, well rounded, experienced and seasoned advisor, with a caring reputation for guiding my clients as they live through the fabric of their lives. People count on us for applicable knowledge, financial wisdom, and support. I am a proud “Trusted Advisor” of Compass Capital Corporation.

The Fogarty Family at The White House

Tim Shanahan's Cameos in SEI's "What Advisors Have to Say"

noreply@blogger.com (Tim_Shanahan) — Tue, 18 Mar 2014 14:55:00 +0000

I recently contributed some thoughts in a series of Q&A for SEI in a blog posting called:
What Advisors Have to Say

Hear what advisors have to say about how SEI helps them focus on client service, marketing and more.

How Can SEI Help You Save Time?
Rely on SEI’s investment programs and back office support to help you better focus your time on meeting client needs.

What Do You Like to Do In Your Spare time?
By outsourcing investments and operations to SEI, you can focus your work time on your clients and spend your spare time doing what you really like to do. Hear what some advisors like to do in their spare time.

If You Weren’t An Advisor, What Would You Do As a Career?
Hear a side from advisors as they talk about alternate careers. What hobbies and activities would you like to spend your time pursuing?

Advisors Answer the Question: Do You Wear a Watch?
SEI can help you get back to business. How do you manage your own time? In this age of cellphones and other technology, find out if advisors still used the tried and true timepiece.

What Helps You Manage Your Time?
From CRMs to office staff, how do you as an advisor manage your time spent in the office?

Change

noreply@blogger.com (Tim_Shanahan) — Thu, 27 Feb 2014 18:15:00 +0000

One of the really neat things I've learned over the years is to use symbolic shorthand. I distinctly remember a first day in a Suffolk University class called "The Psychology of Women," and the professor wrote two simple symbols on the chalk board (I know I'm dating myself now) to say "This is the class you're in."

As a long time student of psychology, I've observed over and over that people HATE change, even if it's a good change. Change makes humans uncomfortable. I've created a shorthand graphic of my own that symbolizes how most people seem to feel about a lot of things: "No Change!" It would look something like this using a mash up of the symbols for "no" and delta (the triangle symbol) for "change."

One thing that has not changed is Warren Buffett publishing his annual letter to shareholders in Berkshire Hathaway. In the upcoming version, Warren Buffett looks back at a pair of his real estate purchases and the lessons they offer for equity investors. It's a great read and I recommend that you click through to it here in John Mauldin's Outside the Box. There are many classic Warren Buffett quotes in it, but here are two that resonated with me:

"With my two small investments, I thought only of what the properties would produce and cared not at all about their daily valuations. Games are won by players who focus on the playing field -- not by those whose eyes are glued to the scoreboard. If you can enjoy Saturdays and Sundays without looking at stock prices, give it a try on weekdays."

"Those people who can sit quietly for decades when they own a farm or apartment house too often become frenetic when they are exposed to a stream of stock quotations and accompanying commentators delivering an implied message of "Don't just sit there -- do something." For these investors, liquidity is transformed from the unqualified benefit it should be to a curse."

The Periodic Table of Investment Returns depicts annual returns for eight asset classes, ranked from best to worst. Each asset class is color-coded for easy tracking. Well-known, industry-standard market indexes are used as proxies for each asset class. We use the version that SEI Trust publishes called Destination: DIVERSIFICATION, Asset Class Returns: Annual Returns for Key Indices (1994-2013) Asset Allocation Risk and Reward: Annual Returns (1926-2013).

The notable box to focus on is the plain gray one representing the 60/40 diversified portfolio which is actually the most popular choice of our clients and a typical traditional mix. How appropriate! Gray for dull and boring--no change. The observation that always occurs to me is that the gray 60/40 box is never the best and never the worst and most often in the middle, right where most people are most comfortable.

So in conclusion, if like most people you like no change, our advice is, "Just sit there--do nothing." No change might be the best course after all.

Risk and Guaranteeing Your Retirement Income

noreply@blogger.com (Tim_Shanahan) — Thu, 20 Feb 2014 19:14:00 +0000

Risk—It’s all around us but what is it?

Twenty-five years ago, my parents gave me an inspirational poster that hangs in my office with a lithograph of a sailboat that says: “Risk—You cannot discover new oceans unless you have the courage to lose sight of the shore.” Appropriate for me since I’m a sailor. I understand that risk because I do like to see the shore and when plotting the course to a distant destination like Provincetown from Boston. It does make me a little uncomfortable when I lose sight of the shore about halfway there.

I often counsel clients, friends, and family about taking “compensated (or more likely not taking un-compensated) risks.” When asked to define risk,most of our clients tell me “it’s the risk of the stock market going down” when what they really mean is it’s the “risk of my account going down all the way to zero because of the stock market decline.” Interesting, because that has neveractually happened to any of our clients in their entire lives. Also interesting because the “headline risk” of what might be happening in the stock market is not as relevant to your accounts as you might suspect, since the exposure to the stock market in a typical Compass Capital managed account is approximately less than 40%. In other words, 60% of a typical account is NOT in the stock market. Correlations to the market are another topic.

It seems risk is an individually perceived concept. While the typical investor is focused on systemic market risk or volatility risk and perhaps inflation risk, the two risks that get my attention most as a planner and advisor are “event risk” and “longevity risk.”

Event risk by definition is unexpected. Therefore, it is important to have a flexible retirement solution in the event liquidity is needed. Having the ability to adjust distributions from a portfolio on an as-needed basis can be critical. The exogenous event risk is simply the wildcard that upsets the applecart and blows all of our predictions about expected outcomes away. It’s the “Black Swan or the two standard deviation event.” Think of any of the major meltdowns that have occurred for seemingly trivial and unrelated reasons or the ones that we don’t even know exist yet.

Longevity risk is a really interesting and in my opinion the most dangerous risk. I usually plan out to age 100 for clients when preparing a financial planning scenario. Typically the client says, “I’ll never live that long, although my dad is 91and going strong.” To which I reply, “What if you’re wrong?” “What if you outlive your money?” To win that bet you might need to lose and die before you’d otherwise wish to.

Possibly the largest single concern for retirees is that they will outlive their assets. Even sizable portfolios can be rapidly depleted given a combination of unsustainable distribution levels and/or an uncooperative market. Longevity risk is a greater concern now more than ever. In the U.S. today life expectancy at birth in 2013 is 78.7 years. For U.S. men, the average life expectancy is 76, while it's 81 for U.S. women.Furthermore, if we look at couples at age 65, at least one person has a 50% chance of living beyond age 92 and a 25% chance of living to at least age 97. Planning to age 100 does not seem like such a stretch.

Want to know your life expectancy? You can use Social Security’s simple Life Expectancy Calculator to get a rough estimate of how long you (or your spouse) may live http://www.socialsecurity.gov/oact/population/longevity.html

Considering advancements in healthcare, these trends are likely to continue. Unlike our fathers, fewer retirees than in the past will receive distributions from defined benefit pension plans. The days of working 40 years for the same company and receiving a percentage of salary during retirement are coming to an end for many. In 1980 there were 148,000 private sector defined benefit plans compared to just 47,000 in 2004. Also in 1980 there were 30.1 million active participants in defined benefit pension plans, but by 2004 that number fell to only 20.5 million.These statistics suggest that a lower percentage of retirees’ income is being received in a regular “paycheck-like” manner. The responsibility of both funding and managing retirement assets—a tall order given that many investors make poor investment decisions, and don’t save enough—now falls squarely on the shoulders of the individual.

The risks that you face while drawing down your assets are much different than the risks you face while in your accumulation stage. Therefore, traditional portfolio risk measures such as standard deviation or beta are not necessarily the best benchmarks for measuring risk. Measures such as inflation risk or longevity risk, on the other hand, are much more important and relevant to an investor in distribution mode.

So what if you could add guaranteed income protection to your current investment strategy? We all routinely insure health (sickness), life (death) auto (accidents), home (fire, theft) and other property, but have you insured your retirement income (running out of money)? We now have the tools to offer you protection from the potential of outliving your money. Compass Capital Corporation, as your investment advisor, now has the ability to offer a way to combine our investment strategies with a Contingent Deferred Annuity (CDA) offered by Transamerica Advisors Life Insurance Company. We can now structure guaranteed withdrawals as early as age 60 that may increase with age and/or interest rates. Investors can lock in 4-8% as a Coverage Percentage depending on their age at lock in and will never decrease as long as the account has not been subject to excess withdrawals. Automatic step ups are permanent. There are no surrender charges and the investor can turn off the guarantee at any time. You do not need to buy an annuity in the traditional sense with all of its many layers of fees and surrender charges.

This CDA solution is called the RetireOneTransamerica II Solution and is an effective way to insure against the risk of outliving your money. A prospectus is available which discusses the risks charges and expenses and should be read carefully before investing. Call us for more information if that is a discussion you’d like to have.

Q1 2014 Investment Strategy and Capital Markets Outlook by Capital Guardian Wealth Management

noreply@blogger.com (Tim_Shanahan) — Tue, 11 Feb 2014 13:00:00 +0000

As we recently announced, Compass Capital has embarked on a joint venture with Capital Guardian LLC and an immediate benefit of our association is access to their research. We are pleased to offer you a copy of the Capital Guardian Wealth Management Q1 2014 Investment Strategy and Capital Markets Outlook which shares their viewpoints regarding the macroeconomic outlook and asset allocation.

Attached, please find the Capital Guardian Wealth ManagementInvestment Strategy and Capital Markets Update for Q1 2014. This outlook is the collaboration of numerous individuals within the firm and represents our views regarding the economy, the capital markets and strategic/tactical asset allocation.

The Capital Guardian Investment Strategy Committee maintains a positive outlook for equities for 2014. US equities continue to offer value when looking at the spectrum of global asset classes, but developed market stocks are becoming more interesting as global economies improve and valuations remain attractive. The committee continues to be cautious towards fixed income and recommends keeping portfolio duration low and adding exposure to floating rate instruments.

As 2014 begins, market participants are focused on the overall strength of the economy and prospects for the corporate sector. On the economic front, growth and employment have steadily improved over recent quarters, prompting the Fed to embark on scaling back its asset purchase (tapering). However, the Fed has also promised to keep rates low for an extended period and has expressed concern over the low level of inflation. While asset purchases will be winding down, the Fed is still in an extremely accommodative stance by historical standards, which provides a backdrop of liquidity that should be supportive of growth.

U.S. equities are not as attractively valued as they were at the beginning of 2013 but should benefit from a better economic backdrop in 2014.

· Equity valuations among non-U.S. developed markets are relatively cheap and should see multiple expansions as their economies and corporate fundamentals improve.

· Despite attractive valuations, Emerging Markets may continue to experience drawdowns and volatility as their economies shift to slower more sustainable consumption based markets.

· We continue to recommend a careful approach to fixed income investing – avoid longer duration securities, remain with high credit quality, and include floating rate notes.

· Municipal bonds continue to look attractive when compared with similarly-dated treasury securities, though security selection is key.

· The CG investment committee expects coupon-returns for high yields as spreads are relatively tight, though justified by strong credit fundamentals, similar to 2013.

· Alternatives can provide diversification benefits to portfolios as many managers target equity-like returns with lower-than-equity volatility, while others aim for low or negative correlations to broader stock and credit markets.

We hope the attached report provides you with an informative view of the economic and market factors that resulted in our investment recommendations.

Best regards,

Brian

Brian T. Kirkpatrick
Chief Investment Officer

Capital Guardian Wealth Management


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Get to Know Tricia Welsh, CFP, and Compass Capital Corporation Trusted Financial Advisor

noreply@blogger.com (Tim_Shanahan) — Mon, 10 Feb 2014 12:46:00 +0000

Tricia Welsh, CFP^®

^{by Compass Blogger- Susan Scheide}

I have never wanted to be one of those women who “have it all,” meaning both a family and a career. It seems too complicated and difficult to me. But I have the privilege of working with one of those women, Tricia Welsh.

Tricia Welsh

Tricia, like Compass partner John Ahern and me, has a military family background. Her father was a pilot in the Air Force. She was born in Bitburg, Germany when her father was stationed there. He was a member of the 22^nd Fighter Squadron; a unit whose members included Buzz Aldrin and Ed White of NASA fame.

Tricia moved often as a child – leaving Germany for Manhattan Beach, California, when she was two, then off Dayton, Ohio at the age of seven. Her family finally settled in the Washington D.C. area where they stayed through her high school years. Tricia’s father did a stint at the Pentagon, was a fighter pilot in Vietnam, and moved a few more times, finally ending up at NATO in Naples, Italy. When he retired, he did so as a full-bird Colonel. During this time, Tricia’s Mom earned a PhD in American History from the University of Maryland. What a busy life this family must had led, with lots of exposure to different cultures and I’m sure a lot of good stories!

No doubt it was the influence of her father’s career as a pilot that got Tricia interested in flying. She has had a pilot’s license for many years now and one of her best flying experiences was when she finally got to take her Dad up in a plane a few years before he passed away. “He didn’t seem nervous at all, which was pretty amazing since once I was flying to meet him in New Jersey, and got lost and never made it. I quickly got my instrument license after that flight,” Tricia told me.

Tricia and her father, ready to take flight

Tricia spent much of her financial career in New York City. Her work experience there including working at two well known business magazines – Forbes and Fortune – and in between those two jobs, working on Wall Street as a trader in the securities industry.

Tricia received her Certificate in Financial Planning from Boston University and passed the Certified Financial Planner exam in March 2004. She also holds an MBA in Finance from New York University’s Stern School of Business and a Bachelors of Fine Arts degree from Pratt Institute in Brooklyn, N.Y.

Here is how Tricia summed up her early career:

“I was working at Forbes Magazine in sales promotion – second job out of college and got my MBA at night during that time. When I graduated I started working in one of the money center bank professional development training programs – that was a 9 month stint and when training ended I got a job on the securities side where I was involved in both institutional sales and trading. Eventually I was put in charge of the Fed Funds Desk at Irving Trust where we bought and sold overnight money in the billions every day – it was the most exciting (though stressful) job ever! After the Wall Street gig I worked at Fortune Magazine as a reporter specializing in the financial markets. For seven years I worked with the most amazing and brilliant group of people. I moved to Boston in 1997,gave birth to my third child and took a few years to think about what I wanted to do next. Since I had always been interested in personal finance from my days at Fortune, I decided to get my CFP, and here I am at Compass in a career that is unbelievably interesting and fulfilling.”

Tricia shared an article she wrote on her early days with me, and said I could share it with you. Training, money, and courage can turn a passenger into a pilot.

Tricia lives in Hingham now. She has three children; Patrick, Julia, and Claire. Both Patrick and Julia are at the University of Vermont, and Claire is still at home with Tricia, three orange cats who are brothers and two turtles.

“Our favorite time together is probably skiing”, Tricia told me. Her children all started when they were 3 years old, and they have enjoyed many family trips out west where the mountains are MUCH bigger. They also ski regularly in Vermont where they have a condo, conveniently close to the college her children attend. Tricia and her longtime boyfriend Andy are heading out to British Columbia in a few weeks for their first helicopter skiing experience.

Tricia having fun

I know that all of Tricia’s children are musical – Patrick played the trumpet in the jazz band throughout high school, Julia still plays the violin and oboe in University of Vermont’s orchestra and band, and Claire is a budding singer/songwriter with many of her songs on iTunes. So I asked her about how music played such a big part of their family life, and here is what Tricia, proud mom, had to say:

“We always thought music was important. I played the piano growing up, and their Dad still plays it. We had Patrick take piano lessons in kindergarten when we moved here, but I think it really started with the Hingham Before School Strings Program – starting in third grade children can elect to play a string instrument and each of my children did that – Claire and Patrick played the cello and Julia always played the violin. In fifth grade band starts in school and so Patrick switched to the trumpet. The band and orchestra teachers in Hingham are absolutely amazing – they really inspire the kids. Claire started piano lessons and singing in fifth grade and sometime in middle school stopped the cello and concentrated on being a singer/songwriter. I am lucky to have so many great and different kinds of music in my house.”

Tricia and her children

Tricia is friendly, funny, and very smart. She has an incredible sense of style, and even on casual Friday manages to look chic and pulled together. It’s hard not to like a woman who laughs when we sometimes refer to her as “Corporate Barbie.” She’s also a talented writer, and never fails to offer me useful editing advice when I go to her to proofread something.

I consider Tricia’s investment advisor style very approachable. In addition to providing financial planning and investment management for individuals and families, she has an expertise in providing services to people going through life changes, like divorce and death. She is thorough and easy to understand, and doesn’t use excessive jargon. I needed to help my recently widowed mother understand her financial situation, and Tricia was extremely helpful to both me and Mom.

As the only female advisor at Compass Capital Corporation, I joked that this blog entry had to represent all womankind. What a powerful example Tricia is from my point of view. A mother, a sister, a friend, an athlete, a pilot, and a Certified Financial Planner!

It’s great to have a woman advisor in the office, and I really enjoyed learning a lot of new things about her while working on this piece.

Thank you to Colonel Al Bryniarski for your service to our country, and thank you Tricia, for sharing a bit of your personal story with me.

Tim and Me Since 1984 - by Guest Blogger Susan Scheide

noreply@blogger.com (Tim_Shanahan) — Mon, 16 Dec 2013 18:05:00 +0000

I am a member of the class of 1983, University of Massachusetts in Amherst. My degree is in English, although my dream was to become a veterinarian. I failed chemistry—twice—and that dream died. The job market was not good in 1983. I had no marketable business skills, and almost no work experience because I spent my college summers teaching horseback riding at a YMCA camp. Despite my father’s business connections in Boston, no one was interested in hiring an English major with no skills or experience. So Mom and Dad decided I should attend Katharine Gibbs School and learn how to type and take shorthand. So I did.

After successful completion of their Entree program (for college graduates), I took up the job hunt again. My first job was just awful; I stood at a copy machine all day and made seemingly millions of copies in various colors, and then bound them into booklets. I wanted to quit after the first day, but my father said, “It would be career suicide to quit your first job in less than six months!” So I stuck with it for six months to the day. Dad later admitted he was wrong, and that I should have quit after the first day and just never listed that job on my resume.

Back to the interviewing process. And here is where my story gets relevant to The Trusted Financial Advisor blog! Enter Tim Shanahan and Compass Capital Corporation, a newly founded Registered Investment Advisor in 1984. Tim was seeking his first secretary/receptionist/office manager/assistant all rolled into one. He had contacted the Katharine Gibbs placement office figuring he wanted to hire a “Katy Gibbs girl.” It took me approximately 30 seconds to decide I would take the job if he offered it to me. The entire company was going to be Tim, Ken Smith, and me. Ken Smith was a guy my age who looked like a red-haired Clark Kent and was built like Superman. Tim had sparkly blue eyes. Need I go on? I was a 23 year old who had just spent six months making copies. These guys seemed like a massive step up!

Tim Shanahan, 1984

Dad told me not to take the job. The salary offer wasn’t great to start with, and Dad told me, “Guys like that are a dime a dozen. Here one day, gone the next! You need to be with a big firm...” Sorry Dad! Two good looking fellows have offered me a job, and you want me to turn it down? I don’t think so!

In the early days, we had a two room office. Ken and I shared one room, and Tim had the other. Tim and Ken worked on trying to find clients and running financial plans for them, and I blundered my way through everything else. We had blue letterhead, custom tinted correction fluid (“blue out” as we called it), a used typewriter, and a dot matrix printer that was so noisy it came with a plastic hood.

I’ll never forget that pivotal day when Tim came in with a “portable” computer (which was a Compaq, with a seven inch green screen and was about the size of a sewing machine case) and a huge box of software and manuals. The keyboard doubled as a monitor cover. I think the screen was about 7 inches tall, and personal computers were still monochrome. He dropped it all on my desk and said, “Here—figure this out, and then teach me how to use it.” To this day I laugh and call that the Tim Shanahan method of learning: sink or swim.

Ken Smith, Susan Scheide, and the "portable" Compaq

That computer was a big step up for us. Previously, we had been using a typewriter that could store a few pages of text in memory for our financial plans. You had to tell it which stored page you wanted to have it type, stop it, type in the client’s name, and then let it continue! To create the title page, you had to know how to center text on a page manually. The computer was a miracle, except back then a separate program was required to print a spreadsheet on tractor feed paper (when it wouldn’t fit on letter) in the correct orientation. That program was called, cleverly, “Sideways.”

We all learned on that machine. Ken was good with numbers, and I was good with words. We worked hard, but we shared a lot of laughs too. And some frustrations. One day, one of the men said to the other, “Pass me that phone book,” and so the phone book was literally thrown through the air. Landing, sadly, on the cord to the computer’s power, unplugging it, and wiping out hours of work. Those were the days when figuring out a client’s spending pattern meant actually inputting the amount and payee of each check they had written over the course of a year. The flying phonebook taught us all to back up our work frequently.

Tim prepared income taxes back then because we needed the money. Meaning Susan and Ken also did taxes! Tim would fill out the forms in pen, and I would type them up and mail them. And one day I got ahead of myself, and mailed someone’s return, and Tim hadn’t signed it. We panicked! He sent me down to the mailbox with a note, his business card, and told me to wait until the mailman came to pick up the mail and beg him for the envelope back. It worked—and I have never forgotten to check for signatures again! Sink or swim.

After a year that saw me learning more things than I could have imagined, including taking the College for Financial Planning’s now-defunct “Paraplanner” course (I think I was one of the first 10 people in the country to earn the designation of Paraplanner), I was ready to move up in the world, and when someone offered me a job that paid more, I took it. Tim was reluctant to let me go, but as with most start up companies, the money just wasn’t there to pay me. We parted on good terms, and he actually gave me a Cross pen set with my name engraved on it that I have to this day. I’ve never gotten anything except severance pay from any other former employer.

Many years went by, and many jobs for me. And Compass Capital grew, and thrived. Tim and I stayed in touch. We even met up in Boston a couple of times over the years for lunch and to say hello. I eventually ended up the assistant/office manager for a one-man investment advisory shop, and worked for that gentleman for more than 10 years. He was a very wealthy man, who only practiced his investment advisory service to have something to do (although he was exceptionally good at it, having been with State Street Research for 35+ years). After a long time, he told me he only needed part time help, and that I should feel free to use the office to search for a full time job, and to take as long as I needed.

As I always did when I needed a new job, I contacted Tim and asked, “Are you still good for a positive reference?” and he shocked me and said, “Why don’t you come in to see me. I have someone working for me, and it’s not really working out.” I was pretty surprised, but in I went. I remember feeling really self-conscious because at the time I was a larger size than he had ever seen me, and I wasn’t feeling too great about myself.

You know those people you have in your life where you can just pick up like you’ve never been apart? I guess that’s how the interview felt to me. A lot of water had passed under the bridge for both of us, but Tim has always been one of the few people who seemed to just “get” me. And Tim is the kind of boss who doesn’t dwell on HOW you accomplish a task he gives you, as long as you get it done and the end result is correct. Exactly how I function best. To my surprise, that very evening he called me and offered me my old job back. He nearly fell out of his chair when I told him my current salary, but he has said to me, more than once, “You’re a tough act to follow.” He gave me what I was getting paid, and two weeks later, I took over as office manager and assistant to the president.

Compass holiday party host and hostess (Tim and Susan)

That was in the year 2000. Since then we have moved twice, and seen numerous changes in the firm and in the country. We were all together at the office in Newton when the terrorist attacks of September 11 took place. We have endured many regular cycle SEC and FINRA audits. We have grown our business with wonderful clients, learned new things, and through it all, I’ve remembered that this is a sink or swim job. Tim is always supportive of my efforts, but for me, failure is not an option. I don’t want to let down the only person, besides my Dad, who has ever just “gotten” me.

Tim and Susan in their Nantucket Reds

As I have shared before in this blog, my father was afflicted with Alzheimer’s for many years. But long before the disease took him, he told me that he was, “Dead wrong about that Tim fellow. You learned more working for him in a year than most places would have taught you in 10.”

American Lifestyle the Magazine Celebrating America

noreply@blogger.com (Tim_Shanahan) — Tue, 26 Nov 2013 12:00:00 +0000

We thought you might like a look at the December issue of American Lifestyle Magazine. It's a holiday edition that we send to clients and we'd like to share with you in "soft" form.

We hope you like it.

Four Investing Pitfalls - Tim Shanahan video

noreply@blogger.com (Tim_Shanahan) — Thu, 21 Nov 2013 17:56:00 +0000

Four Investing Pitfalls

To hear Tim Shanahan, Chief Investment Strategist of Your Trusted Financial Advisor- Compass Capital Corporation, in his latest 4 minute presentation on the most common pitfalls of investing please click on this video link.

While it’s true that the Internet abounds with information, not all of it is objective and reliable. And investing isn't just about data. It’s about decisions. When it comes to something as important as your finances, don’t take chances. As you’ll see, do-it-yourself investing can cost you.

It is tempting to want to invest on your own. But getting professional financial advice can keep you on track toward meeting your goals, and help you avoid these four of the most common pitfalls of investing.

Today’s markets are complex and fast-moving. More than ever, investing successfully requires careful planning and an understanding of what it will take to reach your goals. We understand the importance of your financial health, and want to assure you that the resources you devote to professional advice can keep you on a productive path, and can help you avoid the mistakes many investors make.

When Diversification "Fails," and Why We Still Believe

noreply@blogger.com (Tim_Shanahan) — Mon, 18 Nov 2013 13:00:00 +0000

When Diversification “Fails,” and Why We Still Believe

By: Devin Cassels, SEI Investment Management Unit

Single asset classes will often outperform or under-perform significantly over short time periods.
With that noted, short-term under-performance of a diversified strategy does not mean diversification has failed.
Diversification is a long-term investment strategy that should not be judged by short-term metrics.

Believe in Diversification and Stay the Course

Investment success is all about finding the best opportunities, blending them to create efficient portfolios and remaining invested long term. Holding an attractive long-term portfolio, however, is not always easy over shorter time frames. For investors enviously comparing their portfolios to the S&P 500 Index, 2013 is one of those short-term periods.

Please click here to read the entire commentary with exhibits
For a chart of Asset Class Returns through 2012 click here
For a Q3 Commentary from the Absolute Strategies Fund which has an allocation in many of our Compass Capital strategies click here.

John Ahern, A Real Life Hero and Compass Partner

noreply@blogger.com (Tim_Shanahan) — Mon, 11 Nov 2013 12:00:00 +0000

by guest blogger Susan Scheide

John R. Ahern

I used to think they didn’t make men like my father anymore. Then I met John Ahern.

While younger than my father was, John reminds me of him in many ways. When I learned of John’s service in the Marine Corps, it all made sense, as my father was also a Marine.

John’s path to the Corps was very different from Dad’s (Dad enlisted and went to officer training school, then off to Korea). Anyone who has ever known a Marine knows that you don’t ever stop being a Marine. While I have the deepest respect for all who serve our country, in whatever branch of the service, people like Dad and John really are like those buttoned down people in the commercials for “the few, the proud, the Marines.”

John attended West Point and graduated in 1963. He joined the Marines following graduation because he wanted to be a pilot. While that dream did not come true, by the time he realized he wasn’t destined to be a pilot, the Corp had hold of him, and he became an officer in the infantry.

Cadet John Ahern and Andrea Ahern

John married his sweetheart, Andrea (Bernati), and went to Vietnam. Through the grace of God, his training, and perhaps sheer luck, he returned home in one piece. He was then stationed in Norfolk, Virginia. I know for most of us, what we think we know of the Vietnam War we learned from movies. I’ve never really asked John what it was like, but I am sure it was grueling, terrifying, and exhausting.

After five years, John left the Corps, but as stated above, no one REALLY leaves the Corps. John attends the Marine Corps birthday every year, and usually takes a bunch of buddies with him. When I asked him a few questions about this blog entry to get the ball rolling, he said the following:

My creed has been built around the Marine motto of “Semper Fidelis” and the Christian commandment, “Love God and your neighbor as yourself.” Hence: Keep the Faith with yourself, God, and your family and friends.

If you’ve ever corresponded with John, you know he signs virtually everything, “Keep the Faith.” I never knew why until John answered my pre-blog questions, so I’m glad I asked.

I think it’s safe to say that John’s greatest joy comes from his family. He truly seems to relish his role as grandfather (to J.T., Lauren, James, Joey, Kathryn, and Victoria) and I know he couldn’t be more proud of his children (John and Beth). John and his sister, Geraldine (known to John as “Red”) run a real estate business together; she has two children and five grandchildren. And incidentally is the only other Geraldine I know of—the other being my mother!

When I was a child, the house across the street from us caught on fire. My father didn’t hesitate: he ran out in his pajamas with his ladder, climbed to the second story bedrooms, and rescued the two women who were trapped up there (the staircase was on fire, they could not get down). That’s exactly the kind of thing I can picture John doing. In fact, John told me that one of his memorable times in Vietnam was putting out a fire in the regimental command structure.

Something I will never forget about John--on September 11, 2001, that horrible day, we were all in our Newton office building when we learned of the events unfolding across the country. John learned that the adult children of one of his good friends were perhaps in the World Trade Center. Despite all the news reports telling people to stay away from New York, John did all that he could to get there. He just HAD to try to help.

I ask myself, is it something IN people like my father and John Ahern that make them want to be Marines, or is that special quality something they learn as they train to become Marines? Dad is gone, but I’m glad to still have John around to look up to and trust that should I require rescue, and it was within his power to do so, he would come with his ladder and save us all.

In his role as the “Commander in Chief” of Compass Securities, John fields a strong team of soldiers (Andria White, Jane Clougherty, and Susan Weschler) as they navigate the complexities of securities compliance rules and regulations. As a Trusted Financial Advisor for Compass Capital, John regularly goes above and beyond the normal role of advisor for his clients and their families.

I am proud to know John, and wish to thank him, his West Point classmates, and all those who serve for doing so. It’s been an honor writing this.

Email Hack Attack? Be Sure to Notify Brokerage Firms and Other Financial Institutions

noreply@blogger.com (Tim_Shanahan) — Wed, 30 Oct 2013 20:56:00 +0000

Anyone who has experienced an email account intrusion or “hacking” knows how frustrating it can be to deal with the aftermath—from telling friends in milder cases that you didn’t send the flurry of bogus emails they received to regaining access to a blocked account. In the most serious cases, a compromised email account can lead not only to identity theft, but also to theft of your money. That’s why one of the most important first steps you should take if your email account has been hacked is to notify your brokerage firm and other financial institutions.

For a quick video from our partner SEI Investments click here

FINRA has received an increasing number of reports involving investor funds being stolen by fraudsters who first gain access to the investor’s email account and then email instructions to the firm to transfer money out of the brokerage account. In addition to issuing a Regulatory Notice to firms, we are issuing this Alert to warn investors about the potential financial consequences of a compromised email account and to provide tips for safeguarding your assets.

How Cons Use Compromised Email Accounts to Wire Money Out of Accounts

The Federal Bureau of Investigation (FBI), Financial Services Information Sharing and Analysis Center (FS-ISAC) and Internet Crime Complaint Center (I3C) recently issued a joint fraud alert describing a similar trend in which hacked email accounts are being used to facilitate wire transfers. These frauds tend to follow a typical pattern. For example, in some of the instances FINRA has seen, the perpetrators appear to have obtained the investor’s brokerage information by accessing the investor’s email account and searching contact lists or emails in the “sent” folder. The fraudster then typically sends an email to the investor’s broker or brokerage firm (using the investor’s personal email account) with instructions to wire funds to a third-party account, often overseas. The instructions may be accompanied or followed by a fraudulent letter of authorization, which also is emailed from the compromised email account.

In some instances, firms have released funds after unsuccessfully attempting to verify emailed instructions by phone. In at least one case, the fraudulent email stressed the urgency of the requested transfer, pressuring the brokerage firm to release the funds before verifying the authenticity of the emailed instructions. As the FBI/FS-ISAC/I3C alert notes, these fraudsters can be quite creative and persuasive with their excuses, fabricating tales of woe involving a death in the family or some grave illness that keeps the investor from contacting the firm via phone or whatever channels the investor ordinarily uses, while seeking the expedited transfer of assets.

How to Spot a Hack Job

Tell-tale signs that you’ve been the victim of an email account intrusion include reports of spam from people in your “contacts” folder or a slew of “bounced” email messages from people you don’t know. You might find that your password or other account settings have been changed—or that your email provider has blocked you from accessing your account. For information on staying safe online, visit the Federal Trade Commission’s Identity Theft and Data Security website as well as I3C at ic3.gov.

What to Do if Your Email Account Gets Hacked

If your email account gets hacked—or if for any reason you think that your personal financial information has been stolen—immediately contact your brokerage firm and other financial institutions, including credit card issuers, to notify them of the problem. You should also notify the credit bureaus to put a fraud alert on your file.

Check your brokerage account for unauthorized transactions—especially withdrawals or wire transfers to an account that is not yours—and ask the firm to investigate if you find any. It will take time to determine what happened, and the firm will likely need your help in identifying anyone who might have access to your account.

In the meantime, be sure to change your username, password and PIN for your financial accounts—and also change your password to your email account. For additional tips on staying safe online, read our alert, Keeping Your Account Secure: Tips for Protecting Your Financial Information. One of the best defenses against hacking is having a subscription to antivirus software that is installed, active and kept up to date.

If a Problem Occurs

If you believe you have been defrauded, please send us a written complaint. And if you suspect that someone you know has been taken in by a scam, be sure to give us that tip. Here's how:

Online:

File a Complaint (for you)
Send a Tip (for others)

Mail or Fax:

FINRA Complaints and Tips
9509 Key West Avenue
Rockville, MD 20850
Fax: (866) 397-3290

The Debt Ceiling Redux: A Time for Calm, Responsible Money Management

noreply@blogger.com (Tim_Shanahan) — Wed, 09 Oct 2013 13:22:00 +0000

SEI Investments shares their Commentary about the debt ceiling issue. The summary is below:

Our View

Neither we nor any of our managers anticipate a long-term default. Things will work out in the end; but as the deadline approaches, increased volatility is expected. The specifics of what happens next are anyone’s guess. It is likely that any agreement on the debt ceiling will be a temporary one. This would allow for additional negotiation and provide a path toward a grander compromise that includes funding of the budget, a debt-ceiling increase for the entire 2014 fiscal year and a modification of the sequester in exchange for entitlement reform. Alternatively, the debt ceiling could be raised without granting a continuing resolution to fund the government. This would avert disaster but maintain the status-quo level of governmental dysfunction. In any event, no responsible politician wants to throw the economy into disarray by allowing a technical default of the government. Memories of the debt-ceiling debacle of 2011 are still too fresh. Click here for the entire Commentary

FINRA Investor Alert - Private Placements: Evaluate the Risks before Placing Them in Your Portfolio

noreply@blogger.com (Tim_Shanahan) — Thu, 26 Sep 2013 17:59:00 +0000

Each year, companies raise billions of dollars selling securities in non-public offerings that are exempt from registration under the federal securities laws. These offerings, known as private placements, can be a key source of capital for American businesses. But investing in them is risky and can tie up your money for a long time

Fraud and Sales Abuses

FINRA uncovered fraud and sales practice abuses related to private placements that resulted in sanctions of firms and individuals for providing private placement memoranda and sales materials to investors that contained inaccurate statements. In addition, some materials omitted information necessary to make informed investment decisions, and some firms failed to conduct an adequate investigation of the issuer to determine if the private placements were suitable for their customers.

What is a Private Placement?

Simply stated, a private placement is an offering of a company's securities that is not registered with the Securities and Exchange Commission (SEC) and is not offered to the public at large.

Many private placements are offered pursuant to Regulation D of the Securities Act of 1933, which specifies the amount of money that can be raised and the type of investor that can be solicited to participate in the offering.

If you are offered an investment in a private placement, you should know that there may be:

Limited information about the issuer and management, and limited financial reporting. The offering document, sometimes called a private placement memorandum or term sheet, likely will contain limited information on the company's business (and may not be provided at all, if the offering is sold only to accredited investors). And since many private placement securities are issued by companies that are not required to file financial reports, you may have problems finding out how the company is doing, and gauging how your private placement is likely to perform over time.

Who Can Invest?

You generally must be an "accredited investor" to invest in a private placement. This means, broadly speaking, that you must have a net worth (excluding your primary residence) of over $1 million—either alone or with a spouse. Or you must have income exceeding $200,000 over each of the last two years ($300,000 with a spouse), along with a reasonable expectation that you will earn the same amount during the current year.

But private placements are not exclusively offered to accredited investors. If you receive information about a private placement and don't meet the net worth or income criteria, you may still be asked to invest as a non-accredited investor. Ask yourself if you can absorb a loss or potentially have your money tied up for a long time. Keep in mind that private placement securities are considered "restricted" securities and cannot be resold without registration or an exemption from registration – features that make them difficult to sell (illiquid) and may negatively impact the price at which you are able to sell them. In addition, the issuer typically does not have an obligation to provide liquidity to investors by buying the securities back when the investor wants to sell.

General Solicitation Landscape Changing Historically, companies that claimed an exemption under Regulation D were prohibited from engaging in general solicitation or using advertising to market securities. The 2012 JOBS Act changed this. In accordance with SEC rules that take effect September 23, 2013, companies are allowed to conduct general solicitation and advertising for Regulation D Rule 506 private security offerings. While the target audience will be accredited investors, the reality is that all investors—whether accredited or not—will likely be exposed to private placement sales pitches and advertising, for instance by Regulation D crowdfunding platforms, as never before.

Private Placement Tips

Follow these tips to determine if a private placement investment is right for you.

Find out as much as you can about the company's business, including the industry in which it operates to make an informed decision. Also ask yourself whether you are comfortable getting limited information for the duration of the investment. Most importantly, understand if, how and when you might liquidate your private placement securities.
Ask your broker what information he or she was able to review about the issuing company and this private placement. Expect your broker to be knowledgeable about any risk factors associated with the company's business, such as other competitors in the company's space, or economic risks specific to the company's business. Risk factors might also include risks associated with the issuing company itself, such as a weak balance sheet, use of leverage or a limited operating history. In addition, your broker should also be familiar with the risks and features of the private placement.
Ask your broker how this investment fits in with the mix of other investments you hold. How does it align with your risk profile? Be extremely wary if you receive paperwork to sign about a private placement without having a personalized discussion with your broker about why such an investment is right for you.
If you are provided with a private placement memorandum or other offering document, carefully review it. Make sure that statements by your broker or in other sale materials are consistent with it. The offering document—and any sales materials associated with the private placement—should be detailed and balanced. If you don't understand them, don't invest. Ask for a copy of the offering document, if one has not been provided to you.
Read the issuing company's Form D, if available on the SEC's EDGAR database. While it contains only limited financial information, it identifies the company's executives and describes other matters that can be valuable. Also contact your state securities regulator for information.
For real estate private placements, ask about the schedule and source of investor distributions. Specifically, find out if the company's income is able to cover those distributions, or if distributions may be made from proceeds from sales of additional shares or borrowings.
For oil and gas private placements, ask what you can expect to receive in return for your investment, and the circumstances that would result in a loss of some or all of your investment. Ask if the issuer has entered into any operational or services agreements with affiliates, since this can add additional costs that may dilute your return. Also ask about the issuer's past performance in prior offerings, and review the map of the proposed well locations for drilling activity, whether successful or not, in the vicinity. Lastly, ask how—and when—you will be informed of the status of the drilling efforts and whether or not audited financials of the issuer or the specific offering will be provided.
Ask whether the private placement is being sold on a conditional or contingency basis. These types of private placements are designed to be concluded only when certain conditions are met, such as a specific dollar amount invested by a given date. If so, there should be specific information regarding whether the proceeds from sales of securities received prior to the contingency being satisfied may be accessed by the issuer. If any specified conditions or contingencies are not met, the offering document should clearly state that investors will be refunded their investment amount. If there are no contingencies, be wary. An offering that may proceed without a minimum level of investments or other conditions could be a red flag, as the issuer can use the proceeds immediately, regardless of the amount raised from other investors.
Be extremely wary of private placements you hear about through spam emails or cold calling. They are very often fraudulent. A legitimate investment salesperson must be properly licensed, and his or her firm must be registered with FINRA, the SEC and a state securities regulator—depending on the type of business the firm conducts. To check the background of a broker or investment adviser, use FINRA's BrokerCheck. If you suspect fraud or believe you are being treated unfairly by a securities professional or firm, File a Complaint with FINRA.
Ask and check. Ask if the investment professional selling the private placement is registered with FINRA or the SEC. Then check to see if this is in fact the case.

Five Tax DON’Ts Before 2014

noreply@blogger.com (Tim_Shanahan) — Tue, 10 Sep 2013 19:12:00 +0000

As we approach 2014, it is time to review the last several months and think about what can be done in an effort to lower your taxes for 2013. Here are five tax tips to consider before year-end.

DON’T forget to maximize your retirement saving contributions
DON’T forget to review where you are with capital gains and losses
DON’T forget to get your charitable donations done by year-end
DON’T forget to consider doing a Roth IRA conversion by December 31, 2013
DON’T forget to bring your tax return if you are planning to meet with your advisor before year-end

For a copy of the entire article prepared by SEI click here