Before Your Clients Write that Tuition Check……

Now is the time of year that many clients are turning to you for advice about financing the jaw-dropping price of college tuition. Study after study confirms that a college education—one of the biggest legal rackets in America today--is still worth the price of admission and stress. But, several of our clients have been telling Forbes, US News and other national media outlets that wherever your child or grandchild attends, it’s important to get a well-rounded education, not just the prerequisites for a high-paying career.

Bottom line: Take courses that actually make you think, write communicate and create. That’s the only way to be adaptable in a constantly changing world.

Mark Rioboli, CFP, CFS  Director of Wealth Management at Independence Advisors  (Wayne, PA) said universities should take a page from Ben Franklin's book and focus on those things that make students “healthy, wealthy, and wise.” College curriculum should consist of nutrition and fitness training “because without health, you have nothing.” Rioboli also told me critical thinking, project management and sales skills are valuable in any career one chooses.  

Anthony Glomski, founder of Los Angeles-based AG Asset Advisory and author of the new book Liquidity and You: A Personal Guide for Tech and Business Entrepreneurs Approaching an Exit agreed. “When speaking with (and recruiting) young graduates, I’ve found their basic skills are not as far along as I’d like to see, especially reading, writing, organization, and attention to detail. Any degree that emphasizes those skills will add a lot of value in the job market. In a world in which everything is driven by artificial intelligence, the one thing we know that is irreplaceable is the human connection. Degrees that help student develop traits that strengthen human connections are going to be value in their careers,” added Glomski.

Blake Christian, CPA Partner at HCVT in Long Beach, CA said a student’s focus for the first two years should be on “a solid foundation that will help him or her regardless of major--basic finance, accounting and budgeting, for example. Who doesn’t benefit from those skills both personally and professionally?” asked Christian. He is also a strong advocate of business and technical writing, along with verbal communication. “When it comes to writing a business plan, even liberal and creative artists will have a more solid financial footing with a class or two in these subjects,” maintained Christian, author of the new book, Benefits of Becoming A CPA-Preneur.

Glomski, an undergrad accounting major, said he benefitted greatly from the liberal arts courses he took. For instance, “philosophy went really deep, which helped me in developing personal relations. Economics and other social sciences will always be applicable and accounting was invaluable. Sure, accounting is becoming increasingly automated, but it’s priceless training learning how to understand the mechanics and backbone of any business,” Glomski related.

Before junior year, Christian strongly recommends that students do an internship in their chosen field, along with an aptitude tests and counseling to ensure that the student “really wants to go down that path and has the general skills and drive.” 

“How do you teach wisdom?” asked Rioboli. “I suggest starting with meditation and all the principles in emotional intelligence 2.0 by Travis Bradberry, Travis and Jean Greaves.”

Also consider Top 10 Life Advice Comments for Millennials by our client, Matt Topley, chief investment officer of Fortis Wealth in Valley Forge, PA.

Conclusion

Glomski said adaptability is the key ingredient for career success today. “It’s likely you’ll get of out college and be in a career for five to seven years, and then you’ll be in a completely different career. What prepares you for that?”

#college tuition #careeradvice #liberal arts #tuition ROI 

Anthony Glomski, AG Asset Advisory, Blake Christian, HCVT, Mark Rioboli, Independence Advisors, Matt Topley, Fortis Wealth

Estate Planning Myths and Misconceptions

Now is the time of year when extended families get together at the beach, lake, mountains or national parks. While the focus is on meals, family bonding and R&R, it’s also a good time to get the ball moving about those sensitive estate planning issues.

According to my friend Valentino Sabuco, founder of The Financial Awareness Foundation, half of the U.S. adult population has NO financial, estate or gift plan. As most of you know, estate planning is not just for the wealthy or elderly. It’s essential for anyone who wants to make their own decisions about their assets and their heirs—rather than the government making it for them.

I don’t have to remind you that estate planning is not only a touchy subject; it’s complex and often misunderstood. In response, several of our clients have been speaking to the national media recently about estate planning myths and misconceptions that frequently trip successful families up.

With the significant increase in the lifetime exemption under the 2017 tax act ($11.2 million per spouse in 2018), our client, Blake Christian, CPA said even many affluent taxpayers do not believe estate planning is truly necessary. “Nothing could be further from the truth,” said Christian, a partner of HCVT in Long Beach, CA. “Even for the 99 percent who will never pay estate tax, estate planning is very necessary for numerous reasons, including:

1) Avoiding the probate process.
2) Asset protection.
3) Simplifying mixed-family complexities associated with divorce, blended families and common-law marriage situations.
4) Titling assets properly can also make the difference between getting a full or partial step-up in an asset's tax basis for the heirs.

5) Making sure your assets are distributed correctly to provide your heirs with sufficient after-tax income after you are gone,” added Christian. 

According to our client, Mark A. Rioboli, CFP®, CFS, director of wealth management at Wayne, PA-based Independence Advisors, “The misconception is that if you have a will, it controls everything. In reality, it only controls the assets in your own name.” 

*** NOTE: HB clients Anthony Glosmki, Molly Grubb and I will be speaking about advanced planning topics at the Accounting & Finance Show in NYC this week at the Javits Center. More than 2,000 attendees and 200 speakers are expected. Stop by if you are in the Big Apple.

Our client, James Nevers, an advisor at Soundmark Wealth near Seattle, WA agreed. He said it’s a common mistake to believe that if you have a Will, you don’t need to worry about your beneficiary designations on retirement accounts. “I manage several 401(k) plans for medical groups. When I provide participant education to their staffs, I tell them the same story every time we meet – ‘If your primary beneficiary designation on your retirement accounts says your ex-spouse, then all your hard-earned savings in your 401(k) is coming to your ex-spouse, regardless of what your Will states.’”

According to Nevers, you should also check to see if a minor child is listed as a beneficiary. “I don’t know many 8 year-olds who can responsibly manage $100,000. Nor do I know anyone who wants their ex-spouse to get one more penny than they’ve already received,” added Nevers. “Beneficiary designations supersede your will – simple as that.  I advise everyone to consult with their estate attorney about who they should designate, whether it is their spouse, a trust, or another individual.”

Conclusion
As Benjamin Franklin famously said, "Failing to plan is planning to fail." Don’t let that happen to you and your clients. Hope to see you at the Accounting & Finance Show on July 11th and 12th.

TAGS:  Mark Rioboli, Independence Advisors, Blake Christian, HCVT, James Nevers, Soundmark Wealth, NYC Accounting & Finance Show, Valentino Sabuco, The Financial Awareness Foundation

DOL Fiduciary Rule Overturned (Again)

Are you surprised?

As most of you know by now, a federal appeals court vacated the fiduciary rule late last week. On the surface, the decision was a setback for consumers, investors and their advocates and it was a win the broker/dealers, insurers and others in the financial product sales arena who’ve been increasingly under pressure to recommend investments that benefit their clients before themselves.

“It’s definitely a step backward, especially since the rest of the world is moving toward the fiduciary standard,” said our client, Kyle Walters, a partner of L&H CPAs in Dallas. “It’s like the Paris Climate Agreement in which the U.S. was the only major country in the developed world not to sign on.”

Another of HB client, Blake Christian, CPA, said the overturning of the Fiduciary Rule is a concern for larger investors who have significant dollars under management. “There are many games being played with respect to bond pricing, fund fee structures, annuities, Master Limited Partnerships and other investments,” observed Christian, a partner at Long Beach California-based HCVT. “There are a select number of investment advisors who already adopted the Fiduciary Rule before the old rule (now overturned) became mandatory.  These firms will likely leave their voluntary rules in place.”

Since the Fiduciary Rule provides investors with assurance that the investment advisor will be acting on the customer's behalf rather than on behalf of their firm, “there is less likelihood of self-dealing, conflicts and being directed to high-fee investments,” added Christian.

Michael Kitces, CFP, author of the popular Nerd’s Eye View blog, concluded that ultimately, “it’s not about the ‘right’ standard — suitability versus fiduciary — to apply across financial advisors and the brokerage industry. It’s about recognizing that brokers and annuity agents fulfill a sales role that is functionally different than actual advisors.” Job titles and disclosures should accurately reflect the nature of those relationships, Kitces added.

Once the distinction between advice and sales is truly clear, let consumers make their choice, Kitces argued, adding that there are times when the public just wants to talk to a salesperson to help them effect a sales transaction. “After all, when I walk into a clothing store in the mall, I’m not looking for a personal fashion consultant; sometimes I just want a salesperson to help me complete the process of buying what I want, and giving me the relevant product information I need to make the decision,” quipped Kitces.

“As I mentioned earlier, this ruling is definitely a step backward at a time when the industry needs to be moving toward being an advice industry,” noted Walters. “That’s where everything is going one way or the other. I’m not sure how big the impact will be since clients are becoming better educated. Whether [the fiduciary standard] is required or not, clients are asking the right questions of their advisors. If you’re an advisor of any kind, that’s not something you can hide from,” warned Walters.

HB client Pat Runyen, of Valley Forge, Pennsylvania-based Independence Advisors, said it will be hard to determine what will happen long-term if the fiduciary standard dies for good. “Many large brokerage firms already have begun to roll out changes to comply with the rules, and plan to keep some or all of these changes regardless of what happens. My best guess is if the rules go away, the affected firms will likely go back to operating under the ‘suitability’ standard given the lucrative incentives.”

Runyen believes this will ultimately be a “net positive” for individual investors over the long-term given the awareness it has raised. “Since last year, many new clients I’ve met with will ask if I’m held to a fiduciary standard (yes). Before that, no one asked such a question. Many CPAs have told me they’ve been asked the same question,” added Runyen.

Walters agreed with Runyen. “As clients get better educated, they can make the fiduciary standard a priority when choosing who to work with. It doesn’t matter from a legality standpoint. They’re going to vote with their feet.”

According to Christian, those who are acting in a trustee or administrator role will be wise to deal with investment firms that continue to operate under the Fiduciary Rule provisions.  “This will offer the trustee/ administrator added protection if a contingent beneficiary or other interested party brings an action against trustee/ administrator,” added Christian. 

Conclusion

Our Take—as always, the best educated consumers—and the most ethical advisors—will find each other eventually and they’ll win in the end.

TAGS, Kyle Walters, Michael Kitces, Pat Runyen, Blake Christian, L&H CPAs, Nerd’s Eye View, Independence Advisors, HCVT

*** Take our Insta-Poll and see how you stack up to your peers.

Protect Yourself from the Equi-Lax Data Breach

Early in my courtship with my wife, I spent many chilly, rainy evenings in Manhattan, standing in long lines outside art-house cinemas to see quirky foreign films I really didn’t want to see. Those black-and-white flicks were usually in French or Italian, with inaccurate subtitles and typically heavy on relationship issues and light on action. Oy!

Speaking of paying for things we don’t really want (and little action), that’s how Equifax and the other credit bureaus have long treated the millions of consumers whose personal financial data and credit history it collects, hordes and sells without our knowledge. Then they have the nerve to put the burden on us to correct the data they have inaccurately compiled about us and charge us to block/freeze others from having access to it.

Equifax announced last week that up to 143 million people may have had their Social Security numbers and other data stolen by hackers. Those hackers are almost as unscrupulous as the Equifax execs who sold millions of dollars’ worth of Equifax company stock, just before the massive data breach was announced.

It’s just a hot mess that keeps building on itself. However, most consumers don’t have time to be furious because they’re too concerned about protecting their personal financial data.

As New York Times columnist, Ron Lieber noted in his recent column, “some people are waiting until the middle of the night to try to use Equifax’s security freeze website and even failing then to get through. It’s like trying to get Bruce Springsteen tickets, except nobody wants to see this particular show,” quipped Lieber.

We know many of you have been counseling clients about what to do if they suspect their social security numbers, credit history and other personal financial data has been compromised.

Here are some tips from our clients, Independence Advisors in Valley Forge, PA and Soundmark Wealth Management in Kirkland, WA.

From the Soundmark Wealth blog:

1. Select the “Check Potential Impact” button on the Equifax website to see if your personal information was compromised.
2. Monitor all financial accounts and report any suspicious activity.
3. Consider a credit freeze.
4. Sign up for the TrustedID Premier free credit file monitoring Equifax is providing at this time.
5. Return on the provided date to finish enrollment in the free credit monitoring program.

From the Independent Thought blog:

• Check your credit reports.  You are eligible for 3 free credit reports per year.  Visit www.annualcreditreport.com to view the reports.  Accounts or activity that you don’t recognize could be an indication of identity theft.  If you think you’re a victim, visit www.identitytheft.gov to find out what steps to take.
• Consider placing a credit freeze on your files. A credit freeze makes it harder for someone to open a new account in your name, but won’t prevent a thief from impacting an existing account.
• Monitor existing credit card and bank accounts closely.
• Consider placing a fraud alert on your files. A fraud alert warns creditors that you may be an identity theft victim, and requires them to verify that anyone seeking credit in your name is actually YOU!
• Hire a credit monitoring service. LifeLock or American Express’s Credit Secure service are worth considering.

*** NOTE: Please help The Financial Awareness Association with Wealth Advisor Confidence Survey in light of recent natural disasters, Equifax breach, North Korea nukes and revolving door White House.

Conclusion

Eventually Equifax will be punished and consumer privacy rights will be taken more seriously by all the credit bureaus and the Senate Cybersecurity Caucus, among other watchdog groups. But it will take months or years for real reform to take place. In the meantime, be proactive. Follow the suggestions from our clients above. Better safe than sorry. If you’re lucky, you’ll have enough left in your bank account to attend a Springsteen concert.

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TAGS: Equifax breach, Ron Lieber, Independence Advisors, Soundmark Wealth Management

Saluting Great Work by HB Clients

This month marks the 6^th anniversary of the Association Adviser media channel that we created for Naylor, LLC in 2010. What began as a monthly eNewsletter for Naylor’s 11,000 trade association clients and prospects, has morphed into a robust website, blog, social media platform, web TV channel and annual industry benchmarking study with over 1,000 executive directors and CEOs taking part. During that time, Naylor has acquired an event management company, an online career center provider, an association management software company and an online learning solutions company. As Naylor has grown and evolved over the past half dozen years, we’ve been privileged to grow along with it.

But, Naylor isn’t the only HB client evolving and doing great work. In January, we helped Gary Klaben of Chicago-based Coyle Financial Counsel launch his third video blog, Grown Up Money, just for millennials and celebrated our third year helping Wayne, Pennsylvania-based Independence Advisors produce its Independent Thought blog. Meanwhile, Rochester-based Professional Financial Strategies recently launched a new website with a robust video and white paper library. Stephen Haidt, founder of Mobile, Alabama-based Retirement Advisors, Inc. has a new e-book, The Retirement Answer downloadable on his website. 

Paul Carroll, founder of Houston-based Efficient Wealth Management has a new financial planning eBook for United Airlines pilots. Christi Staib of Silver Sail Wealth Management, has a new e-book addressing the financial needs of widows and divorcees and Irvin Schorsch of Pennsylvania Capital Management has a forthcoming book, Reinventing Wealth: More Money, More Memories and More Meaning.

Conclusion

Keep up the great work. Don’t be shy about sharing your personal story, expertise and leadership philosophy with the rest of the world. You never know who might be reading or tuning in.

Our blog and website have more about this and related topics.

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TAGS: Coyle Financial Counsel, Professional Financial Strategies, Independence Advisors, Retirement Advisors Inc

Manage the talent, not the job description

Many of you are lamenting that you can’t keep up with all the new business that’s come in recently. If you’re expecting us to say admiringly, “That’s a nice problem to have,” then think again. Chances are, you’re not keeping up with the client promises you’ve made; you’re team’s getting burned out; you’re not scaling up to take on bigger and higher profile clients; and you’re probably losing opportunities to firms with deeper bench strength. Still think that’s a nice problem to have? If you stopped hiring and interviewing prospects during the downturn and you weren’t developing your staff and knowledge base internally during those dark days of 2008-2010, then you may be playing a dangerous game of catch-up just when the demand cycle is on overdrive.

Zero turnover in six years
I recently interviewed Stephanie Drake, head of the American Hospital Association in Chicago. A human resource professional by training, Drake told me she manages talent, not job descriptions. “The person who manages our publications also handles all of our finances,” she said. “That person has a unique skill set that you can’t interview for. I want people to do their best work and utilize as many of their talents or interests as they can.”

Does this approach work? Drake’s had had no voluntary turnover in the six-plus years she’s been at the helm. That’s right, zero turnover. Drake shared another example: “Suppose you’re a marketing person and you’re interested in conference planning even though you’ve never done it before. We’ll encourage you to shadow someone in our conference planning group and try it out and see if it’s a good fit for you.”

Charles Boinske, founder of Independence Advisors  in Wayne, PA agreed. “Team development is critical. Educate them. Provide them with learning opportunities. Doing so will increase your firm’s knowledge base and lead to better results for your clients and more satisfied team members,” said Boinske, a new client of ours.

Now if you’re really committed to exponential growth, not just a few percentage points every year, then Gary Klaben, Family Manager of our client Coyle Financial Counsel in Chicago, said the kind of people you have on the team will be attracted by a “10x” growth philosophy as well. “They’re going to be more alert, responsive and curious. And they’re going to take ownership of the business. That’s very important in wealth advisory services because there are so many moving parts and things going on that we need folks to be looking out for the best interests of the business. It’s not just a job.”

Never stop innovating

AHA’s Drake said her organization is willing to try anything at least once to see what happens. “If it serves a member need and has the potential for positive ROI, then we’ll give it a try. Our new HR professional certification program is an example of that [philosophy]” she said.  Boinske agreed that you should never stop innovating.  “I tell my staff, ‘If we don’t fail periodically then, we aren't trying hard enough.’ Keep a logbook of your successes and failures and celebrate both.”

According to Klaben, if you really want to create exponential growth in your business, then you have to “pull the future toward you by embracing technology and change.”

Conclusion

Get your team invested in the business, not just in promotions, new job titles and bonuses. The more they feel like stakeholders in the business and less like employees, the more likely they’ll go the extra mile for you and help you bring in, develop and retain like-minded high achievers.

It’s Monday. Let’s get to work. Time to bring in all those great opportunities that you and your team deserve.

There's more on the FREE Resources page of our website.

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Tags: Manage the talent not the job description, Stephanie Drake, American Hospital Association, Gary Klaben, Coyle Financial Counsel, Charles Boinske, Independence Advisors