UPDATE: 2 Lewisburg financial planners to offer free advice to Wood-Mode employees

SUNBURY — City attorney Joel Wiest will meet with former Wood-Mode employees and their families at 7 p.m. Thursday at the Shikellamy High School gymnasium, but they’ll have some company.

Two Lewisburg area financial planners are donating their services to the nearly 1,000 people who lost their jobs Monday.

John M. Machak, an investment advisor from The Wealth Factory in Lewisburg, said he wants to help employees work through the difficult time.

“I was moved by Attorney Wiest offering free legal advice to the employees of Wood-mode and I would also like to help out during this difficult time and offer financial planning services to those employees free of charge,” Machak said. “I can provide financial counseling, help plan a strategy, map out priorities, analyze cash flow and perhaps most importantly prepare a survival budget. Facing a sudden job loss with a plan can lower stress and make coping with it much easier.”

Joshua Knauss, founder and CEO of Omniwealth Group, said was surprised by the decision, particularly “the abruptness of the announcement and the lack of notice for their employees.” 

“These individuals are dealing with a tough blow and I feel obligated to help in any way I can,” Knauss said. “I am offering financial counsel, pro bono, to any affected employees to help them navigate this sudden transition and avoid any rash and harmful financial decisions in the process. Clearly many of these individuals are coping with shock, both emotional and financial, which can be disorienting. The loss of a job is disruptive, but it doesn’t have to derail financial plans or severely alter your goals. Sound advice can be invaluable during times like these. We want to use our expertise and experience to help people navigate this transition well.”

Furloughed employees will be invited to discuss any potential legal matters concerning the sudden closure of the Snyder County custom cabinetry manufacturer tonight in Sunbury.

“I want to thank everyone who offered venues for this,” Wiest said. “This shows our community can and does come together in times of stress and need and I want to thank the Shikellamy Area School District for the use of the building.”

Wiest’s offer to answer any legal questions from the affected employees and their families first came Tuesday night. At the time, he explained he’s not certain about what legal options are open to the employees but said he could help them properly file any legal paperwork or offer guidance on related issues.

“I have been flooded with calls and emails since Tuesday and I just want to make sure everyone knows there are people that care,” Wiest said. “We will do the best we can to get everyone heard and see what we can offer to them.”

Wiest said he is also creating a social media page for employees to speak with him.

The Academy of Home Equity in Financial Planning focuses on smart use of housing wealth

As defined benefit plans and pensions become a thing of the past, researchers continue to extoll home equity’s critical role in retirement income planning.

For some time, a group of academics and financial planning professionals have sought to spread that message, forming the Funding Longevity Task Force to drive this mission and working in partnership with the American College of Financial Services.

Now, that task force has a new name and a new academic institution to back it.

As the newly minted Academy of Home Equity in Financial Planning, the team now has a home at the University of Illinois at Urbana-Champaign.

Jamie Hopkins, director of Retirement Research at Carson Group and a long-standing member of the group, said the name change represents a more finely tuned mission.

“The name change isn’t just a name change, it’s a commitment to the future. A Task Force – which implies a temporary effort – to an Academy – which should be a more sustainable and long-standing initiative,” Hopkins said.

“The University of Illinois support also provides additional academic independence and credibility to the mission,” he added. “It is amazing to see the work of this group evolve and continue to shape best practices and research in the housing wealth and retirement arena.”

Craig Lemoine, director of the financial planning program at the University of Illinois, will be guiding the team.

“Our mission in the year ahead is to continue promoting scholarship in the areas of home equity, retirement sustainability and aging in place,” Lemoine said. “We hope to measure financial service professional’s understanding of these issues and over time develop content that will help both advisers and consumers.”

Lemoine added that exploring home equity use is critical because a person’s housing needs evolve as they age.

“And with that are questions of sustainability,” he said. “If we age in place, do we have resources to help cover additional costs? Understanding options surrounding home equity strengthen retirement conversations.”

In addition to Lemoine, Karin Hill, a longtime reverse mortgage policy advisor with the U.S. Department of Housing and Urban Development, will join the academy.

Hopkins said Hill is a welcome addition to the team.

“Karin Hill has years of impactful work at HUD,” he said. “She really did shape a lot of the regulations and best practices we have today from the government side.”

Founded in 2012 by Synergy One Lending President and CEO Torrey Larsen and Longevity View Associates Principal Shelley Giordano, the original task force included a slew of well-respected experts, Ivy League degrees and PhDs abound.

It worked to advance research on reverse mortgages by publishing content about the role housing wealth can play in retirement, promoting research illustrating the benefits of its use, giving interviews as subject matter experts to media outlets and speaking at industry events.

Now, the newly named academy, which has retained many of its members, will work on publishing its own research as a group, which will focus on the use of housing wealth and retirement.

“It is about raising the level of professional practice of financial advisors and housing experts. It is also so important that these two very separate industries and professions come together to support retirement security,” Hopkins said.

“Unfortunately, there is a lot of work to do as many in financial services are not yet willing to embrace incorporating housing wealth, reverse mortgages, and more traditional mortgage strategies into planning,” he added.


Goldman Sachs buys United Capital

The once upstart RIA business just raised its game — big time.

Following increasingly larger investments by major private equity firms and last year’s successful Focus Financial Partners’ IPO, the industry can now claim the ultimate establishment endorsement: the sale of one of its pioneer aggregators, United Capital, to one of Wall Street’s most storied firms, Goldman Sachs.

Goldman is buying United for $750 million in cash, the company announced today. United has approximately $25 billion in AUM, $230 million in revenue and close to 100 offices around the country. It also owns the FinLife CX digital platform and financial planning software offering. The transaction is expected to close in the third quarter, subject to regulatory approvals.

Financial Planning reported in January that United CEO and founder Joe Duran began the sales process that month by hiring New York investment banker Moelis Company and reported in April that Goldman had emerged as one of the final bidders.

Acquiring United will help Goldman accelerate its “long-term strategy to offer clients solutions across the wealth spectrum” by “broadening [the bank’s] reach,” Goldman CEO David Solomon said in a statement. Duran “will join” Goldman as part of the transaction, the company said in its announcement of the deal.

“This is a huge validation for the RIA industry,” says Karl Heckenberg, CEO of Fiduciary Network, another large aggregator, which has combined assets of more than $40 million. “It’s very exciting because you have a very respected firm, that’s not in private equity, who sees value in the space coming in with a long-term strategy.”

Industry analyst Chip Roame agrees.

“This is a big deal,” says Roame, managing partner of Tiburon Strategic Partners. “Private equity firms have paid more for advisory firms and Focus went public for more money. But this deal is important because United, which at its core is an aggregator, is being acquired by a prominent strategic buyer, not a private equity buyer.”

United appears to be a good fit for Goldman, which has made no bones about wanting to expand further into the mass-affluent market under the leadership of Solomon, who became CEO of the bank last October.

On an earnings call in April, Solomon said Goldman intended to “pursue partnerships to engage the mass market.” CFO Stephen Scherr pointedly noted that “very large” market has $9 trillion “across more than 20 million U.S. households.”

Goldman already owns Ayco, a Saratoga Springs, New York-based RIA which specializes in compensation packages and financial planning for Fortune 500 executives through HR departments. Ayco has around $35 billion in AUM, according to the firm’s SEC Form ADV.

Three years ago, the Wall Street giant launched Marcus by Goldman Sachs, its online bank offering loans and savings accounts to mass-affluent customers. Marcus now has $35 billion in deposits, the company says.

Goldman has also acquired several personal finance apps and is the bank behind Apple’s new credit card. And in March, Goldman snapped up Standard Poor’s Investment Advisory Services, a $33 billion model portfolio business that is expected to incorporate Goldman funds in the customized portfolios it sells to the mass-affluent market.

Industry executives expect Goldman to cross-sell the firm’s in-house products on United’s distribution platform.

“They will absolutely cross-sell, it’s just a matter of disclosure,” says one former Goldman executive now working in the RIA business. “It’s less a matter of if they will cross-sell than how transparent they will be.”

MarketCounsel CEO Brian Hamburger says cross-selling and transparency will become increasingly important issues in the RIA business.

“That’s the biggest part of the story,” Hamburger says, “There will be a great divide among RIAs.”

Some firms will take on investments with perceived conflicts of interest, while others will strive to maintain a conflict-free profile, he explains. “Clients will become far more interested in disclosure brochures so they can identify which firms are truly aligned with their interests,” according to Hamburger.

Industry analyst Jamie McLaughlin is more sanguine.

“Very, very few of United Capital’s predominantly mass-affluent clients would be eligible for Goldman products, particularly alternative investments,” McLaughlin says. “There’s very little product distribution opportunity for Goldman with this acquisition.”

Overall, Pirker believes United “fits beautifully” into Goldman’s mass-affluent plans.

“United’s scalable advice service is made for growth,” Pirker says. “It’s just a matter of capital and Goldman Sachs has plenty of capital. The big question is cultural fit. Independent advisors are at the opposite end of the spectrum from Wall Street bankers.”

Was the deal worth it for Goldman?

A sale price of $750 million means United’s multiple would be near 18 times EBITDA, certainly on the high end of recent valuations.

But MA observers have noted the scarcity value of an RIA with $25 billion in AUM. “There are not a lot of platforms of that size that come on the market,” investment banker Liz Nesvold said last month during the bidding war for United.

Industry executives have also noted that Goldman has the potential to recoup some of its purchase price — and lower its multiple — by bringing the assets United has with custodians in-house.

The sweep from United client accounts, now parked in cash, could be profitably lent out by Goldman, possibly resulting in substantial additional revenue for Goldman.

“The cash sweep is a nice foundation for further growth,” Pirker says.

Looking ahead, advisors may want to keep in mind what Goldman executives told shareholders after the Wall Street bank launched Marcus: “[We] are uniquely positioned to be a disrupter in consumer finance.”

Charles Paikert

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How To Get The Best Gay Financial Planning Advice

How to get the best LGBT financial planning advice.  If you are lucky enough to be part of the LGBTQ+ community, a Gay Financial Planner just might be the best for your financial future. I’m going to use Gay Financial Planner and Gay Financial planning but know we are including the entire spectrum of the Queer Communities financial advice needs in this conversation.

Why not make financial planning fun and fabulous. Take Pride in your money. (Photo by Diane Bondareff/Invision for Greater Fort Lauderdale Convention Visitors Bureau/AP Images)

Invision for Greater Fort Lauderdale Convention Visitors Burea


You are Fabulous, and Your Financial Planning Should Be Too!

I won’t eat at Chic-Filet because I don’t like fried food. I encourage people not to eat at Chic-Filet because of their anti-gay corporate policies.  If you agree with some of this gay boycott, why would you spend your financial planning dollars with an advisor who is not part of the Queer Community, or at the very least supportive of it?

When looking at demographics the truth is the overall financial advice industry- my industry- tends to be older, is less likely to be of color, and skews more socially conservative as a group that the overall U.S. population.

As a gay financial planner, working in West Hollywood, not many of my clients are Trump supporters.  All the same, I would be remiss if I didn’t point out I have no idea of your financial advisor is a Trump supporter or not.  For that matter, just because someone is wearing a #MAGA hat, it doesn’t necessarily mean that they are a homophobe or anti-gay.   However, it would be fair to be concerned about this possibility.   As a group the gay community can vote with our dollars and our wallets, so why not Queer Eye your money- and work with a Queer Financial Planner?

What difference does sexual orientation or gender identity make when it comes to financial planning?   To put it as simply as possible, the way you choose to spend your money and live your lives has everything to do who you are and how you live. Not to mention your career paths and even where you choose to live and retire.  If someone has is repulsed by you and your choice of a mate, how can you expect them to give you the very best financial advice possible?

The Queer Eye guys Bobby Berk, Tan France, Jonathan Van Ness, and Antoni Porowski can clean up your home, and Queer Financial Planner can clean up your financial life. (Photo By Tom Williams/CQ Roll Call)


1 – The Queer Eye of a Gay Financial Planner


Over the years when I’ve attended a financial industry event, I’ve been reminded how conservative many in the financial advice industry are.  They may be nice people, but they not likely my people.  Some of this just boils down to age, or place in life.   I love kids, but I’m not a parent for example.  Further, I’d rather discuss Hamilton or Dear Evan Hansen (or any other Broadway musical) as opposed to Gold or Shooting things or fishing.  Not trying to be stereotypical here, but I like what I like.  I can discuss sports, but I spent way too much time as a child watching pro-football games when my Dad was playing. (Mike Rae -USC, Raiders, Redskins).

Sadly, in light of the #metoo movement, many females I’ve spoken with have described their family’s financial person as creepy.  Not exactly a skill you should be looking for in a person you want to help you get your financial house in order and make like changing financial choices.

While not all in the gay community are democrats or liberal, as a group we do tend to skew this direction.   A gay financial expert is more likely to share your political and social views and values.  You may ask, is this all important?  Plain and simply YES.  It boils down to empathy and trust.  In the political climate of Trump, it can be extremely difficult to trust someone or feeling empathy for – or in turn, receive empathy or be trust by- someone with a vastly different political view of the world.

Gay, straight or otherwise you should only hire a financial planner that you can trust .  The truth is that many in the Queer Community have found it easier to trust another member of the community.  This is no different from women looking for a female advisor, for example.

Related: From Pride to Fabulous Queer Financial Priorities

Can you afford a wig collection like Moira? Or are you one missed paycheck away from having to move to Schitt$ Creek yourself? (L-R) Co-creator/Executive producer/Actor Daniel Levy, actors Catherine O’Hara and Annie Murphy, and co-creator/executive producer/actor Eugene Levy of ‘Schitt’s Creek’ speak onstage during the POPTV portion of the 2018 Winter Television Critics Association Press Tour at The Langham Huntington, Pasadena on January 14, 2018 in Pasadena, California. (Photo by Frederick M. Brown/Getty Images)


2 The Gay Lifestyle and What It Means for Your Financial Plan

Homophobia is alive and well even today in 2019.  I’d love to live in a city like the one on Schitt$ Creek where homophobia is not even a thing.  I do feel comfortable walking down the street in Los Angeles, but I will tell you there is still anti-gay sentiment here.

I’ve known many same-sex couples who have been afraid to come out to their financial advisors over the years. You are entrusting your financial life to this person, with the hope that they can lead you to LGBT financial freedom, but you don’t trust them enough to come out to them?  If you omit this major part of your life, they won’t have all the information necessary to help you accomplish your most important financial goals.

A few times over the years I’ve reviewed comprehensive written financial plans where the sex of the second spouse was changed to cover the fact that this was a same-sex couple. The will lead to two huge problems down the road:

1)  The dreams of both partners were not included in this Financial Plan.  Financial Planning for couples (gay or straight) is not a solo sport.  Also, how committed will you be to a financial plan that you were not part of crafting? Not much I’d guess.

2) The queer community does have our own financial planning needs and goals.   Think of things like unique health care needs. Not to mention that life expectancy is quite different if a couple is two women, versus two men.  The difference may not seem dramatic now but can prove quite sizable over time.

Don’t get burned, with less than fiduciary financial advice. Gay straight or otherwise.


Essential Checklist for a Gay Financial Plan

How to choose the best gay financial planner. This may be one of the more important choices you will make as a real-life adult. Here is what you should be looking for.

  • Seek out a financial advisor that provides the services and advice that you need to help you accomplish your specific life and financial goals. This person may be down the street or across the country.  With technology, you don’t always need to see your financial person face to face.  We help clients across the country and around the world.
  • Do your wallet a favor and upgrade to a person who actually does comprehensive financial planning. Don’t waste your time with someone who just gets paid by selling investments, annuities or Life insurance products.
  • Make sure to look for professional designations like Certified Financial Planner™and Accredited Investment Fiduciary™.   I mean really, would you want a ‘doctor’ who didn’t go to med school?
  • It is imperative that your financial planner works on the Fiduciary Standard. This will mean that they are obligated to put your financial best interests before their own and must offer unbiased advice. Want to know if they are working under the fiduciary standard? Just ask.
  • While age is just a number, if you are approaching retirement, you may also want to consider your advisor’s age. When an advisor is much older than you, will they still be working when you need them most in the later years of your own retirement? If not, is there a younger partner in place to assure seamless succession? No one wants to look for another financial advisor when they are eighty years old.

Congrats on reading to the bottom of this post.   Take some time and think about your current financial advisor, if you have one, and do they measure up to as a fabulously gay financial planner?   If the answer is anything but a resounding yes, do yourself and favor and upgrade.  Let a Queer Eye maximize your money. At the very least it should make the road to financial freedom a bit more fun.

What Steps Are You Going To Take To Improve Your Finances Today?


Financial Planning for a Baby: What It Costs to Raise a Child

A new report from the U.S. Department of Agriculture states parents planning on raising a child should expect to spend an extra $14,000 dollars or more a year.

The cost of raising a child includes everything from the price of food, housing, transportation, health care, miscellaneous goods and services, and what the government calls “child-specific expenditures”. Those include clothing, childcare, and education.

The report also estimates a cost of $233,610 to raise a child from birth all the way through age 17. This doesn’t include the costs of a college education.

Fox 13’s Max Roth sat down with Gary Gygi from Gygi Capital Management to get an idea of what it costs to raise a child in Utah and what future parents should be aware of beforehand.

Watch the video above for more information.

Raymond James, Silver Lane Advisors Liz Nesvold on RIA engagement

Q: Where can advisors benefit the most from leading technology?

LIZ NESVOLD: It’s a difficult question because honestly there are advisors who aren’t taking advantage of the tools that are available today. A lot of advisors haven’t reinvested, or haven’t embraced the fact that they don’t need to use legacy systems anymore. This is a community that really started and evolved in the ‘70s and ‘80s, so it’s an aging community. Not everyone has embraced the latest and greatest. It’s a community that is very staid.

What will help aging advisors warm up to some of the tools available today?

The first time the community started to sweat technology was with the introduction of the robo advisor. Our view back in 2015 was that the direct-to-consumer firms were not going to go the way of the Dodo bird, but it would be no different when Internet banks came on the scene. The larger banks finally came to the conclusion that they were going to build the technology themselves and in 90 days had amassed the same amount of assets. So, it’s one of those things.

What do we see in the future? There will be a changing dynamic and advisors will start paying attention. There’s a whole series of digital innovation that will be powering the advisor. It’s not about robos changing the business model anymore; it’s about how tech will empower the advisor. The old guard is quickly learning to think differently about tech.

“The old guard is quickly learning to think differently about tech,” says Liz Nesvold, managing partner at Silver Lane Advisors.

The face of the client is changing — whether the community appreciates it or not. The clients that firms are doing business with today are not the same people who are going to control the assets in the next 10 to 15 years. It’s going to be millennials and you have to interact with them sooner or later. A lot of the community, although not exactly the vast majority, are beginning to pay attention.

What’s holding independent firms back?

I call it terminal velocity. Invariably, firms get to a point where they have done what they can to grow as far as they can and have hit a wall. The firms that have come on the scene have benefitted so much from innovation. In the last decade, firms have been very comfortable with that kind of evolution and making switches and making changes if they’re unhappy. The older firms of the ‘70s, ‘80 and ‘90s that have been around a disproportionate share of new technology will be the same old, same old, in terms of their size. It becomes harder for them to get around making a change — switching custodians or moving to a new CRM — just because there is a lack of comfort with the digital side. A lot of those firms have a lack of comfort with digitization and are not creating new workflows that are incorporating the technology as solutions.

How are tech providers trying to up the level of adoption, especially for an aging workforce?

The fintech has to be at the top of its game. There are popular tech platforms that will become dinosaurs because the end consumer isn’t forcing them to continue to evolve. These are the firms that will probably be acquired — without saying names. They will be on the block at some point. Then, there are firms forcing innovation and consolidation in the fintech industry. Firms will innovate or not. Be the acquirer or the acquiree.

The truth is you have an advisor community that approaches clients differently. Everyone doesn’t approach the business in the same way. Some are investment-only and focus on performance tools. Others want the best financial planning software. This forces the vendors to stay on top of their game. It’s when we get lazy as an industry that innovation slows down.

What is the single, greatest danger for RIAs?

Not everyone is on their game in terms of cybersecurity and that will matter significantly more in the coming years. There are firms with these great platforms that are growing aggressively and all the sudden you realize they’ve been a victim of spear-phishing attack.

These are things that are just under the radar screen and advisors are just not paying attention to the fact that they exist. You have to continue to look at things you’ve never even thought you had, like mock audits and cybersecurity testing. Some of the bigger firms in the industry hire hackers to determine what’s their level of penetration. I mean, mammoth companies who spend billions to protect their end consumer. The RIA community isn’t there yet, but it’s on everyone’s list of what they worry about.

Regtech is a growth area right now, but people just don’t talk about it because it’s just not sexy. At the end of the day, it comes back to risk management. The RIA industry has a huge spotlight shining on it right now and it’s much easier to target a firm with $4 billion in assets that is multi-custodian with multiple vendors. That’s the ideal target.

It’s an evolving industry that hasn’t spent the billions yet and haven’t caught up to looking at the big data that can spot hacking activity. This whole industry that has become the darling of the financial services. This is where hackers will spend their time trying to take advantage of others.

How can an aging advisor workforce reach out to younger clients?

Forget about the millennials, we should be talking about Gen Z. How are they going to want to communicate? The changes are coming faster and faster and Gen Z will influence how millennials will want to communicate. We need to skate where the money is headed. We almost need to start thinking about leapfrogging where we are now, instead of just playing catch up. People who were late to the party are always going to be late if they are just trying to catch up. If we’re just worried about technology and millennial engagement that we’re developing today, we’re going to miss the boat again.

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Apps We Love: Financial Planning

Do you trust your money to financial apps? I know many people who find online banking risky and won’t use online investing and planning services, but others have gotten over the hump of trusting online financial services. As these services constantly remind us, they wouldn’t be in business for long if they didn’t have the utmost security.

According to survey results from The Financial Brand published in September, 2019, 41% of U.S. banking customers use at least one financial app, primarily in the areas of personal financial services, budgeting and saving, investment advice including robo-advisors, and lending services. We surveyed members of the CPA Practice Advisor community to find out what financial planning apps they like best.

Samantha Mansfield, director of professional development and community at CPA.com, told us, “Part of financial planning is budgeting, and I really like Every Dollar app.  Simple to use, it allows tracking of every dollar spent to give a real record of actual spend. The customization of categories is good, it’s easy to roll your budget from month to month and see totals at any given time.” Every Dollar is created by David Ramsey’s companies, The Lampo Group and Ramsey Solutions.

Randy Johnston, executive vice president at K2 Enterprises and CEO of Network Management Group, Inc., recommends Wealthfront. Operated by Wealthfront Advisors LLC and Wealthfront Brokerage LLC, the app provides a high interest savings account you can use to help meet your savings goals. Are you setting aside money for an emergency fund and want the funds to earn a nice return but be very liquid? Wealthfront might be the solution you’re looking for. You can also find planning advice, investment options, and you can open a line of credit at Wealthfront. You can start your savings account with as little as $1. Once your funds reach $500, you can consider opening an investment account.

If you’re looking for a financial planning app that incorporates investment analysis, the ability to create personal financial profiles, comprehensive reports and charts, and tax computations all in one place, Johnston recommends Planmode Financial Planning. Produced by Sawhney Systems, a Princeton, NJ-based company that has been developing financial planning software for more than 30 years, Planmode allows you to set up your own financial goals and then develop a plan to achieve them. “It is an integrated financial planner that incorporates income, expense, and tax integration,” said Johnston.

You can use U-Nest to help save and organize funds for a college education. Also recommended by Johnston, U-Nest allows you to set up a monthly contribution plan, incorporate gifts from friends and family members, and manage a 529 college savings plan.

Do you have a global portfolio? Pushkar Bhoopalam, head of the Tax Practitioners Segment at Thomson Reuters, recommends MoneyControl. “It has all the information required for markets trading in one place: historicals, news, asset trends, industry trends, etc. MoneyControl has helped me invest without the need for a private wealth advisor.” With MoneyControl, you can track the latest updates on global financial markets. A recent upgrade has met with some negative reviews on the user interface, but we expect these issues will be addressed soon. Many reviewers claim this is the best app available for tracking the Indian markets.

Are you just getting started with investing? Stacy Kildal, founder of Kildal Services LLC, and co-creator and host of the QBOShow.com, suggests you try Acorns and Stash. “We’ve been using Acorns and Stash to do ‘spare change’ investing since each came out. We won’t be able to retire with either, but both are no brainer ways to do simple investing,” said Kildal. Featured as an Apple App of the Day this Spring, Acorns lets you set up a monthly investment plan for as little as $1 per month, similar to Stash. You can open an account and begin investing at both Stash and Acorns with as little as $5. Invest in ETFs and stocks, and learn about the funds and how to make investment decisions as you go.

Joshua Lance, CPA, CGMA, managing director of Lance CPA Group, recommends Betterment. “It’s a great app to automatically transfer money to an investment account. Simple easy to use and I really like some of the automatic tax features it has like tax loss harvesting.” Lance also recommends Personal Capital. “I love this app because I can see my whole financial picture at a glance and it’s easy to understand how the financial planning that I have done sets me up for the future.”

Caleb Jenkins, EA, CQP, leader of client accounting services at RLJ Financial Services, Inc., told us, “I use HD Vest eMoney to create goals and plans for my financial future, and I can track my spending and all my investments using this app. It has some really helpful forecasting reports to create accurate goals and plans for the future.”

If you’d like an app that provides a single view of all of your assets and liabilities at a glance, Sandra Wiley, president of Boomer Consulting, Inc., recommends Mint Personal Finance. “It’s still my favorite for aggregating all of my accounts in one easy-to-see location.” Michelle Walsh, vice president of client services at XCM Solutions, LLC agrees. “Mint is very easy to use and allows you to see everything in once place!”

The tax break retirees might not know about

Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about.

The tax break retirees might not know about
Seniors who are working on a contractual or freelance basis after retirement should take advantage of the 20% tax deduction for pass-through income under the new tax law, according to this article from Barron‘s. “No one is talking about what a wonderful retirement planning technique this deduction is for your affluent professionals,” says an expert with the American College of Financial Services. “Most of us don’t just retire flat out. We consult or continue to work part-time.”

Bloomberg News

This is the no. 1 barrier to early retirement
A survey by TD Ameritrade has found that medical costs top the list of barriers for people who want to retire early, according to this article on personal finance website Motley Fool. Clients who want to retire before the age of 65 are advised to determine the options available to them, such as buying a health insurance policy and getting covered through a spouse’s plan. Those with high-deductible health plan have the option of contributing to a health savings account, which offers triple tax benefits: tax deduction on the contributions, tax-free investment growth and tax-exempt withdrawals for qualified medical expenses.

Should you really do nothing amid market volatility? It depends on whether you’re 27 or 63
Younger clients who are investing in a retirement account such as 401(k) are advised to stick to the buy-and-hold strategy during a market downturn, according to this article on CNBC. By doing nothing, they will be taking advantage of the low-cost environment. However, they should hold the money earmarked for near-term expenses in cash or a CD and not in the stock market because of greater risk, says a CFP.

For small and mid-size businesses, it may be time to set up an employee retirement plan
Small businesses that are not offering retirement plans to their employees should consider opening one before the year is over, according to this article on USA Today. Having an employee retirement plan provides certain perks, such as tax deductions for the contributions. Small businesses can also have time until April of the following year to make contributions for the current year and claim the corresponding deductions. Small business employers also have the option of setting up a SEP.

Lee Conrad

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8 Questions Every New Parent Should Ask Their Financial Planner

The first few months of parenting are a bit of a whirlwind, to say the least. But in between the diaper changes and the middle-of-the-night feedings, there’s something else you should prioritize: a meeting with your financial planner to go over a handful of baby-related money tweaks that need to be made. Like what? We checked in with Priya Malani, founder of the financial planning firm Stash Wealth, to get her input on the questions new parents should ask.

“Do I need to adjust my life insurance?”

If you’re having or recently had a baby, it’s a great idea to get life insurance because someone is officially dependent on your income, Malani explains. While you might be offered coverage through your employer, if you lose or change your job, that insurance isn’t usually portable (in other words, you can’t take it with you) and it tends to be more expensive than getting a private policy. Having a child is a good time to consider private life insurance coverage. There are many calculators online to help you figure out how much you might need—or you can call an insurance agent who will be able to help you dial in on the right amount of coverage as well.

“What about disability?”

Disability insurance is definitely important, but it’s also very expensive. It’s also likely you’re provided short-term disability through your job. (Definitely look into this before exploring other options once you’ve had a kid, Malani says.) For more comprehensive coverage, you’ll need to weigh the cost against your own personal desire to take on the risk that if something happens to you and you can’t work for some time, how will you pay your bills? Do you have family close by that could step in and help? Finally, do you have a high- or low-risk job? Answering these questions will help you decide if the cost of disability coverage is a worthwhile investment for you.

“Should I set up a will?”

This is something you should take care of when you’re expecting, but if you wait until after baby arrives, talk about it with your financial planner ASAP. Here’s why: Your will allows you to name guardians for your child, God forbid something should ever happen to you. (Guardianship is different from godparents, FYI.) It also dictates how your assets will be transferred and to whom. When you bring up the will with your planner, this is also a great time to work to update beneficiaries on your retirement accounts—401(k)s, IRAs, etc. (Keep in mind your child will need to have a social security number for this to take effect.)

“How’s my emergency fund looking?”

According to Malani, you’ll want to take a minute with your financial planner to analyze the changes to your fixed expenses once the baby arrives. Are you going to be paying for daycare? More doctor appointments? Try to estimate these costs and make sure your emergency fund covers three months’ worth of your fixed expenses. As for your flexible expenses? Great news: These actually tend to go down a bit once baby arrives. (RIP, eating out and traveling as frequently as you did pre-kid.)

“Any advice on budgeting for basics?”

In a perfect world, this question comes up about 12 months before baby’s expected arrival—i.e., when you and your partner are first toying with the prospect of having kids. This way, you have time to set up something Malani likes to call a “baby fund,” which is basically a savings account at an online bank that’s earmarked for future expenses related to having kids. The more time you can give yourself to plan for unexpected costs, the better, but even automating $25 a week after the baby arrives can help you start padding a “miscellaneous” account of sorts for the inevitable expenses that do come up. (We’re talking to you, toys and adorable baby clothes.)

“What about big picture expenses like child care? How should I adjust my budget?”

No matter what your long-term child care plans are, it’s never a bad idea to use the arrival of a child to take inventory of your monthly expenditures to see what’s left over, if anything, and start setting money aside. Research the cost of your options, whether it’s day care, a nanny or even a nanny share. Once you have a sense of what the expense will be, you can work with your financial planner to budget and start automating saving.

“Any tax breaks I should be thinking about?”

Even if it’s not tax season yet, it’s good to keep any rebates—or write-offs—top of mind right out of the gate. For example, in 2018, new parents likely qualified for the Child Tax Credit, currently $2,000 per dependent. (Note: This phases out as your income increases.) If you’re single, having a child may allow you to file as Head of Household, something that provides a larger standard deduction and has the potential to land you in a lower tax bracket.

“Should I open a 529 for college?”

This is a personal decision, explains Malani, but one that you should discuss with your financial planner so you can weigh all of your options. Not everyone contributes to college savings for their children. But if it’s something you’d like to do, a 529 can be a great decision. For one thing, it’s tax-free (as long as you use the funds for education). It’s also tax-advantageous if you live in one of the states that offer incentives for contributing. That said, it’s not something you necessarily have to do in year one—but if family and friends are sending cash gifts to the baby, it’s a nice way to put them to use in the early days. (Just keep in mind that these funds can only be used for higher education and there is a penalty if you take money out and put it toward something else.)

RELATED: 6 Money Moves Every Woman Should Make Before Having Kids

Cetera Financial Group aims to solve IBD ‘disruption’

Perhaps no firm knows better about disruption than Cetera Financial Group. Now it seeks to gain a leg up on rivals by helping financial advisors prepare for potential economic upheaval.

The network of six independent broker-dealers with 7,500 advisors went through bankruptcy protection and a subsequent restructuring in 2016. Institutional investors sold a majority stake in the firm to Genstar Capital in 2018. And CEO Robert Moore stepped down in March due to health reasons.

Los Angeles-based Cetera has clearly “checked the box relative to resiliency,” according to its president, Adam Antoniades. Its new aim is to ensure advisors and prospective IBD acquisitions can deal with the “disruption that the business will face” in a stock downturn, he says.

Cetera 2018 revenue

“The rising tide has hidden a lot of sins,” Antoniades said in an interview late last month. “A major decline in the market and a correction for sustained period will really challenge a lot of advisors and a lot of firms. Our sense is, we’ve got our entire platform oriented towards navigating that disruption.”

Antoniades also says he hopes Cetera is known in the marketplace for organic growth and cutting down friction areas between the firm, advisors and clients.

He declines to discuss reports that Cetera sought to purchase Advisor Group to combine the two major IBD networks and says he has no updates on the firm’s CEO search. Finding the right person is “really important” for realizing the firm’s potential, he adds.

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Antoniades instead revealed aspects of the firm’s thinking about the future of the sector in the event of a downturn. Offerings like subscription billing, sophisticated planning tools and a client portal displaying their specific needs and priorities will help Cetera advisors through any downturn, according to Antoniades.

“Having capabilities to better align the value that advisors deliver to the way they get paid is really critical,” he says.

The rainy day pitch — along with the resources of private equity firm parent Genstar — appears to be paying off: Foresters Financial agreed in April to sell select assets of its U.S. brokerage and RIA to Cetera in a deal that could add some 500 advisors to its bank and credit union channel.

In the first quarter alone, Cetera recruited advisors managing $7.5 billion in client assets and producing $48 million in gross dealer concessions, according to Antoniades.

The recruited client assets outpaced even No. 1 IBD LPL Financial’s impressive $7.1 billion haul in the period. However, LPL’s recruited client assets for the past 12 months topped $30 billion, according to the firm.

Cetera’s large IBD rivals all say they’re investing resources in recruiting, MA, technology and organic growth, often with the help of PE backers.

“Private equity and smart money are very interested in the backdrop of this industry,” Advisor Group CEO Jamie Price said after Reverence Capital Partners agreed to buy a 75% stake in the firm last week. “Our job is to help our advisors take advantage of that in ways that others can’t.”

Ironically, in 2018, Advisor Group parent Lightyear Capital emerged as a potential suitor to purchase Cetera, according to reports at the time. Antoniades has acknowledged Cetera didn’t recruit as well as executives had hoped during its capital structure review and sale last year.

But Antoniades described 2016 as “a great year for reinventing ourselves” which “served its purpose.” Cetera saw less than 10% attrition of advisors during the five months of the restructuring, with 3% of the share from terminations of advisors who weren’t a cultural fit, he says.

In early May, Cetera announced the launch of a program to enable advisors’ practices to sell in the event of “an unforeseen and often tragic exit.” Practices can lose up to 75% of their value within two months of the unplanned loss of an advisor, according to the firm.

An online valuation platform by powered by Truelytics, the business intelligence software, serves as the core of what Cetera is calling its Legacy Builder Program. The firm consulted with advisors as well as continuity and succession experts in building the service.

After announcing that Genstar would be its new majority owner last year, Cetera unveiled offerings of loans to support advisors’ growth plans and an expanded recruiting team. Genstar — also the parent of RIA consolidator Mercer Advisors — has a record of driving growth, Antoniades says.

“The scale story is still very much at the center at the theme at Genstar’s investment in Cetera,” he says, noting the cost of increased regulation and tech spending. “They believe it will become increasingly more difficult for firms to stay in business and compete.”

Tobias Salinger

For reprint and licensing requests for this article, click here.

Thinking About Working with a Financial Planner?

If you’re thinking of working with a financial planner, there are things you should know about them. Consider asking a potential financial planner questions in the following areas.

Ask them what credentials they possess. Anyone can call themselves a “financial planner”; there are, however, some designations that indicate the planner has some additional training.
• CFP stands for Certified Financial Planner. CFPs must take a series of college level courses that cover major aspects of financial planning and must pass a ten-hour comprehensive examination. They also must meet continuing professional education requirements. A CFP with a college degree must have at least three years of individual client experience; one without a college degree must have five.
• ChFC stands for Chartered Financial Consultant. ChFCs have an insurance industry background, but must also meet requirements similar to those a CFP must meet.
• ChFEBC stands for Chartered Federal Employee Benefits Consultant. ChFEBCs must take a two-day course in federal retirement and benefits. Two days may not seem like a lot of study, but most financial planners haven’t had any federal specific training.

Ask them how much and how they are compensated. Financial planners are entitled to earn a living, just like the rest of us, but how they are compensated might affect the recommendations they make. You will want to get an idea of what your investment related costs will be before you agree to work with a planner.
• Commission-based planners are compensated by receiving a commission for every investment you make. The commission often comes in the form of a sales charge or “load”. They might be more highly compensated if they sell you a certain type of investment.
• Fee-only planners charge a fee for their advice, and do not sell investments that have a commission attached. Sometimes they might charge a percentage fee based on the value of your investments with them. Though they tend to work with higher net-worth individuals than the average federal employee, more and more of them are extending their outreach to individuals with a more modest net-worth.
• Hybrid planners (sometimes called fee-based) may charge a fee and receive a commission as well.
• Salaried planners are paid a salary by the firm that employs them.

You may also wish to ask them about their investment strategy, how long it will take them to develop a plan and other items. The Securities and Exchange Commission has several helpful publications on financial planners and investment planners available on their website http://www.sec.gov.

You can also investigate a financial planner’s disciplinary record. The SEC regulates planners and firms that manage $100M or more. Individual state securities agencies regulate planners and firms that manage less than $100M. The Financial Industry Regulatory Authority also has a “broker check” feature on its website, http://www.finra.org.

Ask them if they will act as a fiduciary. A fiduciary must act solely in the best interests of the client at all times and must disclose real, or potential, conflicts of interest. Members of the National Association of Personal Financial Advisors (NAPFA) and Registered Investment Advisors (RIA) are required to act as fiduciaries. The CFP Board (which regulates Certified Financial Planners) requires that CFPs adhere to a fiduciary standard.

Advisor Group CEO Jamie Price discusses Reverence deal

The largest MA deal thus far in 2019 will accelerate a “much bigger” change that started three years ago at Advisor Group, CEO Jamie Price says.

In 2016, insurance giant AIG sold the network of four independent broker-dealers to private equity firm Lightyear Capital and the Public Sector Pension Investment Board of Canada.

On May 9, Advisor Group’s owners unveiled a definitive agreement to sell a 75% stake in the 6,500-advisor network to Reverence Capital Partners. The purchase price reportedly amounts to more than $2 billion.

Advisor Group 2018 revenue

The earlier deal enabled the Phoenix-based firm to shift “from a corporate entity to a truly independent company” aligned with advisors and clients, according to Price. The new capital structure will help advisors gain scale and resources, he says.

“Private equity and smart money are very interested in the backdrop of this industry,” Price says, describing the growing investment in wealth management as good for advisors and the industry alike. “Our job is to help our advisors take advantage of that in ways that others can’t.”

Indeed, the deal stands out for its sheer size. With $268 billion in client assets, Advisor Group dwarfs the size of any firm that has sold so far this year.

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The biggest wealth management MA deal in the first quarter — in terms of client assets — was the purchase of a majority stake in Kestra Financial by Warburg Pincus, according to investment bank and consulting firm Echelon Partners. The recapitalizing IBD has about $80 billion in client assets.

With a reported price tag as high as $2.4 billion, Advisor Group’s transaction compares with the $1.7 billion paid by Genstar Capital for a majority stake in Cetera Financial Group last year. Edelman Financial Services’ majority owner Hellman Friedman paid $3.02 billion in 2018 to acquire Financial Engines.

All three deals involved private equity capital. PE firms are helping fuel record levels of MA deals in wealth management for each of the past six years, according to Echelon’s latest annual review of wealth management transactions.

“Given wealth managers’ ability to generate consistent cash flows and high rates of growth, private equity’s interest in the industry appears here to stay and should continue to drive large-scale MA activity and consolidation,” the report states.

Despite the level of investment, wealth management executives whose firms receive PE backing still say that the industry lacks a full understanding of the acquiring firms’ intentions. Price echoes the point.

“It’s not an industry where you think about cost-cutting,” he says. “It’s quite the opposite.”

Under Lightyear ownership, Advisor Group’s headcount of producing representatives has jumped by around 35% and its client assets have soared by 60%. In the past year alone, the firm made three MA deals of its own while rolling out a new digital onboarding platform designed to make every aspect of the client account opening process easier and faster.

Advisor Group 2018 revenue

Price and Advisor Group promise more of the same under Reverence. Lightyear, PSP and other current shareholders including retiring executive chairwoman Valerie Brown would retain up to a 25% stake in Advisor Group under the deal, the parties say.

The sellers will also keep seats on the board, alongside Price and other members to be appointed in the coming weeks by Reverence.

Milton Berlinski and two other Goldman Sachs alums launched Reverence in 2013 with a focus on financial services investments. Berlinski had spent 25 years overseeing the financing of such deals with Goldman’s financial institutions unit, Price points out.

Jamie Price is the CEO of Phoenix-based Advisor Group.

Reverence’s past and current stakes include those in fund company Russell Investments, USAA asset management unit acquirer Victory Capital and bank and wealth management firm First Republic. Like Lightyear, the acquiring firm “has a deep understanding of this business,” according to Price.

Lightyear also appears to have shown a keen sense of timing with the deal. After nearly 10 years of bull returns in equities, wealth management is in a “toppy market” for sellers, says IBD recruiter Jon Henschen.

“The timing is right for Lightyear,” Henschen said in an interview the week before the official announcement of the Reverence deal. “Pulling the trigger now would make sense.”

Henschen spoke after a Bloomberg report in April stated a different suitor, Centerbridge Partners, was nearing a deal to buy Advisor Group for more than $2 billion.

Price declines to discuss the final purchase price, citing the fact that both Advisor Group and Reverence are private firms. He also declined to state the timeline of the deal negotiations, calling the selection of Reverence an internal matter considered by the board.

He jokes that, judging by some of the media coverage of the possible deals, “You would have thought that it had been going on for two years.”

Advisors staying on with the firm will reap rewards in the form of a recognition and retention program after the deal. Other firms changing their capital structure without altering their overall management teams in recent months have opted not to provide any retention bonuses for advisors.

“We want to recognize our advisors in multiple ways,” Price says, noting the firm would share more details closer to the expected third-quarter close of the deal.

Advisor Group Chairwoman Valerie Brown is retiring from the firm but will remain an investor in it.

Brown, the departing chairwoman, has been a “fantastic partner, mentor, coach and, for me personally, a friend,” Price says. “She won’t be far away, particularly as an investor.”

The onetime Cetera CEO had retired to Jackson Hole, Wyoming, by the time Lightyear convinced her to join Advisor Group as executive chairwoman in 2016, Price notes. She’ll now return to retirement.

Brown is “grateful for the extraordinary success that our advisors and employees have created over the last three years,” she said in a statement.

She “worked closely with Lightyear and PSP in reviewing potential transaction partners,” Brown continued, expressing confidence that Reverence will “enhance Advisor Group’s momentum by supporting investments in solutions” for advisors and clients.

Tobias Salinger

For reprint and licensing requests for this article, click here.