Category Archives: fiduciary responsibility

Annuities aren’t the only thing Ken Fisher is concerned about…

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Dear Mr. Market:Unknown-1

If you follow financial news at all, you have likely been paying attention to the controversy surrounding Ken Fisher. Ken leads a firm with over $100 billion in assets under management, and he made some comments that did not go over well at a recent industry conference. Following that, the media dug up past comments of his from social media and other industry events. Institutional clients have so far pulled out over $3 billion invested with Fisher, and the company is understandably now in PR damage control mode.

Many are using this as an opportunity to bash him and his organization. Ken has rankled many in his industry, whether from his overwhelming marketing success or his “I hate annuities” stance, and it’s a convenient time to sling mud his way. Continue reading →

Social Security Scam Alert

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Dear Mr. Market:Scam Alert

We normally pen all of our articles (letters) to you but in this case the work was already done. This one has nothing to do with the stock market or economy but everything to do with your hard earned money being threatened by another scam.

Scams are nothing new but they sure seem to be getting more prevalent and slicker by the day. As you’ll note from the chart below the number of scams are predominantly centered around Social Security and that trend is on the rise.Top Government Imposters

Click here to read an article written by Michelle Singletary in the Washington Post. In the timely article she includes a helpful list and some links that serve as critical reminders of what to be aware of out there.

Have a great weekend and stay alert!

 

Top 3 “Less is More” Hurricane Florence Stocks

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Dear Mr. Market:Ambulance-Chasers

We don’t make it a regular practice to be ambulance chasers every time there is a tragedy or natural disaster. That being said, almost every major event (whether it’s considered good or bad) can create an opportunity for your investment portfolio.

Conversely, the old adage of “less is more”, could certainly apply here. We’re not simpletons just for the sake of it but in general the ‘less is more’ approach can greatly benefit your finances. Think about it…and if you haven’t already, we’ll spell out several major ways that having less of something will benefit your wallet: Continue reading →

Happy Halloween: What Costume Is Your Financial Advisor Wearing?

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Dear Mr. Market:

Tonight is Game 6 of the World Series but it’s also Halloween. What are your plans? Will you be glued to the television or handing out candy to little ghosts and goblins? Since Mr. Market is a one trick pony and mainly wants to talk about the stock market, we’re sharing an article that was written five years ago on Halloween night. Enjoy!  Continue reading →

Who does Mr. Market vote for…Donald Trump or Hillary Clinton?

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Dear Mr. Market:

160323171742-hillary-clinton-donald-trump-investors-780x439How dare we put you on the spot like this?!? What an awful question! How will you (the stock market) react if Trump wins or if Hillary wins? By the way…as an aside….a great client of ours recently asked why everyone refers to Trump by his last name and Hillary by her first name. Why is that?

Depending on which side you’re on, this question may initially seem like simple semantics but it’s not. Are you “presidential” if you roll with a campaign based on your first name? Do you “feel the Bern” or did you “Trust in Ted”? Whether you’re a proponent of Hillary for President or Hillary for prison…it’s still Hillary. Where are we at America?

At My Portfolio Guide, the one thing we typically don’t shy away from is having a clear opinion. There are some great firms out there that simply can’t give you one! You’ll hear what you want to hear. They fear losing your “vote” or ruffling feathers. Yes…we understand that balance too, but as much as our job is about deciphering news versus noise…it does become important to take a stance. Continue reading →

Financial legislation that finally benefits YOU!

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DOL3Dear Mr. Market:

Recently the Department of Labor announced new legislation that will have a profound impact on the financial services industry. What is refreshing is that the focus is on the individual investor, protecting their retirement accounts from predatory practices that have unfortunately become the norm on Wall Street. The new regulations will help protect individuals, and in many cases, open their eyes to what has been unfortunately taking place with their accounts for years.

While the document that addresses the new guidelines is 1,023 pages long, what it addresses at its core is that financial advisors must act as a fiduciary when working with qualified accounts. It is estimated that investors will save $17 billion a year after exorbitant fees and charges are eliminated! It has been well documented that we have a ‘retirement crisis’ as the average U.S. consumer is not saving enough for their retirement. Hopefully the focus and legislation we’re starting to see will give people more confidence to save and invest.

The legislation focuses on advisors that offer advice on qualified accounts (IRAs, 401(k)s, 403(b)s, Simple and SEP IRAs) and requires that they must act as a fiduciary. This means that advisors must do what is in the client’s best interest and put them ahead of their own. Sounds like common sense, right? What might shock many investors is that the ‘trusted’ advisor they have worked with for years might be anything but a fiduciary, many of them viewing their client’s assets as a revenue-generating machine lining their own pockets and financing their extravagant lifestyles.

“With the finalization of this rule, we are putting in place a fundamental

protection into the American retirement landscape. A consumer’s

best interest must now come before an advisor’s financial interest.

This is a huge win for the middle class.”

Tom Perez, Labor Secretary

Continue reading →

Does Ann Wagner or any politician really have your back?

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Fiduciary4Dear Mr. Market:

We don’t typically venture into topics that involve politics as they can be polarizing to say the least. Everyone can think of an individual they know that is always more than willing to share their political opinions whether you want to hear them or not! From time to time, however, there is a topic that needs to be addressed and political party affiliation has absolutely nothing to do with it … It’s a matter of doing what is right.

Recently the Department of Labor issued a new proposal addressing investment management fees associated with retirement accounts. According to a report issued by the White House Council of Economic Advisors, a difference of only one percentage point in fees equals $17 billion! This is money that will either remain in individual’s retirement accounts or find its way to brokers and financial firms’ pockets.

There have been other versions of this legislation proposed in the past. This most recent version requires any advisor that is compensated for providing advice with retirement accounts (IRAs, 401(k), 403(b), Simple IRAs and SEP IRAs for example) to operate as a fiduciary, always putting the clients interests first. Why is this even a debate?! What it essentially comes down to is the mighty dollar. Continue reading →

Is Financial Engines right for you?

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financial enginesDear Mr. Market:

If you were asked to list two or three of the largest Registered Investment Advisory (RIA) firms in the country which ones would come to mind first? You’d definitely hear many of the names associated with Wall Street and the investment industry. Names like: Merrill Lynch, Charles Schwab, Fidelity and Wells Fargo – while these are certainly large firms none of them are RIA’s. We’ve written on several occasions what an RIA is and how they are driven by their fiduciary responsibility to their clients. A simple online search of RIA’s will show that the largest firm is nearly 40% larger than any its closest competitor. It specializes in assisting individuals in managing their company retirement accounts and has become a behemoth in the investment industry. Financial Engines, Inc. has risen out of relative obscurity and is quickly becoming a household name.

Financial Engines is based out of Sunnyvale, CA, is publicly traded under the ticker symbol FNGN, and currently manages over $90 billion in assets! To put this in perspective the second largest RIA firm is Fisher Investments with assets under management of just over $50 billion. Fisher Investments is a marketing machine and if you have a portfolio over $500,000 in value, you’ve most likely received one of their post card mailings or solicitation emails.

Financial Engines, on the other hand, is a relatively young company and is the creation of some of the brightest minds in the industry that made their mark in the late 1990’s. The founders of the firm are Nobel Prize winning economist William Sharpe, Stanford Law Professor Joseph Grundfest, Attorney Craig Johnson and Jeff Maggioncalda. While the firm went through some minor growing pains, they have certainly found their target market – working with individuals and managing the investments in their company retirement plans. Continue reading →

Building Your Financial Team – The Road to Success

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Teamwork arrowDear Mr. Market:

How ‘fit’ is your financial team? Putting together a financial team to help you meet your financial goals is like building a winning sports team. Each member of your financial team needs to know what their responsibility is and what they are contributing to your financial success.   With tax-season behind us and the equity and fixed income markets experiencing volatility, now is a great time to assess your team and see if it is truly making the grade!

There is no single approach to building your team or a guide on how to assemble one. The key is the team needs to work for you, they need to give you a sense of comfort and they need to work together. Whether you work with individuals or utilize software solutions it is important that an assessment takes place so that you don’t suddenly find yourself in a hole that you need to dig out of.

In this article we will discuss how to build your “Team of Trust”. We will look at three key areas that every investor should consider: Estate Planning, Tax Planning and Financial Advice. We will discuss some key elements with each member of the team: Why? Who? What? How Much? Continue reading →

What is the difference between Fee-Only and Fee-Based advisors?

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Compensation #3Dear Mr. Market:

Last week I had lunch with an old colleague of mine. It’s always good to catch up with others in the same profession but sometimes it also truly helps you understand why so many consumers are confused. Here’s a brief background and then a summary of an actual conversation between two financial advisors:

Both financial advisors began their careers working for major wirehouse firms (think Morgan Stanley, Prudential, UBS, Smith Barney, etc…). They each then worked at Charles Schwab as part of the Retail Branch Network and Schwab Private Client (SPC) group. Thereafter, Advisor #1 (who we will call Fee-Based Advisor) left Schwab to join one of the advisors that is in their Schwab Advisor Network program.  This is a network that has made certain firms wildly successful as Charles Schwab branch representatives get compensated to vector investors and Schwab account holders to meet with advisors who pay to be in their program. Advisor #2 (who we will call Fee-Only Advisor) is not part of any network and is not affiliated with any brokerage firm, mutual fund company, or insurance company. “Fee-Only Advisor” is a Registered Investment Advisor (RIA).

Fee-Based Advisor: So…how are things out there?

Fee-Only Advisor: Good…I keep plugging away but sometimes it’s frustrating to see how undereducated the general public is about this industry. Continue reading →