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Friday, May 06, 2016

What to look for in a Financial Advisor: Select a financial consultant whose service offerings correspond to your goals

As the profession has evolved over the past 40 years, different types of advisors have emerged with different practice emphasis or specialties.  Different compensation methods have also emerged making it important to look for an advisor with an understanding of the differences.

Are you saving for retirement?  If so, look for a Certified Financial Planner™ or other financial advisor who offers comprehensive financial planning.  Comprehensive financial planning is not merely about the return, it is also about tax and risk management and helping you create the future you want.  Your advisor can help you with long-range planning designed to help you build and preserve your savings.

If you are mostly interested in a strategy that anticipates market changes and pro-actively adjusts your portfolio, you may want an advisor who offers active money management featuring tactical asset allocations.  Tactical asset allocation seeks to continually fine-tune portfolios in light of valuation and economic factors.  The goal with active portfolio management is to take advantage of the better-performing arts of the market.

Are you just seeking a basic financial strategy?  If you are just looking for a one-time financial plan, consider a Certified Financial Planner™ who can offer a “blueprint” along with a hand in implementing and carrying out the plan over time.

If you are looking for a “quarterback” to help you manage your financial life, a wealth management firm may be what you are looking for. Typically, this type of firm unites several specialists in investment management, retirement planning, estate planning and insurance, along with a network of other professionals they can refer to as needed.  In a team effort, they draw on their collective knowledge and abilities to design personalized, long-range strategies for each client.

Today, many financial advisors have fee-based practices and some only charge fees.  In working for fees only, a financial advisor is telling you that his or her business is built on advice and objectivity, not product sales.  Some advisors are still largely paid by commission and others through a mix of fees and commissions.  Keep in mind that if you want an advisor who can offer you insurance products, commissions will be part of the relationship.

Finally, take your time as you search for the right advisor.  Many people hire the first financial advisor they meet.  Shop around until you find an advisor who makes you feel comfortable that your finances are in their hands. 


Posted by: Patrick Carroll at 4:27 PM
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Friday, May 06, 2016

Guarding Against Identity Theft: Take steps so criminals can't take vital information from you

At the current time, one in 14 Americans aged 16 or older have been a victim of identity theft in the past 12 months.  That equates to more than 16.6 million people – a sobering statistic.  While 86% of victims cleared up the resulting credit and financial problems in less than one day, 10% of victims had to struggle with the issues for a month or more.

Tax time is a prime time for identity thieves.  They would love to get their hands on your return and to claim a phony refund using your personal information.  E-filing of tax returns is becoming increasingly popular – just make sure you use a secure Internet connection.  When you e-file, you aren’t putting your Social Security number, address and income information through the mail.  If you can’t bring yourself to e-file, then consider sending your returns via Certified Mail.  And, make sure to put the rough drafts of your returns through a shredder.

The IRS does not use unsolicited emails to request information from taxpayers.  If you get an email claiming to be from the IRS asking for your personal or financial information, report it to your email provider as spam.

Another precaution to take is to be very careful using Wi-Fi networks. Don’t risk disclosing financial information over a public Wi-Fi network. A favorite hacker trick is to sit at a coffee house, library or airport and set up a Wi-Fi hotspot with a name similar to the legitimate one.  Inevitably, people will fall for the ruse and log on and get hacked.

Look for the “https” when you visit a website.  When you see the “s” at the start of the website address, you know the site has active SSL encryption.    A padlock icon in the address bar confirms an active SSL connection.  You can also opt for a virtual private network (VPN) service which encrypts 100% of your browsing traffic but it could cost you around $10 a month.

Make sure you check your credit report on a regular basis.  You are entitled to one free credit report per year from each of the big three agencies.  Another tip is to choose passwords that are really esoteric and preferably with number as well as letters to make them tougher to hack.

A final bit of information is to be careful talking to strangers.  If you get a call or email from someone you don’t recognize telling you you’ve won a prize, and claiming to be from the county clerk’s office, a pension fund or a public utility – be skeptical.  You could be doing yourself a big favor!


Posted by: David Shober at 3:47 PM
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Friday, May 06, 2016

Money Concerns for Those Remarrying

Some of us will marry again in retirement. How many of us will thoroughly understand the financial implications that may come with tying the knot later in life? Many baby boomers and seniors will consider financial factors as they enter into marriage, but that consideration may be all too brief.  There are significant money issues to keep in mind when marrying after 50, and they may be important enough to warrant a chat with a financial professional.

You might consider a prenuptial agreement. A prenup may not be the most romantic gesture, but it could be a very wise move from both a financial and estate planning standpoint. The greater your net worth is, the more financial sense it may make. If you remarry in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin), all the money that you and your spouse will earn during your marriage will be considered community property. The same goes for any real property that you happen to purchase with those earnings. Additionally, these states often regard extensively comingled separate property as community property, unless property documentation or evidence exists to clarify separate origin or status.   A prenuptial agreement makes part or all of this community property the separate property of one spouse or the other. In case of a divorce, a prenup could help you protect your income, your IRA or workplace retirement plan savings, even the appreciation of your business during the length of your marriage (provided you started your business before the marriage began). The goal is to make financial matters transparent and easy to handle should the marriage sour.

You should know about each other’s debts. How much debt does your future spouse carry? How much do you owe? Learning about this may seem like prying, but in some states, married couples may be held jointly liable for debts. If you have a poor credit history (or have overcome one), your future spouse should know. Better to speak up now than to find out when you apply for a home loan or business loan later. In most instances, laws in the nine community property states define debts incurred during a marriage as debts shared by the married couple.

You should review your estate planning. Affluent individuals who remarry have often done some degree of estate planning, or at least have made some beneficiary decisions. Remarriage is as much of a life event as a first marriage, and it calls for a review of those decisions and choices. In the event of one spouse’s passing, what assets should the other spouse receive? What assets should be left to children from a previous marriage? Grandchildren? Siblings? Former spouses? Charities and causes? Some or all of these questions may need new answers. Also, your adult children may assume that your new marriage will hurt their inheritance.

Are you a homeowner planning to remarry? Your home is probably titled in the name of your family. If you add your new spouse to the title, you may be opening the door to a major estate planning issue. Joint ownership could mean that the surviving spouse will inherit the property, with the ability to pass it on to his or her children, not yours. One legal option is to keep the title to your home in your name while giving your new spouse occupancy rights that terminate if he or she dies, moves into an eldercare facility or divorces you. Should any of those three circumstances occur, your children remain in line to inherit the property at your death.


Posted by: Patrick Carroll at 3:42 PM
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Friday, May 06, 2016

Beware the Ransomware Threat

It may sound like something out of a movie, but cybercriminals are actually holding business as well as household files for ransom.  Hackers are using ransomware to hijack computers and hold files hotage in exchange for payment.  Malware programs such as CryptoWall, CryptoLocker and CoinVault spring into action when you unsuspectingly click on a link in an email, encrypting all the data on your hard drive in seconds.  A “ransom note” appears on your screen informing you that you will need to pay $500, or more, to access your files again.  If you fail to pay, your files will be destroyed.

Worldwide, more than a million computer users have been threatened by ransomware, including a county sheriff’s department in Tennessee. 

If your files are held hostage, should you pay the ransom?  The Department of Homeland Security and most computer security analysts say no, because it may be pointless.  By the time you get the note, your files may be destroyed or encrypted so deeply that you will never be able to read them again.

How do you guard against a ransomware attack?  Back up your data frequently – and make sure the storage volumes are not connected to your computer. Second, make sure your anti-virus software is renewed and kept up to date.  And, most importantly, never click on a mysterious link or attachment.  Ransomware is a kind of cyberterrorism – don’t become the next victim.  


Posted by: Patrick Carroll at 3:14 PM
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