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First Quarter Investment Commentary

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Contributed by: Angela Palacios, CFP® Angela Palacios

U.S. markets continued to enjoy positive returns for the first part of the year as the Trump rally extended through February. We began to see a small amount of volatility creep back into the market as March wore on and investors were left to continue to wait and see if there was any progress on economic and corporate friendly Trump policies. The S&P 500 ended the quarter in positive territory, up over 6%, while Bonds ended up just shy of 1% at .82% for the quarter, according to the Barclays US Aggregate Bond Index. Developed international was the clear winner, up 7.25% on the quarter, for the MSCI EAFE Index. Economic data continues to flow in, sending a strong signal that the U.S. economy is healthy and sustainable.

Europe headlines ended the quarter centered on the long awaited invoking of Article 50. While purely a political event rather than a market-moving event, the trigger marks a point of no return for the split between the United Kingdom and the European Union.  The two year countdown on Brexit begins—get your popcorn and settle in to watch!

Steady Headwinds for Interest Rates Ahead

The Federal Reserve is proactively increasing interest rates this year and has begun with the first interest rate increase of the year in March. What is overlooked, though, is all of the assets still on the balance sheet from years of quantitative easing (QE), the process which the Fed has used to increase money in the economy by buying treasury bonds and flushing the system with liquidity. 

In addition to raising interest rates, The Fed will also continue its reverse QE process by letting the bonds they purchased simply mature and roll off the books, essentially taking that liquidity out of the system. Below, you will see a chart by maturity date for the rate this will happen. Because of the lumpy distribution of maturity dates, it is likely the Fed may try to smooth out this maturing process through a combination of letting the bonds mature and outright selling. This would prevent any one month or year from having an outsized event of pulling liquidity out of the economy, leading to bond volatility.

Source: JP Morgan

Source: JP Morgan

Auf wiedersehen T+3! 

In March, the SEC voted unanamously to shorten the trade settling cycle from a maximum of three days down to two. In the day and age of instant gratification, investors have been left scratching their heads wondering why they have to wait the traditional trade date plus three business days in order for the cash and securities to officially change hands after they trade. That meant that if you needed to withdraw funds from your account, you had to wait nearly one week after selling a security to receive a check. That wait will now be reduced by one day! While the biggest benefit is for you, the invester, we will notice there also may be other “behind the scenes” benefits. Some examples include:  reducing credit and counterparty risk, increased market liquidity, and lowering collateral requirements. This is slated to take effect on September 5th of this year.

Investment Pulse: Check out Investment Pulse, by Angela Palacios, CFP®, a summary of investment-focused meetings for the quarter.

Investor Basics Series: Nick Boguth, Investment Research Associate, introduces us to Fundamental Investing

Of Financial Note:  Jaclyn Jackson, Portfolio Coordinator, continues her series on behavioral investing here.

It is important to remember, even with markets up, not to become complacent with your portfolio. While many investors become laser-focused on their statements when volatility strikes, it is important to remember there is a laundry list of items that are best addressed when markets have been positive for an extended period of time:

  • Plan for upcoming cash needs

  • Rebalance portfolios

  • Make your charitable contributions

  • Don’t ditch your plan!

If you have questions surrounding any of these points, don’t hesitate to reach out to us! We are here to help! At The Center, we want to help each and every one of our clients to take charge of their financial futures. Newsletters, blogs, webinars and more can be found on our website to help you do so. This is all part of Living Your Plan™.  Thank you for placing your trust in us!

Angela Palacios, CFP®

Director of Investments

Financial Advisor

Angela Palacios, CFP® is the Director of Investments at Center for Financial Planning, Inc.® Angela specializes in Investment and Macro economic research. She is a frequent contributor The Center blog.

The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. This information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Angela Palacios, CFP®, and are not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk, investors may incur a profit or loss regardless of strategy or strategies employed. Rebalancing a non-retirement account could be a taxable event that may increase your tax liability. International investing involves special risks, including currency fluctuations, differing financial accounting standards, and possible political and economic volatility. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. The Dow Jones Industrial Average (DJIA), commonly known as “The Dow” is an index representing 30 stock of companies maintained and reviewed by the editors of the Wall Street Journal. The Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate bond market. The MSCI EAFE (Europe, Australasia, and Far East) is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the United States & Canada. The EAFE consists of the country indices of 21 developed nations. Please note direct investment in an index is not possible. Index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Past performance does not guarantee future results.

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Investor Ph.D. Series: 6 points you should know about Technical Analysis

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Contributed by: Angela Palacios, CFP® Angela Palacios

While most often investors apply fundamental analysis when picking a suitable security to invest in, a less widely used strategy called technical analysis could be just as important. 

Why would you use it?

Here’s the scenario: you’ve researched and decided, “There is a strategy I have to invest in.” Perhaps it is a company that makes a widget and you think, “This is the best widget ever made and it is going to change everyone’s life!” Fundamental analysis helps you decide if Widget Producer A or Widget Producer B is the better-run company that is worthy of your investment dollars. But, does it matter what price you pay for that investment? Yes! This is where technical analysis can play a role in your portfolio decision making.

What is it?

Technical analysis, at its most basic level, only looks at supply and demand for a security. It attempts to find a trend or pattern in the price movement and volume of a traded security and decide if that trend is more likely to continue or reverse course.

How does it work?

Understanding basic assumptions behind technical analysis can be a key concept. First, it assumes that markets are efficient at all times; meaning everything that can be known about a company is known by all investors and reflected in the current price at which it is trading. Second, security prices move in trends; or, essentially, an object in motion stays in motion (or is much more likely to in the future). Third, history repeats itself. Investor behavior that caused prior patterns to occur is assumed to still be present and will likely repeat.

Which indicators are most commonly followed?

There are many indicators you can pick from when conducting technical research. Most investors that do this type of analysis have their favorites that fit with their own unique investing style. Some examples are: moving averages, volume, Oscillators, Bollinger Bands, Fibonacci levels, trend lines or relative strength.

Where can I find this information?

There are many resources that have a “fee for service” out there that can be used to conduct technical analysis. Yahoo! Finance, on the other hand, is a free resource available online for anyone to view. Their interactive charts help make it easy to view many of the most common indicators with the click of a button.

Can anyone do this?

Yes! However, it can take time, consistency, skill, and experience to be able to do technical analysis well; and even then, so-called “experts” can get it wrong quite often.

While there is no silver bullet in investing, blending both fundamental and technical analysis can help investors toward a potentially better outcome. Is this a fool’s errand or the potential secret sauce? I will leave that up to the individual to decide!

Angela Palacios, CFP® is the Director of Investments at Center for Financial Planning, Inc.® Angela specializes in Investment and Macro economic research. She is a frequent contributor The Center blog.

The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Angela Palacios and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected.

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Investor Basics: Intro to Fundamental Analysis

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Contributed by: Nicholas Boguth Nicholas Boguth

There are two major types of analysis when it comes to investing: Technical Analysis, which you can read more about in Angela Palacios', CFP®, Investor PhD blog, and Fundamental Analysis, which I will break down for you right now.

Ultimately, fundamental analysis is an evaluation of the financial position and performance of a company or strategy.

When doing fundamental analysis on a stock, the process involves breaking down all of the quantitative information found on the company’s financial statements. Digging into a company’s balance sheet tells you about their current position as it pertains to assets, liabilities, and shareholders’ equity. The information on income statements and statements of cash flow reveals how the company has performed, or how much expense, revenue, or profit it generated. Fundamental analysis also involves looking at qualitative factors such as management, the business model, accounting practices, and competitors. All of this data is then analyzed, compared to peers, and used to make an investment decision.

The graphic above lays out The Center’s investment selection process. You will see that there is both quantitative and qualitative fundamental analysis done when choosing the strategies in our model. The process is slightly different when comparing all strategies as opposed to only stocks, but the same considerations have to be taken into account before making an investment decision. We look at quantitative factors such as manager tenure, ownership, costs, risk metrics, and return metrics, just to name a few. We also look at a vast amount of qualitative information about the fund companies, managers, and investment team. Fundamental analysis is step one to selecting each individual strategy for our portfolios. If you have questions on how we build portfolios or fundamental analysis, please reach out to our investment team!

Nicholas Boguth is an Investment Research Associate at Center for Financial Planning, Inc.® and an Investment Representative with Raymond James Financial Services.

The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Nick Boguth and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Every investor's situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

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Asset Flow Watch: First Quarter 2017

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Contributed by: Jaclyn Jackson Jaclyn Jackson

The U.S. economy showed improvement, even before last year’s election, and data since continues to trend well. Overall, consumer confidence and optimism remained high with the Trump administration policy most of the first quarter. One of the most common ways to monitor consumer confidence and investor sentiment is to watch fund inflows and outflows. Market analysts use fund flows to measure investor sentiment within asset classes, sectors, or markets. This information (combined with other economic indicators) helps savvy investors identify trends and determine potential investment opportunities.

Asset Flows: What Investors Did This Quarter

This quarter, investor demand increased in global stocks and taxable bonds. While at a slower pace, the Trump agenda (lower taxes, infrastructure spending, deregulation, etc.) continued to lure investors into US equities. In February, US equities saw double the flows they’d received in January (reflecting fewer outflows from active managers). Hopeful economic data from Europe generated inflows for international equities, which primarily went to passive strategies. Yet, the most divergent trend from 2016’s fourth quarter is that fixed income flows started a comeback with a favor toward taxable bonds, specifically, intermediate term bonds. In spite of looming rate-hikes, March 31st ended as fixed income’s twelfth consecutive week of inflows.

Forward Steps

We’ve witnessed post-election equity runs correlated with the anticipation of “business-beneficial” tax and regulation reform. Nonetheless, the House’s inability to repeal/replace the Affordable Care Act leaves doubt that the Trump agenda will progress as expected. Late 2016’s boost in stock returns could have overweighed portions of your equity allocation. At the same time, you may have also noticed a decrease or underweight to your bond allocation. Consider rebalancing back to your target allocation. In the face of Trump agenda uncertainty, rebalancing should help protect recent capital growth accumulation. As always, if you have questions or concerns when it comes to your portfolio, we are always happy to help!

Jaclyn Jackson is a Portfolio Administrator and Financial Associate at Center for Financial Planning, Inc.®

This information does not purport to be a complete description of the securities, markets, or developments referred to in this material; it has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete. Any opinions are those of Jaclyn Jackson and are not necessarily those of Raymond James. This information is not a complete summary or statement of all available data necessary for making and investment decision and does not constitute a recommendation. Investing involves risk, investors may incur a profit or loss regardless of the strategy or strategies employed. International investing involves special risks, including currency fluctuations, differing financial accounting standards, and possible political and economic volatility. Investing in emerging markets can be riskier than investing in well-established foreign markets. Rebalancing a non-retirement account could be a taxable event that may increase your tax liability. Asset allocation does not ensure a profit or guarantee against loss. Past performance is not a guarantee of future results.

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First Quarter Investment Pulse

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Contributed by: Angela Palacios, CFP® Angela Palacios

During the first quarter of the year, managers and strategists are eager to travel and get the word out on what they think is to come in the New Year. This quarter was no exception. Here is a summary of some of the standout guest speakers we were able to host at the Center!

Priscilla Hancock, Global Fixed Income Strategist of JP Morgan

Priscilla Hancock stopped by to visit our office to discuss the current state of the municipal bond market. Priscilla’s insight into this market is both logical and insightful. She discussed that, for the most part, municipal bonds are less expensive now. Investors often worry about the performance of their municipal bonds in an environment of falling tax rates—which it seems we are on the verge of. Investors have sold off the space recently for that reason. But she has found there is very little to no correlation between municipal bond performance and tax rates over the long term. The municipal bond market is driven primarily by the retail investor, so you or I. We can benefit from the tax-advantaged status that the interest from municipal bonds produces. As rates fall, municipal bonds tend not to experience as much price appreciation because retail investors focus more on the yield a bond provides rather than the total return aspect they can provide. So as rates fall, the retail investor tends to sell. As rates rise, they experience the opposite effect. Rates then start to look attractive again, so investors may resume buying and help prevent prices declining, as much as treasuries, while rates rise.

Wendell Birkhofer, Senior Vice President, Investment Policy Committee Member of Dodge & Cox

Wendell Birkhofer brought Dodge & Cox’s unique value-based outlook to discuss equity markets both here in the U.S. and abroad. They are seeing value in financials here in the U.S. and also in Europe. Regulation changes and interest rate increases are a couple of the market forces that tend to be favorable to bank stocks—and are occurring right now. There is pent-up cash on hand at banks that could potentially get paid to shareholders in the future—if regulations loosen under the new Trump administration. In the U.S. markets, they see middling valuations (although some pockets are expensive). This tends to be a favorable environment for active management over passive management from their perspective. They also continue to find good value in emerging markets, while countries like Japan still struggle with corporate governance headwinds.

Ted Chen, Portfolio Manager and Aditya Bindal, Ph.D, Chief Risk Officer with Water Island Capital

Short volatility and the illusion of diversification were the topics we discussed with Mr. Chen and Mr. Bindal. They shared their groundbreaking research on the topics to a packed conference room of Center staff. They discussed how since the 2008 market crisis, the volatility of volatility has been off the charts (this is how much the VIX, a measurement of volatility in the equity markets, has, itself, been volatile). The markets have seen volatility spikes to the tune of two standard deviation events fourteen times over the past nine years! Alternative investment strategies are supposed to be uncorrelated to equity markets; however, they showed us that during these volatility spikes, most investment strategies lost value. This is what they call “short volatility.” They went on to share that true alternative strategies should possess characteristics, such as: low beta, market neutrality, and a lack of correlation regardless of low or high volatility time periods. These concepts are something we explore in our own portfolio construction process, and they have given us some excellent food for thought to chew on in the coming months and years!

Angela Palacios, CFP® is the Director of Investments at Center for Financial Planning, Inc.® Angela specializes in Investment and Macro economic research. She is a frequent contributor The Center blog.

The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Angela Palacios and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Municipal securities typically provide a lower yield than comparably rated taxable investments in consideration of their tax-advantaged status. Investments in municipal securities may not be appropriate for all investors, particularly those who do not stand to benefit from the tax status of the investment. Please consult an income tax professional to assess the impact of holding such securities on your tax liability. International investing involves special risks, including currency fluctuations, differing financial accounting standards, and possible political and economic volatility. Investing in emerging markets can be riskier than investing in well-established foreign markets. Investing involves risk and investors may incur a profit or a loss. Alternative Investments involve substantial risks that may be greater than those associated with traditional investments and may be offered only to clients who meet specific suitability requirements, including minimum net worth tests. These risks include but are not limited to: limited or no liquidity, tax considerations, incentive fee structures, speculative investment strategies, and different regulatory and reporting requirements. There is no assurance that any investment will meet its investment objectives or that substantial losses will be avoided. Diversification does not ensure a profit or guarantee against a loss. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Investments mentioned may not be suitable for all investors. Raymond James is not affiliated with Priscilla Hancock, JP Morgan, Wendell Birkhofer, Dodge & Cox, Ted Chen, Aditya Bindal and/or Water Island Capital.

American Health Care Act Pulled: Details and What to Expect Next

Contributed by: James Smiertka James Smiertka

Last week, the American Health Care Act (AHCA) was pulled from the House floor when it was clear that there would not be enough votes to pass it. President Trump conceded that they were about 10 to 15 votes short with no support from Democrats and even some moderate Republicans. The opposition came amid worries that the bill would take away medical insurance from millions of Americans. Some of the House’s most conservative members (members of the Freedom Caucus) were instrumental to the bill’s failure as they viewed parts as too similar to Obamacare, among other concerns.

Main Takeaways

  • The AHCA would have rescinded a range of taxes created by Obamacare, ended the penalty on people who refuse to obtain health insurance, and ended Obamacare’s income-based subsidies while creating less-generous age-based tax credits.

  • The AHCA would have ended Obamacare’s expansion of Medicaid, cut future Medicaid funding, and let states impose work requirements on some Medicaid recipients.

    • States would have been allowed to deny Medicaid coverage for able-bodied adults without children who did not work, study, train or seek work.

  • The nonpartisan Congressional Budget Office (CBO) estimated the AHCA would:

    • Lower premiums by 10%.

    • Reduced the federal deficit by $337 billion.

    • Capped Medicaid spending for the first time (saving taxpayers $880 billion).

    • Increased choices for consumers.

    • Lowered taxes by $883 million (targeted toward middle-income Americans and small business owners).

  • The CBO also estimated that the AHCA would have immediately stripped health insurance from millions of Americans.

    • The CBO stated that 14 million people would be uninsured by next year, rising to 21 million in 2020 and 24 million in 2026.

  • The conservative House Freedom Caucus wanted to more aggressively lower insurance costs and to dismantle federal regulation of insurance products along with eliminating federal standards for minimum benefits that must be provided by health insurance products.

  • The American Psychological Association (APA) voiced major concern that the AHCA would have reduced mental health and substance use coverage for millions of Medicaid enrollees and contributed to the loss of coverage for millions more.

What’s Next?

Based on Representative Paul Ryan’s comments immediately after the AHCA bill was pulled, there was no indication that another attempt at healthcare reform was imminent. Within a few days, there was news that House Republican leaders and the White House had restarted negotiations for healthcare legislation, but no timeline has been given. It seems likely that the Trump administration will look to focus on other priorities in the near future as well. Healthcare reform is still a top priority for the Trump administration, but it’s worth noting that a total repeal of the Affordable Care Act (ACA) may be difficult to pass through the Senate, so the failure of this bill also has the potential to be a catalyst for Congress to combine efforts to make changes to the existing ACA. The current administration believes that this will be a tough year for the ACA, and some Democrats are open to change so it’s likely not a question of if it will be revisited, but a question of when and how. If you have any questions about how changes created by the new administration may affect your financial situation and plan, reach out to us!

James Smiertka is a Client Service Associate at Center for Financial Planning, Inc.®

This information does not purport to be a complete description of the developments referred to in this material; it has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members.

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Webinar in Review: Stock Option Optimization

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Contributed by: Emily Lucido Emily Lucido

If you have non-qualified stock options, restricted stock units, or incentive stock options but don't fully understand them, you're not alone. What exactly are stock options? Why do employers offer them? How do they factor into your overall financial game plan? In a recent webinar hosted by Nick Defenthaler, CFP®, he answers all these questions in a simplified manner and discusses what it could mean to be offered a stock option from your employer and how to go about maximizing them.

Employee stock options can be an incredible add-on to employee compensation. Typically, those that are eligible are people within a higher level executive position at their workplace, or are with a startup firm. In most cases, employers use stock options as a way to attract, retain, and motivate employees which can then potentially drive up the company stock price.

What is vesting?

One very important part of stock options is the vesting schedule. Every company has a different structure for vesting. The vesting schedule can depend upon a variety of things including the company you work for, as well as, your position at the company. The chart below represents a three year vesting schedule:

In the above example, each year, you receive 33% more of the stock options, ultimately leading you to year three where you end up with 100%, having access to all options (which is where the incentive to stay with your employer comes in). So, if you were to leave the company in year two, you would only end up with 67% of options vested.

What are the most popular forms and how do they function?

  • Non-Qualified Stock Options (NSO)

    • A written offer from an employer to sell stock to an employee at a specific price within a specific time period

    • With NSO’s the market price has to be greater than the exercise price for the option to have value

      • Can be seen as a more risky form of equity compensation

    • Tax implications: when you are granted or “given” stock options, there is no tax

      • If you exercise those options there could be a taxable event if there is a gain

      • The gain is taxed as ordinary income, as a form of “compensation”

  • Restricted Stock Unit (RSU)

    • Similar to NSO’s, RSUs are a written offer from an employer to sell stock to an employee at a specific price within a specific time period

    • Main difference: As long as the company stock has value there will be value in your stock option. It is not determined by the market price as NSO’s are

      • Can be seen as more conservative form of equity compensation

    • Tax implications: Same as NSO’s - when you are granted or “given” stock options, there is no tax liability

      • Tax is due upon vesting

      • Also taxed as ordinary income, as a form of “compensation”

      • In most cases, we recommend selling the shares of RSU once they vest, in order to reduce risk and to diversify

An important note when thinking of stock options and whether to exercise or not:

“Don’t let the tax tail wag the investment dog.”

  • Simply put, don’t let taxes be your only reason for deciding whether to exercise or not

  • If you choose not to exercise because you are worried about the tax implications, the stock could easily go down in price, losing the potential gain you could have made

Overall, stock options have many benefits to them and can be extremely valuable when used effectively. There are many more opportunities you can take advantage of, so take a moment to listen to the webinar below as Nick goes into more detail on what you can do to effectively manage your portfolio when considering your stock options.

Emily Lucido is a Client Service Associate at Center for Financial Planning, Inc.®

This information does not purport to be a complete description of employer stock options or employer stock option planning strategies, and should not be construed as a recommendation. This information has been obtained from sources considered to be reliable but we do not guarantee that it is accurate or complete. Opinions expressed are those of Emily Lucido and are not necessarily those of Raymond James. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.

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Investor Basics: Inflation 101

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Contributed by: Nicholas Boguth Nicholas Boguth

The most basic definition of inflation is “the rise in price of goods and services.”

Below you will see the Bureau of Labor Statistics’ (BLS) inflation data for the past 10 years, but what do these numbers mean?

Let’s look at last year for an example – average inflation was 1.3%. That means the price of goods and services in the U.S. increased by about 1% last year. It does not necessarily mean that the t-shirt you bought last year for $10.00 is now going to cost $10.10, but rather 1.3% was the average change of all the goods and services that the BLS measures.

Inflation is largely determined by the supply of money, which is why it is a major long-term goal of The Fed to target a certain inflation rate (that target right now is 2%). Keeping a clear inflation goal can promote price stability, interest rate stability, and aligns with The Fed’s goal to help maximize employment.

Since The Fed has explicitly stated that it will be targeting a 2% long-term inflation rate, you may see why investing can be a very important tool for personal retirement planning. If The Fed nails the 2% target, $1 that sits in your change jar for the next 20 years will likely only buy you the equivalent of what $0.67 will buy you today. Feel free to talk to us about strategies about how to combat the effects of inflation!

Nicholas Boguth is an Investment Research Associate at Center for Financial Planning, Inc.® and an Investment Representative with Raymond James Financial Services.

The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Nick Boguth and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. The Consumer Price Index is a measure of inflation compiled by the US Bureau of Labor Studies. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Past performance does not guarantee future results.

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Introducing Secure Messaging - A New Way to Help Keep Your Personal Information Safe

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Contributed by: Lauren Adams, CFA®, MBA Lauren Adams

From presidential campaign email hacking to “zombie” internet-enabled devices, it’s hard to watch the news lately and deny that cybersecurity will likely be one of the most important issues and challenges of our time. Cybersecurity is a constant threat for individuals, businesses, and governments alike, and it’s a subject that we take very seriously here at Center for Financial Planning.

That’s why we continually work to find ways to make sure your personal information is kept safe and secure. Going forward, you should expect to see messages from us that contain personally identifiable information (such as Social Security Numbers or account numbers) sent via Raymond James’ Secure Messaging system. Secure Messaging allows us to encrypt the entire message we send, not just the attachment. Opening and replying to this email is fairly straightforward once you get the hang of it, and the process depends on whether or not you have an Investor Access account.

For Clients That Have Investor Access

You can receive and view a secure email on your computer, open the secure email, and open the secure email attachment entitled SecureMessageAtt.html (opening the attachment may differ slightly depending on the internet browser you use). If viewing from a mobile device, just click the link embedded within the message itself. Then, you will be able to click a button to “Read secure message” by logging in with your Investor Access email address, password, and security question. Your secure message will then appear. Need to send us an attachment back? Make sure you reply within the Secure Messaging system (not just to the email you received alerting you that have received a secure message from Raymond James Financial), and use the Attach a File, Add, and Upload buttons to send us the document back.

Want step by step instructions with screenshots? Check out this link.

For Clients That Do Not Have Investor Access

You can receive and view a secure email on your computer, open the secure email, and open the secure email attachment entitled SecureMessageAtt.html (opening the attachment may differ slightly depending on the internet browser you use). If viewing from a mobile device, just click the link embedded within the message itself. Then, you will be able to click a button to “Read secure message.” The first time you open a secure email, you’ll go through a one-time registration process. After that, you access a secure message by logging in with the password you’ve established. Your secure message will then appear. Need to send us an attachment back? Make sure you reply within the Secure Messaging system (not just to the email you received alerting you that have received a secure message from Raymond James Financial), and use the Attach a File, Add, and Upload buttons to send us the document back.

Want step-by-step instructions with screenshots? Check out this link.

Other Secure Ways to Send and Receive Information

Furthermore, as an alternative to Secure Messaging we also continue to use e-Signature, to allow clients to easily and securely sign forms electronically, and, our online content management and file sharing platform, the Vault. Haven’t tried the Vault yet? Get signed up for Investor Access and discover this easy way to upload secure information for your planner to review! Check out the blog articles we’ve already written on e-Signature and Vault for more information, or contact your Client Service Associate. We love when clients start using these tools for the first time, and we’re happy to walk through Secure Messaging, the Vault, or e-Signature together!

Lauren Adams, CFA®, MBA is Director of Client Services at Center for Financial Planning, Inc.®

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Lauren Adams and not necessarily those of Raymond James.

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The Responsibility of Handling Other People’s Money

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More and more often as we meet with clients, a recurring topic of conversation is the responsibility of handling the financial affairs of others. Whether that’s for an older adult parent or relative, or whether it’s the handing off of that responsibility to a son, daughter, friend, or other trusted party that concerns our older adult client. As the population continues to age, there is a growing need for older adults to plan for the shift of the responsibility of handling their financial affairs, either now or in the future, to someone else for a variety of reasons—medical, dementia or other incapacity issue, or simply the desire not to have to handle one’s own day-to-day financial affairs.

It is important to be aware that there are a number of roles that you might be assigned to in order to handle the financial life of an older adult; and it is important that these be planned for in advance to avoid potential conflicts in the future:

  • Social Security Representative Payee – The Social Security Administration allows for a representative payee to be assigned in the case that there is an incapacitated recipient of Social Security (family or friends of the recipient that must be 18 years or older).

  • Long Term Care Insurance Lapse Provision Designee – Someone assigned to receive notices in the case that long term care insurance premiums are not paid on a long term care insurance policy. The designee has the responsibility of making sure the premiums get paid until the insured needs to go on claim.

  • Agent for Funeral Decisions – Some states (now including Michigan) permit the appointment of an agent to manage the funeral arrangements for a person, which can be separate from the Executor of the Will.

  • Power of Attorney – General Power of Attorney for General/Financial Decisions allows the power to handle bill paying, banking, investments, IRA and other distributions, and any other financial decisions on the person’s behalf, serving as their financial fiduciary (and making decisions based on their best interests).

As the Power of Attorney, use the resources you have available to you:

  • The professional team – the client’s Financial Planner, CPA, attorney, physician, etc.

  • The client’s Personal Record Keeping Document and Letter of Last Instruction, if they have one.

  • The client’s Financial Plan and history with their planner – this will tell a story about how they have lived their financial life and their historical patterns (especially helpful if you are assisting someone who has developed dementia or cognitive impairment). It’s helpful to begin to attend meetings with the client and their financial adviser, if the client is comfortable, as soon as you know there is an issue and if you know you will be involved in assisting the client now or in the future.

Planning ahead for your involvement in handling money for an older adult is always suggested, so that you can get familiar with the client’s situation, the team members involved, and the resources available. Being a financial fiduciary is a big responsibility, one that you don’t want to take lightly or push off until the last minute to tackle. Contact your planner or myself, at Sandy.Adams@CenterFinPlan, if we can be of assistance in handling these or other Long Life Planning matters.

Sandra Adams, CFP® , CeFT™ is a Partner and Financial Planner at Center for Financial Planning, Inc.® Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.

Raymond James Financial Services, Inc. and its advisors do not provide advice on tax or legal issues, these matters should be discussed with the appropriate professional.

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