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We Are Proud to Share Our Support

We Are Proud to Share Our Support

Our clients are some of the most generous people we know. That’s why we are proud to follow their lead as we support efforts to help those affected by Hurricanes Harvey and Irma. We have been relieved to know that our clients are safe and well, and staying strong for friends and family that may be struggling. We share and support their concern for their neighbors and have sent contributions to both the American Red Cross and the Ricky Martin Foundation for their good work helping those in need. We know that every donation makes a difference and we encourage everyone to find their own way to make a difference.

To learn more about how we’re giving back, contact us.

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Two Standards to Look for in a Financial Advisor

Two Standards to Look for in a Financial Advisor

By Elaine Lee

You probably have spent your time working, raising children and maybe even caring for aging parents. You’ve put money away for retirement, saved for college and have emergency funds available. As you think about the future, though, there are nagging questions: Will I be able to live the lifestyle I’ve imagined without running out of money? Am I taking the right step to protect my family? Maybe it’s time to stop trying to do it all yourself and find a financial advisor who can help.

Finding a financial advisor can sometimes feel as stressful as finding your spouse. How do you know who to trust with such an important part of your life? If you’re just beginning your research, don’t sweat. Start by understanding two important legal standards regulating how financial advisors provide advice: the fiduciary standard and the suitability standard.

The Fiduciary Standard

In today’s world of financial services, not all advisors are created equal. When you’re ready to seek financial guidance, don’t just assume the advisor always has your best interests in mind. To understand the importance of the fiduciary standard, you must first understand the definitions of standards required by law. The fiduciary standard obligates advisors to put your interest before their own. Fiduciary advisors recommend solutions and strategies that are most likely to help you reach your goals and are consistent with your risk tolerance and objectives. Advisors that work under a fiduciary standard must disclose any conflict of interest and adhere to the duty of care and loyalty to you. They also are usually completely transparent about their compensation.

The Suitability Standard

In contrast, the suitability standard only requires advisors to suggest investment products that are suitable to your circumstances regardless of your goals. Also, there is no requirement for the advisor to avoid any conflicts of interest, allowing them to recommend suitable financial products that may provide the advisor with higher personal compensation than other suitable products. In fact, advisors employed by broker-dealers, insurance companies and other firms operating under the “suitability standard” can lawfully sell their clients an investment product that may be suitable whether or not it is in their best interest. Advisors adhering to the suitability standard are also less likely to fully disclose their compensation structure. This is because they are compensated in a variety of obvious and non-obvious ways including commissions, production “credits,” trailing fees and even trips or contests for selling a certain product in high volume.

There are wonderful advisors and poor advisors that work under both the fiduciary and suitability standard. Pending Department of Labor rules will require all financial advisors to be fiduciaries on retirement accounts – but no other aspect of your life. If your primary concern is trust, you might be best served searching first for advisors that legally work under the fiduciary standard at all times. This standard not only prevents conflicts of interest when recommending investments, but it is a great way to assure trust between you and the person helping you reach your financial goals.

Are you looking for more ways to understand how and when to choose a financial advisor? Download our new learning paper.
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MarketWatch invites Liz to share her goal-oriented approach

goal oriented approach, investing, financeWhen financial advisers ask about their clients’ goals, they often hear something like “I want growth with moderate risk.” Trouble is, that’s not a goal.

An answer like that can lead to problems both for clients, who may have trouble making decisions about what they want to accomplish with their money, and for advisers, who may struggle to give clients the kind of service they need.

The matter becomes even more important as the number of investment choices has exploded, leaving investors feeling frustrated with portfolios that can resemble cluttered garages: They might know what they own, but they don’t know where it’s hidden or what it was used for anymore.

To clear the clutter, advisers should focus their clients on goals, setting a measurable beacon for their portfolios and establishing a shared understanding about what they’re working to accomplish.

Doing so can help both of you focus on a plan, rather than get distracted by market movements.

To do that, Liz suggests a two-step approach: Focus first on major life stages, then on defining specific financial goals within those stages. Conversations framed this way can lead to a clear — and shared — vision of your clients’ priorities.

This article from Liz Miller originally appeared on MarketWatch. To read the full version, click here.

To gain even more guidance to a clutter-free approach, pick up a copy of Liz’s book, “Clutter-Free Wealth: A Goal-oriented Guide to Gaining Control of Your Affluence.

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Congratulations to Elaine Lee!

Congratulations to Elaine Lee!

We’re proud to share that Elaine Lee has earned her CERTIFIED FINANCIAL PLANNER™ certification!

The CFP® certification is the industry standard for professional financial advisors. To earn the designation, professionals must complete university-level financial coursework and pass a six-hour exam covering 72 topics – ranging from risk management to investments, tax laws to retirement planning. Though Elaine is an experienced advisor, we encouraged her to pursue the designation; she shares that she enjoyed the added curriculum and she feels the program has enhanced her expertise.

Elaine joined Summit Place in 2016 after spending several years with a nearby firm. Elaine was drawn to our unique approach to wealth management, offering our clients comprehensive financial expertise along with concierge service. This approach resonated with her as she looked back on her earlier executive career in which she saw so many executives missing the value of a qualified advisor.

Elaine shares, “As my parents came to the ‘land of opportunity,’ it was ingrained in me that obtaining a good education was paramount and delaying gratification was a virtue. With this mindset, I spent my first paycheck wisely but also saved for my future. Years later, as the president and chief operating officer working with global brands, I was executing strategic growth plans and managing multi-million dollar budgets. Looking back, I wish I had a trusted professional helping guide my personal financial decisions when I was an executive. I was strapped for time and didn’t have the expertise to understand or manage the full picture around my finances. There’s a huge opportunity cost associated with not taking advantage of all the financial planning disciplines as you are accumulating your wealth. Investments, risk management, taxation, retirement and estate planning all work together to make sure you are preparing for your long-term goals; I’ve realized this is essential for successful executives.”

As a former executive, Elaine understands the challenges of balancing a demanding career and family. She has always wanted to guide people to take intelligent next steps with matters they don’t have time or expertise to address but are critical in doing so. Today, Elaine helps them consider and execute strategies to achieve their long-term goals so they can focus on their daily demands. Now, as a CFP®, Elaine feels she adds even more value to clients by helping them make sound decisions on an even broader array of financial issues.

Elaine emigrated to the United States from Hong Kong when she was just three years old, eventually settling in New York City. She earned her B.S. in business administration and marketing from New York University’s Stern School of Business. Currently, Elaine resides in Morris County, with husband and two daughters.

Congratulations Elaine for adding this designation to your career accomplishments! If you’d like to reach Elaine, you can send her an email here: elaine.lee@summitplacefinancial.com.

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Planning on retiring early? Use these three retirement savings strategies

Retirement savings

Retirement account rules are stacked against early retirees. People may face a 10 percent early withdrawal penalty if they take money out of their traditional IRAs before age 59½ and before age 55 with traditional 401(k) plans and other workplace retirement plans.

According to Tom Anderson, here are some strategies early retirees can use to maximize their retirement savings:

Rule 72(t) distributions

There is an exception to the early withdrawal penalty for IRAs. The IRS allows you to take “substantially equal periodic payments” under Rule 72(t).

To avoid the 10 percent penalty once you begin distributions, you must continue to take the required distribution for the longer of five years, or until you reach age 59½. Once distributions begin, if the series of payments is modified in any way, the 10 percent penalty will be imposed retroactively beginning with the first year of distribution.

Taxable accounts

In a taxable account, the money in the account is yours, minus capital gains taxes, without any strings attached to distributions.

Roth conversion

“[Roth conversions] require careful tax analysis each year, after the year is over, and before taxes are filed to determine the capacity for additional withdrawals or conversions,” said Pearce Landry-Wegener, a CFP at Summit Place Financial Advisors in Summit, New Jersey.

Converting to a Roth can be a bad idea if you live in a high-tax state and plan to move to a state with lower or no state income taxes later in retirement.

This article originally appeared on CNBC. If you’d like more information on retirement planning, contact us.

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Summit Place Financial Advisors Honored by American Registry

american registry most honored businesses

 

We’re thrilled to announce that Summit Place Financial Advisors has been recognized as one of “America’s Most Honored Businesses – Top 10%” by American Registry. This recognition of excellence includes significant mentions in the press and honors by industry peers, trade groups and clients. Given to top businesses for their continuous professional recognition, we’re excited to receive this award for 2017.

Contact us for more information.

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A Memorable Trip to The Chautauqua Institution

A Memorable Trip to The Chautauqua Institution
By Pearce Landry-Wegener

For the past 14 years, our president Liz Miller has spent a few weeks of her summer teaching courses at The Chautauqua Institution in upstate New York. Equal parts education, performing arts appreciation and interfaith worship, this unique nonprofit community, founded in 1874, is both hard to describe and like nowhere else. A nine-week celebration dedicated to learning and discussion, each week at Chautauqua centers around topical theme of our time. It also features a variety of guest speakers, lectures, performances, and religious services. In addition to the featured theme of the week, guests are invited to enroll in additional courses that cover an array of topics. In recent years, Liz and I taught classes entitled “Family Legacy Planning” and “Where to Invest Today” – the format allows for both teaching and a sharing of experiences and ideas, attracting a wide variety of participants.

I’ve joined Liz for the past four years and gain something new with each trip. This summer, during the two weeks we taught at The Chautauqua Institution, we reconnected with old friends and formed new relationships. We also took the opportunity to consider the world and economy with a fresh perspective. While on site, Liz interviewed with Matt Warren of WJTN: a local radio station eager to inform their listeners about how to plan their legacy and where to invest in the stock market. Given the opportunity for us to discuss important topics with such a connected community, I continue to look forward to this journey year after year.

Take a look at the picture gallery below, and cheers to another unforgettable trip to Chautauqua.
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Planning Your Legacy and Future Lifestyle? Check Out Our Learning Center

Planning your future lifestyle and eventual legacy isn’t easy and can be even more challenging for those unsure of where to begin. Whether thinking about a full retirement, transiting to the next phase in learning center, educationyour life, or considering how to fund your loved ones’ education, you are probably inundated with the wealth of information found on the internet. A handful of online resources provide solutions for financial planning but this common advice can apply to people in a wide range of circumstances. If you’re looking for strategic guidance that uniquely speaks to you on these topics (and many more), our learning papers can help.

The “Lifestyle and Legacy Planning” section of our Learning Center includes in-depth papers on a range of personal finance topics. The newest one is “Planning Your Next Move? Explore Renting.” This paper provides those entering the next phase of their lives a handful of reasons why renting may be better than buying.

If you’re looking for additional resources to plan your legacy and future lifestyle, here is an overview of our Learning Center:
  • Strategic Educational Funding for the Next Generation: As parents and grandparents, you only want to see your children succeed. But you might also worry about funding their future education. In this learning paper, we outline your options and our favorite choices to fund your loved ones’ education.
  • Thriving in Turbulent Times: We all know these good times can come to an end any moment. If you want to stay ahead of the damage of market declines, you should analyze the key steps in this paper.
  • Why Proper Accounting Titling and Beneficiary Designations are so Important in Estate Planning: Coordinating account titling and beneficiary designations are often overlooked elements of a successful estate plan. Many people unwittingly title accounts or designate beneficiaries in a way that undermines their estate plan. This paper can help you avoid errors by explaining the various account titling options and the use of beneficiary designations.
  • It’s Tax Time: Here are 5 Tax Management Tips: Tax season will be here before you know it. From saving for retirement to donating to charity, we highlight five strategies to help reduce your tax liability.

We will continue to add resources to the Learning Center to better help you manage your finances. In the meantime, you can click here to download all learning papers.

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Personal Finance Mistakes Grads Make on Their First Job

personal finance, recent grads, young adultGraduation season is here and young adults will soon enter the workforce. Now, these professionals will need a strategic plan to stay ahead of their finances. In an interview with Financial Advisor Magazine, wealth management advisor Pearce Landry-Wegner recently shared his insights on common personal finance mistakes new grads make on their first job, and solutions for each. These include:

Not setting up a repayment plan for student loans

Recent grads can forgo student loan payments during a six-month grace period after graduation. During this time, it’s critical they review and set up a repayment plan. Also, there are options for student loan forgiveness through public service. But it is important they know which employers fall within this realm to ensure loan forgiveness.

Not keeping fixed expenses as low as possible (e.g., rent, car, gym, cable)

Additionally, to avoid debt, recent grads should keep living expenses to 25 percent of a paycheck. If necessary, there are ways to negotiate pricing with some cable and internet providers to keep these costs low.

Not saving enough

Recent grads can work with their bank to schedule a recurring payment deposited directly into a savings account. This helps with the overall saving process. To make it easy for the employee, most companies can divide a paycheck and deposit the funds into different accounts. Also, to help build an emergency fund and pay down debt (student loans, credit cards, etc.), it’s important to put half of all bonuses directly into the bank.

Not signing up for the 401k/retirement plan at work

Often times, recent grads don’t understand how to plan for their retirement. As a first step, there are many forms that allocate a percent or fixed dollar amount for retirement from each paycheck. This allows for retirement funds to grow steadily, and the percent option can automatically increase with every raise.

Not reading the benefits package and understanding new medical coverage

By reading the medical coverage thoroughly, recent grads can tell whether their primary doctors are covered and whether they’ll have an increased co-pay. From here, they can take the necessary steps to either switch physicians or explore their options for independent health plans.

Not checking the job’s disability insurance

If disability insurance is offered by the new employer, recent grads should pay the premium after taxes so that the benefits will be tax-free (if they’re needed).

To read about more personal finance mistakes recent grads make, click here.

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Is Amazon’s Stock Too Expensive?

Is Amazon’s Stock Too Expensive?
Amazon recently reached $1,000-per-share – even before Amazon announced its intention to buy Whole Foods, the company was a standout beneficiary of a struggling retail sector. While Target, Macy’s and Kohl’s were down over 20 percent this year, Amazon was growing its retail dominance.

In an interview with U.S. News & World Report, Liz Miller explained that many may continue to think of Amazon as a technology stock but it is more appropriately the leading retail stock in the S&P 500. What is abundantly clear this year is that traditional retail is nearly crumbling but consumers have not reduced their discretionary spending. They are increasingly transitioning to shopping exclusively on the internet. Amazon is a prime beneficiary of this growth because the company almost single-handedly created this trend. Perhaps it is not surprising that the stock appreciated as much (and more) as traditional retailers declined.

It is also never easy to value Amazon as a stock; traditional valuation metrics look very expensive. Yet the valuation has perpetually reflected the future upside potential of internet purchasers. And by any growth measure, the online retailer has exceeded expectations.

Is the stock too expensive? Any stock that temporarily outperforms the broad averages can easily have a correction. If a correction were to occur, though, it would likely indicate a buying opportunity for the leading retailer of our time and the primary beneficiary of every positive consumer economic indicator.

Read Liz Miller’s interview in U.S. News & World Report.

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18 Bank Street, Suite 200
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