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Articles on Wealth Management Topics

Consumers of Financial Advice Beware: Not All CFP® Practitioners Are Created Equal

The Certified Financial Planner (CFP®) designation is the most widely recognized certification for financial advisors. However, CFP® certificants vary enormously in the regulatory environments and business models in which they operate. These differences have tremendous implications for the quality of financial advice that a consumer should expect to receive from a given CFP® practitioner.

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Predicting Future Investment Returns: Implications for Retirement Planning

In the last installment of Articles on Wealth Management Topics, we discussed academic research on different ways to estimate the magnitude of future stock market returns. As a refresher, the worst of the ways studied was to extrapolate future returns from past returns. Nearly as ineffective is to base estimates of future returns on surveys of individual and institutional investors.

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Mean Reversion in Financial Markets: The Case for a Contrarian Approach to Investing

Returns in financial markets are often cyclical. That is, multi-year periods during which asset classes or investing styles or mutual fund sectors succeed in generating above-average returns are usually followed by multi-year periods of disappointing returns, and vice versa. Since this market behavior is a key tenet on which our contrarian investment philosophy rests, let's explore the academic research supporting it and the ramifications for successful long-term investing.

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The ABC's of QCD's: Qualified Charitable Distributions Explained

After having played political ping-pong with them for almost a decade, Congress finally made qualified charitable distributions (QCD's) a permanent feature of the tax code late in 2015. And that's a good thing: (a) for those who consider their IRA required minimum distributions to be an unneeded and tax-inefficient nuisance, (b) for charitably-minded retirees, and (c) for charities in general.

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The Current State of Social Security Claiming Strategies

The Bipartisan Budget Act of 2015 was a mixed blessing for investors and retirees. As in most bipartisan compromises, there was plenty to dislike in that budget agreement. It did away with a couple of coordinated Social Security claiming strategies, "file-and-suspend" and "filing a restricted application", that were deemed by the Administration to be unintended loopholes.

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Supercharge Your Retirement Savings with Mega Backdoor Roth IRA Contributions

Roth 401(k) contributions are especially advantageous to younger workers still looking forward to their peak earning years. And for higher-paid employees, Roth 401(k)'s may be the only way for them to contribute to Roth-style accounts. Now here's a way - courtesy of some fairly recent clarification from the IRS - to potentially supercharge the pace of your contributions to Roth-style accounts at the workplace, regardless of whether or not your employer offers a Roth 401(k) feature.

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Is Now the Time to Rollover a Retirement Plan Account to an IRA?

One of the major factors to consider when deciding whether to rollover a retirement plan account to an IRA is investment flexibility. An IRA typically allows its owner almost unlimited investment flexibility. In contrast, a 401k, 403b or 457 retirement plan account-holder is constrained to choose from among the menu of investment options made available by the plan's sponsor and service provider.

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Target-Date Mutual Funds: A Step in the Right Direction, But Far From Ideal

Target-date mutual funds have been attracting more and more assets during the last decade, primarily as a result of their burgeoning use in 401k and 403b plans. Plan sponsors and participants alike are drawn to the simplicity of TDF's, but as is often the case, the easy solution is not the best one. The weaknesses of target-date funds stem from three words: lack of customization.

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Brokers Come Under Fire as the Fight Over Fiduciary Financial Advice Heats Up Again

The seemingly endless debate about the standards of care with which various types of financial advisors are legally required to treat their clients received some much-needed attention in Congress recently. Given that the SEC and DOL are both working on new rules governing the relationship between advisors and clients, it's critical for current and prospective consumers of financial advisory services to understand the regulatory environment and to be aware of recent developments.

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