by Keythe Ward-Aguilar, CFP® on August 23, 2010
At the end of last year, 2009, my company, Ward Aguilar Financial, was nominated by a group of our peers and clients as one of the best wealth managers in Orange County, CA. In January, 2010, it was announced that we were listed as one of top firms for 2010. What a really nice honor!
What people don’t realize is the process. It is run by a third-party research firm, Crescendo Business Services through Orange Coast Magazine, and adheres to the guidelines established by the Investment Advisors Act of 1940 regarding third-party recognition (testimonials-not allowed in our highly regulated world). This research company administers a survey, by mail and phone, to approximately 1 in 4 high-net-worth households and all FINRA licensed individuals in a general geographic area. Each survey individual is asked to name and evaluate three wealth managers. (See our web site for what a “wealth manager” provides for clients-www.wafinancialinc.com).
Each respondent is asked to evaluate only wealth managers whom they have worked with or each peer respondent is asked to evaluate only those advisors they know from personal experience. We are evaluated on several levels from customer service, integrity, knowledge, expertise, communication, if we meet client expectations, service, quality of recommendations and overall satisfaction. There is plenty of space on the response card to give positive AND negative input regarding the wealth manager.
The survey is scored, including both negative and positive, to determine which wealth manager meets the identified standards. They then screen the wealth manager on their regulatory compliance history as reported by FINRA, the SEC, the State Board of Accountancy and the State Bar. I do remember having to disclose all my license information but did not know they went to such lengths to check our backgrounds. Only FINRA licensees, Investment Advisor Representatives, CPAs and state licensed attorneys with many years of experience can be qualified for the final list.
We DO NOT pay a fee to be included or named. I always thought people paid for this type of recognition. I guess I will think twice before I jump to that conclusion! In the end, the list contains wealth managers that represent less than 7% of wealth managers in our local area. That is a pretty small number.
I tried to find out who nominated us but they would not share that information. I am most proud about my clients and peers thinking so highly of us. Thanks to any of you that nominated us. Thanks!
by Keythe Ward-Aguilar, CFP® on August 6, 2010
There are a lot of strong emotions circling the new health-care law, and regardless of how you feel, there are changes coming that may need to be considered regarding your investments and taxes. The new tax hikes related to the health-care bill are directly intended for high-net worth individuals. These may be what are referred to as “unintended consequences” for some individuals.
Individuals with adjusted gross income above the magical number of $200,000 for singles, and $250,000 for married couples, a 3.8% Medicare tax will be applied to investment income such as capital gains, dividends, interest, rental and annuity income – mostly known as “unearned income”. This is a significant tax hike for some. Along with the new Medicare tax, there are proposed increases in capital gains and income taxes going forward when the Bush tax cuts are due to expire.
The same 3.8% tax will apply to unearned income from assets held inside a trust. This is new territory for trusts. The Medicare tax will apply the same way it does assets held outside trust, except the income threshold is much lower. Instead of the $250,000 threshold, it will be triggered if trust unearned income exceeds $11,200. If the investment income is paid out to the beneficiaries, it is not subject to the tax. But if it remains inside the trust, it may be subject to the additional 3.8% tax.
Investors may consider reevaluating their plans. Here are some suggestions from the conversations we are having with clients. Municipal bond interest will remain tax-free under the new rules so that may be something to revisit. Using cash-value life insurance and overfunding the policy so loans may be used to fund retirement (loans are not considered income, so are not subject to tax) might be a discussion you should be having with an advisor. If you have large capital gains in an investment, consideration may be given to taking the gains this year and re-buying the position. This will raise your cost basis and may help with the exposure to the added tax later on. Be careful when considering IRA conversions as this may trigger higher income in the year of the conversion.
by Keythe Ward-Aguilar, CFP® on May 7, 2010
Wow! What a wild ride the market can be. I can’t remember another day like this one. I am thrilled that a lot of my clients were overweighted in cash. What does it look like going forward? Who knows without that magical crystal ball, but I will remind people about keeping their focus on the goal. Most of my clients are long term investors and are well diversified. The day to day swings are tough, without a doubt, and the ride will be bumpy over the next year, but we need to remember that most of you are in it for the long haul with an solid objective in mind. We need to take a deep breath and not panic.
It continues to make sense in our current environment to have a focus on high-quality investments. I have to say that with the pending elections in the U.K. and the troubles in Greece and with the Euro, I would probably lean towards large companies that are a little less dependent on the European markets – especially the European banks that carry large amounts of Greece debt.
Today we experienced how the global markets have advanced and how quickly money moves. A good asset allocation is a valuable tool that will help investors sort through the volatility and hopefully find opportunities. Ultimately, we still need to make sound investment decisions that are consistent with our individual goals.
