Jen Hackmann Earns Registered Paraplanner℠ (RP®) Designation

 Congratulations to our Jen Hackmann for completing the Registered Paraplanner℠ course of study.  The curriculum encompassed the financial planning process and general financial planning concepts. We applaud Jen for her recent accomplishment as she passed a rigorous examination that tested her ability to synthesize complex concepts and apply theoretical concepts to real-life situations.

As a Registered Paraplanner℠, Jen will renew her designation every two-years by completing continuing education hours, reaffirming adherence to the Standards of Professional Conduct and complying with self-disclosure requirements. But she says she’s ready to start putting her recently tested knowledge to work. Jen explains,

It will be exciting to continue to broaden my knowledge base and be able to support the overall direction and vision of the Center’s financial planning process.”

Well done, Jen Hackmann, RP®

Parents and Children Misaligned on Finances

 As the mother of a teen and a pre-teen, I can testify that parents and children often speak different languages. Like when my daughter says "I'm going to die," it doesn't generally mean she's seriously ill; it more likely means she got a hole in her favorite pants! I live for the promise of the day when my children are grown and we will be able to communicate on the same plane.  After reading the recent Intra-Family Generations Study conducted by Fidelity Investments, I’m not so sure that will ever happen…at least when it comes to finances.

The Intra Family Generations Study found that parents and their adult children are on different pages when it comes to several key family financial issues, including retirement planning, inheritance planning, and caring for elderly parents.  The study found that 97% of parents and children surveyed disagreed on whether adult children will care for their elderly parents if they need long term care assistance.  Children tend to overestimate the value of their parents’ assets (by an average of $100,000 or more) and parents are overly critical of their children’s financial decisions.  In addition, while 24% of adult children surveyed say they will need to help their parents in retirement, 97% of parents say they won’t need help.  Clearly, there are misunderstandings between the generations.

So why, you might ask, are adult children and parents so disconnected?  According to the study, (which I can vouch for in my personal experience) families simply don’t talk about financial issues.  Talking about things like investments, debts, savings shortfalls, income taxes, or estate planning is taboo in many families. 

Most interestingly, the study did find that 60% of adult children and 68% of parents indicated that they would be more comfortable discussing these important financial issues with a third party financial professional than with each other.  Financial planners are the ideal financial professionals to lead productive family meetings.

If you find yourself as either a parent who has not discussed future financial issues with your adult children or as an adult child who has not discussed long term care or financial issues with your parent, contact your financial planner to schedule your family meeting today.

Sandra Adams, CFP® is a Financial Planner at Center for Financial Planning, Inc. Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In 2012 and 2013, Sandy was named to the Five Star Wealth Managers list in Detroit Hour magazine. 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.

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Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.  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 websites users and/or members.

Jennie Bauder Attends Branch Professionals Opportunities Conference

 When Jennie Bauder got the invitation, it was an "opportunity" she couldn't pass up.  Jennie is one of our Client Service Managers and was among 100 select Raymond James professionals who received an invitation to participate in the Opportunities Conference.  The two-day program, held in St. Petersburg, Florida, focused on daily operations for client service professionals and recent technology enhancements.

The Opportunities Conference gave Jennie a broader perspective on Raymond James.  "This was my first visit to the Raymond James Headquarters in St. Petersburg.  It was a great experience and wonderful to meet so many of the faces at Raymond James."

Conference organizers did due diligence while planning the conference.  Conference leaders gathered information from all attendees in advance to design the conference so participants had a change to align with other professionals who shared key interests.  "We shared numerous best practices within our group, and also tackled some common challenges," Jennie explained.  And after two full days packed with new information, Jennie was happy to come back and share what's up and coming with her peers in Southfield, Michigan.

The Center Celebrates at "Detroit Loves Cinema"

On Thursday February 14th, The Center joined Detroit Passport to the Arts (DP2A) for a special screening of Oscar Nominated Shorts at the Detroit Film Theater at the Detroit Institute of Arts.  We had a great time strolling down the red carpet, voting for our favorite short films and best dressed, and taking in the Detroit Historical Museum for an after-party.  Center for Financial Planning is a season sponsor for DP2A in conjuction with our 2020 vision which includes initiatives to support the community around us.

Founded in 2009 by Detroit Chamber Winds & Strings, Eisenhower Dance Ensemble and the Great Lakes Chamber Music Festival, Detroit Passport to the Arts provides an introduction to the Detroit cultural scene for people 45 & under.  With an affordable passport, DP2A offers an opportunity to experience Detroit and its culture with like-minded people.  A passport provides access to six performances, including dance, opera, symphony, theatre, film and chamber music, followed by six social networking events.  For more information about DP2A visit dp2a.org or call 248-559-2095.

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Detroit Passport to the Arts is not affiliated with Raymond James

Center Sponsors Birmingham Bloomfield Chamber Government Forecast Breakfast

 Senator Debbie Stabenow provided the keynote address at the Chamber’s Annual Forecast Breakfast held at The Community House on February 11^th.   She discussed the current political climate in Washington and its impact on the nation’s and Michigan’s economy.  Center team members in attendance included: Sandy Adams CFP®, Tim Wyman CFP®, and Troy Wyman CFP®.

“Our strength comes from making things and growing things,” Stabenow said to the crowded ballroom at The Community House.

For a more detailed account of topics covered by Senator Stabenow, please reference the article, Debbie Stabenow Talks Innovation, Bipartisan Collaboration in Birmingham (http://birmingham.patch.com/articles/debbie-stabenow-talks-michigan-innovation-bipartisan-collaboration-in-birmingham

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Links are being provided for informational purposes only.  Raymond James is not affiliated with and does not endorse, authorize or sponsor an 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.  The opinions and services of Debbie Stabenow are independent of Raymond James.

Center Curtain Call

 

The Center's Team enjoys sharing their knowledge with the press to help stories come to life, share facts and bring important topics to the forefront.  We are also honored when we are recognized by media and publications for our work and service to our profession. Here's what's new:

In the News

Melissa Joy, CFP® was quoted in the Chicago Tribune on February 18, 2013 in an article titled “Focus on performance, rating rather than IRA fees” by Janet Kidd Stewart.  

2013 Five Star Wealth Manager

Center team members Matt Chope CFP®, Sandra Adams CFP®, Troy Wyman CFP®, Laurie Renchik CFP®, and Julie Hall CFP® received recognition by Five Star Professional being named a 2013 Five Star Wealth Manager.  

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Five Star Award is based on advisor being credentialed as an investment advisory representative (IRA), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

Debt: Just Another Four-Letter Word

 Is DEBT a four-letter word? It doesn’t have to be – but managing (notice I didn’t say avoiding) credit and loans is an important component in building and maintaining wealth. Clients that have worked with us over the years know that as comprehensive planners, we are trained to view our clients’ entire balance sheet or net worth statement. A quick refresher: Your net worth consists of both assets (investments, savings, etc.,) AND liabilities/debts (home mortgage, auto loans, etc.). You can help improve your net worth or wealth by adding to investments and/or reducing liabilities. Therefore, we work closely with clients to track and analyze their net worth each year as one measurement of overall financial health.

Debt doesn’t have to be one of those bad, four-letter words if used and managed properly. Financing a house can be a good lifestyle decision as well as a smart financial transaction. Certainly today’s low interest rate environment makes it more compelling to wisely use debt or leverage.

For example, Sue and Steve are 45 years old and currently desire to retire in 15 years. “Retire” to them means working for a charitable organization that they are passionate about…perhaps earning some wages…perhaps not.  Essentially, they would like to be Financially Independent at the end of 15 years. Ideally, clients such as Sue and Steve plan to also retire their mortgage over the next 15 years. However...

Utilizing mortgage debt over the next 15 years can be a good financial strategy:

1. Interest rates are historically low, giving them a better opportunity (not guaranteed) to earn higher returns on their retirement savings.

2. There is an income tax benefit for mortgage interest paid.

3. The mortgage payments are a forced savings mechanism. 

Depending upon their overall situation, we might even suggest a 30-year mortgage and that they invest the difference between the 30 and 15-year payments for additional flexibility. As always, each situation is different and you should consult the appropriate professionals.

In summary, our experience suggests that clients’ eliminate debt, including home mortgage debt, at or near retirement.  At retirement, the name of the game becomes “cash flow” and not having to service debt payments goes a long way in living a successful retirement. 

Timothy Wyman, CFP®, JD is the Managing Partner and Financial Planner at Center for Financial Planning, Inc. and is a frequent contributor to national media including appearances on Good Morning America Weekend Edition and WDIV Channel 4 News and published articles including Forbes and The Wall Street Journal. A leader in his profession, Tim served on the National Board of Directors for the 28,000 member Financial Planning Association™ (FPA®), trained and mentored hundreds of CFP® practitioners and is a frequent speaker to organizations and businesses on various financial planning topics.

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Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.  Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.  Investing involves risk and investors may incur a profit or a loss.

Sequestration Frustration

After a debt-ceiling reprieve, the US government’s next big hurdle is the March 1st Sequester. What is sequestration and how does it affect you?

During the debt ceiling showdown in the summer of 2011, a group of arbitrary across-the-board spending cuts deemed unacceptable to both Democrats and Republicans was drafted to ensure action on deficit reduction. It wasn’t a solution, it was just a way to buy time and it’s called a sequester. Through a series of compromises, the deadline for the sequester has been moved to March 1, 2013 and separated from other components of the “fiscal cliff”.

When totaled, the sequester’s automatic spending cuts reduce government spending in 2013 by $85 billion (source: JP Morgan Market Bulletin, 2/19/13). Here’s a breakdown of cuts mapped out in the legislation through 2021.

What does the sequester mean to you as a citizen and investor?

Fiscal drag.The Congressional Budget Office estimates the initial impact to GDP in 2013 of around 0.56% if the sequester lasts from March through the end of the year (source: Washington Post, “The Sequester”, 2/20/2013).  This could mean uneasy stock markets, less hiring, and more muted recovery.

Arbitrary cuts. The punitive nature of across the board cuts may have an impact for you in other ways. Those most affected probably work within the government. Some could lose their jobs and those that don’t could find themselves working in a very constricted environment. For the average citizen,  daily encounters with the government may be slowed or changed. Some examples? Fewer food safety inspections, flight back-ups due to cuts at the FAA, slower federal court systems with lighter dockets meaning delays to cases, cuts to federally-funded scientific research, defense contracts, and reduced military benefits.

Market disruption.The idea of a sequester is popular with almost no one. This could translate into less confidence in stock markets and increased volatility. In the longer term, the failure to address debt and deficit issues could have even larger implications.

We can’t predict how everything relating to a spending sequester will fall out. Markets so far this year have turned the other cheek whether from fatigue with politically-inspired deadline drama or positive reaction to other news. We’ll keep you posted as Capitol Hill sorts things out in the coming weeks and months.

Required Disclaimer: 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 information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Any opinions are those of Melissa Joy, CFP® and not necessarily those of RJFS or Raymond James.

Let’s All Give Melissa Cyrus an Official Welcome!

 We would like to take a moment and officially recognize our newest team member Melissa Cyrus and applaud her recent accomplishment.  Melissa came aboard in May 2012 after two summer internships with The Center in 2010 and 2011. She has settled in nicely to her new role as a Client Service Assistant and recently passed the challenging Series 7 securities licensing exam as well as the Series 63 which cover state laws and regulations.  Congratulations Melissa!

Melissa earned her bachelor’s degree from Grand Valley State University with a double major in Finance and Economics.  When not at work, you might find Melissa playing basketball or running and in the summer she enjoys being on the water boating, kayaking or tubing. Melissa enjoys spending time with friends and family. And when it comes to mottos, she is a firm believer that you should be yourself because everyone else is taken.

Personal Emergency Reserve Savings

 The other day during my morning drive to work, I heard a rather startling statistic on our local news radio program – 40% of Michigan residents have NO (that means $0) savings!  Michigan is number 26 of the 50 states in savings rankings, which means that there are 24 states that are worse.  OUCH!

There is no doubt that with the market downturn of 2008 and the slow economic recovery in the last several years, many families had no choice but to dig into savings to survive. But that’s exactly one of the reasons that emergency reserve savings are so important!  Now that more people are back to work and are back to a more normal cash flow, it’s time to get back to business and build the reserves again.

How much emergency savings do you really need?   

Experts don’t always agree on an exact number, but many financial planners recommend having at least three to six months living expenses in an emergency fund, invested in cash or cash alternative investments.  For some, it is easier to pick a specific dollar amount as an achievable goal (say $10,000 or $20,000).  Clearly, the higher your monthly expenditures, the higher your reserve savings should be, especially if the majority of those monthly expenditures are non-discretionary.

Whether you are one of Michigan’s 40% with no savings, or are just someone who doesn’t have enough set aside for an emergency, start “reserving” some cash today. 

To get started, here are a few tips to consider:

• Save aggressively.  Use payroll deduction from your paycheck, if possible, or budget in savings (i.e. have an amount automatically moved from your checking to a savings or investment account on a monthly or bi-monthly basis).
• Reduce your discretionary spending.  Remind yourself that this is likely a temporary adjustment until your reserve savings reach an adequate level.
• Consider other resources until reserves are built.  Do you have cash value life insurance that you can borrow from if you have an urgent need?  Do you have other investments generating income that can be pulled off to build reserves? 

Hopefully, you’ll never have to tap into the funds you are committing to setting aside. But it is impossible to know what is around the next bend and it is always best to be prepared. The time to start (or continue) building your emergency reserves is now!  Consult a Certified Financial Planner™ for these and other ways to help save for your financial future.

Sandra Adams, CFP® is a Financial Planner at Center for Financial Planning, Inc. Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In 2012 and 2013, Sandy was named to the Five Star Wealth Managers list in Detroit Hour magazine. 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.

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Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

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 information is not a complete summary or statement of all available data necessary for making an investment decision.  Prior to making an investment decision, please consult with your financial advisor about your individual situation.  Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.