4 Steps to Save You Big Headaches on Your Summer Vacation

 Though we have experienced some glorious summer weather, June 21st actually marked the “official” start of summer.  The shift in season brings a host of activities – evening strolls, outside concerts, boating, picnics, and if you are one of the lucky ones…taking a summer vacation! 

Whether you are hoping to relax by tranquil waters or seeking the rush of scaling a mountain, few can disagree there is nothing like a summer vacation.  In my family, planning is half the fun.  The discussion of our destination, where to stay, who to visit, and what to pack gets us ready for the anticipation of our departure. 

But when you are planning time away from your home base, it is very important that you prepare yourself financially.

Here are some behind-the-scenes items to add to your travel to-do list: 

1. Research the “financial” aspects of your destination well in advance.  Get an idea of where to access ATMs and banks in the area. It is also prudent to understand the local currency and exchange rate(s) if traveling abroad. 

2. Be sure to have different types of currency available during your time away (if possible). This can include cash, traveler’s checks, debit and credit cards.  Not all debit or credit cards may be accepted where you are traveling so carrying cash for daily expenses is always helpful. 

3. Notify your credit card companies and banks when and where you will be traveling.  This ensures the utmost safety for your accounts. If you do not give notification, that souvenir you are trying to purchase may be flagged as potential fraud and your account frozen for unauthorized activity! It is also a good idea to find out what your service fees will be for utilizing credit while in a foreign country. 

4. Make a list (or copies) of all your pertinent information like credit card account numbers, insurance cards, passports and driver’s licenses.  Keep this list in a secure spot at home or with your financial planner.  It is always hoped it will not be needed but should a situation arise, you will be thankful you have this information. 

Going on a vacation, whether a quick get-away or trip around the globe, is such an exciting part of the summer.  Taking a small amount of time to engage in some financial housekeeping will help ensure your time away is as relaxing or adventurous as you planned!

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:

Detroit Free Press

Timothy Wyman, CFP®, JD was quoted in the Sunday Free Press on June 9, 2013, in an article titled, “Detroit retirees fear city will break pension promises,” by Susan Tompor.

Investment News

Melissa Joy, CFP® was quoted in Investment News on May 29, 2013 in an article titled; "Advisorsshrug off proxy season in favor of cost, performance data'" by Jason Kephart.

Hour Detroit Magazine

Center team members Dan Boyce, CFP®, Matt Chope CFP®, Sandra Adams CFP®, Laurie Renchik CFP®, and Julie Hall CFP® received recognition by Five Star Professional in the June 2013 issue of Hour Detroit Magazine. They were named to the 2013 Five Star Wealth Managers list, a select group of wealth managers in the Detroit area.

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.

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In Life & In Investing, Knowledge is Not Experience

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 Some people are very smart; they have many designations and/or degrees.  They are well-read in the big topics of life. But that does not mean they are experienced in all areas.  The luxury of working with fantastic entrepreneurs, scientist, doctors, lawyers and accountants is a daily way of life at the Center.  These fabulously smart people in their area of expertise delegate the area of their life that they don’t have the time or interest that is necessary to become an expert.

When the financial meltdown was fully in gear between September of 2008 and March of 2009 and when GM and other large companies were going bankrupt, many in our industry and even more outside of the industry were losing their heads (believing that the world might actually come to an end). Internally we were discussing much more productive things. We believed that it was not the end of the world. In fact, we believed that the investments we maintained for clients were real and people would be using the products and services generated by these companies for generations to come.

A doctor told me once that an expert knows more and more about less and less.  He performed one type of surgery every day for over 10 years.   He went to medical school and spent over 12 years in total with his education, much of the last 4 years focused on one area.  He went on to tell me that education is one necessary ingredient – it’s the foundation for wisdom -- but without repetition, you don’t have experience.  At the Center we pride ourselves on the foundation of knowledge but leverage our many years of experience to help clients reach their goals.

Matthew E. Chope, CFP ® is a Partner and Financial Planner at Center for Financial Planning, Inc. Matt has been quoted in various investment professional newspapers and magazines. He is active in the community and his profession and helps local corporations and nonprofits in the areas of strategic planning and money and business management decisions. In 2012 and 2013, Matt was named to the Five Star Wealth Managers list in Detroit Hour magazine.

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 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 is not intended as a solicitation or an offer to buy or sell any security referred to herein.  Any opinions are those of Center for Financial Planning, Inc., and not necessarily of RJFS or Raymond James.

Steps to Prepare Heirs for Successful Transfer of Family Wealth

 Roy Williams and Vic Preisser have been studying wealth transition for some time.  Their research of 3,500 families’s duplicated the 70% failure rate of wealth transfers from one generation to the next as cited from previous studies.  In their book, Preparing Heirs: Five Steps to a Successful Transition of Family Wealth and Values, the authors outline steps to achieve a successful transition. Whether you have a family business, millions to pass on, or more modest amounts, you will likely find some of the suggestions may meet your needs. The first step, Assessing a Wealth Transition Plan, the authors develop a wealth transition checklist which includes:  Heirs understanding their future roles, heirs reviewing the family estate plans and documents, and creating a family mission with incentives and opportunities for heirs.

And if you are interested in avoiding falling into the 70% trap, the research on wealth transition failures will be of interest. Three factors emerged as to why successful transitions failed.  The first is a breakdown of communication in the family—often coming from a lack of trust within the family.  The second is a lack of preparation of the heirs---particularly if one person was to be the dominant manager and was not ready to take on that role; and the third factor is a lack of clarity of roles of family members in the management of family assets.

Passing on wealth from one generation to the next doesn’t work on autopilot. If you don’t want to go from “shirtsleeves to shirtsleeves in three generations”, take the time to make sure your children and grandchildren are involved in the transfer of wealth from the beginning.

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.  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 Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.  The services and  opinions of Roy Williams and Vic Preisser are independent of Raymond James. You should discuss any legal matters with the appropriate professional.

Tips for Protecting Your Identity While Traveling This Summer

 The heat is on, and you may be hitting the road for summertime fund to an exotic vacation destination.  Whether your definition of an exotic trip means travel to Weeki Wachee Springs, Graceland, or Traverse City here are a few practical tips for protecting yourself from identity theft while away.

Avoid Virtual Danger

  • Secure Electronic Devices.  Computers, tablets and smartphones may contain large amounts of private data.  Keep a close eye on electronic devices.  These are easy targets for identity thieves.          Note:  According to Credent Technologies, a data protection company, 11,000 mobile devices were lost at the busiest U.S. airports in 2011.  Over 75% of those were taptops, tablets or smartphones.
  • Password Protect Devices:  Make sure all devices are password protected and that any sensitive data is encrypted.
  • Be Wary of Unsecured, Public Wireless Networks:  Hackers can use unsecured networks to easily access your computer.  Be sure to update anti-virus software.
  • Alert Your Bank:  Let your bank and credit card companies know when and where you will be traveling.  Financial institutions have become more vigilant about monitoring accounts for unusual activity.  Alerting your bank to your travel plans will prevent them from freezing your account while you are away from home and help them monitor for unauthorized transactions in other locations.

When on the Road

  • Use Hotel Safes:  Don’t leave personal information out in your hotel room.  Keep credit cards and documents containing personal information and electronic devices in a hotel safe or with you.
  • Take Mailbox Measure:  Don’t let mail pile up in your home mailbox.  Arrange for someone you trust to pick up your mail while you are away, or have the postal service hold your mail while you are gone. 
  • Clean Out Your Wallet:  Tourist destinations are often frequented by pickpockets.  Before you head out the door, take any unneeded credit cards or personal information out of your wallet.  Do not keep your social security card in your wallet.

The Center team wishes you safe travel this summer!

Information provided by:  Raymond James Operational Risk & Privacy Office and the Information Security Office.

How to Transfer Family Assets Through Successful Family Meetings

 Research has show that 70%* of wealth transfers fail from one generation to the next.  Family meetings are one vehicle that can be used to help all members of the family gain a greater understanding of family assets and values.  But despite the usefulness, family meetings are seldom held.  Parents may be reluctant to share knowledge of family resources because they are concerned about stifling individual initiative and because their children may have different economic situations and temperaments. There is also the divorce issue, which leaves some parents reluctant to have in-law children know of the wealth situation. Second and third generation children are often scattered through the country and beyond which make meetings difficult.  However, the consequences of not helping the next generation understand wealth management may cause family friction, jealousy, business failures and frivolous use of resources.

There are many ways to begin family meetings.  Designating specific times at holidays or vacations when the family is together is one possibility.  Technology is another.  The use of a family web site, blogs, and social media for the family can be an innovative mechanism to celebrate successes and discuss more serious issues.

Meetings do not have to start out will full blown disclosure. 

Some techniques you can use to assess family values & engage in learning experiences:

  • If the family is charitably inclined, have younger members choose a charity of choice, find out about its programs, fund raising activities, financials and success.  Designate a sum of money to go to one or more charities after the research project; reevaluate the following year.
  • Game playing.  What would you do with your life if you won the 5 million dollar lottery; what would you do if you knew you only had ten more years to live?
  • Pick  investment vehicles such as real estate, stocks and bonds to research
  • Discuss alternatives for educational funding
  • If you have a family business, discuss the process for getting family members involved. Discuss what educational needs are critical to success of them in the business.

Eventually, a meeting with the family advisors, financial planner, attorney and CPA should take place.  This will help the family know the advisors and gain greater understanding of the net worth of family, the tax situation, estate planning situation and an opportunity to discuss short and long range goals.

Successful family meetings are intended to engage family members, not be a set of rules handed from one generation to the next.  Healthy communication among family members builds trust; trust builds understanding and is more likely to achieve acceptance and enthusiasm in achieving individual and family goals.

Coming up in the third part of this blog series, a step-by-step resource for anyone hoping to keep the legacy they leave behind from evaporating.

*Sources:  1983 MIT Study reported in the Economists;  Roy Williams and Vic Preisser from the Williams Group  research study.

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.  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 Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.  The services and  opinions of Roy Williams and Vic Preisser are independent of Raymond James. You should discuss any legal matters with the appropriate professional.

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Welcome to our New Summer Intern

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At the Center, we value developing the next generation of financial service professionals.  For the last six years our Summer Internship Program has provided an opportunity for college students to gain first-hand experience working in a financial planning firm.  This year we welcome Zachary Gould as our newest summer intern.  Zach is a Senior at the University of South Carolina and is double majoring in Finance and International Business.  He will primarily be supporting the Investment and Financial Planning Departments. In addition Zach will have opportunities to participate in unique education, training and staff shadowing to round out his experience at The Center.  Zach says, “I am thankful for the opportunity to intern at The Center this summer and look forward to learning the art of financial planning from such a passionate and knowledgeable group of people.” 

Some fun facts:

  • Zach just finished a studying abroad in Paris at the America Business School
  • He enjoys playing ice hockey and basketball
  • Member of Soundcheck, an all-male a cappella group, and Alpha Lambda Delta Honors Society

Welcome, Zach! 

Passing on Wealth to the Next Generation

 You may have heard the saying, “Shirtsleeves to shirtsleeves in three generations.” In a family, it refers to the phenomenon of a generation building wealth, passing it to a second generation, and by the time the third generation rolls around, the wealth has disappeared.  Unfortunately, many research studies indicate it is true. In fact, 70%* of wealth transitions fail. Whether you are passing on a family business or family investment assets, most parents have the same desires.  They would like the money to enrich the lives of their children and grandchildren and to be neither frivolously spent nor a burden.  Parents would like their children to know the family values and participate in the formation of a value orientation for multiple generations.

There is the catch. Successful transitions do not just happen when the elders die and assets are distributed.

Successful transitions begin long before elders are gone. One way to begin is the family meeting where adult children are involved in knowing about and understanding the family wealth situation.  Passing on family values is an everyday experience.  Family meetings give members the opportunity to express their views, take responsibility and acknowledge where they may need additional help in accepting responsibilities. Family meetings also give members the opportunity to understand how family resources can benefit several generations.  These family meetings should involve members in the decision making process.

There are many ways family meetings can be conducted but they all center on the same objectives of trust, communication and understanding.  Parents teach their children to ride bicycles, play baseball and drive cars.  Family meetings help the next generations to use one of their most valuable resources, family wealth, to attain personal satisfaction and growth in an environment of family values.

Coming up in my next blog, more on avoiding the shirtsleeves to shirtsleeves trap. I’ll discuss how to use a family meeting to begin transferring assets.

**Sources:  1983 MIT Study reported in the Economists;  Roy Williams and Vic Preisser from the Williams Group  research study.

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.  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 Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.  The services and  opinions of Roy Williams and Vic Preisser are independent of Raymond James. You should discuss any legal matters with the appropriate professional.

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Pretty in Pink!

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 We’re happy to spread the word that It’s A Girl! Center Client Service Manager Jennie Bauder and her husband Kelly announced the arrival of their new, darling daughter, Emma.  Jennie and Kelly tell us they are having the “time of their lives” welcoming their first child into this world.  She’s a sweet little treasure that looks like her daddy except for the adorable dimples she got from mom.

Emma Bauder was born on May 30, 2013 at 9:25 a.m.  She weighed in at 9 lbs. 5 oz. and measured 21 ¼ inches long.   Baby Emma, mom, dad and Maggie (the family pet dog) are all doing well. 

Congratulations Jennie!

Black Monday? How about Ruby Tuesday?

 Most investors are familiar with the infamous “Black Monday” stock market crash.   The Dow Jones Industrial Average (DJIA) dropped by a whopping 22.61% in one day on Monday October 19, 1987.  Many may not be as familiar with records that are being set right now for Tuesdays.  May 28th marked the 20th Tuesday in a row where the Dow Jones Industrial Average ended on an up note.  This is a record breaking streak of gains for any specific day of the week in the history of the DJIA.  The previous high count was 13 days in a row and has occurred on 3 separate occasions for Monday, Wednesday and Friday with the most recent streak occurring in 1900! 

This Tuesday winning streak that began on January 15th has included 1,573 points for the Dow or 83% of the years gains for the index as of May 28th.  The picture below is a total of Year to date points made or lost cumulatively on the particular day of the week for the DJIA. 

http://buzz.money.cnn.com/2013/06/04/dow-tuesday-streak/

There has been much speculation as to why Tuesday has been so great? 

Here are some of the arguments.

  • The federal reserve is buying bonds through their open market operations on Tuesday and Friday’s
  • Retail investors placing mutual fund buy orders on Monday, after looking at their accounts over the weekend, and then the managers are putting that money to work on Tuesday.
  • Automated trading programs that seek out trends have noticed this trend and started to buy in anticipation, and as such, perpetuating the trend.
  • Or it could just be random

While the debate of why this phenomenon has occurred may not be over, unfortunately, the winning streak itself is over as of Tuesday June 4th.

http://www.bespokeinvest.com/thinkbig/2013/5/28/20-for-tuesday.html

Angela Palacios, CFP®is the Portfolio Manager at Center for Financial Planning, Inc. Angela specializes in Investment and Macro economic research. She is a frequent contributor to Money Centered as well asinvestment updates at The Center.

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. 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. 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. 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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