We're Expanding!

Contributed by: Lauren Adams, CFA®, MBA

If you happened to visit The Center in December (perhaps for your annual review or maybe just to drop off a gift for Toys for Tots), you may have noticed an unusual amount of construction workers milling around and near our offices. You may have heard the occasional drill or hammer while chatting with Gerri or having a coffee in the reception area. You may have even come in to find a wall there one day and gone the next. To our December visitors, thank you for pardoning our dust. We really hope you’ll like what we did with the place.

2016 was a major year of investment in our team and resources at The Center. I was hired in July as the Director of Client Services, Jeanette LoPiccolo, CRPC®, who was hired as a Client Service Manager, Emily Lucido and Ashley Frank, both Client Service Associates, all came on in September, and Josh Bitel, another Client Service Associate, was added to our team in December. These new faces brought enthusiasm and fresh ideas with them… but things also started to get pretty cramped around here. And so, to cap of a year of major investment, the partners decided that it was also time to expand our physical location as well.

Now, visitors to The Center will notice that the office opens up both to the left and to the right from the lobby. We’ve added over 2,000 square feet of new space, new offices, new workstations, and even a new conference room where we can hold additional client and team meetings. We’ll be putting the finishing touches on our new space in the coming weeks; walls will receive special touches and additional furniture will arrive. This new space will allow those that were previously sharing close workspaces to spread out, and for us to arrange our departments, including Financial Planning, Investments, and Client Service, together to help share knowledge and function more cohesively. With the addition, Matt Trujillo, CFP®, and Nick Defenthaler, CFP®, will now have room to host client meetings in their offices.

We also have room to grow.  This year marks 32 years since our founding. Our commitment to the financial planning process, putting clients first, and providing exceptional service hasn’t changed since Dan Boyce, Marilyn Gunther, and Estelle Wade started the firm in 1985, and we know our steadfast commitment will allow us to continue to grow into the future. So come in, say “hi!” and see our new space!

Lauren Adams, CFA®, MBA is Director of Client Services at Center for Financial Planning, Inc.®

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Why Approaching Difficult Topics Now Could Help Avoid a Mess with Parents’ Finances

Contributed by: Sandra Adams, CFP®, CeFT™

As I write this, we are a couple of weeks into 2017, and already I have been involved with two client family meetings – adult children meeting with their parents about their parents estate planning and finances. I am sure this is just the tip of the iceberg for this type of meeting – and I am so thankful. Why? Because these families are planning ahead! Approaching these sometimes very difficult topics now can be the key to avoiding a very big mess later.

You might think “So, what’s the big deal? Mom and Dad seem to have things under control. They can pay their bills just fine, they seem to be financially comfortable, and I don’t want to invade their privacy and ask them too many questions about their money, so let’s leave well enough alone until we really need to get involved.”

Here are just a few of the “big deals” that could occur for those who wait until mom and dad can’t handle things (i.e. in this case, parents now are unable to handle financial affairs due to incapacity):

• Parents may not remember where they hold accounts, what their account numbers are, passwords, etc.

• Parents may not remember all income sources, amounts, etc. (pensions, Social Security, etc.) and may not have been reconciling checkbooks.

• Parents may not have been paying bills and may not remember what bills need to be paid (you are lucky if they have bills set up for auto bill pay, as many of this generation have been uncomfortable setting this up).

• Parents may or may not have a filing system and/or record keeping system that you can understand; depending on the stage of their incapacity, they may or may not be able to explain it to you.

• If your parents have existing Durable Powers of Attorney (General/Financial and Medical) that give you authority to act on your behalf, you can hope that they are up to date and written broad enough instructions to be used with most financial and medical institutions.

• You can hope that there aren’t too many other surprises that you didn’t expect!

My advice is always to follow the proactive planning of some of my clients, and start talking to your parents in advance of a crisis (or in advance of “that time” when parents can no longer do things themselves). Sure, it is not always the most comfortable conversation to start, but you might be surprised to find that many older adult parents find comfort in knowing that their children (1) want to be involved, (2) are interested in their well-being, and (3) know that there is a plan in place once the family meeting has taken place. Start the process of planning for your parents today! Don’t hesitate to contact me if I can be of assistance (Sandy.Adams@CenterFinPlan.com).

Sandra Adams, CFP® , CeFT™ is a Partner and Financial Planner at Center for Financial Planning, Inc.® Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. 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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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 Sandy Adams and not necessarily those of Raymond James. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

Fourth Quarter Investment Commentary

Contributed by: Angela Palacios, CFP®

2016 has been the year of the stock market taking major geopolitical news in stride. From the UK Brexit vote to an unexpected Trump victory in the U.S. presidential election, the market has shrugged off some major news that could have jolted it in a very negative way. Equity markets, however, once again demonstrated their resilience, and along the way this has become the second longest bull market in US history as of April of 2016. The S&P 500 ended the year up strong returning 11.96%, while bonds gave back great returns in the first three quarters of the year (they were up 5.8% as of 9/30/16) to end up only 2.65% on the Barclays US Aggregate Bond Index. International markets continued to struggle as they were nearly flat in 2016 with a 1% return for the MSCI EAFE while emerging markets bounced back strongly returning 8.5% on the MSCI Emerging Markets index.

Source: JP Morgan

2017 is likely to usher in a market driven more by fiscal policy than by monetary policy. The Federal Reserve is anticipated to continue their slow pace of raising interest rates into the New Year while Trump takes office very soon and launches his 100 day action plan. So if you choose not to give up and move to Canada, here is what we are watching in the New Year!

Trump’s 100 Day Action Plan:

Donald Trump has plans to shake up many potential areas such as trade, Obamacare, immigration, education (common core), tax code, and infrastructure improvements. Political risk could amplify volatility globally, although it hasn’t yet. This populist movement as shown by Brexit and our own election (people fed up with the status quo) is a theme likely to continue abroad as France, Germany, and Holland will host their own elections in 2017. The U.S. dollar has reached its highest level in 14 years in the wake of the presidential election, and a strong dollar has traditionally been a headwind for the earnings of large companies with significant international exposure. Taken together, these factors tell a somewhat cautionary tale for equities going into 2017.

The Economy:

Our economy continues to chug along with unemployment at very low levels. According to the Bureau of Labor Statistics as of November 2016 we were at 4.6% unemployment. We are considered at full employment now. This means that wage inflation is starting to pick up, although slowly, which could start to be reflected in the overall inflation rate creeping up in the U.S even though it has been subdued for an extended period of time. Inflation currently stands at 1.7% (bls.gov). 

A Note on Diversification:

2016 has tested our patience on diversification yet again. Locally, The U.S.’s flavor of the month benchmark has morphed from the S&P500 to the Dow as the benchmark to keep up with. Pure U.S. equity exposure has continued to drastically outperform a diversified portfolio to historically unusual levels. This year other asset classes have had the opportunity to shine as Emerging markets*, small cap equities** and high yield debt*** have also performed well. Diversification seems to once again be working after a long drought. We, at The Center, still see merit to utilizing a diversified approach when it comes to managing our investments. As geopolitical risk rears its ugly head around the world, it will likely be important to tap into the long-term returns of many different asset classes to hopefully limit portfolio volatility.

We understand that you need to retire and achieve your goals regardless of what markets are doing. This is why we build portfolios to be all weather and stick by our strategy of diversification as a sound long-term approach to investing. It is a task that we take very seriously and we thank you for your continued trust in us.

Checkout Investment Pulse, by Angela Palacios, CFP®, a summary of investment focused meetings for the quarter.

Does the order in which you achieve your average returns really matter?  Of course, it all depends.  Check out when the sequence of returns matter!

Nick Boguth, Investment Research Associate dives into the surprising reality of what it takes to dig out of the hole of negative returns.

Jaclyn Jackson, Portfolio Coordinator, discusses the trends of investor behavior during significant events over recent history.

If you have topics you would like us to cover in the future, please let us know! As always, we appreciate the opportunity to meet your financial planning and investment needs. Thank you!

Angela Palacios, CFP®
Director of Investments
Financial Advisor

Angela Palacios, CFP® is the Director of Investments at Center for Financial Planning, Inc.® Angela specializes in Investment and Macro economic research. She is a frequent contributor The Center blog.

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* As measured by the MCSI EAFE Index
** As measured by the Russell 2000 Index
*** As measured by the Barclays Aggregate Bond Index
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 Angela Palacios, CFP®, and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Diversification does not ensure a profit or guarantee against a loss. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. 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. The Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The MSCI EAFE (Europe, Australasia, and Far East) is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the United States & Canada. The EAFE consists of the country indices of 22 developed nations. Investing in emerging markets can be riskier than investing in well established foreign markets. Investing involves risk and investors may incur a profit or a loss. International investing involves special risks, including currency fluctuations, differing financial accounting standards, and possible political and economic volatility.

Investor Ph.D.: Sequence of Returns

Contributed by: Angela Palacios, CFP®

When planning for our goals, we often think in terms of “What return will we average over time?” But does it matter what pattern these returns happen in? What if they are choppy or we experience very negative returns right before we need the money or as we are drawing it? The answer can be startlingly different depending on what phase of your goal you are in.

If you are accumulating for a future goal the sequence of how to help achieve your returns in general doesn’t matter as long as you average what you need at the end. Look at the following example:

Source: Blackrock

The chart below shows two 30-year income scenarios. The solid line shows a withdrawal plan that started off with three years of negative returns in a row. The dotted line repre­sents a withdrawal plan with the negative years at the end. Both plans started with $250,000 and both took out $12,500 per year inflated by 3% for inflation. No other actions were taken to manage income withdrawals. Both plans had a 6.6% average annual rate of return on the underlying investment for the 30-year period.

These nuances are why it is critical to work with a financial planner to plan for and pursue your goals!

Angela Palacios, CFP® is the Director of Investments at Center for Financial Planning, Inc.® Angela specializes in Investment and Macro economic research. She is a frequent contributor The Center blog.

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The information contained in this blog 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 Angela Palacios, CFP®, and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected.

Investor Basics: Drawdowns 101

Contributed by: Nicholas Boguth

It is imperative to try to avoid major drawdowns when investing. This may seem intuitive, but let’s take a closer look.

Drawdown is a metric used to measure risk. It is a measure of the peak-to-trough decline of an investment or portfolio. Minimizing drawdown is arguably more important than seeking large returns when it comes to investing, and here is why:

Below is a simple chart showing the returns investors would need to get back to where they started if they lost 10%, 30%, and 50%. The math is relatively simple: if you start with $100 and proceed to lose 50%, you now have $50. In order to get back to the $100 that you started with, your $50 would have to gain $50, or increase by 100%.

So the math is simple, but who really cares about the hypothetical? Let’s look at how the S&P 500 actually performed compared to diversified portfolios during the drawdown that started in ’07. The chart below, from JPMorgan’s Guide to the Markets, shows how the S&P 500 lost over 50%, and took 3 FULL YEARS before it recovered back to its peak. Compare that to the 40/60 portfolio. Since the drawdown was significantly less, it was a much quicker recovery and broke even after just 6 months. This is why it is important to try to avoid major drawdowns when investing.

For a more in depth look on drawdowns and sequence of returns, check out the Investor PhD blog written by our Director of Investments, Angela Palacios, CFP®.

Nicholas Boguth is an Investment Research Associate at Center for Financial Planning, Inc.® and an Investment Representative with Raymond James Financial Services.

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The information contained in this blog 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 Nick Boguth and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. 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.

Investment Lessons of 2016

Contributed by: Jaclyn Jackson

As we embrace the fresh start of a new year, it is important that we retrace our steps to learn from our investment victories and missteps during 2016. I’m optimistic that reflection can help us become better investors in 2017.

A Look Back on 2016 Market Performance:

• First Quarter: US large equities beat US small and mid-equities (SMIDs) in the first quarter as both had positive runs. We witnessed value stocks shifting to outperform growth stocks and commodities make a comeback. Meanwhile, gold became one of the best performing assets. 

• Second Quarter: All three domestic market caps continued to have positive returns with U.S. SMIDs beginning to overtake U.S. large equities. Taking advantage of an improved energy sector, high yield bonds performed well. Emerging markets had both ups and downs, but rebounded by June. Yet, the unexpected BREXIT vote shook the MSCI EAFE and MSCI EAFE Small Cap indices emphasizing a flight to safety. Gold benefited from the flight as demand increased and the US dollar slightly upped the Euro. 

• Third Quarter: Domestic equities continued their success into the third quarter. Driven by the rising prices of crude oil, energy was up. Concurrently, high yield bonds also continued to recover. The price of gold fell, but ended the quarter positive overall. Internationals had positive returns. A weaker US dollar supported international fixed income returns. 

• Fourth Quarter:  The beginning of the fourth quarter was rough all around, but US equities rebounded by November. Election results helped US equity index funds see their largest monthly inflows in two years. Anticipated policy changes brought gains to commodities and financials, but hurt interest rate sensitive stocks. International investments for US investors were negatively impacted by a strengthened dollar.

Asset Flows: What Investors Did in 2016

Source: Morningstar Direct 2016

After an equity selloff in January 2016, investors flocked to fixed income most of the year. In a year of sluggish growth for the US, Europe, and Japan, bonds provided hope for those seeking modest but relatively predictable returns. As the inflow/outflows graph shows, taxable and municipal bond fund flows dominated without waiver. Apart from commodities (gold) and sector equity, all other categories were out of favor for most of the year. A post-election U-turn helped November bring in inflows for U.S. equity index funds, but it remains that the 2016 investor theme was seeking predictability (through bonds) in an unpredictable environment (populism, political uncertainty, and looming fiscal and monetary policies concerns).

Lessons Moving Forward

• Fear of the unknown can’t guide our investment decisions.  It is understandable to seek refuge when things are uncertain, but we may miss out on opportunities hiding under our shells. Buying bonds in 2016 may have helped limit negative exposure to curveball events, but if you used some of your portfolio’s equity budget to purchase them, you also missed the US equity run that persisted throughout the year. Similarly, portfolios placed on the sidelines after the US elections missed the equity surge that began shortly after. People who remained invested in equities in 2016 felt the hit of BREXIT as well as its fast recovery. They also experienced value stock comebacks. A diversified portfolio can help you maintain market participation and mitigate bumps in the road (market volatility) over time.

• 2016 reminded us that the world is unpredictable. No matter how smart, how informed, how technological, or well-researched - nobody can predict the future. In other words, we can’t allow predictions about the markets or economy change our long term, comprehensive investment plan. Admittedly, it is important to pay attention to what is happening in the world. Our gaze, however, should be focused on the long-term implications of that news. Multiple portfolio changes based on short-term noise undermines our investment strategy. We need to give ourselves the time to really understand and unravel the true long term risks/threats to our portfolio before modifying our strategy. 

Jaclyn Jackson is a Portfolio Administrator and Financial Associate at Center for Financial Planning, Inc.®

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This information does not purport to be a complete description of the securities, markets, or developments referred to in this material, it has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. This information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Opinions expressed are those of Jaclyn Jackson and are not necessarily those of RJFS or Raymond James. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Investments mentioned may not be suitable for all investors. Investing involves risk, investors may incur a profit or loss regardless of the strategy or strategies employed. Diversification does not ensure a profit or guarantee against loss. Investing in oil involves special risks, including the potential adverse effects of state and federal regulation and may not be suitable for all investors. International investing involves special risks, including currency fluctuations, differing financial accounting standards, and possible political and economic volatility. Gold is subject to the special risks associated with investing in precious metals, including but not limited to: price being be subject to wide fluctuation; the market being relatively limited; the sources being concentrated in countries that have the potential for instability; and the market being unregulated. The MSCI EAFE (Europe, Australasia, and Far East) is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the United States & Canada. The EAFE consists of the country indices of 21 developed nations. The MSCI EAFE Small Cap Index is an equity index which captures small cap representation across Developed Markets countries around the world, excluding the US and Canada. Please note that direct investment in an index is not possible. Past performance is not a guarantee of future results.

Fourth Quarter Investment Pulse

Contributed by: Angela Palacios, CFP®

Some great research this quarter!  From a headline grabber, to sage words of wisdom from long tenured investors, take a look!

Kevin O’Leary from Shark Tank – 11/18/16 CFA® Society of Michigan

The investment department had the opportunity to listen to “Mr. Wonderful” himself discuss what he has learned being an entrepreneur and his outlook for 2017.  Highlights included that he prefers to invest in companies run by women because they set and accomplish achievable goals for themselves and their employees.  He also discussed his plan for the future generations of O’Learys.  He is not interested in handing his children a privileged life on a platter.  Rather he will pay for them from birth through college and then they are on their own to make their way in life.  The same will happen for their children and so on.  He said his mother taught him this important lesson:

“The only birds that dies leaving the nest are the ones that don't learn how to fly.”

Kevin's predictions for 2017 included:

1. Donald Trump wins the election (he called this a week before the election on television)

2. Oil will end 2017 under $50

3. The 10 year US Treasury bond interest rate will end the year under 3%

4. The S&P 500 will end 2017 at 2,300

5. Financials will underperform the S&P 500 in 2017

6. Real Estate Investment Trusts will outperform the S&P 500 in 2017

7. Energy will underperform the S&P500 in 2017

8. Russell 2000 will outperform the S&P 500 in 2017

9. Europe (currency unhedged) will surprise in 2017 and outperform US markets

Investment team gathers before the presentation: From left to right: Jaclyn Jackson, Portfolio Administrator and Financial Associate, Lauren Adams CFA®, Director of Client Services, Melissa Joy CFP®, Partner; Angela Palacios CFP®, Director of Investments; Nicholas Boguth, Investment Research Associate

David Fisher of American Funds

It was a pleasure learning from David Fisher, equity portfolio manager at Capital Group, and his 50 years of investment experience.  David spent time discussing the culture of their firm and how important it has been over the years to attract and retain high quality investment professionals.  Analysts are compensated on how they perform relative to a benchmark rather than relative to each other.  They feel this has contributed strongly to their years of serving clients well.  David spent his career researching media, consumer electronic and electrical equipment companies.   He discussed how vastly those markets have changed over the years.  He said:

“If you don’t obsolete yourself, someone else will obsolete you.”

He was referring to Eastman Kodak.  Remember those cameras?  The type where you would have to take your film in to develop?  The company held the patent to digital technology and didn’t develop it because it would have put their profitable film and camera areas out of business!  Oops!

Scott Davis, Portfolio Manager of Columbia Dividend Income Fund

We have sat down many times with Scott.  He brings great perspective to our portfolios with his dividend growth focused strategy.  Many investors have chased dividend yields over the past few years when they found their bond portfolios lacking.  Scott argues that the quality of the dividend rather than the yield is most important.  Dividends are not contractually committed to like bond interest.  It is completely up to a Board of Directors whether the dividend is paid or not.  A high yield is only positive if it is sustainable.  A stock price generally depreciates very strongly before a dividend cut occurs, which is why the work Scott does is so important. 

He also discusses with corporate management the type of shareholders that they want to have.  A company’s shareholder base changes when they commit to paying/growing a dividend.  When doing this they have a more stable investor base that tends to hold a position longer term.

Angela Palacios, CFP® is the Director of Investments at Center for Financial Planning, Inc.® Angela specializes in Investment and Macro economic research. She is a frequent contributor The Center blog.

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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 Angela Palacios and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Holding investments for the long term does not insure a profitable outcome. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Investments mentioned may not be suitable for all investors. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represent approximately 8% of the total market capitalization of the Russell 3000 Index. 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. International investing involves special risks, including currency fluctuations, differing financial accounting standards, and possible political and economic volatility. Investing in oil involves special risks, including the potential adverse effects of state and federal regulation and may not be suitable for all investors. Investing in the energy sector involves special risks, including the potential adverse effects of state and federal regulation and may not be suitable for all investors. Dividends are not guaranteed and must be authorized by the company's board of directors. Raymond James is not affiliated with and does not endorse the opinions or services of Kevin O'Leary, David Fisher, Capital Group, Scott Davis and/or Columbia Dividend Income Fund.

What to Expect This Tax Season 2017

Contributed by: Josh Bitel

The Center's Commitment to You

At The Center, our goal is to provide exceptional service and help meet your needs as efficiently and effectively as possible. We offer the following commitments and services related to the tax season:

• Consistent communication about timelines for tax document receipt, as that information is available.

• Assistance in understanding your tax-related questions and coordination of information, such as cost basis.

• Coordination and communication with CPA’s and tax preparers upon your request. We’ve found that sharing and collaborating with your other trusted advisors can have substantial benefit to you.

• Financial planning and investment management integrated with perspective on tax consequences. If you would like to review or discuss our approach to taxes as it relates to your personal situation, please let us know!

• There is still time to make to contributions to IRA, Roth IRA, and SEP IRA’s until April 18th. Please contact us if you need assistance or would like to discuss this further. 

As you complete your taxes for this year, a copy of your tax return is one of the most powerful financial planning information tools we have. Whenever possible, we request that you send a copy of your return to your financial planner, associate financial planner, or client service manager upon filing. Thank you for your assistance in providing this information which enhances our services to you. If you would prefer that we request a copy of your returns from your tax preparer and have not already, please complete a Consent to Disclosure of Tax Return Information Form and return it to our office.

The Center and Raymond James are constantly exploring ways to enhance technology to provide better service and overall experience for our clients. One new software enhancement rolled out in late 2016 was the Tax Snapshot tool. This personalized report can be generated at any time throughout the year by simply contacting your planner. The Tax Snapshot will give a breakdown of any realized capital gains, losses, and income (dividends and interest) generated within your portfolio throughout the year. This report allows us to have a clear, concise view of the tax status of your portfolio and offers us the opportunity to better communicate these figures with your tax professional as we all strive to work on the same team to serve you in the best way possible.

IRS Filing Dates

Typically, the regular tax return filing deadline is April 15th. However, this year the filing deadline will be on Tuesday, April 18th. This is because the 15th falls on a Saturday this year, and also due to the observance of Washington D.C. Emancipation Day holiday on Monday, April 17th.

Raymond James Tax Reporting

Up to date information on Raymond James Tax Reporting can be found at this tax resource page. This page includes information for TaxACT, TurboTax, and H&R Block users and tax download instructions.

If you have Investor Access through Raymond James, you can view tax reports along with statements for all of 2016 by logging into your account. These documents are available as Adobe PDFs for printing and saving. The information will be archived for 14 years. If you have not already created an online profile, we strongly encourage you to do so.

As an added convenience, you can choose to receive your tax documents electronically. To go paperless, enroll or log in to Investor Access, Raymond James’ secure system for accessing your account information online.

With electronic delivery, you’ll have 24/7 access to your client documents as soon as they become available. Not only will you be able to view your documents sooner, but also, your documents are archived together in one secure location so they are easy to find when you need them.

Tax documents available electronically include the IRS Composite Form (1099-B, -DIV, -INT, -MISC, -OID) and IRS Forms 1099-R and 5498.

Mailing Schedule & Availability for Raymond James Forms

• February 15th – Mailing of original 1099s

• February 28th – Mailing of amended 1099s and those delayed due to specific holdings

• March 15th – Final mailing of any additional original 1099s as well as continued amended mailings as needed

Information on Amended and Delayed Documents

The IRS has granted Raymond James, along with several other broker/dealers, a reporting extension that allows them to delay 1099s for those clients who hold what are considered “pass-through” vehicles for tax reporting purposes. The goal of this extension is to provide an up-to-date 1099 that otherwise might be amended causing confusion or the need to refile.

As a reminder, Raymond James is required by the IRS to produce an amended 1099 if one of the following adjustments is received after the original 1099 has been produced:

• Income Reallocation: Certain investment types, including regulated investment companies, mutual funds, real estate investment, unit investment, grantor and royalty trusts, exchange traded funds, holding company depository receipts, and equities often adjust declarations of income paid during the previous tax year after year-end. These updates are referred to as income reallocations and may result in a more favorable tax treatment.

• Adjustment to Cost Basis: Raymond James is required to report the adjusted cost basis of sold covered securities to the IRS on Form 1099-B. Because cost basis reporting is mandatory, adjustments to reporting result in amended 1099s, which will be mailed as needed. Visit the Cost Basis Legislative Resource Center for more cost basis resources.

• Incomplete or Incorrect Reporting on Original 1099: If a taxable event was not reported or was incomplete on the original 1099, an amended 1099 is required. This includes adjustments received after the original 1099 was produced.

• Other Adjustments: In addition, processing of the following often result in delays in correct information being provided to Raymond James:

• Original issue discount bonds (including select municipal bonds)

• Some cost basis adjustments

• If there are changes made by mutual funds related to foreign tax withholdings

• Tax-exempt payments subject to alternative minimum tax

• Distributions from U.S. Treasury obligations and select mortgage backed securities payments (45 day delay bonds)

As always, we are here to answer any questions that you or your tax preparer may have. Don’t hesitate to let us know how we can help!

Josh Bitel is a Client Service Associate at Center for Financial Planning, Inc.®

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Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.The information contained in this blog 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 Josh Bitel and not necessarily those of Raymond James. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.

Planning for a Wild 2017

Contributed by: Kali Hassinger, CFP®

Happy 2017 everyone! A new year is a great opportunity to evaluate your financial wellbeing and set goals for the future.  Some of you may have existing financial plans in place, and others may be thinking that 2017 is the year to take control of your finances.  In either situation, it’s important to understand that financial planning is an ongoing and ever-evolving process. Separate from your personal circumstances, there are many outside forces that affect your financial plan, and there are a few items that may be especially important to evaluate this year.

Given the events of 2016 and possible changes in 2017, the following circumstances could be prime examples of why it’s important to review and update your plan.

• Taxes – With the impending presidency of Donald Trump and the GOP in control of both the House and the Senate, we are anticipating a possible overhaul of the current tax system. For almost all taxpayers, your current tax rate could be reduced.  If the brackets are consolidated as expected, 2017 may be a good year to accelerate taxable income or max out your Roth IRA contributions. You can read more about the proposed tax plans here (http://www.centerfinplan.com/money-centered/2016/12/22/is-tax-reform-coming ).  

• Estate Planning – Just as with taxes, the political landscape of 2017 is set to possibly repeal the current Estate Tax. Because this tax is such a central point for Estate Planning with high net worth individuals, some current estate plans may need to be revised. There is also the possibility that the current gift tax laws may be on the docket for elimination. Although nothing is certain at this point, we will remain up to-date on any changes as they come.

• Allocation – 2016 was certainly a year of surprises for the market. After a decline in January, the shock of Brexit, and Donald Trump’s unanticipated election, the market overcame intermittent volatility and reached all-time highs in November.  Just as no one could predict that the market dip after Brexit would recover so quickly, no one expected the markets to actually go up in the wake of Trump’s election. There is no way to predict the future, but there is a disciplined investing approach that can help you through market uncertainties. With a balanced investment portfolio it is possible to reap the benefits of part of these gains while also insulating yourself from potential volatility. Your balanced portfolio returns may not reach the same highs as the S&P 500, but it can help you reach your goals with proper management over time. 

Regardless of your situation, a new year is always a great opportunity to reorganize and review your goals.  Life can be unpredictable, but not unplannable. We are always here to help, and we encourage you to reach out with questions.

Happy New Year! 

Kali Hassinger, CFP® is an Associate Financial Planner at Center for Financial Planning, Inc.®

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This information does not purport to be a complete description of the securities, markets, or developments referred to in this material, it is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Opinions expressed are those of Kali Hassinger, CFP®, and are not necessarily those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change. There is no assurance that the statements, opinions or forecasts mentioned will prove to be correct. Investing involves risk, investors may incur a profit or loss regardless of the strategy or strategies employed. Asset allocation and diversification do not ensure a profit or guarantee against loss. Raymond James Financial Services, Inc. and its advisors do not provide advice on tax or legal issues, these matters should be discussed with the appropriate professional. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Please note that direct investment in an index is not possible.