Announcing the Newest Member of the Dunston Financial Group Team

 

Dunston Financial Group is excited to announce the addition of our newest team member, Meera Meyer. Meera is a Certified Financial Planner™ professional with over five years of experience working with independent fee-only advisory firms in both California and Colorado. She brings to Dunston Financial Group a variety of financial planning experience, including college and retirement planning, financial security analysis, real estate and rental property analysis, and estate planning. She began her career in the non-profit sector where she worked with, and currently sits on the board for, Project Education South Sudan, an organization that educates and empowers girls in South Sudan. She also sits on the advisory board for the Women’s Partnership Market, a B Corp that partners with grassroots organizations and female artisans to empower women worldwide.

Article Source on: Announcing the Newest Member of the Dunston Financial Group Team

A Deeper Sense of Self: Ruminations on Philanthropic Giving

Have you ever thought about giving financially to support a cause that’s important to you? Would you like to leave a legacy? Do you believe that money is more than something to accumulate? Studies have shown that charitable giving has psychological and health benefits, and that it can also help train your heirs to have certain values you might want them to have. According to charitable giving expert Lorraine del Prado, some of these values include:

  • Inoculation of heirs “from ‘affluenza,’ the dysfunctional relationship with money.
  • Giving provides a psychological boost for those of inherited wealth, who suffer from guilt and low self-esteem from money they haven’t earned.
  • Giving reduces the sense of separation from the larger world.
  • Philanthropy provides good training in letting go.
  • A forum for meaningful intergenerational communication.”*

Of course philanthropy offers economic benefits as well, including, but not limited to, reduced income, capital gains, gift, and estate taxes, diversification of one’s inheritance, and unlocking income from underperforming or highly appreciated assets. And while tax savings are important, they generally aren’t the primary drivers of philanthropic giving. Instead, del Prado maintains that a deep sense of community, family, and strong values are often what lead people to give.

Even though wealth is not merely a tool given that it’s needed for basic economic security, wealth can and often should be viewed as an instrument that helps one accomplish greater good for one’s self, family, and community. Personally, the idea that there’s a nexus between wealth and the greater good is exciting to me. Our society needs strong families and communities and wealth can be a wonderful means to that end.

 

*Private training session with Lorraine del Prado, 2017.

Originally Posted here: A Deeper Sense of Self: Ruminations on Philanthropic Giving

Investors Aren’t Yet Safe: Why Working with a Fiduciary Is More Important than Ever

A recent editorial in The New York Times points out that consumers of financial services aren’t yet safe even though the Department of Labor’s Fiduciary Rule will likely go into effect. They are not yet safe because the new secretary of labor, Alexander Acosta, is now proposing a replacement rule that will essentially rescind the original fiduciary rule. In case you’re not familiar with the issue at hand, the editorial board explains that “While some financial advisers must adhere to a legal duty to act in a client’s best interest, many others face no such obligation. One result is that consumers pay an estimated $17 billion a year in excessive fees because advisers steer them into high-cost products when lower-cost ones are available.”

Why would Mr. Acosta propose such a rescission?  “Mr. Acosta objected that the rule ‘as written may not align with President Trump’s deregulatory goals.'” The editors go on to explain how striking this is given that “Mr. Acosta’s job as labor secretary is to advise Mr. Trump on how to help working people, not how to achieve his deregulatory goals. The fiduciary rule, as written, will help working people. Rescinding it will not.”

So what is the consumer to do? The article is correct when it says that “some financial advisers must adhere to a legal duty to act in a client’s best interest…,” but who are these advisors? These advisors are fee-only advisors, and many of them are members of the National Association of Personal Financial Advisors. If you don’t want to worry about whether or not an advisor has your best interest in mind or, if the current administration is going to act to protect your financial interests, then be sure to work with a fee-only advisor. Fee-only advisors are legally obligated to act in a fiduciary capacity and must always place your interests ahead of their own.

Article Source over here: Investors Aren’t Yet Safe: Why Working with a Fiduciary Is More Important than Ever

Client Success Story: Senior Executive Gets Peace of Mind

One of our clients is a C-level executive for a large international company. He came to our firm with a complex set of needs ranging from restricted stock planning, real estate investment needs, concerns about his investment portfolio, and worries about his overall risk management plan. His primary goals were to build wealth and to protect it. After analyzing his financial situation in great detail, we were able to help him devise a risk management plan that gave him significantly better insurance coverage for his real estate portfolio, and we also rescued him from some very poor whole life insurance products. We also helped him devise a much more robust life insurance, property & casualty insurance, and disability income insurance strategy. When we first sat down, his group disability income insurance was no where near sufficient to protect his family in the event of a long-term disability. After working with his HR department, we were able to build an executive-level supplemental disability insurance strategy that augmented his disability coverage from about 60% of his pay to around 80% of his pay. For someone at his income level, this was a critical risk that needed to be ameliorated. He also completed the financial planning process with an investment strategy, a clear retirement plan, and some advice on what to do with his restricted stock. Most importantly, our client had peace of mind that his family would be taken care of financially in the event something were to happen to him. Every client has different goals, but this was a clear example of a client who was able to greatly benefit from working with a professional wealth planner.

Article Source over here: Client Success Story: Senior Executive Gets Peace of Mind

Study Finds that Most Investor Portfolios Have Significant Shortcomings

Dunston Financial Group recently attended the National Association of Personal Financial Advisors (NAPFA) annual conference in Seattle. As expected, we were not disappointed by the quality or substance of content. We are honored to be a part of such a collegial and intellectually stimulating community of fee-only financial planners.

Several things stood out at the conference. One of which was a set of findings put forth by BNY Mellon. In an attempt to ascertain the health of investor portfolios, BNY Mellon studied a large sample size of portfolios and found that most portfolios had significant shortcomings:

  1. 89% of investor portfolios were missing asset classes
  2. 89% were lacking an overall portfolio plan
  3. 86% followed or fled a trend too late
  4. 83% of portfolios were subject to sector bets that the investor did not know were taking place
  5. 78% of portfolios didn’t have enough or held too many holdings
  6. 78% of investor portfolios had unnecessary or unknown portfolio risk
  7. 75% had little to no tax management
  8. 68% of portfolios were subject to hidden costs

We weren’t surprised when we heard this given that we regularly encounter such findings when analyzing portfolios on behalf of our own clients. Such shortcomings can have serious consequences for investors’ goals, including goals related to retirement and long-term wealth accumulation. When was the last time you had a portfolio checkup? It’s always better to catch such issues sooner rather than later.

First Seen right here: Study Finds that Most Investor Portfolios Have Significant Shortcomings

Dunston Financial Group Featured in MagnifyMoney.com – 7 Money Rules Freelancers Should Live By

Dunston Financial Group was recently featured in a short article over at magnifymoney.com. The article is about cash flow management strategies for freelancers and people who are self-employed. The article offers up the following 7 tips:

  1. Base your budget on your lowest grossing month
  2. Set your lifestyle now
  3. Anticipate large expenditures
  4. Always plan ahead for taxes
  5. Have multiple income streams
  6. Save at least a year’s worth of expenses
  7. Make sure your money is working for you

You can read the entire piece over at magnifymoney.com.

Article Source here: Dunston Financial Group Featured in MagnifyMoney.com – 7 Money Rules Freelancers Should Live By

Client Success Story: Retirement Hopes Become a Reality

When we first met with Phil and Nancy (clients’ names changed for confidentiality purposes), they weren’t sure if they could retire. As their financial planners, we had not yet taken them through the financial planning process, so we weren’t sure either. Phil was an IT professional who worked for the state government. He enjoyed his job, but he was ready for a change and wanted to retire. Nancy was a homemaker who enjoyed singing in her church choir. Phil was not a high income earner, but he and Nancy were frugal and did a good job saving over the years. Phil had a keen eye for details, and he asked us a lot of very good questions. One of Phil’s biggest concerns was deciding which retirement pension plan option to select at retirement. He also had questions about whether or not it made sense to purchase additional years of pension service credit and long-term care insurance.

After analyzing Phil and Nancy’s finances in great detail, it became clear that their retirement plan could benefit from the purchase of additional years of service credit. We assisted them with this process, and we also helped them determine the most efficient means of funding that purchase. We further analyzed Phil’s pension, and we were able to advise him on the best pension payout option, one that would ensure that Nancy was protected in the event of Phil’s passing. Fast forward several weeks later when we met for a final review of their financial plan, and we were able to present some very good news. Not only was Phil in a position to be able to retire, but we had effectively created a strategy that put Phil in a position to be able to retire with more money than he could make if he were to remain employed. In short, he was losing money by going into work every day! We’ll never forget the smiles that lit up the room that evening. In addition to delivering good news about retirement, we also helped Phil and Nancy implement a long-term care strategy that would allow them to enter retirement knowing that they were financially protected from the risk of excessive long-term care costs. It wasn’t long after that meeting that Phil turned in his termination notice, and he was retired shortly thereafter. Phil was greatly missed by his colleagues, but he and Nancy started traveling the world and enjoying the retirement that just a few months earlier they didn’t know could be a reality.

Article Source right here: Client Success Story: Retirement Hopes Become a Reality

7 Things Prospective Retirees Need to Think About

Retirees face a variety of challenges as they enter retirement. Here are some broad talking points for retirees to consider:

1.) Daily life in retirement

A big question involves how time will be spent in retirement. Retirement is no longer the “lazy boy” retirement that past generations envisaged. People are often working in retirement and spending time in a variety of productive ways. Boredom is a major concern for many retirees.

2.) Portfolio rate of return

Many people don’t have a pension, so it will be up to them to design a portfolio that will generate enough return to last throughout retirement. This can be a daunting task, but one that the retiree needs to take seriously.

3.) Portfolio withdrawal rate

Closely related to the portfolio rate of return is the portfolio’s sustainable withdrawal rate (SWR). The retiree needs to ascertain how much can be safely withdrawn from her portfolio in order to try to make the portfolio last for up to 30 years or more in retirement. Start out too aggressive and the portfolio could be depleted; too conservative and one could have a surplus.

4.) Life expectancy

How long will the retiree live? Family background, current health, and other factors play into this discussion, but it’s important to start with a reasonable and informed assumption about life-expectancy.

5.) Inflation 

Inflation is a major risk to retirees. The retiree needs to ensure that her portfolio is not eroded by inflation. Keeping a portfolio too conservatively invested can result in a portfolio being far from “safe”.

6.) Health care expenses

Health care is a major concern for most retirees. This is a complicated topic, but one in which the retiree needs some familiarity heading into retirement.

7.) Sequence of returns

Returns, unfortunately, don’t come in the form of a nice average return every year. Returns vary, and if a retiree faces negative returns early in retirement, there’s a chance her portfolio will not recover from this early negative sequence. Conversely, if the retiree has good luck and gets positive returns early in retirement, this can disproportionately affect her portfolio in a positive way. The sequence in which portfolio returns come is therefore critically important, and retirees need to have a plan in place to protect against early negative return sequences.

Original Post over here: 7 Things Prospective Retirees Need to Think About

Dunston Financial Group in The Wall Street Journal

Dunston Financial Group is excited to share that we were featured in yesterday’s edition of The Wall Street Journal. The title of the article is “How Entrepreneurs Can Use IRAs to Finance Startups,” and it’s about how one can use IRA/401(k) money to fund a startup venture. Known as ROBS (Rollover for Business Startups) transactions, they definitely are not right for everyone, and they carry a unique set of risks. Nevertheless, in the right circumstances, ROBS transactions can be an effective business funding strategy.

Originally Posted on: Dunston Financial Group in The Wall Street Journal