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Why the Technology (and Person) Managing Your Money Matters

Money and technology are so closely related that if a financial advisor isn’t employing the latest technology, how will it equate to risk for you and your money?  When it comes to managing your money, you expect your financial advisor to have the best technology resources available to do the job. 

Since the last recession, the financial services industry is leading the way in technology development, with healthcare second and other sectors closely following. 

Among the new technologies, Artificial Intelligence (AI) and machine learning are in first place for the top development trend in financial services.  The acceptance of AI at large financial companies has still deemed a threat to the old system of money management but continues to be widely accepted by established advisors (ages 35-44) even more so than advisors that are new to the industry.  New technology is helping clients and advisors to be more efficient in managing assets and their risk.

One of the new developments using AI is in behavioral finance software that determines client behaviors and their adversity to risk before selecting funds, ETFs and other assets to be managed inside portfolios.  No longer should selection be done manually when AI can search funds with precision based on client behavioral perimeters.  Without an assessment of client behaviors before market activity, potential losses may impact the client and be more difficult to recover. 

When behavioral finance software combines with risk profiling, the assessment of misaligned investment choices can be overridden helping to build better portfolios based on scientific data and not solely on past performance.  Without behavioral considerations, misaligned investment choices aren’t just possible, but likely.

Investment managers must continuously upgrade their technology infrastructure to keep up with client expectations and best practices to continually improve the client experience and make advisors better at their jobs.  While robo technology, or portfolio automation, continues to become an accepted part of the investment equation for younger clients with fewer assets, to clients transferring wealth to future generations, artificial intelligence and machine learning are the next great frontier.

*Advisory services offered through Trajan Wealth, L.L.C., an SEC-registered investment adviser. 

These links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. Contact the external site for answers to questions regarding its content.

The Value of Planning for Life’s Messes

Planning is valuable for many reasons and helps to ‘normalize’ things when you find yourself in the middle of an unexpected life event.  A death, a critical illness, job loss, new family member, an inheritance, divorce, or a catastrophic event that can cause a major financial detour.  How you plan will help determine how you survive and normalize after these events.

Planning can be as simple as making sure you have the right insurance coverage, from personal insurance such as medical and critical illness insurance, property insurance and an emergency fund.  All insurance is to offset risk, cover expenses, and to protect other assets such as retirement accounts that you’ve accumulated.  An additional item is to have a will in case something happens to you so that your loved ones carry out your wishes.

Some people consider financial planning to include risks that are health related.  If you or a family member had a major medical event or condition, would you have the financial assets to cover all the expenses and cover your loss of income related to the medical event?  How would it impact your portfolio and ability to accumulate assets?  Which assets would you choose to liquidate first?

With life’s always changing events, planning for the unexpected when experiencing a significant life event is essential.  It is possible to run scenarios within a financial plan to see outcomes of specific circumstances and how they may impact you.  If you get detoured by an event or wrong investment decision, planning can help you to recover quickly to a ‘new normal.’  Life can be messy and what you do now will make the difference in what may happen later.  No one can predict the future, but it helps to prepare ourselves now as much as we can. 

If you would like to visit regarding planning for potential risks and how it may impact your portfolio, please contact our office. We have a team of experts to lead you through the murky financial waters. 

*Advisory services offered through Trajan Wealth, L.L.C., an SEC-registered investment adviser. 

These links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. Contact the external site for answers to questions regarding its content.

Social Security Retirement Benefits: Why Waiting May Be the Best Decision

Taking Social Security Benefits can be a guessing game unless you do your research to figure out what age to take benefits is the best for you.  Do you receive benefits at the earliest age or wait until your full benefit age?  Will you die in early retirement or live a longer life than you imagined?  These are the challenging questions many pre-retirees ask because it can add up to thousands of dollars over your lifetime.  Most people want to get their benefits sooner than later, not realizing that the odds are in their favor for living longer than they thought.  Pre-retirees need to plan for the long haul, or so to speak each generation, on average, is living longer than the previous. 

Finding out your ‘break even’ age for Social Security is important to determine what age is best to start taking benefits.  Once you make the decision and start benefits at a specific age, you can’t change your decision since it is essentially ‘locked-in’ for life.  Benefit amounts will not increase, aside from the occasional small cost of living increases. 

The best way to determine when to start taking benefits is by running a break-even analysis to find your break-even benefit age.  The break-even age is when an individual’s total lifetime Social Security benefits received would be equal to the benefit amount, but using a different claiming age.  When doing your pre-retirement income planning, the break-even analysis is a crucial piece of information to consider.

Deciding to start Social Security benefits at the first opportunity or delaying benefits is a personal decision.  Factors to consider are other retirement assets available and their value, genetic health factors, and outstanding debt and lifestyle considerations.  If you would like more information on social security benefits and implementing it into your financial plan along with other assets, contact our office for a meeting. Our fiduciary standards always ensure we put your best interest at heart. 

 

*Advisory services offered through Trajan Wealth, L.L.C., an SEC-registered investment adviser. 

*These links are being provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. Contact the external site for answers to questions regarding its content.

Suitable Investments and You

 

suit·a·bil·i·ty:  The quality of being right or appropriate for a particular person, purpose, or situation.

The definition of suitability seems quite easy to understand and should be clear when it comes to investment recommendations to clients.  However, many times when clients come to our firm the investments they have are not suitable for them. We base this conclusion on a set of objectives to consider.  Determining suitability includes an examination of the client’s demographics such as age, income, willingness to take on risk, and aversion to risk.  Additional factors include how long until the client liquidates the investment, likelihood of recovery from loss, and current financial health including personal debt, and tax considerations.  A suitable investment for a forty-five-year-old will look very different than an investment for someone entering retirement.

Only after getting to know our client through these objectives, or ‘facts’ can we start to develop an investment strategy.  Suitability is not always clear-cut and is often in flux. What seems like a suitable investment one day can change with the correction of the stock market, suddenly becoming an unsuitable one.  For this reason, constant monitoring of investments coupled with performance and the ever-evolving circumstances of the client make suitability critical to an overall investment strategy. We ask a lot of questions during our meetings for this reason.  

The client has a crucial role in their suitability as investor knowledge and understanding come into play inside their portfolio.  However, this doesn’t that mean that if an investor understands the investment and all associated risks, is it a suitable one. Unsuitable investments can ruin a portfolio and can be a source of on-going stress for the investor.  Our recommendations consider suitability, but for those investors that execute an investment on their initiatives outside our advice, there is not much the securities regulators, or we can do. Advice and suitability must come first, asset allocation second, and the execution of the investment last as a continuous process.  

Suitability is part of fiduciary standards.  We operate our business in this manner and are legally bound to recommend only suitable investments to our clients.  

3 Things being a Marine taught me about being a financial advisor

 

Hello, this is Jeff Junior, President, and CEO of Trajan Wealth. I’ve spent nearly two decades in financial services helping people manage their wealth, prepare for retirement, and manage the ever-changing financial landscape. But before I was serving my clients in the financial sector, I was serving my country as a Marine. Memorial Day is an important day for reflection as I honor my fellow servicemen and women who have served before, with and after me. This day is an opportunity for us to be grateful, and honor those who have made the ultimate sacrifice for us, our families and our country.

I learned a lot while in the Marines and have found three lessons in particular that now transfer to my role as a financial advisor.

The Real Cost of Credit

2017 was a challenging year for the credit industry. From the data breach at Equifax and multiple lawsuits that follow, it has been a tumultuous time for consumers to have faith in the world of credit. Unfortunately, it’s becoming apparent that for Americans overall, it’s not going to get any better in 2018 as the trend of acquiring more debt increases.

Aside from having to shell out money for damages caused in 2017, the credit industry will have a very lucrative 2018 even after paying fines and settlements thanks in part to the American consumer.

According to MarketWatch, U.S. households owe more than $1 trillion in credit-card debt, and the numbers are only rising. Your typical culprits of irresponsible spending that contribute to increasing credit card debt among Americans includes more access by those considered ‘subprime borrowers,’ increased costs for food and housing and continuous spending on unnecessary items. As the average household holds a balance of $15,983 on credit. The cost of maintaining a lifestyle beyond their means can cost a lot more than anticipated with interest rates on the rise.

Legacy Planning as Part of Life Planning

Leaving a legacy through the passing assets today and after your death is a process that requires correct planning and execution. With the recent Tax Cuts and Job Act of 2017, updated tax codes, and an ever-changing political environment, legacy planning requires consulting with multiple professionals in order to pass assets without financial consequences.

Legacy planning should always be a team effort involving an attorney, tax specialist, and your financial advisor if planning involves securities assets, or will benefit more than one generation, non-profit, or other entity. Transferring wealth has no ‘right or wrong’ way but is best the way that you prefer.

7 Tips to Avoid the Most Common Tax Scams

With the significant 2017 cybersecurity leaks involving the personal information of millions of Americans, this year’s tax season is expected to be one of the worst ever for tax scams. Aside from cybersecurity leaks, scammers also target HR departments via emails requesting employee information while posing as the IRS, which has corporations on edge to maintain the security of employee information.

This year’s tax season officially opens January 29th, 2018 and runs through April 17, 2018 and scammers are ready and waiting to file tax returns in the names of other people. Hundreds of thousands of people will file their taxes this year expecting a return, only to find out the return was sent somewhere else. What can you do to protect yourself?

Fear, Greed, and Your Portfolio

We like to think there are times when humans can be 100 percent rational, but in reality, our emotions are always influencing our decisions whether we want to acknowledge that fact or not.

In fact, one of the most famous mathematicians of all time, Godel, based his foundational incompleteness theorem partially on that point. The universe is likely objective, but humans cannot always objectively measure, observe, or even understand it.

So stop fighting your irrationality. You’re officially off the hook.

Fear plus greed and your finances

Is Retirement Really About Numbers?

For some people retirement is all about the numbers; the age you plan to retire, how much money you need, and so forth. But is retirement really about numbers?

Numbers give us a baseline to help you financially plan for today and the future. Your numbers can change throughout your life. Maybe you’re already retired or are within ten to twenty years of retiring, but one thing is clear; whether you love them or hate them, numbers play a role in all aspects of your financial life:

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Speak to our financial team today about your future goals and how we can help.

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