The Ridgewood Blog Brings a Free Market Laissez-faire Point of View to Local, New Jersey State and National Issues.
How do financial experts help clients achieve growth? Advisors are key to guiding individuals and businesses toward financial success. They offer personalized strategies designed to build wealth and secure a stable future. Let’s explore the key approaches used by professionals in Novi.
Continue reading What Strategies Do Financial Advisors in Novi Offer for Growth?
the staff of the Ridgewood blog
Ridgewood NJ, countless Americans entrust financial advisors with their financial well-being and the management of their finances. Interestingly, the choice of a financial advisor is often made through a brief internet search rather than through personal endorsements. This means that millions of Americans could be entrusting their entire financial positions on a person who appeared on a search result, rather than a personal recommendation or other source.
Continue reading Study Finds, NJ Cities Have Among the Worst Financial Advisors in the Country
A life settlement occurs when you decide to sell your life insurance policy to a third party, usually an institutional investor. There are plenty of reasons one may not need or want this type of insurance anymore, and the solution to this situation is selling it to somebody else. This way you will receive a one-time cash payment that is larger than the policy surrender value, however, it’s still less than the death benefit value. The number of life settlements is increasing every year due to a variety of factors. As a result, the insurance settlements market was born. When considering a life settlement, it is important to get familiar with all the details of this arrangement and how to make the most out of it.
Continue reading Spotlight On Life Settlement Transactions: Getting The Best Value
August 18,2016
the staff of the Ridgewood blog
Ridgewood NJ, The use of robo-advisors is on the rise among investors looking for an alternative way to get help with financial planning.
In fact, a report by the consulting firm A.T. Kearney predicted that robo-advisors will be managing 5.6 percent of Americans’ investment assets by 2020, up from 0.5 percent when the report was done in 2015.
Despite the intriguing name, don’t imagine that robo-advisors resemble something from a science fiction movie, with lights flashing as they dole out warnings about dangers to your portfolio.
Instead, a robo-advisor is an online wealth-management service that uses a software program to provide automated advice based on an algorithm.
Robo-advisors have their merits. Clients save money, at least on the front end, because fees are usually lower, says Rick Rivera, a partner at Safeguard Investment Advisory Group (www.safeguardinvestment.com).
The required minimum investment also usually is low, which could be helpful for young investors who haven’t had time to build wealth.
“If you’re a do-it-yourselfer, it might work for you,” Rivera says. “But is it something that saves you money for the long term? Maybe not.”
Investors should weigh the advantages against the disadvantages, he says. Examples of when robo-advisors fall short include:
• Looking at the big picture. Robo-advisors are limited to what their software is designed to handle. Human financial planners don’t have that limitation. They can provide advice based on the bigger picture of how all of a person’sassets, tax liabilities and other factors interact and affect each other.
• Adapting to market fluctuations. Questions remain about just how well robo-advisors react to rapid market changes. Recently, when U.S. markets experienced extreme volatility because of Brexit – the United Kingdom’s vote to leave the European Union – at least one robo-advising firm halted all its trading. “People were saying this could have been negative for those trying to buy when stock prices dropped,” Rivera says.
• Helping with estate or long-term care planning. Older clients often are concerned about how to best leave wealth to their heirs through trusts or other means. They also worry about whether they will need expensive long-term care that
can eat away at their savings. These aren’t areas robo-advisors usually venture into, but human ones do. “We can say here are your options, here is what we can do to protect you,” Rivera says. “We can show them avenues that robo-advisors
can’t.”
Ultimately, robo-advisors may appeal to those who have uncomplicated portfolios and can get by on general advice, but for many investors a one-size-fits-most approach doesn’t cut it, Rivera says.
“I can’t tell you how many times someone has come to me and said they heard that all life insurance is bad, or all annuities are bad, or all mutual funds are bad,” Rivera says.
“But each of those things is created for a specific purpose. Whether they are good or whether they are bad depends on your needs. That’s where human advisors can step in and help you weigh just what those needs are.”
About Rick Rivera
Rick Rivera is a partner at Safeguard Investment Advisory Group (www.safeguardinvestment.com) and has more than two decades of experience in the financial industry providing guidance to those planning for retirement. He is an investment advisor representative holding a series 65 license, as well as Life-Only and Accident and Health licenses in California.
“Saving for the future shouldn’t be a privilege for the wealthy, and Washington doesn’t need to put another roadblock between people and their financial goals. By ignoring the advice of the SEC and Congress, the DOL’s rule will increase the cost of retirement advice for lower- and middle-income Americans while creating a preferred class of rich investors. I will continue to fight for everyone’s right to get good financial advice because—unlike this administration—I believe in the people of New Jersey to make the best choices for their families and their futures.” Rep Scott Garrett
April 7,2016
the staff of the Ridgewood blog
Ridgewood NJ, Yesterday’s editorial (opening paragraphs below) point out that this set of rules is slanted to capture investment accounts with the goal of making small and medium sized savers invest in government run plans. Follow the money — those government run plans are going to lean toward investing in government paper with associated pitiful returns. That’s the conflict of interest that’s not being disclosed.
From the editorial…
President Obama’s regulators aren’t slowing down, alas. And on Wednesday they unveiled another part of their plan to push Americans out of private investment accounts and into government-run plans.
The Department of Labor says its so-called fiduciary rule will make financial advisers act in the best interests of clients. What Labor doesn’t say is that the rule carries such enormous potential legal liability and demands such a high standard of care that many advisers will shun non-affluent accounts. Middle-income investors may be forced to look elsewhere for financial advice even as Team Obama is enabling a raft of new government-run competitors for retirement savings. This is no coincidence.
Bu
Labor’s new rule will start biting in January as the President is leaving office. Under the rule, financial firms advising workers moving money out of company 401(k) plans into Individual Retirement Accounts will have to follow the new higher standards. But Labor has already proposed waivers from the federal Erisa law so new state-run retirement plans don’t have the same regulatory burden as private employers do.
This competitive advantage could be significant. Last month the board of California’s new “Secure Choice” retirement plan wrote to state legislators about their “exciting win” in Washington. They reported that employers enrolling workers in the new government-run plan “would have no liability or fiduciary duty for the plan.” Score! The California bureaucrats added that “we have been given the green light to auto-enroll workers into an Individual Retirement Account (IRA).”
Meanwhile, there are only losses for private competitors. The final rule Labor Secretary Tom Perez unveiled Wednesday is being marketed as less onerous than an earlier draft. Thus much of the financial industry is going to take a few weeks to decide on its response. But the main question is exactly how many billions of dollars in costs and lost opportunities will be visited upon investors. And how big the incentive will be to seek government options…