Cambridge in the News

InvestmentNews - Planners need to focus on taxes as clients face "double whammy" from mutual fund investments

This past year investors have not only experienced heavy losses; they have also experienced above-average capital gains distributions, largely as a result of redemptions that forced fund managers to liquidate positions. In this week's InvestmentNews article "To cushion tax shock, advisers urged to act" Jeff Benjamin reports that tax management is especially important right now: Planners need to work with their clients to capture the tax benefits of these losses without altering long-term investment strategies. Bert Whitehead of Cambridge Connection in Franklin, Michigan points out, "For every $10,000 worth of investment losses we can harvest, we're saving our clients about $2,000 in taxes, and it's important to show clients how much money you are saving them in times like these." Troy Von Haefen of Von Haefen Financial Planning in Nashville, Tennessee agrees. "This is a golden opportunity for advisers to do a couple of things: harvest losses and show clients that you can still keep them in the market," he says adding that "the clients will see a little silver lining during a down time." To read the entire article, click on View to the right.

Kiplinger's Personal Finance - ACA recommended for those seeking a financial advisor

In this month's Kiplinger's Personal Finance article "Getting the Best Financial Advice" Jeffrey R. Kosnett points out that "when you're hiring a financial advisor, you're not just hiring someone to manage your money. You're hiring someone who will influence your life, your future, your kids' lives and maybe even your parents' lives." One of his recommendations is the Alliance of Cambridge Advisors whose members are among those who emphasize life events and goals. To read more, click on View to the right.

Investment Advisor - Dennis O'Brien described as someone who wants to help people

In this month's Investment Advisor article "Problem Solver" Robert F. Keane profiles Dennis O'Brien of Coastal Financial Advisors in Farmingdale, New Jersey who says, "I believe in helping people that need it and not necessarily because they have a lot of assets." Case in point: the newlywed couple who came to him with $70,000 in credit card debt. "Everyone has problems," O’Brien says, "but it's the ones with more problems that I enjoy the most because you can really see the resolution, and I get to experience their joy at having gotten through those hard times." In addition to advising his individual and small-business clients, O'Brien uses his skills to work extensively with non-profit institutions, a portion of his practice that he plans to develop further. "It all goes back to what I do with all of my clients," he says, "working with cash flow management, managing assets, helping them with basic, fundamental management issues."

InvestmentNews - The recent stock market decline has some questioning the buy-and-hold strategy

"Cash is now the new king," Jeff Benjamin's article in this week's InvestmentNews, examines the dilemma many advisors find themselves in as the financial markets' woes continue: Should the traditional buy-and-hold investment strategy be replaced with something that looks more like market timing? Doug DeGain of Douglas W. DeGain in Rochester, Michigan has not found it easy to ride out the recent market turmoil, but he is more concerned about the alternative to staying in the market. "I'm not a proponent of market timing, nor am I clairvoyant," he says adding that "I'm envious of any advisor who was able to dodge the bullet by getting out of the market, but I'd be more impressed if they'd share with us their next move on when to get back in." To read the entire article, click on View to the right.

InvestmentNews - Bond-laddering strategy has helped many investors ride out the current market decline

Jeff Benjamin's article "Fee-only advisers drawn to STRIPS" in this week's InvestmentNews looks at how fee-only financial planners use Treasury STRIPS--separate trading of registered interest and principal securities--to create a bond-laddering strategy which has helped clients weather the current market storm. This strategy--a fixed-income technique used by planners who shun commissions and fees based on assets under management--found its way into many of the sessions at the recent annual conference of the Alliance of Cambridge Advisors in Nashville, Tennessee. Barry Swaim of Wealth Management Group in Winston-Salem, North Carolina notes that "most advisers won't recommend this strategy because it commits money for 15 years or more to an investment, and its tough to justify an asset-based fee on something that's just sitting there," but adds Swaim, "My clients who bought these bonds four or fine years ago are doing fine right now." Echoing this sentiment is Philip Watson of Philip M. Watson Financial Advisors in Franklin, Tennessee: "I'm using this strategy more and more, and my clients that have a ladder in place are not concerned about the market right now." To read the entire article, click on View to the right.

Boston.com - The recent market decline can represent opportunity for those with decimated retirement accounts

In today's Boston.com article "Follow these tips to start rebuilding your nest egg amid the market turmoil" Linda Stern notes that even though the recent meltdown in the stock, bond, and real estate markets has dealt a serious blow to retirement plans, this is not the time for despair. Instead, she advises, "Take action" and lays out a plan that can not only rebuild futures but also create even better retirements. One of her tips is to “stick with your plan,” and she adds, "If you don't have one, get one." One of her recommendations is the Alliance of Cambridge Advisors whose fee-only financial professionals "will know how you can capitalize on the current turmoil to rebalance your accounts, adjust your 401(k) contributions, and...will also give you the willpower to avoid selling during panics."

InvestmentNews - The luster is out of the golden years for many nearing retirement

In this week's InvestmentNews article "Financial crisis forces workers to rethink retirement, surveys show" Lisa Shindler reports on an unmistakable trend: The recent economic downturn is forcing many to postpone retirement. Recent surveys by Eons.com--an online social network for the 40+ crowd--and AARP unearthed the following: Many pre-retirees said that they have experienced serious losses in their retirement portfolios year-to-date, have stopped contributing to their retirement plans, have tapped into their retirement accounts to cover current living expenses, and have increased the number of hours they are currently working. One of the advisors working with clients who are reconsidering their retirement plans is Rebecca Preston of Preston Financial Planning in Providence, Rhode Island. About half of her clients who are in their late 50s and early 60s have decided to postpone retirement. "Many of these individuals would likely be safe...if they retired on time, but they're too nervous," she says adding that "they're just very conservative." To read the entire article, click on View to the right.

BusinessWeek.com - In volatile markets investors need to ask important questions

In today's BusinessWeek.com article "The Fed, the Crisis, and Your Portfolio" Ben Steverman poses five questions nervous investors may want to ask their financial advisors in the wake of the current credit crisis. Weighing in on two of them, Avani Ramnani of Athena Wealth Advisors in Jersey City, New Jersey first considers the important question "Do I have enough cash?" She advises those who are worried about job security to "build cash reserves" while they're still cashing a paycheck. Also, for those who aren't sure how their money is invested, it's important to ask "Where is my money?" Ramnani cautions "If someone can't explain what they're investing you in, that's a big red flag." To read the entire article and learn what the other three important questions are, click on View to the right.

Bloomberg.com - Recent increase in FDIC bank deposit insurance limit helps savers

Today President Bush signed into law the temporary increase in Federal Deposit Insurance Corp. protection--from $100,000 to $250,000 per depositor--reports Jeff Plungis in Bloomberg.com's "New FDIC Limits Protect Customers, May Not Add Yields." "This was long overdue," says Barry Kaplan of Cambridge Southern Financial Advisors in Atlanta, Georgia, noting that it will save clients a lot of trouble: "Everyone has been doing gyrations because they've been afraid the bank wasn't going to be there in the morning." But even with this increased protection, Kaplan advises consumers to carefully check bank ratings before opening accounts or buying CDs; he relies on Bankrate.com's ratings and "steers customers away from institutions that don't have at least three stars on a five-star scale." To read more, click on View to the right.

ABCNews.com - Financial experts address investors' concerns

As the skittish economy has Americans facing financial uncertainty, today’s ABCNews.com article “Financial Pros Answer Your Top Questions” goes to the experts to address some of their concerns. Connie Stone of Stepping Stone Financial in Chagrin Falls, Ohio responds to a reader who heard that money market funds may be in trouble: "Should I take my money out?" he asks. First, Stone points out, as of September 19, 2008 money market accounts are insured, and some financial institutions are considering adding Treasury guarantees for their money market accounts. But, she adds, "Yields on money markets are low compared with CDs. You might want to put some of your cash in 6-, 12-, and 18-month CDs to increase the yield if you do not intend to use the money during those timeframes."

TheBostonChannel.com - Nation's financial crisis has many wondering what to do

Tonight's ABC evening newscast on Boston's WCVBTV-Channel 5 tackled the concerns of viewers who are wondering what to do about their finances as our nation's financial markets become more unstable and the government considers a bailout plan. Dana Levit of Paragon Financial Advisors in Newton, Massachusetts was available to answer their questions about bank and money market accounts, 401(k) plans, and pensions. Overall, Levit advised: "Stick with your sound financial advice, which is to save 10 percent of your gross income, have an adequate emergency fund, and diversify your portfolio, and you'll be fine." To read a transcript and access a video of the broadcast, click on View to the right.

InvestmentNews - ACA member helps clients invest in experiences and memories

In this week's InvestmentNews article "Encourage 'alternative' investments" Kathleen Rehl of Rehl Financial Advisors in Land O'Lakes, Florida writes about how she helps clients invest "in a way that will maximize their return of happiness." When she asks them to identify what they truly value, many of her clients answer "spending time with family members who are spread out across the country," creating the perfect opportunity for Rehl to suggest that they use a small portion of their portfolio to "buy experiences and invest in rich memories." To read her entire article and learn how Rehl helped one client couple make this "alternative" investment work for them, click on View to the right.

InvestmentNews - Young adults in U.S. have more debt than they did last year at this time

In this week's article "Americans under 35 piling up debts" Andrew Coen cites a recent Qvisory study which reveals that 75% of those surveyed owe as much--or more--than they did last year; but as their financial situations worsen only 14% said they turn to a financial advisor for help. Many have gone without health insurance at some point and are carrying medical debt; most do not have a retirement plan. Carol Friedhoff of Savvy Outcomes in Dublin, Ohio notes that "financial advisors could play a huge role in helping young adults navigate these challenges, but very few seek out planners or can afford them." Jill Gianola of Gianola Financial Planning in Columbus, Ohio adds that "it's hard for young adults to figure out what their standard of living should be. They find themselves in a tougher cash-flow problem from the beginning." Both advisors sometimes give discounts for their services to young adults who are struggling to establish themselves economically. To read the article and learn more about the advice Friedhoff and Gianola offer, click on View to the right.

WebCPA - Financial professionals can help Baby Boomers move into retirement

In today's WebCPA article "CPAs Can Help Boomers Make the Big Transition" Richard Stolz looks at the ways advisors and CPAs can help guide their clients as they approach retirement. Bert Whitehead of Cambridge Connection in Franklin, Michigan encourages client couples to think about how they're going to spend their time when they retire and has sent some of them to seminars that explore retirement's personal side. "For many clients," he says, "their self-esteem is wrapped up in their business card. They wonder what they're going to do in retirement." Addressing the financial side of retirement, Whitehead stresses that once a cash-flow goal is set, "advisors [should] focus on the distinction between a general projected yield on a portfolio and the actual cash flow it will generate." And to maximize clients' financial comfort level at retirement, Whitehead advises that they continue saving a portion of the income they generate from their various retirement sources: "They're frightened they'll run out of money. That's why having them save 10 percent every year is very appealing to them."

Investment Advisor - Upcoming ACA conference noted

This month's Investment Advisor calendar lists the Alliance of Cambridge Advisors Annual Conference which will be held October 17-21 at Loews Vanderbilt Hotel in Nashville, Tennessee.

InvestmentNews - Financial advisors split on whether bear funds are a good thing

In this week's InvestmentNews article "Bear market funds maul competition" David Hoffman reports that bear market mutual funds--which seek positive returns in down markets--have had an average year-to-date return of 8.2% while the Standard & Poor's 500 stock index is down 11.67% for the same period. Even in the face of this success, some advisors aren't sold: Kevin Young of Young Wealth Management in Davis, California is among them. "Bear funds are only valuable if markets are in decline," he says, "and since calling a drop in the market is market timing, such a strategy can be dangerous." To read the entire article, click on View to the right.

Bankrate.com - Downsizing can be a smart move for retirees

Bankrate.com's Securing Retirement series turns its attention to trimming the fat from your retirement budget in Steve Santiago's article "Ways to downsize during retirement." He presents 6 tips for scaling back without feeling deprived, starting with "Shrink your domicile." Connie Stone of Stepping Stone Financial in Chagrin Falls, Ohio says, "Housing is the biggest area to save money." For some of her clients she suggests smaller homes with less upkeep; for others she recommends shopping for a retirement community with bundled services, such as meals and laundry. Stone tells of a client who recently moved from a condominium to a retirement community apartment: "She absolutely loves it because now she has a smaller home, and she has fixed costs for her meals." To read the other tips on downsizing, along with more of Stone's comments, click on the View link to the right.

Financial Advisor - CFP's revised ethics code takes effect

The Frontline News feature in this month's Financial Advisor notes that the Certified Financial Planner Board of Standards' revised Standards of Professional Conduct takes effect on July 1. For the more than 57,000 CFP certificants, this revision clarifies the fiduciary role of advisors and the responsibility they bear for acting in their clients' best interests. Avani Ramnani of Athena Wealth Advisors in Jersey City, New Jersey believes that these new standards bring the profession's practices into line with the public's ideas of what it should be doing: "There's a gap between what should be happening and what is happening," she notes.

InvestmentNews - Can fun and financial planning go hand-in-hand?

Definitely, says Kathleen Rehl of Rehl Financial Advisors in Land O'Lakes, Florida. Her article "Financial retreats focus on fun" in this week's InvestmentNews describes how Rehl asks clients to "escape into, not out of, financial planning" by inviting them to visit her in Florida: "I believe that there may be a different way to do financial planning, especially with clients who are far away. I can spend concentrated face-to-face time with my clients, as well as provide an opportunity for rest and recuperation." Among her retreat themes: Moving from Success to Significance, Planning for a Re-Fired Life, and Starting Life Over as a Widow. To read her entire article and learn how Rehl hosts these financial retreats, click on the View link to the right.

Cleveland's The Plain Dealer - Handling the tax implications of selling a home

In today's Ask the Expert column in The Plain Dealer reporter Teresa Dixon Murray refers a reader's question to Ken Robinson of Practical Financial Planning in Cleveland, Ohio. The reader and his wife just sold their home for $20,000 less than they paid for it two years ago and are asking if they can claim it as a capital loss. "A loss on the sale of a primary residence," answers Robinson, "is a non-deductible personal loss." But, he points out, the loss (or gain) isn't simply how much you got when you sold the house minus how much you paid for it. For tax purposes there are a number of adjustments that can affect this number. For example, you're allowed to subtract certain expenses of the sale from the selling price, and you're allowed to add the cost of certain improvements to what you paid for the home. Robinson's advice? Consult IRS Publication 523 Selling Your Home (available at irs.gov). Then "if you are at all unsure how to handle the sale of your home on your tax return, consult a qualified tax advisor."

Associate at Cambridge Cape Cod Advisors gains college planning credential

Congratulations to Philip L. Stockton, an advisor with Gregory Fenton at Cambridge Cape Cod Advisors in Cape Cod, Massachusetts. Today he was awarded the Certified College Planning Specialist credential through the National Institute of Certified College Planners (NICCP).

Cleveland's The Plain Dealer - How one advisor plans to spend her economic stimulus check

In today's Plain Dealer article "Most plan to spend tax rebates, surveys show" Cleveland reporter Teresa Dixon Murray takes a look at how some of the area residents who work in finance-related fields plan to spend their economic stimulus checks. Among their plans: paying bills and college tuition, saving, and special projects in and around their homes. Connie Stone of Stepping Stone Financial in Chagrin Falls, Ohio and her husband will put half of their tax rebate check into their cash reserve fund and will use the other half for trees, shrubs, and perennials . Stone--who is a master gardener--says, "My husband and I are fanatical about landscaping and gardening." They bought a 104-year-old house ten years ago and have been gradually working on the landscaping since then. These purchases, she says, "will provide a return for the next 20 or so years."

InvestmentNews - Advisors can focus on what makes clients smile

"Meeting with clients right now might not be much fun," says Kathleen Rehl of Rehl Financial Advisors in Land O'Lakes, Florida. With the turmoil on Wall Street providing more than enough pessimism to go around, it's a good time to turn to something less bleak, and the title of her article in this week's InvestmentNews says it all: "Refocus clients to big-grin goals." And what, exactly, is a "big-grin" goal? For each of us, says Rehl, it's the answer to the question, "What would give you lots of joy and put a huge smile on your face this year?" Some of the goals her clients' answers have identified are traveling, redecorating, celebrating a family event, improving their health, and getting organized. "Presuming that the goal is affordable," says Rehl, "the advisor's job is giving a green light to spend." To read the entire article, click on the View link to the right.

InvestmentNews - April 15 tax deadline poses a tough problem for a number of investors this year

According to Lipper, Inc. of New York, for 2007 mutual fund investors will owe a record-breaking $33.8 billion in taxes on capital gains distributions. In this week's InvestmentNews article "Deadline on taxes a greater menace for many advisers" Brooke Southall describes the situation some investors find themselves in: 2007 will mark the first year of capital gains since 2000 when the technology bubble burst, and falling home values and a declining stock market are making it difficult for these investors to raise the money to pay the capital gains taxes they owe. Advisors meeting with their clients to sort through these problems are filing a record number of extensions; these may buy time, but they are no panacea, says Avani Ramnani of Athena Wealth Advisors in Jersey City, New Jersey. "Extensions only enable you to gather any missing information. This is not an extension to pay your taxes," she cautions. "If someone extends their deadline and does not pay what was originally due to the Internal Revenue Service, they get levied with interest and penalties. That may not be worth delaying the payments." To read the article, click on the View link to the right.

Wealth Manager - Donna Skeels Cygan honored

Congratulations to Donna Skeels Cygan of Essential Financial Planning in Albuquerque, New Mexico for being named in this month’s issue of Wealth Manager as one of "The Top 50 Women in Wealth Management." Of this honor, the editorial staff of the magazine says, "This is not merely a list of who has the most assets under management or who has the highest production numbers. Some, for example, are on this list because of less-tangible contributions they've made to women in the profession, such as serving on committees or mentoring. However, they all have at least one thing in common: they are role models for the next generation of women advisors."

Financial Advisor - Moving the financial planning industry toward professional status

This month's Financial Advisor article "Why Aren't We There Yet?" by David Drucker uses the opening of the College for Financial Planning in 1972 as the inception date of the financial planning industry. Why then after nearly 40 years has the industry not achieved professional recognition, he asks. Bert Whitehead of Cambridge Connection in Franklin, Michigan weighs in: "The first thing we have to do," he notes, "is get rid of our sales mentality. Many people who come into financial planning are just looking for that seven-figure W-2 they get from making a big annuity sale." Jenna Hung of LifeStream Financial in Santa Clara, California adds that the public needs to see financial advisors as true fiduciaries. "Their perception of financial advisors as members of a true profession would also be advanced," she says, "by more quality control, in the form of some kind of peer review process, the establishment of career paths for the next generation of advisors, and a mentoring system..." To read the article, click on the View link to the right.

Newsweek - Many baby boomers can't afford to retire

For many leading-edge baby boomers who are nearing retirement age, the title of Daniel McGinn's and Temma Ehrenfeld's article in this week's Newsweek says it all: "Retirement Postponed." The housing bust, the weakening economy, and the volatile stock market have all taken their toll on the retirement plans of many Americans who had planned to sell their homes and downsize to a condo, pursue a second career or part-time work, and/or rely on their 401(k)s for retirement income. Essentially, many baby boomers who thought they would be quitting work by now have discovered that they simply can't afford it. "There's a lot of sheer panic out there," says Bert Whitehead of Cambridge Connection in Franklin, Michigan.

The Boston Globe - Dana Levit fields finance questions in live Q & A session

Dana Levit of Paragon Financial Planning in Newton, Massachusetts took personal finance questions from readers in today's online Money Makeover chat sponsored by The Boston Globe. One concern common to a number of the callers was debt: "Trouble," for example, has $54,000 in credit card debt, is committed to becoming debt-free, and is looking for a good debt consolidation place. Levit's response? "My favorite organization is a non-profit consumer credit counseling service that is part of the National Foundation for Credit Counseling. Their name is CCCS Credit Advisor, and their number is 800-208-2227. ... The first step is to talk to a counselor at CCCS, and they'll be able to tell you more about your options. Keep up the good work!" To read a transcript of the entire broadcast, click on the View link to the right.

Wall Street Journal - Some things to consider about retirement-contribution protection insurance

Retirement-contribution protection insurance, designed to continue funding the retirement of an individual who has become disabled, is attracting interest among financial advisors. In today’s Wall Street Journal article "Securing a Nest Egg" Karen Hube describes how these policies can be used to supplement standard disability coverage, which usually replaces enough income to cover a family's day-to-day needs but not enough to continue funding retirement accounts. This could be especially important for those with high incomes, since disability insurers have caps on how much they will pay out each month. While someone earning $30,000 a year might be able to replace 75% of his income, someone earning a much larger salary might be able to replace only 40%. Additionally, those who earn part of their income as "extras" could come up short when it comes to disability coverage. "Policies often are tied to base salaries and don't factor in bonuses, stock options, and commissions," says Barry Kaplan of Cambridge Southern Financial Advisors in Atlanta. Another important issue when considering this type of coverage is tax liability. If you are able to get group coverage through your employer, contributions will continue to be made into the retirement plan. But if you get an individual policy, an irrevocable trust will be set up in your name if you become disabled. And with the trust, any distributions are subject to taxes which are paid annually out of the trust's assets, even though the distributions are reinvested in the trust. "To keep taxes to a minimum, you can choose tax-efficient investments within the trust," says Kaplan, adding that "you may defer taxes by investing in an annuity within the trust."

Cleveland's The Plain Dealer - Online retirement calculators are no substitute for professional advice

A number of reputable companies and organizations have begun offering free online access to retirement calculators, says Cleveland reporter Teresa Dixon Murray in today's The Plain Dealer article "Retirement planning: basic tips." And since most consumers don't seek professional help as they plan for retirement, these new, sophisticated tools can help with the number-crunching. However, the best retirement calculator isn't a substitute for sitting down with a professional, she notes, but for those who are using them--even as a starting point--there are some important tips to keep in mind. First, be realistic about what your living expenses will be in retirement. "Many people spend just as much in retirement as they did when they were working," says Ken Robinson of Practical Financial Planning in Cleveland; he recommends drawing up a true budget and then trying it out. "Once someone decides what he can get by on in retirement, he needs to practice living on it," Robinson says. "That test drive for a couple of months will show whether it's a realistic estimate." Also, figure out how much you can withdraw each year without running out of money and don't assume you'll never touch your principal. "It's unreasonable for people to assume they can live off interest alone," says Connie Stone of Stepping Stone Financial in Chagrin Falls, Ohio. And, at the same time, be realistic about investment returns: Stone likes "6 percent, the ultimate conservative number." And count on living a long time, adds Robinson: "While the average life expectancy may be in the mid-80s, don't hang your calculations on that," he cautions. "You should look at how long your money will last if you live to 95 or 100." And don't forget big-ticket expenses in retirement, Robinson reminds us: "Make sure you've accounted for how you'll pay for adequate health-care coverage in retirement...and allow money for home repairs and other emergencies." And, notes Stone, "Don't hinge your entire financial future on one Web site. At the very least, pump the same number into several reputable calculators and see how they compare." She adds this final cautionary note: "While online calculators can be useful, they're not the same as developing a financial plan with an expert."

Newsweek - New financial planners needed now for baby boomers nearing retirement

In this week's Newsweek article "Planners Wanted ASAP" Jane Bryant Quinn reports that 50,000 new financial planners are needed, "and in a hurry" since baby boomers are now approaching retirement age and need help making financial decisions "that could make or break their lives." Her advice to them? First, steer clear of investment advisors and seek the help of a financial planner instead. "Unlike investment advisors," she notes, "planners take a holistic view of your situation--your personal needs and goals, how much you can afford to spend, whether you need long-term care insurance and ways of conserving capital." Second, Quinn recommends looking for planners who practice as fee-only and neither sell products nor accept commissions. And consumers aren't the only group for whom fee-only planning makes sense. Some commissioned planners and brokers are getting tired of making their living by selling "stuff, especially tax-deferred annuities, insurance and high-fee mutual funds," and Quinn notes that these "breakaways" tend to migrate to a "fee-based" and then a full, fee-only practice over time. For those moving toward this type of practice, whether as a "breakaway" or as someone changing careers (since most financial planners enter the field as a second career), she recommends the Alliance of Cambridge Advisors for help in transitioning into the business of fee-only financial planning.

Financial Advisor - ACA membership recommended for new financial planners

In this month's Financial Advisor article "Blueprint For Success" David J. Drucker looks at the resources available for financial planners who are new to the field. One of the advisor networks he highlights where new planners can find the assistance and support they need to get their business started is the Alliance of Cambridge Advisors. Founded by Bert Whitehead of Cambridge Connection in Franklin, Michigan, this network of fee-only advisors trains its members in the concepts and processes pioneered by Whitehead since 1972. Sheryl Clark of Sunrise Financial in Tucson, Arizona started in the financial planning field by working for Whitehead in 1991, and by 2000 she was "fully ensconced" in the Cambridge experience, noting that "Cambridge members don't have to recreate the wheel. We learn how to price our services, how to set up our files and handle appointments and are even given a proprietary software system." Jenna Hung of LifeStream Financial in Santa Clara, California also sings the praises of Cambridge: "I've learned how to manage clients' expectations and to add value." To read the article, click on the View link to the right.

InvestmentNews - Rising health care costs force many baby boomers to delay retirement

In this week's InvestmentNews article "For baby boomers, a longer ride into the sunset" Lisa Shidler describes the situation many boomers find themselves in: As health care costs rise, they may have to delay retirement until they are over 65 or perhaps phase into it. Rebecca Preston of Preston Financial Planning in Providence, Rhode Island has a number of clients who have expressed an interest in foregoing full retirement in favor of phasing out of work. "Clients...find the idea of continuing to get health care while working attractive," she says. She has a number of university professors and doctors who are hospital employees and plan to continue working at their own pace. "Retirement is definitely not the gold watch and waltzing out the door at age 65," notes Preston. "I think those days are largely over." To read the article, click on the View link to the right.

Three ACA members to speak at 2008 NAPFA National Conference

Three members of the Alliance of Cambridge Advisors will be featured speakers at the 2008 NAPFA National Conference. Celebrating the 25th anniversary of NAPFA, this year's conference will be held from May 13-16 at the Long Beach Conference Center in Long Beach, California.

Thursday, May 15 William Starnes of Mallard Advisors in Newark, Delaware will be a panel member discussing "What We Learned When We Merged."

That same morning Bert Whitehead of Cambridge Connection in Franklin, Michigan will speak on "Segueing from AUM to Value-Based Annual Retainers."

Friday, May 16 Jill Gianola of Gianola Financial Planning in Columbus, Ohio will be a speaker on the topic "NAPFA University: School of Investments - The Investment Policy Statement" for three consecutive sessions, Chapters 1, 2, and 3.

For more information on the conference and for a full description of each of these presentations, click on the View link to the right.

InvestmentNews - How financial advisors can assist new widows

In this week's InvestmentNews article "Making a new widow's life easier," Kathleen M. Rehl of Rehl Financial Advisors in Land O'Lakes, Florida describes how financial professionals need to be mindful of the human element--as well as financial planning--when providing support for a new widow. Says Rehl, "It's important for you to listen, really listen. Listening helps you guide her in making appropriate decisions. Begin by asking, 'What can I do to help?' rather than just telling her what to do." It's also important, she points out, to be patient and remember that a new widow is living from one day to the next, so it's best to stick with short-term goals rather than overwhelming her with long-term goals at this time. To read the entire article and learn how Rehl assists new widows, click on the View link to the right.

Louis Rukeyser's Mutual Funds - Alliance of Cambridge Advisors recommended to those seeking the help of a financial professional

In this month's Louis Rukeyser's Mutual Funds article "Prudent Advice" Hannah Choe says to choose your financial advisor "with as much care as you would your doctor or attorney." Even though this will take some work and time, the effort will more than pay off in the long run. In addition to researching education, credentials, professional background, and services offered, it is “vital,” she says, to look at the fees financial advisors charge and to be wary of those who collect commissions. One of her recommendations is the Alliance of Cambridge Advisors whose fee-only method serves the best interests of clients: "The fee-only method prevents conflict of interest between the client and financial advisor while guaranteeing objective advice."

InvestmentNews - This couple's story shows why you shouldn't buy a new house until you've sold the old one

In his article in this week's InvestmentNews Bert Whitehead of Cambridge Connection in Franklin, Michigan has advice for those who have vacant real estate for sale in the current market. "Why it may pay to sell losing real estate" describes the situation two of his clients found themselves in. In their 40s with $750,000 in investments and a combined annual income of over $250,000, they had moved with their two children to a new city and bought a new $1million home. Although the future looked bright, they were under a large cloud: Over three months had passed since they moved, and their former house--which had been appraised at $750,000 two years before when they refinanced--had not sold. Says Whitehead, "My clients had broken the No. 1 rule for homeowners: Don't buy a new home until you sell the old one!" Panicked when they came to him, they were paying a $4,000 mortgage payment on their new house plus $2,500 for their former house. Additionally, they were paying $12,000 annually in property taxes, $300 a month for insurance on their now-vacant former home, and $600 a month for its utilities and landscaping maintenance. "In total," notes Whitehead, "my clients were shelling out over $50,000 a year in carrying costs. On top of that, they had to face the sobering reality that property values in their old neighborhood were dropping by 5-10% per year, amounting to another $40,000 or more in annual carrying costs." To read the article and learn what Whitehead advised, click on the View link to the right.

BusinessWeek.com - Protecting your portfolio in this shaky market

In today's BusinessWeek.com article "Risk: Smart Strategies for Tricky Times" reporter Ben Steverman asks how investors can protect their portfolios in today's shaky market. Stocks started the year 2008 by dropping even more than they did at the end of 2007; huge banks are being forced to raise extra capital at high interest rates; the credit markets remain seized up in the wake of the subprime meltdown. Since this is a good time to give investment portfolios a "risk tune-up," Steverman asked several financial planners for their advice on how to position themselves in these risky times. Staying diversified to maximize returns and minimize risk is important, notes Barry Kaplan of Cambridge Southern Financial Advisors; he adds that even risky investments are acceptable in moderation, provided they are part of a broader strategy: "You have to look at how it fits into the overall portfolio." A number of the planners interviewed, while granting that there are ways to try to keep risk at a minimum, also question whether managing risk is even possible since there are simply some things about the future that are not predictable. Says Kaplan, when a financial panic happens "everyone heads for the door at once, and no one's risk model has that built in." To read the article, click on the View link to the right.

Consumer Reports Money Adviser - A realistic look at the possibilities of retiring abroad

Retiring abroad was once seen as a way to ensure a lifestyle beyond American means, but the declining U.S. dollar has caused some of those inclined to make such a move to take a second look. Even so, with some forethought and planning it can become a reality, according to Greg Daugherty's article "The cost of living in paradise" in this month's Consumer Reports Money Adviser. He suggests taking taxes into account; they may actually add up to less than you were paying in the U.S., especially if you lived in an area with high property taxes. He also reminds those considering such a move to keep logistics in focus; you'll need to be mindful of the regulations governing Social Security and Medicare, and you may want to make changes to your investment portfolio since living abroad can make the falling dollar hit you harder. And, he notes, keep in mind that there are special costs related to living abroad; Robert Walsh of Lighthouse Financial Advisors in Red Bank, New Jersey points out that it is important to ask yourself "how often you would expect to fly back to the U.S., either for leisure or for medical checkups." And, he adds, "If you have kids or grandkids, especially of the young and impoverished variety, you may want to budget a few bucks to subsidize their airfares to visit you."

Financial Advisor - Gay couples need to plan carefully for the possibility of divorce

In this month's Financial Advisor article "With Gay Marriage Comes Gay Divorce" Caren Chesler points out that financial planners should warn gay couples--even more than heterosexual couples--that they need to plan for divorce or risk facing some "hefty financial consequences." The main problem is that the federal government and most states do not recognize gay marriage; this means that if a gay couple divorces any assets transferred between the partners--even alimony--is considered a "gift" by the IRS and can be taxed if the amount transferred is over the $12,000 annual limit or the $1,000,000 lifetime limit. Planners interviewed for this article agree that the best option is for gay couples to plan for divorce at the onset of their relationship and to transfer assets to one another slowly over time so that they do not set off a taxable event. However--even though federal tax laws favor heterosexual married couples--there is one benefit to being married and gay that derives from the fact that the IRS doesn't recognize same-sex marriage. The partners in a gay marriage continue to file as individuals, and, notes Dana Levit of Paragon Financial Advisors in Newton, Massachusetts and President of PridePlanners Association--a non-profit group that educates financial professionals on the needs of non-traditional families, that means all of the caps afforded to individuals are retained. "This is where it's a good thing to be gay," says Levit. "Things that get phased out for joint filers just don't apply." To read the article, click on the View link to the right.

Financial Advisor - Considerations for retirees planning to start a small business

A number of baby boomers are nearing retirement having overspent and undersaved during their working lives, making the prospect of starting a small business during their retirement years an attractive one. In this month's Financial Advisor article "Boomers in Business," David J. Drucker reminds those in the financial planning industry that advising retirees and near-retirees on forming and operating a small business is a skill the boomer generation is forcing them to train for. Says Tina Anders of Anders Financial Planning in Petaluma, California, "AARP says that 80% of boomers will want to work in retirement, they have the time to properly develop a business plan, and they've probably paid off their mortgages. They also say banks are looking more favorably upon funding retirees' small business proposals since many boomers have relevant experience and networks in place." In light of this, there are important considerations for planners with clients considering starting a small business. First, size up clients' capabilities: Do they have experience running a small business? Second, examine their financial situation: Will their finances be devastated if the business fails? Finally, be sure they understand the importance of a business plan: If they find that the business is not on track, does their plan include ways to modify their strategy or even exit the business? These questions need to be posed and answered, since the impact of a failing business--especially in retirement--can be significant. To read the article, click on the View link to the right.