Women as Retirees

A recent survey by the WISER institute shows that retirement is a myth for the majority of women across the country. Here are a few of the key findings:
· 38% of women aged 30-55 are worried they will live at or near the poverty level because they cannot adequately save for retirement. The figure for men in the same age group is 33%.
· 52% of women expect to continue working once they reach retirement age
· 54% of women have little to no money left to save for retirement once they pay their bills. This figure rises to over 62% for African-American and Hispanic women.
· More than four in ten women sampled said their retirement would be less comfortable than that of their parents.

College Planning

* ATTENTION parents of students of the Class of 2007, 2008, and 2009! Has your student begun the process of choosing a college? Do you or your student even know where to start?
I can help with complete college planning. This includes step-by-step guidance along the way as your student prepares for college, choosing a college, and helping you develop plans to pay for tuition, books, fees, room and board, and the like.
* I also provide assistance for students in their senior year (Class of 2006) as you prepare for filing for financial aid, in order to avoid costly delays.
If you’d like some help with either situation, give me a call. It may be too late and I won’t be able to help you out, but it won’t cost anything to talk it over and see if there is anything I can do to help.
* SPEAKING of college planning, one of the biggest mistakes I see parents making these days is to put saving for college ahead of all of their other financial goals. Understandably, they want to give their children everything, and that includes an education without cost to the student.

Keep this thought in mind: you can always take out a loan for college. You can’t take out a loan to retire.

With the cost of college spiraling upward, many parents come realize that not only do they need to save for education, but out of the same paycheck they need to put money aside for retirement as well.

College preparation, including savings, should be thought of as a family project, so include the children in the activity. It’s not bad parenting to share the cost of college with your children – in fact, many would argue that teaching this kind of fiscal responsibility is very important to a child’s (or young adult’s) financial education. Encourage your kids to:
· get a part time job to help save up for school costs
· discuss the concept of student loans with them, so they will be mentally prepared when the time comes
· Do their best in high school – this will boost their chances for scholarships and grants

"Incidental" Financial Advice

In April of this year, the Securities and Exchange Commission voted on an obscure ruling called the “Merrill Lynch rule”, which allows broker representatives to offer fee-based accounts without having to register as investment advisors. Broker representatives accept commissions as their compensation, so they must sell a product in order to receive compensation.

This ruling is something that consumers of financial products (investors) need to understand.

The Investment Advisor Act of 1940 provides certain protections to the consumer – such as ensuring that the advice provided is in the best interest of the consumer, for example. This ruling allows the broker representative to bypass this registration, so long as their advice is “solely incidental” to traditional brokerage services.

The obvious question here is, why would anyone hire a professional to provide them with “incidental advice”? If you were to ask folks why they do business with these brokerage firms, the answer would likely be because they feel comfortable that they’ll get good advice from a brand name company. In reality, you’re getting advice from people, not from a company. It’s a person you must trust.

In truth, there’s no such thing as incidental financial advice. Just as there is no such thing as incidental dentistry or an incidental brake job. Incidental financial advice is, by definition, incomplete financial advice, and does more harm than good. Either advice is provided properly and completely, in the interests of the consumer, by a professional acting as a fiduciary, or it’s simply a part of an overall sales job for insurance or investment products.

Two Types Of Professional
This ruling by the SEC effectively separates a class of financial professionals from being held to a fiduciary standard. The irony is that the SEC is pointing out with this ruling that the advice provided by the broker reps is incidental to their primary function of selling securities products. Doesn’t it make you wonder then, why the brokerage firms advertise themselves as financial advisors, financial consultants, and other titles that imply something other than what their primary job function is?

The Financial Planning Association, the largest organization of professionals who are dedicated to financial planning, stated in a written response to the SEC decision: “We believe that, at an absolute minimum, a consumer warning label is warranted given the confusion in the marketplace over who is a broker agent and who is a fiduciary investment advisor.”
With the adoption of this ruling, the SEC has effectively created two classes of financial professionals – those that work strictly in the best interest of their clients, and those that hide behind an exemption.

I just thought you’d like to know about this.