Who's Managing Your Money? - Del Mar Foundation

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18 Νοε 2013 (πριν από 3 χρόνια και 10 μήνες)

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Who’s Managing Your Money?

Moderated by Carolyn Kling, Kling Partners

Presented by:

Paul Spitzer, Advanced Practice Advisors

Carolyn Taylor, Weatherly Asset Management

Herb Morgan, Efficient Market Advisors

Carlee Harmonson, Union Bank

30
th

Anniversary Celebration

The
Del Mar Foundation
presents
a two
-
hour panel discussion with local diverse
financial professionals who welcome an open audience dialogue.


At
this session,
the goal of the panel
is to provide an understanding of related costs
associated with investing and how they affect you as an investor. The panelists will
define the differences between banks, trust departments, brokerage firms, investment
firms, money managers, mutual funds, exchange traded funds, and other fund
structures.


The panelist
will present the differences between the role of a Fiduciary
and
the
‘suitability standard’ to which many companies adhere. You will learn how Trusts play an
important role in asset ownership and the correlation of taxes, management,
administration fees and investment performance.


Designed
to give local residents an opportunity to “ask the experts,” the Del Mar
Foundation Legacy Planning Series continues their 30
th

Anniversary Educational
Series.

“Who’s managing your money?”

Paul C. Spitzer, Founding Member

Carolyn P. Taylor, President

Comprehensive Wealth Management



Comprehensive wealth managers have the highest level of
expertise and fiduciary standards in the industry


More than a just money manager or a financial planner


Combines portfolio management and financial/estate
planning to manage a client’s financial life as efficiently as
possible


Paying a wealth manager to advise on all aspects of your
financial life should save and make money over time


Serious money demands serious legal, tax and financial
knowledge and creativity

Services should be timely, applicable and al la carte catered to your
needs.

Holistic Wealth Managers
-

Need to be Dynamic and Individualized

Tax Planning


Types of taxation:


Income vs. capital
gains tax


Possible offsets


Deductions,
capital loss carry
-
forward, business
income, etc.


Deferral of income
-

maximizing
contributions to
retirement, defined
benefit, ESOP and
other tax
-
advantaged
vehicles


Charitable giving

Estate Planning


Overall gift strategy


fits with Trust
documents, taxes
and wishes


The “alphabet
soup”


LLC, FLP,
QPRT, CRT

Financial Planning


Concentrated stock
positions


Volatility and risk
minimization
strategies


Income strategies


tax preferred, tax
deferred, tax
-
free,
and taxable


or
blend


Hierarchy/use of
funds


Where to draw
from first
considering tax
and estate
implications

Asset Management


Asset structures
and types of
holdings
appropriate for
each


Asset location vs.
asset allocation


Risk mitigation for
each type of
structure


Types of
investments within


Inflation
-
protection,
income oriented

Significant Events


Steps to Take


Discuss legal ramifications


Review
f
inancial
s
trategies


Decide how best to minimize taxes


Re
-
evaluate
f
amily dynamics, including roles and responsibilities


Divide assets (if applicable)


discuss location and fairness


Define the many “what if’s”


Create a roadmap to optimizing a long
-
term plan given the
change in circumstance

Significant events include: divorce, death, remarriage, job loss and health issues.

Multigenerational Wealth


Introduce the younger generation to the team of advisors


Keep topics and specifics general

Family Meeting


Review relevant legal, tax and investment topics as well as
asset allocation

Annual Meetings


Appoint roles for family and non
-
family members to gain
experience and responsibility

Quarterly Meetings


Meet individually as well to address specific situations and
concerns and interplay of how the larger picture fits within

Additional
Communication


How to help families transition wealth more smoothly from the older to a younger
generation:

Asset Location and Investments


Asset allocation is the number one driver of risk and return.


Assets include: equities, real estate, alternatives, raw materials, fixed
income and international

Asset Allocation


Asset location


by type of account and type of structure or purpose


Retirement vs. Taxable Accounts


LLC, FLP, CRT, Trust (Irrevocable or Living)

Asset Location


Diversification is key


Adding each of the following, as appropriate: covered calls, dividend stocks,
non
-
dollar, low beta, preferred stock

Minimizing
Volatility &
Addressing Risk

The goal is to minimize volatility while maximizing after
-
tax and inflation
-
adjusted returns.

Highlight of Fiscal Cliff Negotiations

Links to Learn


www.weatherlyassetmgt.com


www.newyorktimes.com


www.wallstreetjournal.com


www.bloomberg.com


Finance.yahoo.com


www.brightscope.com


Herb W. Morgan,

President and Chief Investment Officer

Costs Matter


For decades institutional investors have had a massive cost
advantage over retail investors…Not any longer.


**M

Traditional Mutual Funds


Mutual Fund
Exp

Ratio





1.50%


Mutual Fund Trading Costs*(Not reported in expense ratio)




.78%


Cap Gains Liability






2.50%





UNWRAPPED” EXPENSE RATIO


4.78%


Exchange Traded
Funds (ETFs)


ETF Expense Ratio






.20%


ETF Internal Trading Costs (Not reported in exp. Ratio)




.
01%


Capital Gains
Liability**







.
0%





UNWRAPPED” EXPENSE RATIO



.21%


Source: “Expense Shifting: An empirical study of cost shifting in the mutual fund industry.”
Nicolag

Sigelkko
, Wharton University
1999

**Most ETFS but not all ETFs do not distribute capital gains due to their unique “in kind” creation and redemption structure



Cost Matters

$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
Yea r 0
Yea r 1
Yea r 2
Yea r 3
Yea r 4
Yea r 5
Yea r 6
Yea r 7
Yea r 8
Yea r 9
Yea r 10
Yea r 11
Yea r 12
Yea r 13
Yea r 14
Yea r 15
Yea r 16
Yea r 17
Yea r 18
Yea r 19
Yea r 20
0.21% Total Expenses
4.78% Total Expenses
$10,158,314

$4,425,000

Asset Allocation Decisions Matter Most


Cisco was, is and likely always will be a great company.



1999



Today


Facto

Revenue

$12.15B


$180.0 B

15X

Net Income

$ 2.10 B


$ 40.0 B

20 X

Market Value

$300 B



$110.0 B

-

2/3


So what is “Asset Allocation”?

Institutional Style Asset Allocation




Opportunistic

0% to 10%


Tactical

15% to 30%

Strategic

60%


80%

Art & Skill

Monkey Math

Courage

Carlee Harmonson,

Senior Vice President, Regional Director,

Trust
& Estate Services
The
Private Bank

Trust and Estate Services

Trustees administer personalized, tax
-
sensitive and court
-
supervised instruments according to
sound fiduciary principles.

Administration



Living trusts



Testamentary trusts



Charitable trusts



Special needs trusts


Philanthropic Services

Grant administration and investment management of:


Foundations


Endowments


Pooled income funds

Estate Settlement



Asset preservation



Complex administrative and accounting services



Preparation and filing of tax returns

Comprehensive
Management of
Specialty Assets



Real estate



Mineral, oil, and gas interests



Closely held business interests



Promissory notes



IRA rollover trusts



Probates



Conservatorships



Guardianships

Wills, trusts, foundations and wealth planning strategies have legal, tax, accounting and other implications. Clients should

co
nsult a competent legal or tax
adviser.

Role of a Trustee


A trustee ensures your wealth is managed and distributed in accordance with the wishes outlined
in your trust. The trustee should maintain a neutral position and balance the interests of current
and future beneficiaries. The trustee must avoid conflicts of interest and self
-
dealing. The trustee
must keep beneficiaries informed of trust activity.



As a fiduciary, the trustee is responsible for:


Investing assets appropriately and providing accounting and bookkeeping


Maintaining a complete inventory of all trust assets


Recording all income and principal distributions and receipts


Maintaining documents and records


Filing annual income tax returns


Communicating with and making distributions to beneficiaries throughout the life of the trust
and upon termination, if applicable.












Investing

assets appropriately
for

generational
beneficiaries

Accounting and
bookkeeping

Tax payment and
Recordkeeping

Communication and
distribution to
beneficiaries

Estate Settlement Services

Executing your wishes as directed in your estate plan is complex and may require
extensive probate administration, asset management, sub
-
trust funding, and
disbursements to your beneficiaries.


Your trustee needs to bring objectivity to settling your estate as planned:

Marshalling,
investing, and
safeguarding assets

Handling complex
administrative and
accounting
requirements

Preparing and filing
tax returns

Distributing assets
when, how, and to
whom you specify

Specialty Assets

Many trusts contain specialty assets:

Real Estate

Management


Management
services for
commercial,
industrial,
residential and
agricultural
property holdings

Mineral, Oil and Gas
Interest


Unique industry
expertise and
knowledgeable
asset managers

Closely Held
Business Interest


Industry specialists
who can manage
the complexities of
private business
interests

Loan Management


Expertise in loans
held in fiduciary
accounts

Duties of a Trustee

STARTING THE TRUST

ADMINISTRATION

BOOKKEEPING
RESPONSIBILITIES

INVESTMENT
MANGEMENT
COORDINATION

RESPONSIBILTIES TO
BENEFICIARIES

TAX PAYMENT AND
RECORDKEEPING

MAINTAINS NEUTRAL
POSITION

DISTRIBUTION UPON
TERMINATION

Reviews Trust
Agreement

Marshalls the assets

Meets with beneficiary
and/or grantor to
determine investment
objectives an d
income/principal
needs

Manages
recordkeeping for all
assets

Completes an
inventory of all trust
assets


keeps track of
all cost basis and
acquisitions for tax
purposes

Arranges for appraisal
of trust assets and
determines property
insurance needs

Records all income
and principal
distributions and
receipts

Takes care of all
transaction activity

Collects all income,
e.g., dividends,
interest payments.
Ensures they are
reinvested or
distributed as
established in
agreement

Draws up investment
strategy according to
objectives of trust
agreement

Manages investments
according to market
circumstances, safety
of principal, and
income needs

Regularly reviews
performance and
objectives

Makes distributions to
beneficiary as directed
by agreement

Supplies detailed
statements on a
regular basis outlining
principal, income, and
investment activity

Takes care of financial
obligations for medical
needs, if beneficiary is
ill

Files annual income
tax return and
provides information
for beneficiary tax
return

Compiles a record of
adjusted cost basis
and taxable income

Manages investments
to allow minimal tax
exposure

Seeks legal counsel
when and if needed

Reports actions to an
independent auditor

Follows terms of trust
agreement and avoids
conflict of interest

Arranges partial or
final distribution
according to trust
agreement

Divides the assets of
the trust property
between beneficiaries

Supplies accounting
information and tax
data

DMF Board Director and Founder of Kling Partners, Carolyn Kling
will moderate the panel. Ms. Kling provides family office
investment services to family enterprises, family offices and private foundations. Applying valuation tools that integrate bu
sin
ess
succession and family generational planning and modeling for family members, Ms. Kling evaluates investment portfolios to
assess risk adjusted performance on an after tax basis, investment policy, structure, asset allocation, management fees and
other risk parameters. Ms. Kling collaborates with client advisors, trust and estate planning attorneys, tax strategists and

CP
As to
ensure a seamless integrated investment plan to meet investment objectives through generations. Ms. Kling has earned the
professional designation of AIFA, Accredited Investment Fiduciary Analyst.


Paul Spitzer, Founder, Advanced Practice Advisors, LLC
Mr. Spitzer has been in the financial business for over 25 years. He
specializes in Investment Policy Statement construction by aligning the proper asset allocation strategies to each of his cli
ent
s’
needs. The majority of Spitzer’s career encompassed two decades at AG Edwards, (later Wachovia) where he initiated and
concluded two high
-
profile IPOs valued at $100M each. He is a Member of the Committee for the Fiduciary Standard in
Washington DC and is active in various San Diego charities and professional financial associations. Spitzer earned his BA at
Idaho State University.


Carolyn P. Taylor, President, Weatherly Asset Management

Ms. Taylor, majority owner of the partnership, is personally and professionally committed to providing comprehensive high
-
quality investment management services. With over 30 years of portfolio management experience, Ms. Taylor offers a wealth of
investment expertise to WAM’s clients. Formerly an investment banker at Dean Witter Reynolds, Inc., NY, a portfolio manager a
t
Neuberger & Berman NY, and
Payden

&
Rygel
, LA, Ms. Taylor has managed over $1B in assets during her storied career.
Additionally, Ms. Taylor is a member of the Chartered Financial Analysts Society of San Diego, the San Diego Foundation’s
Investment Committee, the Jewish Community Foundation and the National Association of Professional Women. Ms. Taylor is a
Founding Member of the National Advisors Trust Company with assets of $7.7 B. Ms. Taylor received her BS and BA from
Stanford University.


Herb
W. Morgan, CEO & Chief Investment Officer, Efficient Market Advisors, LLC

Prior to becoming CEO of Efficient Market Advisors, located in Del Mar, Mr. Morgan held the post of Sr. VP of Advisory at
Linsco
/Private Ledger Financial Services, Inc., Sr. VP with Dreyfus and Sr. VP with ING Funds. Mr. Morgan is involved with
philanthropy in education where he served as the Chair of the Investment Committee on the Foundation Chapter of Theta Chi
Fraternity, Inc. Mr. Morgan graduated from UC Santa Cruz with a BA in Economics (Honors). Currently Herb is the President of
the Board of Trustees of the San Diego City Employees Retirement System (SDCERS) a $5.5 billion dollar public pension plan.


He
serves on the SDCERS Investment, Audit, Disability and Business & Governance Committees.


Herb has been seen on CNN,
CNBS & Fox News.


Herb writes an investment column for Forbes.


Carlee
Harmonson, Sr VP, Reg Dir, Trust & Estate Services The Private Bank, Union Bank

Carlee
leads a team of specialists in wealth planning, investments, risk management and fiduciary
services.
Carlee has been
with Union Bank since 2002 and is a veteran of the trust business with over twenty
-
five years’ experience in both Personal Trust

and employee Benefit Plants. Carlee is a graduate of UC Davis with a BA in Sociology and holds the professional designation
“Certified Retirement Services Professional.”