Indiana wealth management firm supports new fiduciary standard ruling.

As an Indiana wealth management firm with proven credentials and a fee-based system, we believe it is important for clients to know that there are new rules mandating a fiduciary standard for retirement plan assets. And advisers who are using commission based accounts and buying mutual funds in their (not client’s) best interest are going to feel the sting.   This rule can be a positive for the industry. Advisers will be accountable to act in ways that are legally best for their client when offering advice pertaining to a client’s retirement plan, or the investment of assets that need to be rolled over or distributed from a previous workplace IRA.   If this ruling were to follow some precedent, it can be found in a ruling sourced from a Pinsent Masons Legal guide, based on the Law of England and Wales (updated 2010). It reads: As agent, the broker has a legal duty to act in good faith in what he believes to be the interests of his client. This means he must account for any secret profit that he makes, and he is not allowed to put himself in a position in which his interest and duty conflict.1   The truth is, conflicts have arisen, and the people who are paying the price are middle class Americans. The Labor Department’s review of academic literature provided by the White House Council of Economic Advisors suggests that advice from professionals who have a financial incentive to put investors in a specific product takes a $17 billion bite out of the retirement savings from working- and middle-class families each year.2   Yet there still are opponents of this ruling. One of their main concerns is that under the new Best Interest Contract Exemption (the BIC), advisors would only receive commissions and other revenue under very stringent conditions. They worry about a lack of clear communication which could result from a mistake on the advisors part due to misleading statements, or could cause a conflict of interest.   And while making a mistake about fees or commissions is indeed a concern, so is the practice of trying to limit fiduciary responsibilities: In 2013, 44 percent of regulatory exams uncovered deficiencies in advisory agreements, according to the North American Security Administrators Association. In some cases, regulators called out “hedge clauses” that attempted to limit advisors’ roles and their fiduciary responsibilities.3   Is your investment advisor living up to your expectations? Do you know how they are being compensated? A reputable advisor will not only explain their investment strategy, but detail how they are compensated and the type of responsibility the have to you as a client.   If you need any questions about the complexities of wealth management answered now, or would like to know more about the best way to accumulate wealth for your particular situation, we invite you visit: www.midwest-wealth.com.   As a private investment group specializing in wealth management, Midwest Wealth Management, Inc. offers a proprietary trading platform, alternative investment offerings and dedicated advisory support for a select audience. For more information, please visit www.midwest-wealth.com.   1. Roberts, Alex. Insurance broker remuneration: law and regulation. Out-Law.com. Legal news and guidance from Pinsent Masons. 2015 http://www.out-law.com/page-8927 2. Maxey, Daisy. Battle Continues Over Fiduciary Rule for Retirement Investments. The Wall Street Journal. 14 June. 2015 http://www.wsj.com/articles/battle-continues-over-fiduciary-rule-for-retirement-investments-1434054916?alg=y&mg=id-wsj 3. Thornton, Nick. Navigating the minefield of fiduciary liability. What advisors are doing to safeguard themselves in a litigious world. Benefitspro Jan 14, 2015 http://www.benefitspro.com/2015/01/14/navigating-the-minefield-of-fiduciary-liability indianapolis alternative investments
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Each day between 2011 and 2030, 10,000 baby boomers will celebrate their 65th birthdays. As the boomers grow older, their middle-aged children may find themselves in a challenging situation: providing financial assistance to their parents as well as their own kids.   According to a poll by the Pew Research Center: • 75 percent of adults believe that they have a responsibility to provide financial assistance to their aging parents. • 63 percent of adults have given some type of financial support to their grown children in the past year.   Members of the Sandwich Generation—those who are taking care of aging parents while supporting their own children—often come under serious financial and emotional stress. As your parents move into retirement, it’s wise to plan ahead for any financial and legal responsibilities they may expect you to take on.   Starting the conversation   These days, 65 is hardly considered old age. But it’s crucial to sit down with your parents and have an honest discussion about issues that may arise—before they need your help. What are their expectations for the future, and what kind of assistance will they need from you? Will they have sufficient resources to cover their care as they age?   As part of this conversation, be sure that they have their important documents and information organized. You’ll want to know where to locate items such as:   • Wills and legal documents • Investment, bank, and insurance account numbers • Safe deposit boxes, real estate deeds, and automobile titles • Emergency contact numbers (medical providers, neighbors and friends, and financial, tax, and legal advisors)   Looking into legal matters   If they haven’t already done so, your parents may want to hire an attorney to help them manage their affairs. For example, they may need assistance with:   • Appointing a health care representative. Without legal authorization, medical privacy laws prevent doctors from discussing a parent’s medical conditions with you. In addition to appointing a health care power of attorney, your parents may want to consider a living will, which provides instructions on how to manage treatment if they have a terminal or irreversible condition and cannot communicate. • Reviewing and updating estate-planning documents. Besides the basic estate planning documents, such as wills, durable powers of attorney, and revocable trusts, your parents may wish to draft a letter outlining who will receive personal effects like jewelry and family heirlooms.   Discussing their financial situation   Depending on your parents’ circumstances and financial savvy, they might need help managing their money as they age. Making arrangements now can help prevent confusion down the road.   • Look into banking options. Most banks offer automatic bill payment services from checking or savings accounts—a convenient option if your parents are comfortable with the Internet. • Review insurance coverage. Be sure to discuss your parents’ existing life and long-term care policies, and make changes if necessary. • Enlist an advisor. Now may be a good time to get to know your parents’ financial advisor, or to talk to your own advisor about your parents’ situation. He or she can recommend products that are suitable to their investment goals, whether that means income, capital preservation, or growth. An advisor can also propose cash management solutions, which allow your parents’ monthly social security, retirement plan, and annuity payments to be deposited automatically into an account. You can typically access these funds through a debit card, unlimited check writing capabilities, and online bill-pay services—everything that a bank checking account offers.   Looking to the future   As your parents age, a number of other considerations will likely come into play. Will they be able to continue living at home? How long will they be able to drive? Although these topics may be difficult to discuss, it’s important to start the conversation early—for your parents’ sake as well as your own. By planning ahead for any financial assistance and other care they may require, you’ll help ensure that everyone’s needs are met.   Securities and advisory services offered through Commonwealth Financial Network, Member FINRA/SIPC, a Registered Investment Adviser.  
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The role of alternative investment products in wealth management firms

Ben Franklin is famous for his line, “nothing is certain except death and taxes,” and any wealth management firm will tell you that gains from alternative investment products are indeed not a certainty. However, alternative investments may be a good addition to your asset allocation and wealth accumulation strategies- depending on your risk tolerance and portfolio objectives. Because of their complexity, alternative investments are usually handled by a qualified investment advisor, preferably one who is supported by a professional advisory team to help them seek alternative investments with various characteristics and objectives.   Alternatives also are valued for the many different choices they offer for wealth accumulation and cover a wide range of investment styles. For investors who want more liquidity, a good choice might be alternatives which are traded actively. These have a wide variety of approaches that can use long positions, utilize short-selling transactions or leverage the funds to generate returns.   At the other extreme are the assets that are locked up for years —such as private equity. These types of assets are illiquid, and because of their hands-off nature they become difficult to evaluate in a long-term strategy. This is where an experienced investment advisor can help by assessing the valuation properly and determining if the risk of the asset and the potential gains might be suitable choice for an investor’s portfolio.   Even with their complexity, alternative investments offer the advantages of a diversified revenue stream while providing more balance by reducing the return to risk ratio, giving the savvy investor more opportunities for wealth accumulation in this non-traditional market.   For more information about alternative investments, you can also visit our website at www.midwest-wealth.com. While you’re there, you can get even more alternative investment information by downloading our free eBook entitled: The Alternative Investor, a guide book for alternative investments by Greg Shields, founder and CEO of Midwest Wealth Management, Inc.   As a private investment group specializing in wealth management, Midwest Wealth Management, Inc. offers a proprietary trading platform, alternative investment offerings and dedicated advisory support for a select audience. For more information, please visit www.midwest-wealth.com.   Investing in alternative investments may not be suitable for all investors and involves special risks, such as risk associated with leveraging the investment, adverse market forces, regulatory changes, and illiquidity. There is no assurance that the investment objective will be attained.   Private equity investments have special and significant risks and are not suitable for all investors. The majority of private equity consists of institutional investors and accredited investors who can commit large sums of money for long periods of time. Private equity investments often demand long holding periods to allow for a turnaround of a distressed company or a liquidity event such as an IPO or sale to a public company. There is no assurance that the investment objective will be attained. mwm_blogbanner
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New Fiduciary Rule- What one Indianapolis Wealth Management firm sees on the horizon

New rules mandating a fiduciary standard for retirement plan assets may significantly hurt the ability of advisers who are using commission-based accounts and buying mutual funds: and that is good news for plan participants. In these non-fiduciary situations, advisors hire other advisors to pick their mutual funds. Both are getting commissions off the fund purchases, and these commission fees can chip away a retirement fund and cause significant losses over a number of years.   To demonstrate how these small percentages can add up, an economic fact sheet put out by the white house demonstrates that a 1% percentage point lower return could reduce your savings by more than one-quarter over 35 years. In dollars after adjusting for inflation, that’s a $10,000 investment growing to only $27,500 instead of $38,0001. This is a perfect example of how this ruling is positive for the industry: It requires advisers to act in ways that are legally best for their clients, instead of themselves, and often leads to lower fees paid out, and more money invested into a retirement plan where it belongs.   By having advisors held to a fiduciary standard instead of a suitability standard (held by brokers and agents who are handling expensive mutual funds) a retirement account typically won’t see the aforementioned negative effects of high commission fees, as these types of investments are invested for the client because of their high-quality, low-fee characteristics.   You can also visit our website at www.midwest-wealth.com to learn more about intelligent wealth accumulation strategies through alternative investing and other strategic methods. While you’re there, you can get even more investment information by downloading our free eBook entitled: The Alternative Investor, a guide book for alternative investments by Greg Shields, founder and CEO of Midwest Wealth Management, Inc.   Background of the fiduciary rule. Few retirement plan participants are aware their trusted advisors may not be "fiduciaries." The securities industry has done a brilliant job of obfuscating the difference between the fiduciary standard, which carries a legal obligation to act in the best interest of the client, and the much lower "suitability" standard, which brokers and insurance agents owe to plan participants.   Has your advisor established a fiduciary relationship with you? An advisor is a professional you hire to pick stocks, bonds, real estate investment trusts and other investments for you. True advisors are “fiduciaries,” which means they are held to a higher standard of ethical behavior, especially with regard to the relationship between a trustee and a beneficiary. Make sure your advisor believes in and operates in a fiduciary capacity, which means they will hold your interests above their own.   indianapolis alternative investments 1. Fact Sheet: Middle Class Economics: Strengthening Retirement Security by Cracking Down on Backdoor Payments and Hidden Fees. The White House. Statements and Releases. 23 Feb. 2015. 2. Solin, Daniel. The Hidden Provision in the Department of Labor’s Proposed Fiduciary Rule. U.S. News and World Report. 8 May. 2015    
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