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When Robos Aren’t Enough – Betterment Brings in the Humans

How will history judge this period in the financial services industry? Will it be looked at like the end of an era or the beginning of one? Will we laugh at the foibles of robots or at those of us humans trying to match them? Only time will tell, but recently the most prestigious and fame seeking of the Robo-Advisor platforms, Betterment, surrendered the AI high-ground and rolled out a program for its investors to connect with real, flesh and blood financial advisors.   According to a nicely spun press release, it appears this model is being offered by Betterment for additional fees and specific account minimums. Do we detect a bit of hypocrisy and an unflattering unraveling of the strong posture of the world’s foremost robo-platform?   For years us advisors of the human variety have been told that emotional investing and hidden fees have undermined our ability to serve well. We’ve been told that in order to be effective, we should strive to be less human, less prone to the frailties of emotion, market enthusiasm, or fear. Indeed, we’ve been told now for over a decade, that if we’d done our jobs better, the financial crisis would have been avoided. We’ve been instructed to sit back and let the cool, sophistication of algorithms do the work.   And then what happened?   It turns out they brought in the pros to attract and retain a more sophisticated investor. Why? Well, there’s a real motive here: Their model is collapsing. According to Morningstar senior equity analyst Michael Wong, Betterment’s average account size of $27,000 generates less than $100 per customer. And with a customer acquisition cost of over $1000 it will take them over a decade just to break even on each account. And while some investors may not care what or who manages their small investments; when it comes to discriminating investors seeking real value – they want to talk with someone who can listen, who can interpret emotion as well as fact. They want someone who can advise.   At Midwest Wealth Management, we’re proud to say this is the business we’ve been in all along and will be doing for a long time to come. Turns out humans still turn to one another when it comes to the important things, like financial advice.   About Midwest Wealth Management, Inc. Midwest Wealth Management, Inc. was formed by Greg Shields, a 30-year financial services veteran committed to offering sophisticated investors an alternative when looking for a more strategic path for long-term investing. As a private investment group, 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 or call 877-243-4132 to speak to a representative.   Skinner, Liz. Betterment now offering human advice with its robo, Investment News, January 31, 2017.   Securities and Advisory Services offered through Commonwealth Financial Network®. Member FINRA/SIPC a Registered Investment Adviser.
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What’s Estate Planning got to do with it?

Estate planning ensures the people you name take it with them when you die. Your estate is made up of everything, yes, everything that you possess. This includes cars, homes, bank accounts, investments, life insurance policies, furniture. All that “stuff” that you owned when you were alive is part of your estate. Including your digital estate and how to handle those assets. (Digital Assets)

 

Before you die, and sadly, everyone does, you should talk with an estate planner to make sure the people or charities you love are the ones to receive your estate. They can help ensure your final wishes are carried out. This includes instructions stating:

 

  • Whom you want to receive your estate.
  • What you want them to receive.
  • When they receive it.

 

Plus, make sure it all happens with the least amount of taxes, legal fees, and court costs.   An estate plan should also include some of these things too:

     

  • Instructions for passing along your values, like religion, education, even work ethics.
  • Instructions for your care if you become too sick to care for yourself before you die.
  • Naming a guardian for children under 18 years of age.
  • Providing for family members with special needs, including those who are financially irresponsible or vulnerable.
  • Minimizing taxes, court costs, and unnecessary legal fees.
  Most importantly, make sure it’s an ongoing process. You and your estate planner should review and update your estate plan as often as your family and financial situation change throughout your life.   And estate planning is for everyone. Young. Old. Retired. Working two jobs. Healthy. Sick. Everyone. Because you can’t predict how long you’ll live, when you’ll get sick or have a debilitating accident. And you shouldn’t wait until your rich to plan. People with the least amount of money have the most to lose by not planning their estates.   Don’t let your family pick up the pieces of your life and life’s work after you die. If you don’t have a plan, the state and federal governments will be first in line to get their cut, leaving a lot less for your loved ones. A little planning now can save your family from some painful lessons later.   As a private Indianapolis investment group specializing in wealth management, Midwest Wealth Management can help you understand an investment strategy designed for your specific needs.

 

About Midwest Wealth Management, Inc. Midwest Wealth Management, Inc. was formed by Greg Shields, a 30-year financial services veteran committed to offering sophisticated investors an alternative when looking for a more strategic path for long-term investing. As a private investment group, 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. What is Estate Planning? Estate planning powered by wealthcounsel.com, http://www.estateplanning.com/What-is-Estate-Planning/ 2014 WealthCounsel, LLC.
   
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Retirement income and the significance of a wealth management strategy.

A good wealth management firm offers financial planning, investment portfolio management and a number of financial services to help clients create a wealth accumulation strategy that reduces risk and aligns with a client’s particular goals. Building and protecting an investment portfolio is key. At Midwest Wealth Management, our process is to quickly determine and identify sources of risks for our clients and then develop a plan for avoiding or minimizing undue exposure. Tax liability is another area we pay particular attention to, and part of any long-term strategy is to come up with a plan to minimize the negative effects of taxes on investments.

 

Allocating assets across various investments is another way we minimize risk and help ensure a successful wealth accumulation strategy, as a well-diversified portfolio means a poor performance from any one asset won’t jeopardize the overall strategy because its effects are balanced by other better-performing assets.

 

We also use our extensive knowledge with alternative investments as another way to diminish volatility and increase a portfolio’s durability due to an alternatives ability to offer performance that isn’t correlated to what you experience with typical stocks and bonds. So, a traditional drop in the market has little to no effect on an alternative investment. There are also some other simple strategies that can make a positive difference in the long run. For example, if your company has a matching contribution program, you should always put as high as a percentage as you can to maximize your company’s contribution and leverage that extra money toward your wealth accumulation goals.

 

Whatever the wealth accumulation strategy, the main point to remember is that a wealth advisor has a fiduciary responsibility to their clients, meaning they are legally bound to act in their client’s best interest. This is always the case at Midwest Wealth Management, where your voice carries the most weight in helping you achieve your vision of a well-invested future. We invite you to learn more at www.midwest-wealth.com. You can also call us if you have any questions or if you would like to schedule a private interview at 317.288.4989.

 

Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.

 

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.   About Midwest Wealth Management, Inc. Midwest Wealth Management, Inc. was formed by Greg Shields, a 30-year financial services veteran committed to offering sophisticated investors an alternative when looking for a more strategic path for long-term investing. As a private investment group, 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.
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Should the option to buy or sell be up to your Robo-advisor?

On Friday, June 24th the morning after Britain voted to leave the European Union (EU) – the markets were preparing to open up to with big losses and investors were gearing in for high volatility. The real outcome of the events was unknown in regards to the long-term effects it would have on any one market, sector or specific company. The only thing that was certain was the number of opinions for investors on what they should be doing: Buy right away? Sell while you can? Ride it out? With news stations and investment commentaries calling for the next big market crash or short-term volatility, what was an investor’s best game plan?

 

For investors using the robo-advisor Betterment platform, the option was simple – do nothing. And although it was completely within Betterment’s rights to use its own discretion in coming to this decision, (given the type of arrangement they have with their clients who aren’t looking to buy or sell instantaneously), it still caught many of their clients completely off guard —especially the ones that wanted to buy on Friday. It sends a bad message when your clients are desperate to adjust their positions and the system refuses to cooperate. Being told they could not do something with their own money was not well received.

 

To make matters worse, there were other digital advisers who thought it best not to touch their platforms at all. SigFig, among others, left their platform untouched. "Just because markets may be up or down doesn't mean we should suspend trading," said Mike Sha, chief executive of SigFig. He said trading halts should be made when trades are not being executed properly, which was not the case on Friday, despite prices being down.

 

These types of events are learning experiences because they help educate investors on how to determine what they really want out of any type of adviser, robo or not. It also brings clarity to what actions advisors can take, or in this case, prevent investors from taking, especially if they advisor determines that it is in the investors’ best interest. It has also brought up the question of why a company — who prides itself on not trying to time the market — is telling clients this is not a good day to buy or sell.

 

It is important to understand how your adviser is able to act under what kind of conditions. And in times of extreme uncertainty, what kinds of actions they are going to take on your behalf.

 

For more information on investing and other financial tips, visit Midwest Wealth Management at www.midwest-wealth.com, or call us at 877-243-4132.

 

Shilder, Lisa. Betterment explains why its Brexit-sparked trading halt on Friday wasn't 'suspended' trading. RAIBiz. 28, June 2016. http://www.riabiz.com/a/5062198653091840/betterment-explains-why-its-brexit-sparked-trading-halt-on-friday-wasnt-suspended-trading

 

Malito, Alessandra. Betterment's move to halt trading following Brexit vote sparks controversy. Investment News.28, June 2016. http://www.investmentnews.com/article/20160628/FREE/160629905/betterments-move-to-halt-trading-following-brexit-vote-sparks

 

http://thetrustadvisor.com/news/did-brexit-trading-glitches-doom-betterments-robo-ipo-hopes
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Financial Wealth Strategies in Zionsville

With the complexity and volatility of a fluctuating market, conventional wisdom regarding investment management is becoming unexceptional at best. So where does exceptional wisdom exist? Would it surprise you to learn that a very successful private wealth management group with unconventional strategies to maximize assets while minimizing risk is situated in the state of Indiana?

 

Located in the heart of Indianapolis, just miles away from Zionsville, Midwest Wealth Management offers sophisticated investors an alternative when looking for a more strategic path for long-term investing. Through a private investor platform featuring a 5-stage investment process called The Wealth Guide ™, Midwest Wealth Management provides an alternative route to wealth creation and the protection that appeals to a more sophisticated investor. Through our private investor platform, we offer a proprietary trading platform, alternative investment offerings, and dedicated advisory support. We believe that not every investor is created equal. For the discriminating few, the path less traveled to Midwest Wealth Management, Inc. is the path they prefer.

 

As a private Indiana 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. Midwest Wealth Management
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What to Ask When You Inherit a Home

Buying a home is one of the most stressful experiences and biggest financial commitments of many people’s lives. But inheriting a home from a parent or relative can be equally stressful and complex in ways you may not anticipate. As you cope with a loved one’s death and all the emotions it stirs up, you’ll need to decide whether you should sell the home, live in it, or rent it out.   Unfortunately, inheriting a house isn’t always a financial gain. The good news is that you can avoid many potential pitfalls by asking the right questions. Here are some key factors to consider before you make any decisions about the house you’ve inherited.   Is there a mortgage on the property? If so, will the estate assets be used to cover it? If there aren’t enough assets to pay off the mortgage, or if the other heirs don’t agree to do so, you can take on the deceased’s mortgage in order to keep the house—as long as you have the means and desire to assume the debt. In this case, you’ll want to consider refinancing to see if you can get a better rate or lower monthly payment.   If the house is “underwater” (i.e., the home’s current value is less than what is owed on the mortgage), you may decide to walk away from the property and let it go into foreclosure. Of course, before making any decision, you should seek the guidance of an estate attorney.   Would it make sense to keep the home? Although selling a family home can be a painful process, it’s important not to let nostalgia jeopardize your financial well-being. Even if you’re able to manage the mortgage, does the home have any other value to you? Ask yourself these questions:  
  • Is it a property you’re going to use, either for vacations or to live in yourself?
  • Do you have the time and money to handle the maintenance and upkeep the house will require?
  • If you plan to use it for rental income, would renovations be needed? Would you be willing to hire a property manager (if you can’t manage the rental yourself)?
  What does the local real estate market look like? If you’re thinking of selling or renting the home, do your due diligence on the local market. A knowledgeable real estate agent can advise you about the options in your area, discuss comparable properties and what they’ve sold or rented for, and help you determine if any renovations would be worth the time and money. (Real estate laws differ from state to state, so it’s important to work with a professional licensed in the state where the property is located.)   If you plan to sell, keep in mind that high-end finishes and other upgrades won’t necessarily get you your money back if the neighborhood isn’t made up of similarly designed homes. Rather than investing in renovations, listing the house “as is” for a lower price may result in a quicker sale.   What are the potential implications for your taxes? Upon inheriting the house, you will receive a stepped-up cost basis: the property’s fair market value at the date of the former owner’s death.  
  • If you decide to sell, this means that, even if the home has appreciated significantly since your loved one purchased it, you’ll only pay long-term capital gains on the sale price over that stepped-up basis.
  • If you decide to live in the house, you may face higher property taxes due to the step-up in cost basis. On the other hand, if you eventually sell, you can avoid capital gains if you reside there for at least two of the past five years.
  • If you decide to rent out the house, you can deduct certain improvements and the depreciation of the house itself against your taxable rental income. Just keep in mind that you’ll have to reimburse the IRS for that depreciation if you eventually sell.
  What do your professional advisors say? Working with professionals who have experience navigating these situations is key to a successful outcome. In addition to your financial advisor, you may benefit from enlisting the services of a qualified estate and tax attorney, as well as a real estate agent. Although dealing with inherited real estate is seldom simple, having an experienced team on your side will help smooth the process, no matter what you decide to do with the property.   This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer.       Untitled design (40)
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Finance and Wealth Management with a Midwest Heart and Wall Street Brain.

It may come as a surprise, but not all successful finance and wealth management firms are located in New York's Financial District. Those Wall Street firms may offer quality investment products however, it is likely they are chosen by advisors who don’t know you. They may not even have the heart to get to know you, your story or your vision for the future.   Further east in the Midwest, sits a firm that has abolished the high fees, pretentious attitudes and cookie-cutter investment advice. We have chosen to support busy, successful people who want and need personalized guidance.   Based in Indianapolis, Midwest Wealth Management is a private investment group. We have a specialized 5-stage process called THE WEALTH GUIDE™. It starts with listening to you and finding out where you want to go. The process provides the advice, resources, and active investment management to help you get there.   If you think you don’t have enough to need a financial plan or an advisor, you might be surprised. We work best with successful professionals who know something is keeping them from saving enough and who feel they aren’t maximizing what they’ve already saved. We want to hear your story, and help you create and achieve your vision of a well-invested future. To learn more, visit us at www.midwest-wealth.com   As a private investment group specializing in finance and wealth management, Midwest Wealth Management, Inc. offers a proprietary trading platform and dedicated advisory support for a select audience. For more information, please visit www.midwest-wealth.com. Midwest Wealth Management  
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Digital Holiday Gifts May Need Estate Planning

In estate planning, we traditionally have counseled our clients on how to protect and safeguard their assets. When we say assets, most people think of hard assets, such as real estate, retirement accounts, life insurance, investments, bank accounts, jewelry, collectibles, etc. With the cloud and internet playing a big role in our everyday lives, there is another form of asset that you need to consider when planning.   I had the opportunity to sit down with Steve Robinson, a founding partner at Robinson Wolenty & Yong, LLP to discuss some major changes and best practices for estate planning in a digital age. A practicing lawyer for 35 years, Steve concentrates his practice in estate planning, probate, business planning and real estate matters.   What are digital assets?   They are best understood in three different categories: social media, entertainment and financial accounts.   Social Media: Emails, Text, Twitter, Facebook, Snapchat, Instagram, etc. Entertainment: Amazon, Ebay, Netflix, Hulu, iTunes, Pandora, Spotify. Financial: Credit cards, mortgage/rent payments, car, utilities, cable.   Why are they important?   These different digital assets are all accessed through online accounts. In order to access your accounts you have to use a unique username and password combination, “soft assets.” I am not saying anything that’s ground breaking or new but I hope you can see where this is heading.   Let’s paint a scenario- You do not receive paper statements from your investment account, everything is sent electronically to your computer which is password protected. You pass away and no one knows about this account nor the password. How does your family find out about the hard asset? They could hire a forensic computer specialist to determine the password, but this can be expensive and time-consuming.   Some of us maintain a record of our password(s), but how many of us actually share where it could be located by someone you trust? In addition, most social media companies will not allow access to customer files without knowledge of the password, which means obtaining a court order to access the account. Many people have family pictures and personal information on these outlets that would cause unnecessary hardships on their family if they couldn’t be easily accessed.   How do you plan for Soft Assets?   We currently use a digital asset estate information form that assists our clients in categorizing and maintaining their soft asset information. This is basically a soft asset inventory, which would include usernames, security questions and passwords. It helps sort one’s email accounts, domain names, banking, investments, tax information, insurance, credit cards, social and digital media accounts. There are several software programs you can purchase to manage your passwords such as:   • Robo-Form • Last Pass • 1Password   However, you still need a password to access your phone and the password manager. All of your estate planning documents should be located in one place, a fireproof safe or lock box work well. These documents should include updated wills, trusts, powers of attorney, and medical powers of attorney. The person responsible for handling your estate administration should know where this information is stored.   Midwest Wealth Management, Inc. does not provide legal/tax/estate planning advice. You should consult a legal or tax professional regarding your individual situation.
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TALKING TO YOUR AGING PARENTS ABOUT THEIR FINANCES AT THE HOLIDAYS~PRESENTED BY GREG SHIELDS

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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Talking to Your Aging Parents About Their Finances~Presented by Greg Shields

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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