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- Entasis Asset Management is an investment firm founded by investors. All founding partners have earned the right to use the Chartered Financial Analyst (CFA) designation.
- We believe conducting investment research in house is a significant differentiator and the article provides support for that viewpoint.
- Additionally, we believe that the individuals managing portfolios should also be the individuals conducting detailed “boots on the ground” research on individual investments.
- Research takes experience, a monetary investment and patience. Unfortunately, many firms do not have the ability or inclination to make research a central part of their offering to clients.
Article Link: http://www.marketwatch.com/story/when-financial-advice-is-really-a-sales-pitch-2015-09-15
- The article discusses differing views on the Department of Labor’s effort to increase transparency and accountability in the financial services industry regarding investment advice.
- A table in the article separates providers of financial advice into four categories; 1) brokers; 2) registered investment advisers; 3) insurance agents; and 4) dually registered advisers. The table provides a good summary of the products/services offered, how each group is paid, the regulatory standard followed and the primary regulator.
- The article recommends that investors remain vigilant and should question or interview individuals that provide recommendations on financial products and conduct background checks of financial representatives on regulatory websites.
- NOTE: this article was posted in the latter half of 2015, but we believe it remains relevant today.
- We firmly believe that all investment professionals should be required to act in the best interest of their clients. How financial representatives are compensated (and how much they are compensated) should be clearly disclosed to clients.
- We encourage prospective investors to spend a significant amount of time interviewing and questioning their financial representative prior to hiring that individual to manage their money. Additionally, clients should interview a number of financial representatives for comparison purposes – how they are compensated, services offered, sample portfolios, etc.
- Ask us about our questionnaire. We have developed an outline of key questions to ask when you are seeking to hire a financial representative and we have filled it out ourselves.
Article Link: http://www.bloomberg.com/news/articles/2016-05-12/your-retirement-savings-might-not-go-as-far
- 10-year U.S. Treasury bonds pay less than 2.0% per year. In other parts of the world, yields on government bonds are effectively negative if held to maturity.
- The U.S. equity market has produced significant gains since the market low in March 2009.
- Low yields on fixed income investments combined with large recent gains in the U.S. equity market means that investors should expect lower returns in the future. As a result, retirees may need to adjust their annual withdrawal rate lower, while younger workers may need to save more or work longer prior to retirement.
- Starting point plays a large part in determining total return for investments over various time frames. Considering we have been in a favorable environment for attractive total returns over the past 7+ years, we believe investors should be prepared for inevitable short- to intermediate-term bouts of market declines and increased market volatility.
- Considering the heightened possibility of lower future returns, investors need to pay particular attention to the fees being paid in their accounts and to the individuals managing their accounts. These include the fees paid to their advisor, the commissions generated through the sale of investment products by their broker/insurance agents, trading expenses and expenses (expense ratios) on their underlying investments, etc. The importance of managing costs is one of our core beliefs. Ask us about our fee transparency.
Article Link: http://www.planadviser.com/Plan-Participants-Need-Understanding-of-Roth-Accounts/
- According to a Willis Towers Watson survey, the percentage of plan sponsors offering a Roth option has increased in recent years; however, very few plan participants that have this option are actually making use of it.
- Unlike traditional 401(k) contributions, Roth 401(k) contributions are made using after-tax dollars, which allow for tax-free withdrawals at retirement.
- Contributions to a Roth 401(k) may help to diversify a participant’s exposure to taxes in retirement.
- Investors (in this case, retirement plan participants) need to examine all options available to them in their plan.
- A Roth 401(k) account can be a helpful tool to manage unknown, future tax liabilities. However, not every option available in a retirement plan is for everyone. If investors are unsure whether or not to utilize an option, they should seek out additional help from the plan’s provider. Or please call us and we will be happy to discuss your situation.