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Family Love Letter Event

December 14, 2016 by admin

Did you know you can gift your Itunes, American Express points, and airline miles to a designated recipient in the event of your death (but only if it’s included in the will!)? Or that if a family member dies you can get refunds on their unused subscription accounts?

These are just a couple of the interesting facts we learned last night at our Family Love Letter event.

We were fortunate to have Karen Shirley, an estate planning attorney, to answer our questions about our wills!

We also received tools to gather all our information in one place for our families. We each walked away with a booklet where we will provide a huge amount of information, from informing our loved ones what type of burial we desire to passwords of accounts that will need to be closed if something happens to us.

We had a fun (and sometimes emotional) night of good food, sharing, and learning incredibly valuable lessons.

Karen Drancik from Neuberger Berman kicked off the evening by sharing stories of individuals in situations with an incapacitated family member (due to Alzheimer’s, dementia, or in some cases, death) and went through extraordinarily stressful situations trying to locate information during their time of grief and confusion. She also shared stories of individuals who had completed their Family Love Letter booklet and gave their families an enormous gift of peace during that time.

Karen Drancik sharing stories and information on how to get your affairs in order before you’re unable.

Karen explained how having difficult conversations before it becomes urgent can help families avoid overly emotional discussions and rash decisions for everyone involved. Developing a plan that includes what is valuable to family members, who will make decisions if someone is incapacitated, and dictating what you wish for your funeral can bring peace during a tumultuous time.

Simply documenting all information that family members will need to know and keeping it somewhere they can locate it easily is an enormous gift to your loved ones. The Family Love Letter booklet takes it a step further by inviting you to write down beloved traditions and even recipes to remember you by.

We were reminded to create a plan for surviving pets, and to create a list of people in your life who should be contacted in the event of your death.

We discussed that it would perhaps be easier to create all these documents digitally, but writing them in your own hand will provide a valuable keepsake for your family. One individual in the audience still has the document his grandfather wrote describing his Ethical Will, describing what he hopes his family will remember of him. Family Love Letter provides a space for you to write these items down.

Attendees were surprised at the amount of information included in the Family Love Letter booklet they hadn’t thought of.

Several audience members inquired how to handle situations with their parents.

Several members of the audience had very emotional questions pertaining to their parents who are suffering from Alzheimer’s, and mentioned how much they wished they had come across a tool like Family Love Letter before their parents began to forget details. Others had questions about whether someone without children or a spouse should have a document like this. (Karen’s response, by the way, was a resounding “YES!”)

Take a look at what one of the attendees had to say about the evening:

“Several years ago, my husband and I took a trip to India. Preparing for the trip made me begin to think of things I should share with my family in the event of a tragedy. I tried to think of any information they might need, and started putting together a binder of information for them with information on bank accounts, insurance, stocks, and other important materials.

Last night, I attended an event called “Family Love Letter – A Holiday Affair” hosted by Castle Rock Investment Company.

Karen Drancik presented a brilliantly concise and thoughtful method of capturing all the necessary information for a surviving family when one passes away. This not only includes financial and investment information, but every imaginable detail including people to notify, funeral and burial wishes, down to a request to airlines to disperse frequent flier miles. What an amazing gift to leave my loved ones!

Thank you, Castle Rock Investment Company, for this important tool!”

-Becky Smoldt

Michele Suriano and Ashley Coombe of Castle Rock Investment Company.

We look forward to hosting the event again in the future. Please sign up for our newsletter if you would like to receive information about dates. If you’d like to set up a time to meet with us to go over this information individually, please call Michele Suriano at 303.725.7086. We look forward to hearing from you!

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Will Trump Repeal the Fiduciary Rule?

November 16, 2016 by admin

By Mack Bekeza

For those who work for Broker-Dealers and Registered Investment Advisers, no one is certain whether Donald Trump or the Republican Party will attempt to eliminate the Fiduciary Rule or keep it intact. But before we get ahead of ourselves it is important to ask one question, will Donald Trump or the Republican Party be able to dismantle the Fiduciary Rule before it becomes enforceable on April 10^th, 2017?

Although we cannot answer this question in confidence just yet, repealing this legislation will be quite a task for a few reasons:

With the Fiduciary Rule being effective since April 2016, the rule cannot just simply be thrown out by an executive order. It is also worthy to note that the legislation took 6 years to be written, so the likelihood of the DOL eliminating it is extremely slim.
Broker-Dealers, Insurance Firms, and Investment Advisers have already spent significant resources in designing compliance friendly products and re-inventing their business platforms. So, if the rule were to be thrown out, the government could have dozens of lawsuits on their hands, especially from those who were for the rule.
Despite the Republican Party holding the majority in Congress, they still do not have enough seats to overthrow a filibuster from the Senate. In addition, repealing legislation can take months or even years, during which the rule could have been enforceable for a notable amount of time.
With Donald Trump already planning to tackle dozens of issues in his first 100 days, repealing the Fiduciary Rule is more than likely not his top priority. The rule will also become enforceable by the 80^th day of his presidency.

Although it appears that the Fiduciary Rule is here to stay, we will keep you updated if there is anything that will threaten the rule.

Prepare for the Unexpected!

November 15, 2016 by admin

By Mack Bekeza

Ever wonder what would happen if you were not able to make critical decisions by yourself because you were incapacitated? Is there anything you can do to prepare for the unexpected? Yes, there is! While you are still able to do so, there are three crucial documents that all adults should have to be prepared for one of life’s major curveballs. The documents include:

The Financial Power of Attorney (“FPOA”): This is a document that allows an individual (the “principal”) to appoint someone (an “agent”) to make financial decisions on their behalf. This authority can be in effect immediately or come into force when the principal is incapacitated. This can also be beneficial for those who travel internationally and will not be available to sign financial documents.
The Medical Power of Attorney (“MPOA”): This is a document that appoints an agent to make most medical decisions on someone’s behalf if they are incapacitated. It is crucial to also include something called a HIPAA waiver which will allow the agent to access medical records. Without the HIPAA waiver, the agent might not be able to act in the best interest of the principal due to lack of information. It is also important to know that if the principal is in terminal condition, a MPOA will not suffice. In that instance, there is another document that will.
The Living Will/Advanced Directive: This document will allow an individual to decide how they want to be treated in the instance that they are in terminal condition and cannot communicate verbally. For instance, the individual can elect to refuse to be on life support or to be heavily medicated so they can pass peacefully. But perhaps the reason why this document is so crucial is because it will remove the burden from family members required to make these painful decisions and can even prevent families from falling apart due to disagreements.

So, what if you have children or if you were to pass away earlier than expected? If so, how can you communicate those wishes to your children along with other family members?

On December 13th, Castle Rock Investment Company is hosting a holiday event about how you can communicate your wishes to your loved ones with a “Love Letter.” The Love Letter™ just might be one of the best gifts you can give to your family! If you would like to learn more about this event, please go to www.castlerockinvesting.com and register on our home page. You will be glad you did!

For additional information on the event or to register, please contact Kristen Sanchez at Kristen@castlerockinvesting.com.

Castle Rock Investment Company to Host “Family Love Letter” Event

November 8, 2016 by admin

47ee43aa-111a-469e-92e2-41dddf180628 Castle Rock Investment Company (“Castle Rock”) is accepting registrations for its complimentary event: “Family Love Letter: A Family Affair,” to be held on December 13th from 5:00pm-7:30pm at its office in Castle Rock, Colorado.

At this event, attendees will learn how they can prepare for a time of loss or incapacity by creating their own Family Love Letter. This planning will prevent rash decisions and mistakes at a time of grief or confusion and serve as a guide for a smooth transition.

“We are so excited to host an event that will assist families in creating a sound future for their loved, ones,” said Michele Suriano, President of Castle Rock Investment Company. “Creating a Family Love Letter can help with sensitive conversations that families must have about preserving, protecting, and transferring the legacy that loved ones leave behind.”

During the workshop, participants will be given a workbook to complete that includes information on assets, advisers, liabilities, insurance benefits, documents and family history.

REGISTER

The event will be held at Castle Rock’s office at 333 Perry Street, Third Floor Conference Room in Castle Rock, Colorado.

For additional information on the event or to register, please contact Kristen Sanchez at Castle 303.719.7523 or by emailing her at Kristen@castlerockinvesting.com.

Morgan Stanley Sticking With Commissions

October 28, 2016 by admin

By Mack Bekeza

Morgan Stanley recently announced how it plans to comply with the impending Fiduciary Rule. As expected, Morgan Stanley did not follow the Merrill Lynch path. Instead, it plans to operate under a provision of the rule called “Best-Interest-Contract Exemption (“BICE”)”. In other words, Morgan Stanley’s strategy is to tackle the compliance requirements and have its clients sign additional disclosures.

Morgan Stanley has decided to take the BICE route because it believes that its “advisers can most effectively uphold a fiduciary standard of care and work in clients’ bests interests by continuing to offer choice.” Morgan Stanley further stated, “Delivering a retirement account platform based on fiduciary principles that provides the widest possible capabilities and preserves client choice is our vote of confidence in our advisers’ continuing commitment to placing client interests first.”

Essentially, Morgan Stanley believes that offering clients the choice between having a commission-based or fee-based retirement account is in the client’s best interest. This also assumes that Morgan Stanley advisers will not sell or recommend certain alternative investments that might not optimally meet a client’s liquidity and retirement needs.

In our opinion, Morgan Stanley may have chosen its business model to differentiate itself from Merrill Lynch. Many advisers only sell commission-based products and want to work for a large broker dealer. The rule points out that paying commissions may be in a client’s best interest (versus asset-based fees) if they have few transactions. However, the firm might still come under fire if its clients believe they are being misled. At the end of the day, it’s about putting the clients first.

If you would like to read further into the decision, check out Investment News’s post about Morgan Stanley’s decision.

Will Morgan Stanley Replicate Merrill Lynch?

October 20, 2016 by admin

By Mack Bekeza

During Morgan Stanley’s third quarter earnings conference call, James Gorman (CEO of Morgan Stanley) stated that the firm will announce their plan to comply with the DOL’s upcoming Fiduciary rule within the next couple of weeks. However, James Gorman did state that “we are not changing things”, “we run our business with the values of doing everything we can to support our clients and we will continue to do so.” In other words, Morgan Stanley will more than likely not go the Merrill Lynch route by no longer offering commission based IRA accounts.

So, if Morgan Stanley decides not to forgo commission based retirement accounts, what would be another possible strategy for them? Although the Fiduciary Rule will technically still allow commissions, it will be required for brokers and advisors to disclose all conflicts of interests to their clients with retirement accounts. It is also important to note that Morgan Stanley’s wealth management division currently oversees $2.1 trillion in client assets, with $855 billion of those assets being under a fee-based model which is a 75% increase from the third quarter of last year. In other words, Morgan Stanley’s strategy could have a significant ripple effect with their clients as well as their advisors.

In addition, Morgan Stanley was charged by the Commonwealth of Massachusetts with “conducting an unethical, high-pressure, sales contest amongst its financial advisors to encourage clients to borrow money against their brokerage accounts.” Morgan Stanley says the allegation is “without merit” and will “vigorously” defend itself. Please note that Morgan Stanley has $70 Billion in client loan balances, which is a new record according to them.

With Morgan Stanley’s strong stance on how they run their business, it will be very interesting to see how this will all play out in the next couple of weeks. And if the charges from Massachusetts are correct, Morgan Stanley will face a world of hurt from regulators and potentially lose client assets. Click on the links to read further into Morgan Stanley’s conference call and the Massachusetts allegations.

Getting the Facts Straight about Qualified Plan Loans

October 18, 2016 by admin

By Mack Bekeza

Are you considering making a large purchase but don’t have the money to do so? Are you in need of emergency cash? Typically, they are many options for people in that situation such as a home loan, a home equity line of credit, personal loans, etc. But what if you do not want to deal with a bank or have a poor credit score? Fortunately, there are a few options, with the most notable being the Qualified Plan Loan. That’s right, you could be able to take a loan from your employer’s retirement plan. In fact, over 75% of Qualified Retirement Plans allow participants to take loans from their accounts.

So now to the big question…is it worth taking a loan from your retirement plan? In short, no. However, it is still important to weigh the options of taking such a loan. Below are the major pros and cons of taking loans from your employer’s retirement plan.

Pros:
1. Qualified Plan loans offer a low interest rate, which is usually the prime rate plus 1%

2. You are not borrowing from a bank; you are just borrowing from yourself. In other words, the interest that you pay will actually go into your retirement account balance. (However, please note that all loan payments going back into the plan are in after-tax dollars).

3. The loan process is typically very easy and you can get the needed cash in a timely manner. On top of that, payments are simply deducted from your paycheck.

4. Loan minimums can be as low as $500-1,000 and people can borrow up to 50% or $50,000 of their vested balance, whichever is less.

Cons:
1. Payment options are not as flexible as other loans since the only two options are the minimum payments deducted from your paycheck or to pay the balance in full.

2. You have 90 days to start making payments back into the plan or else the loan will be considered taxable and will trigger a 10% tax penalty (for borrowers under 59 ½). Remember, if you are laid off, you may only have 90 days to pay the remaining balance in full or the loan will become a taxable event and will also trigger the 10% tax penalty (for borrowers under 59 ½)

3. People who borrow from their employer retirement plan may face loan fees, i.e. loan origination fees, loan maintenance fees, etc. And if the loan is particularly small (say $1,000 for an example) you could theoretically be paying 15% just in fees, which will not go back into your plan.

4. Finally, there are major opportunity costs associated with a Qualified Plan Loan. For example, if the borrowed funds in your account can potentially earn an average of 8% a year while your borrowed funds can only earn a theoretical 4.5% with the interest from the loan, you could theoretically be losing money (depending on market conditions).

In the end, a Qualified Plan Loan may not a great idea for those who have other means of getting an affordable loan and in most cases should only be used as a last resort.

So, how can someone get money for large purchases without going to a bank or borrowing from their retirement plan? For starters, people can make it a monthly habit to contribute to an emergency fund and/or a special purchase(s) fund so that they will not have to borrow money in the first place (please read our previous blogs on emergency funds and on general savings tips).

Overall, borrowing can be quite a hassle and could be costly in the long run no matter how you look at it. However, if you develop a plan for making a large purchase or plan ahead of an emergency, funding these events in our lives can be a much smoother and inexpensive process. If you currently do not have a plan, contact Castle Rock Investment Company to help you reach life’s major financial milestones, we will always work in your best interest!

©2016 Castle Rock Investment Company. All rights reserved. Please share your insights and comments with us at Mack@Castlerockinvesting.com

Major Move by Merrill Lynch to Comply with Fiduciary Rule

October 11, 2016 by admin

By Mack Bekeza

In order to comply with the upcoming Fiduciary Rule, Merrill Lynch decided to discontinue offering commission based IRA accounts to investors starting April 10th of 2017. Specifically, they want to remove a major conflict of interest between them and their clients by only offering fee-based advisory, robo-advisory, and self-directed services for IRA accounts. Merrill Lynch’s decision is expected to have a major ripple effect for not only their clients, but for their advisers and their respective competitors.

So, how does Merrill Lynch’s decision affect their advisers and their competitors?

As of April 10th of 2017, the firm’s 14,000 plus advisers will no longer be able to open new commission based IRA accounts, which is a notable source of their compensation. On top of that, advisors will now have to further prove their value to their clients when their primary form of compensation will be under a fee based model.
Since Merrill Lynch is one the first major wirehouse firms to make this move, it is expected that other wirehouse firms will also follow suit in order to remain competitive in the upcoming Fiduciary focused marketplace.
Merrill Lynch as well as other wirehouse firms will more than likely face other regulatory issues such as having fee-based variable compensation, which will be prohibited under the Fiduciary Rule.
This might lead to certain broker dealers to no longer service IRA accounts due to additional costs of complying.

Although we believe this is an excellent move by Merrill Lynch, we believe that wirehouse firms such as Merrill will still face regulatory issues as they may have to forgo recommending certain investments to clients as well as having to develop a truly uniform method of compensation from their IRA accounts.

Family Love Letter Event

Will Trump Repeal the Fiduciary Rule?

Prepare for the Unexpected!

Castle Rock Investment Company to Host “Family Love Letter” Event

Morgan Stanley Sticking With Commissions

Will Morgan Stanley Replicate Merrill Lynch?

Getting the Facts Straight about Qualified Plan Loans

Major Move by Merrill Lynch to Comply with Fiduciary Rule

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Family Love Letter Event

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