Castle Rock Investing

Independent Guide, Trusted Partner.

Michele Suriano

Prepare for the Unexpected!

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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:

  1. 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.
  2. 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.
  3. 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?

Contact Michele at MSuriano@CastleRockInvesting.com or (303) 725.7086 today to get your documents in order.

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

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47ee43aa-111a-469e-92e2-41dddf180628Castle 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.

 

White House Memo: A Moment of Opportunity for Fiduciaries to Retirement Plans

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Famous showdown between "Fast Eddie" Felson and “Minnesota Fats” in the iconic American film, The Hustler
Showdown between “Fast Eddie” Felson and “Minnesota Fats” in the iconic American film, The Hustler

If you think we’re letting go of the “fumbling children” reference made by FSI chairman Adam Antoniades, you have another thing coming. He reminds me of the proud “Minnesota Fats” character in the classic film The Hustler— he doesn’t want to recognize the truth and talent of the situation he’s faced with by “Fast Eddie” Felson (Paul Newman), because it means that his reign as best player has ended.

Mr Antoniades goes so far to call the leaked White House Memo from January 13 simplistic, though it refers to more PhD studies than his fumbling response could even spell, so he’ll have to try and respond again.

The decidedly complex datasets referenced from such luminaries as Dr. Christoffersen et al (hundreds of academic citations through Google scholar as of yesterday), Dr. Chalmers, Dr. Del Guernico, Dr. Reuter, Dr. Gerstresser, Dr. Gennaioli, Dr. Morey, Dr. Hackerthal, Dr. Jappelli, and more are better than the “old people better look out” response because these people have been researching for years and have more academic standing than he can pretend to. There are case studies of other countries. There are case studies of firms engaged in forward-thinking practices. There are datasets (thanks to afore-mentioned Dr. Christoffersen — one of whose citations include an impressive Duke PhD thesis based upon his work — and several researchers who chose to follow his research out of their own volition).

The argument that the data is too complicated to change doesn’t apply here. There is complicated data on both sides of this argument. Smart people argue on both sides, granted, but the “its too hard” argument is not a sufficient response for anyone to carry off anymore because it makes you sound lazy and entrenched, not smart.

Please, sir, prove your vast intellect with a well-researched paper of any kind that isn’t just a pat on the head and a “you wouldn’t understand.” Stop talking down to your audience. Consumers want legitimate legal protection, and the White House wants to help them avoid the estimated $6 – 8 billion (35 – 50 bps) loss experienced by the average consumer per year from these financial advisors who use high-quality data, but have conflicts of interest. That means, this is a minimum estimated loss to consumers.

Beyond the academics and case studies provided in the memo dismissed as “simplistic,” Mr. Antoniades goes on to discuss the danger to the elderly should the 1975 loose ruling be constrained to oblige investment advisers to eliminate hidden fees.

Memo says:

  1. Consumer protections for investment advice in the retail and small plan markets are inadequate
  2. Current regulatory environment creates perverse incentives that ultimately cost savers billions of dollars a year

To be more exact:

“An investor receiving conflicted advice who expects to retire in 30 years loses at least 5 to 10 percent of his or her potential retirement savings due to conflicts, or approximately 1 to 3 years’ worth of withdrawals during retirement.” (page 2 of the Memo)

We met a nice group of plan administrators earlier last year who were baffled by revenue-sharing built into their record keeping service agreement before we began to work with them – they had lost hundreds of millions of dollars on a plan where the low returns looked like an effect of poor investing. They were public servants, thus a government plan was duped by a private company, folks! Say what you will, but the law will change if this continues to happen. The government does not like to lose.

And if the government isn’t able to win, chances are, small businesses aren’t able to figure out a way around it either. In fact, they aren’t. Even with the best quality data, when investment advisors have conflicts of interest, retirees lose years of retirement savings according to one of the most extensive studies on the matter (Dr. Christoffersen et. al. 2013).

That’s what the White House is talking about changing – and what the entrenched benefactors of the old system, aka “Minnesota Fats”, want to avoid. The old system wants to hold off the new talent in the financial arena so they can have just one more eleventh hour.

Don’t we want to a better system to retire on?

Demand a higher fiduciary standard and go to SaveOurRetirement.com to sign the petition.

 

Michele L. Suriano, Accredited Investment Fiduciary™, is president of Castle Rock Investment Company, a woman-owned SEC registered investment advisory firm serving qualified retirement plans. www.CastleRockInvesting.com

Declaration of Independence

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“Can you be more specific?”

Embarrassing, but true: the retirement industry is asking that of the US government.

The definition of a Fiduciary needs to be more specific because of cases where Plan Sponsors are legally charged unreasonable fees for a long time, but the Department of Labor’s interpretation is undesirable to Wall Street. Of course, Wall Street is on the receiving end of these unreasonable fees.

As an investment advisory firm who identifies in writing as a fiduciary to our clients, we uphold the interests of our client above those of any other interest, because we have no other interested parties. The unfortunate reason that other investment advisors will not agree to sign a fiduciary agreement with a client is because they are “promised” to a large company, who profits from a retirement plan through hidden fees.

While the Plan Sponsor is unaware of this other agreement, and often the Investment Advisor is not entirely upfront about this agreement with the Plan Sponsor’s representatives, it comes out in the end through hidden fees and a whole mess of ugly policies.

The sort of game run here should be illegal. Not because the Plan Sponsors are not careful, instead they often are smart and diligent, but because they are simply not protected by the law. Up to this point, the law is unclear. The Independent Advisor they supposedly hire is not, after all, independent according to a stricter definition now proposed by the Department of Labor, led by Phyllis Borzi.

Insist upon a clear definition of an independent advisor so that you know your advice comes for the interest of your retirement plan, and not for the interest of someone else’s quasi-legal activity. Sign the petition at httpss://www.thepetitionsite.com/414/401/760/tell-washington-to-stand-up-to-wall-street/

 

Michele L. Suriano, Accredited Investment Fiduciary™, is president of Castle Rock Investment Company, a woman-owned SEC registered investment advisory firm serving qualified retirement plans. www.CastleRockInvesting.com

Not that Complicated

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FSI Chairman Adam Antoniades, from Think Advisor
FSI Chairman Adam Antoniades, from ThinkAdvisor

In any fight, there are two sides waving their arms around.

The Financial Services Institute, or FSI, states in response to a recent White House memo that changing the way the delicate fiduciary system is run will ruin everything. The Financial Services Institute, or FSI, is in opposition to redefining the Fiduciary Standard as it is proposed because of various reasons, some more partisan than others. In general, the FSI puts investor advisors first, and the DOL puts workers and clients first.

How could increased or maintained responsibility of advisors lead to greater abuse of power? Among the first things said by the FSI is the atypical “hrrumph, well people outside the industry just don’t understand the complexities of how we deal with these things.” When in reality, it’s not that complicated: you protect the interest of your clients retirement if you are forced to put their interests first under the law, so why not stop dancing around this and just execute the priority anyway?

Demand protection for your retirement you deserve. Sign the petition to here at SaveOurRetirement.org: httpss://saveourretirement.com/take-action.html

 

Michele L. Suriano, Accredited Investment Fiduciary™, is president of Castle Rock Investment Company, a woman-owned SEC registered investment advisory firm serving qualified retirement plans. www.CastleRockInvesting.com

Press Release: Castle Rock Investment Company Announces Support of SaveOurRetirement.com

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(CASTLE ROCK, COLORADO JANUARY 26, 2015) Castle Rock Investment Company has announced its support of the Department of Labor’s (DOL) effort to more broadly define fiduciaries as “those persons who render investment advice to plans and IRAs for a fee.” By amending the regulatory definition of the term “fiduciary,” the DOL will require all investment advice to adhere to the fiduciary standard set forth under the Employee Retirement Income Security Act.   “The DOL’s proposal would ensure that all financial professionals have a legal obligation to put the interests of their customers first when offering retirement advice,” said Michele Suriano, President of Castle Rock Investment Company.  “We must close this ‘Retirement Advice Loophole’ to better protect Americans from conflicts of interest that result in their retirement accounts being drained by hidden fees and second-rate investment options.”

About the “Save Our Retirement” Initiative
Supporters of the broader fiduciary standard, including AARP and other consumer groups, recently launched the “Save Our Retirement” initiative. The campaign, which includes a website with a petition for supporters to sign, urges visitors to “join the campaign to get important updates as the Department of Labor tries to strengthen rules that apply to retirement investing.”

About Castle Rock Investment Company
Castle Rock Investment Company is an entirely woman-owned, SEC registered investment adviser currently serving plan sponsors in Colorado, Idaho, Nebraska, and Texas. Castle Rock focuses on workplace retirement plans to help plan sponsors meet their fiduciary obligations and increase retirement readiness for their employees. The firm puts its clients’ interest first by maintaining its independence from compromised business practices.

For more information, please contact Castle Rock Investment Company at (303) 719-7523, or via e-mail at info@castlerockinvesting.com.

Read Official Press Release

Risk Management: Employee Retirement Plans

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Risk ManagementCastle Rock jumps through hoops to be among the best investment advisors. Not every investment advisor goes through the same rigorous training because these hoops are not legally required. We do not think that making best practices a legal requirement will diminish our status as one of the best firms around, but we do think that selecting an investment advisor should be less risky for Plan Sponsors.

You are supposed to be careful of sales pitches that avoid using the term “fiduciary” but stress “education” instead, because those are not interchangeable services. The difference between these services would be like exchanging accounting for bookkeeping services, or medicine with surgery, or heads with tails in a coin toss. Providing education does not negate a need for a fiduciary; rather, a fiduciary investment advisor should be around for cases where education does not meet the plan’s needs, and an expert opinion is necessary.

How confident are we that Castle Rock is the place to turn? We are the best retirement investment advisor around. You can check our About Us section to be sure, or better yet Contact Us.

Our qualifications exceed all of these expectations, but you may want to check to see if your own advisor is able to eliminate some of the risks to you as a plan sponsor[1]:

  1. At least 50% of assets under management in qualified retirement plans (ours are 99%);
  2. Has an Accredited Investment Fiduciary™ or similar designation;
  3. SEC Registered Investment Advisor (RIA);
  4. Make sure your advisor has been working in the industry for at least a decade;
  5. Get a fee agreement that clearly states how the fees will be charged; and
  6. Make sure that fiduciary status is in writing.

To show your support for conflict-free advice in all retirement plans, please sign the petition here at: httpss://www.thepetitionsite.com/414/401/760/tell-washington-to-stand-up-to-wall-street/

 

Michele L. Suriano, Accredited Investment Fiduciary™, is president of Castle Rock Investment Company, a woman-owned SEC registered investment advisory firm serving qualified retirement plans. www.CastleRockInvesting.com

What’s Going On?

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Source: Bloomberg
Source: Bloomberg

A fiduciary duty, the obligation to uphold the clients’ interest above all else, is Phyllis Borzi’s long sought and tunneled for goal that we at Castle Rock uphold and agree whole-heartedly with. Together, our standards are the highest in the retirement industry. She says that, like in the movie Groundhog Day, bad policies keep being relived over and over. We want to stop the origin of the problem: the poor incentive structure.

Her aim is to make incentives to advisors as straightforward as possible in retirement plans so that the resulting fees will not surprise retirees and leave them with less than they planned.

When investment advisors do not sign up to be fiduciaries to the plans they advise, it leads to corruption and changes the fee structures of these plans so that the retirees no longer have the same security after 65 (typical retirement age). Liability to the Plan Sponsor also changes, and the integrity of the investment advisor themselves is challenged as well.

One example of how the Plan Sponsors are hung out to dry is the John Hancock case, where unreasonable fees were not seen as criminal because of this legal loophole.

Sign your support for reform here at SaveOurRetirement.com!

 

Michele L. Suriano, Accredited Investment Fiduciary™, is president of Castle Rock Investment Company, a woman-owned SEC registered investment advisory firm serving qualified retirement plans. www.CastleRockInvesting.com