8 ways to spring clean your finances

You’ve filed your taxes, and now it’s time to make good on your promise to “spring clean” your finances.

One key task is to throw away – or shred – old bank and credit card statements and aging tax returns that no longer give you joy. But there are other steps you can take to buff up your finances.

Starting by analyzing. Spring is the perfect time to ask a CPA or certified financial planner to review your tax return, especially last year’s net after-tax income sources, says Ian Weinberg, the CEO of Family Wealth Pension Management. 

“Determine, he says, “your top marginal tax rate under the new tax laws and rates and see if some of your income may be better off as tax-free, long-term capital gains, or qualified dividends versus ordinary income, or vice versa,” he says. “Many people will find that their income-producing investments may need to be changed accordingly.”

For instance, a lower tax bracket could call for more ordinary income such as IRA distributions, while a higher tax rate could call for more tax-free income and fewer IRA distributions.

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Also, if you received a refund on your tax return, contribute the proceeds into an IRA or Roth IRA. “Most tax software makes it easy to do and this is a great habit to do each year,” says James Gambaccini, a financial planner with Acorn Financial. “Another option would be to use the proceeds to fund a child’s 529.”

Consolidate, close financial accounts

Prepare a list of your financial accounts – IRAs, Roth IRAs, 401(k)s, taxable accounts and health savings accounts.

“The objective is to consolidate similar accounts, IRAs for example, to a minimum number of custodians,” says Barbara O’Neill, a professor at Rutgers, the state university of New Jersey.

Doing this, especially with your retirement accounts, can help you lower the fees you pay and make it easier when you have to take required minimum distributions or RMDs after age 70½ on your IRAs, says Jon Ulin, the managing principal of Ulin Co. Wealth Management. “A consolidated approach to investing will help to provide a more streamlined approach to your money management approach,” he says. 

O’Neill also recommends eliminating and replacing accounts that charge high fees, mutual funds with 12b-1 fees for example, and/or ones that do not offer high interest rates.

“Compare at least three competing account providers,” she says. According to the Securities and Exchange Commission, 12b-1 fees are paid by the mutual fund out of fund assets to cover distribution expenses and sometimes shareholder service expenses.

Check your debts

Get a handle on your debts, how much interest you’re paying, and when payments are due, says Sarah Carlson, the founder of Fulcrum Financial Group. Search for ways to reduce the interest rate you pay on loans, credit cards and the like; consolidate debt if it makes financial sense, put in place a system to avoid late payments.

Review automated payments

A growing number of people now have recurring payments that are automatically deducted from financial accounts. Review those payments, canceling those for products and services that are no longer used – such as gym memberships, says O’Neill. Apps such as Truebill and Trim App help you find and eliminate subscriptions.

Check your cable, cellphone bills

“Your cellphone is one service that escalates over the years and is never second-guessed,” says Jeffrey Edwards, president of Atlas Financial Planning. “That 12-month free trial that hooked you five years ago is now full price and then some,” he says. 

Document everything

Joshua Mungavin, a financial planner with Evensky Katz / Foldes Financial Wealth Management recommends documenting all your accounts, bills, and service provider contact information.

“You and your loved ones will be happy to have all important information together if there is an emergency or someone passes away,” he says.

“The Family Information Organizer: Your Planner for any Emergency, Disaster, or Loss of a Loved One” is a free eBook that you can use.

Check your insurance plans

Review your auto, life, home and umbrella insurance policies to make sure you’re getting the most competitive rates.

“If you have good students enrolled in your plan, be sure to ask about special rates for children with good grades,” says Dwyer. 

Be digital savvy

Cybersecurity is a critical area for your financial “spring cleaning,” says Aaron Clarke, a wealth adviser at Halpern Financial.

“If you have a password like ‘password123’ or your pet’s name, you need to increase your level of security, particularly for financial accounts and email,” he says. 

Consider boosting your login protection. “Especially for financial accounts, add an extra layer of security with multi-factor identification, or multiple passwords, codes and security questions,” he says.

And, if you have trouble remembering all your passwords for various services you use, consider using a password manager.

“We do not recommend any one brand in particular, but we do recommend selecting a product with multi-factor authentication for the most security,” he says.

Check your beneficiary designations

People die, get divorced, get remarried, have children. And when those and other life cycle events occur, people often forget to review their life insurance and retirement account beneficiary designations, says Scott Bishop, an executive vice president with STA Wealth Management. “If it has been a while since you have looked at them or don’t know what they say, it is a great tip to get organized.”

Robert Powell is the editor of TheStreet’s Retirement Daily www.retirement.thestreet.com and contributes regularly to USA TODAY. Got questions about money? Email Bob at rpowell@allthingsretirement.com.


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Steven Merrill, Financial Planning: Why can’t I keep up with the market?

Question: I have been investing for years, but I never seem to do as well as my friends. I own high quality mutual funds, but I don’t even earn as much as the mutual fund company says I should earn. Do you have any idea why my portfolio always seems to lag? This is getting frustrating.

Answer: Without knowing your portfolio history, it is impossible for me to explain exactly why your portfolio might be underperforming. However, there are several things you need to consider when you think about your investment performance.

First, keep in mind that measuring and reporting investment performance can be tricky. If you want a thorough discussion of the issues involved, check out the “Global Investment Performance Standards,” or GIPS. This 447-page document is the gold standard for investment performance reporting. It is published by the CFA Institute and is used by all reputable investment advisors as the basis for reporting performance. GIPS is available to the public at www.GIPSstandards.org.

You should also keep in mind that comparing your investment returns with your friends’ returns is a foolish exercise. Your situation is different from their situation in ways that you cannot possibly understand without digging into the intimate details of their financial lives. Investments that are appropriate for them may not be appropriate for you and vice versa. Focus instead on making sure that your investments match your circumstances and that your portfolio is properly constructed.

Consider also that your friends are probably not giving you the full picture. I’m not saying that your friends are lying, but they may not know what they are talking about. Remember what I was saying about the complexity of investment measurement and reporting? In any case, do yourself a favor and tune out the external noise and focus on your situation.

When it comes to your own investments, there are a number of reasons why you might underperform—even if you own a well-managed mutual fund. These reasons include the effect of loads or commissions, the timing of your investments or withdrawals, and what you choose to do with dividends. An example will help illustrate what I mean.

Let’s suppose you invest $1,000 in a particular mutual fund at the beginning of the year. At the end of the year your mutual fund company reports that your fund was up 10 percent. Without any extenuating circumstances, you would expect your investment account to now be worth $1,100.

However, suppose you paid a 3 percent load to buy the fund. In that case, you really only invested $970, and your investment would have grown to be only $1,067. You did earn 10 percent, but on a lower invested amount. Over time, the effect of that load will diminish, but if you pay a load on every addition you make to the fund, your performance will always lag. The Securities and Exchange Commission has tried to help investors better understand the effect of loads on portfolio performance by requiring fund companies to report load-adjusted returns in their prospectuses, but many people gloss right over those disclosures.

Mutual fund companies also report performance assuming you made a single lump-sum investment at the beginning of the year and held the investment for the entire year. To the extent you make multiple investments over the course of the year, or take withdrawals during the course of the year, your actual performance will differ from the fund’s reported performance. If the market is going up, your performance will lag the market.

Finally, published fund performance numbers assume you immediately reinvest dividend and interest payments back into the mutual fund. If you withdraw dividends or interest payments or invest them in something else, your actual performance will not match the fund’s reported performance.

Steven C. Merrell is an investment adviser and partner at Monterey Private Wealth Inc., in Monterey. Send questions concerning investing, taxes, retirement or estate planning to Steve Merrell, 2340 Garden Road Suite 202, Monterey 93940 or steve@montereypw.com.

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$40K Grant Awarded To Newtown For Financial Planning

NEWTOWN, PA — Newtown is getting a decent grant thanks to State Sen. Steven Santarsiero and State Rep. Perry Warren.

The two representatives announced the state Department of Community and Economic Development is awarding a $40,000 grant to Newtown.

The funds are being provided through the department’s Early Intervention Program, Warren said. Grants from this program are designed to assist municipalities in creating short- and long-term financial plans to help them meet their goals.

“As a former township supervisor, I understand the importance of developing a sound financial strategy,” Santarsiero said. “With this grant, Newtown Township will be able to provide residents with even greater services.”

Warren added that this grant will provide Newtown with a financial plan for the next five years.

“This infusion of state money will not only help the community grow, but it promises Newtown a prosperous future,” Warren said

Blucora to buy independent broker dealer 1st Global

Jack Oujo admits he may have flubbed the initial call.

The 26-year HD Vest Financial Services advisor and former minor league baseball umpire first balked at the largest tax-focused independent broker-dealer’s clearing switch to Fidelity’s National Financial Services. Upon further review, he says, it looks much better, thanks to tools like eMoney and a new client portal.

“I questioned the whole thing when it happened, but I was wrong,” says Oujo, who has an eponymous New Jersey-based practice and notes he previously “had a bitter taste” toward National Financial. “It’s clear now that they’ve upped their game tremendously.”

HD Vest parent Blucora’s pending $180-million acquisition of 1st Global would mark a further change at the IBD, which also made Envestnet its advisory platform in September and bid goodbye to former CEO Bob Oros three months earlier than expected at the end of 2018.

Blucora has admitted to delays in its conversions. Still, the clearing transition “exasperated” some advisors, according to IBD recruiter Jon Henschen, who says one longtime HD Vest advisor told him service has since improved but the firm is “getting much more corporate” overall.

HD Vest is navigating a closely watched evolution — not just for the parties involved in the deal, the vendors and the 4,500 advisors with the IBDs, but also for the sector as a whole which is adjusting to record consolidation amid increased competition and tighter margins.

Envestnet and Fidelity, noting the clearing migration involved some $22 billion in assets, have acknowledged difficulties for advisors typical in any large-scale transition. Even so, HD Vest roughly doubled its recruited client assets in 2018 to $700 million, while setting record net advisory flows at nearly $1 billion in assets, according to its annual proxy statement.

Combining firms
Combining HD Vest with the second largest tax-focused IBD would move Blucora’s wealth management unit near the top 10 firms in the sector based on revenue. The deal would also result in a new brand under Blucora after folding in some 850 advisors from 1st Global.

What’s more, it reverses the long-ago breakaway move that led HD Vest’s largest-producing advisor and a money management executive to launch 1st Global in 1992, says Carolyn Armitage, a former HD Vest employee who is now a managing director at consulting firm Echelon Partners.

She adds that the deal makes sense “from a philosophical standpoint beyond the economics,” given the proximity of the firms’ headquarters in the Dallas-Fort Worth Metroplex and their complementary focus on supporting tax professionals’ wealth management businesses.

“Given how strong both brands are, going with a neutral brand probably helps both sides overcome some of the emotional aspects and legacy issues of the two organizations,” Armitage says. “I’m really encouraged that there’ll be some new leadership and hopefully additional stability to HD Vest through this acquisition.”

In particular, Armitage praises 1st Global President David Knoch — also chair of FSI’s board — as a talented leader who “knows this space very well.”

However, the structure of Blucora’s wealth unit after the expected close of the deal later this quarter remains unclear.

In an interview, Knoch declined to discuss plans for the combined unit in detail, including leadership positions, whether the firms will consolidate their headquarters and if one firm will adopt the other’s technology. He noted the deal is in its “regulatory approval phase.”

“We’re going to be further empowered to make people’s lives better,” says Knoch. “We’re very passionate about helping tax-focused financial advisors enrich their communities and also enrich the people who live in those communities.”

In a message to shareholders included in the April 10 proxy, Blucora CEO John Clendening wrote that the wealth unit’s “future potential is unbounded” after the deal and its 2018 results.

The deal “gives us greater scale and new opportunities to leverage efficiencies, capabilities and technology to better serve our combined advisor base,” he said. “We will also be able to better to reinvest in our business and take advantage of the ‘best of breed’ across both platforms.”

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Executive moves
In the longer term, Clendening added, the company expects advisors to be able to increase client assets in advisory accounts and potentially bring in more directly held assets. The Fidelity conversion alone will also generate $120 million in additional segment income over the 10-year contract, he wrote.

Before joining Blucora in 2016, Clendening, 56, served for 11 years in executive roles in investor services and other divisions at Charles Schwab. Since he took over in April 2016, the company’s stock value has surged to roughly $35 per share from below $5.

The proxy states that Blucora, which also owns the tax software firm TaxAct, has transformed itself since 2015 from operating a portfolio of internet companies to a tech-enabled financial firm. In that timeframe, the parent firm also moved to Irving, Texas, from the Seattle area.

Todd Mackay — HD Vest’s interim CEO — spearheaded Blucora’s purchase of the IBD from private equity investors in 2015 for $580 million. Wells Fargo previously owned the firm, which was launched in 1983 by CPA-planner pioneers Herb Darwin Vest and his wife Barbara. Most recently, the 30-year company veteran Roger Ochs led the firm until 2017.

Oros had spent less than two years at HD Vest when he left to become CEO of Chicago-based HighTower in January. He left on “very good terms,” solely to be closer to his ailing mother in Michigan, he said at the time.

His separation agreement with Blucora called for him to provide transitional services through March 1 after stepping down Nov. 15, the proxy shows. Oros later “agreed to a general release of claims in favor” of Blucora, and the company waived nearly $220,000 in expenses, it states.

Oros would have been required to repay the costs of commuting, relocation and other expenses under his employment agreement. While he received none of his targeted $487,500 bonus, since he didn’t finish the year, Oros received $1.5 million in total 2018 compensation.

Representatives for HighTower — which previously stated it sought an earlier start for Oros — declined to make him available for an interview.

Blucora spokeswoman Andrea Dorsett said in an email that the company and Oros “separated with a mutual understanding and on amicable terms,” calling the proxy disclosure a “routine update” made in keeping with public companies’ standard reporting practices.

HD Vest didn’t make executives available for an interview nor did it provide responses to other questions.

Heated calls’
The acquisition would combine 1st Global’s specialty in serving large accounting practices with HD Vest’s focus on individual CPAs and enrolled agents. Tony Batman, the majority owner of 1st Global, had sought out “higher-end producers” in breaking away from HD Vest, Henschen says.

One advisor told Henschen he couldn’t process any business for two weeks because of the Fidelity conversion. Henschen says he’s taken some “pretty heated calls” from HD Vest representatives in the past six months amid the array of changes.

“It used to be a rep-driven broker-dealer; now it’s like they’re an employee of Blucora,” Henschen says. “They need to do a one-eighty on the culture. If the current management seems befuddled on how to do that, then put 1st Global’s management in there.”

On the other hand, two of HD Vest’s largest practices expressed support for the firm and the pending deal. Oujo and Kyle Brownlee of Oklahoma-based Wymer Brownlee Wealth Strategies both say they look forward to collaborating professionally with the 1st Global advisors.

“When you’re doing a major conversion at that level, you have to expect that it’s not going to be completely smooth,” says Brownlee. “Due to that investment and capital and time to convert, we’re really in a position where this merger makes a lot more sense.”

Brownlee has been affiliated with HD Vest for 20 years, and the practice spans six locations with nine reps managing some $600 million in client assets. The 50-year-old business aims to double its client assets in the next six to eight years under a strategic growth plan.

Oujo’s practice has six advisors managing $440 million, including the accounts of many Major League Baseball umpires who came up in the minors with him. Through multiple ownership structures, HD Vest’s culture remains centered on accountants who are advisors, Oujo says.

“There’s a meeting of minds that takes place between a rep force that has to stay modern, and an ownership group that has to appeal to a rep force,” he says. “There’s a lot of moving parts here, and the clients can handle change as long as they’re coached through it.”

Conversion process
As for the Fidelity conversion, Oujo credits his team for being well prepared, saying “a lot was thrown” at smaller practitioners who didn’t have as much bandwidth or, in some cases, didn’t even know about it or didn’t approach it with positive or proactive attitudes.

HD Vest’s move to Fidelity spanned 15 months of close work between the firms, Fidelity spokeswoman Nicole Abbott says. The custodian’s preparation included training, resources in the field and an app for communicating directly with advisors, she said in an emailed statement.

“Conversions are always a process and questions inevitably come up during times of change, particularly when advisors are shifting to an entirely new platform, so Fidelity had up to 40 team members onsite for the four weeks around the conversion and will continue to work with the team at HD Vest,” Abbott said in a statement.

Any conversion, especially one involving switching wealth technologies and custodians simultaneously, requires time to adapt, agrees Lincoln Ross, Envestnet’s executive vice president of product and operations. Envestnet supports client firms and their advisors during such moves.

“Firms that make transformative changes to their infrastructure like this are pointing themselves toward the future,” Ross said in an emailed statement. “Once the change is absorbed, these firms experience accelerated growth.”

In February, Envestnet, with launch partner 1st Global, announced it had rolled out advisor-facing tools under the new Vision platform, which combines data from various product providers while using machine learning and analytics for client insights.

Additionally, 1st Global started a client texting tool under MyRepChat that integrates with Redtail customer relationship management software and reached an agreement with Broadridge to develop an enhanced advisor compensation system, according to Knoch.

New blood
The firm has also tapped four new executives to lead its ongoing enterprise projects and recruiting. 1st Global has added at least one new CPA advisor per month since the fall, and the company sees the new tax law as a growth driver, Knoch says.

“CPA wealth management firms are really positioned to give great advice to their clients,” Knoch says. “We think that now is probably the best time that we’ve ever seen in that regard. We have been and we remain really excited about this market.”

For its part, Blucora came within a percentage point, met or surpassed eight stated performance goals around metrics like EBITDA and revenue in 2018, the proxy says. The wealth management unit’s net advisory flows soared above a target of $900 million to $957.3 million.

HD Vest also brought in more than $700 million in recruited assets from 75 experienced advisors and 120 tax professionals it trained as wealth managers. The firm is only in the early stages of its efforts, but production per advisor jumped 20% in 2018, the proxy states.

“Last year we actively pruned the advisor base by setting engagement requirements, which led to the termination of hundreds of advisors,” Clendening wrote. “This has created more capacity for our team to focus on our highly engaged advisors while enhancing our ability to support our most productive advisors and teams.”

About 150 advisors at HD Vest, including Brownlee, are also beta testing a new tax-smart investing platform which is designed to automate their strategies. He says he’s thankful for Blucora’s investments in the wealth unit, including in technology and the 1st Global deal.

“It’s a much more powerful company going forward,” Brownlee says. “Anytime you can have peer collaboration for the betterment of the clients that we serve, I think everybody wins.”

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UNT student wins financial planning competition | News

Rebecca Boyle, a senior at the University of North Texas, won the International Association of Registered Financial Consultants 2019 national financial plan competition. 

The competition had participants create financial plans for a fictional couple, and were judged by a panel of financial consultants.

“I learned the importance of having a process for doing this, about the order of which things need to be done and how things affect each other,” Boyle said in a press release about the competition.

Boyle will graduate this spring debt free, and helps host the UNT Mean Green Money podcast.

Financial Planning 101: Where Do I Start?

Understanding what your advisor handles personally and what will be outsourced is a good place to start in your search. 


When you’re ready to take the leap from DIY financial planning to seeking professional advice, the first step is to choose who you’re going to trust with your financial future.

A financial advisor is likely going to be someone that you work with for many years—maybe even someone who works with your family for generations. It’s important that you choose the right advisor for you. That means taking the time to ask the crucial questions that will tell you whether or not it’s a good fit.

In this blog and more to come, you learn the big questions you should ask all financial advisors you’re considering, starting with this one: What exactly do you do?

What services are provided?

There are a lot of different areas in which a financial advisor can provide expertise: real estate, banking, mortgages, insurance, law, tax, investments…

Some firms offer one of these. Some offer two or three. There are probably very few that offer all of them—which is a good thing. Jack of all trades but master of none is not what you’re looking for. Knowing exactly what services an advisor can provide is the first step in knowing if he or she is a good fit for you.

What is done in-house?

With financial advisors, not every service they provide is done personally, or even by someone in the same office. Some services are outsourced.

While this is not a bad thing nor should it be a deterrent, it is important to know what your advisor is doing personally so you know what you’re paying for.

Do you have an advisor or a salesperson?

Going to a financial advisor to help make sense of financial products that you own or are considering can be extremely helpful, but it’s important to know that your advisor has your best interest in mind.

If the advisor works for a specific insurance company or investment product provider, he or she is a salesman who may be incented to recommend a product that his or her company manufactures and has on the shelf.

Make sure you have an advisor who will search multiple companies and options and who is agnostic about the ultimate decisions to find what fits best for you.

How does the firm invest?

If you’re seeking help with investments, understand how the advisor or firm chooses where your money is invested. Some firms will personally allocate your assets and manage your portfolio in-house. Some will manage your portfolio design and outsource certain components—like stock picking—to a third party.

Beware of firms that outsource the bulk of your asset management to a third party. This is often much costlier for you. If your advisor is handing off your money to someone else to manage, at least make sure you know what other services you are paying him or her to provide for you.

The lesson:

When you’re looking for a financial advisor, be prepared to ask questions so you know what to expect and if the advisor is right for you. Understanding what your advisor handles personally and what will be outsourced is a good place to start in your search.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Brotman Financial Group, Inc. and BFG Financial Advisors are not affiliated with Kestra IS or Kestra AS.

Why clients should reconsider early retirement plans

Our daily roundup of retirement news your clients may be thinking about.

Why clients should reconsider early retirement plans
While many clients dream of leaving the workplace at an early age, an early retirement can have downsides, writes an expert at The Wall Street Journal. Early retirees are likely to suffer from physical and cognitive decline as they become inactive and could develop unhealthy behaviors such as drinking and smoking, writes the expert. “Many of these studies clearly show that health problems intensify after workers qualify for retirement benefits and abate after policies encouraging work are introduced.”

Bloomberg News

The case for a lump sum pension distribution
As more companies shift from pension plans to defined contribution plans, employees may be better off taking a lump sum distribution than choosing the annuity option, especially if they work with an experienced CFP, writes an expert on Kiplinger. “Rolling the lump sum into an IRA preserves the tax-deferred nature of the funds and provides flexibility with future withdrawals,” the expert explains. “As the IRA owner, you own the account and therefore control the distributions.”

A $51,000 mistake clients could be making
About 25% of 401(k) participants below the age of 35 have dipped into their retirement accounts, according to an article on MarketWatch. Many respondents to an industry survey said they made an early 401(k) withdrawal to pay credit card debt. This presents numerous disadvantages, such as missed earnings opportunity and a 10% penalty on top of federal taxes on the withdrawn amount.

How clients can save for retirement in their 40s
Clients who are in their 40s are in a better position to save for retirement, as they are reaching the peak earning years of their career, according to this article on Bankrate. This means they should consider paying down debt and contributing the maximum amount to their retirement plans. They could also save in a traditional or Roth IRA to take advantage of the account’s tax benefits, reduce their exposure to risk, maintain the right mix of investments and get adequate insurance coverage.

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