Sunday, August 3, 2014

Why I Recommend Only Garrett Planning Network Fee-Only Planners

Blue Haven Capital often has individuals or couples make an appointment to interview us for fee-only investment management only to be told at the end of the hour or so that what they really need first is a plan drawn up by a fee-only planner. Often, people are surprised that I don't push them to harder to sign up for investment management, but sometimes they don't need management, they just need a plan. The only planners I recommend, regardless of the location of the client or potential client, are planners in the Garrett Planning Network.

Often, I'll get questions like "Do I have enough insurance?" or "What sort of pension split should I sign up for if both my partner and I are healthy and the same age?" Too often, when I tell them I don't get involved in insurance, people say they'll ask their insurance agent. Really?? They'll ask their insurance agent if they have enough insurance? That's usually when I recommend a Garrett Planner.

The reason I often send clients and potential clients to planners in the Garrett Planning Network is that I know for certain that those individuals will get a comprehensive, objective plan from a full fiduciary. They won't walk out of there with a $1mm universal life policy, they won't be pressured into opening a brokerage account to buy the latest high commission bells-and-whistles products from one of the many Wall Street brokerage firms, they'll simple have an objective plan to help guide them financially well into the future.

Sometimes those same people come back to me to manage their money according to their plan. Usually, they are looking for very low cost, index oriented, full fiduciary investment management. Those people tend to dislike things like rebalancing and paying attention to tax ramifications. Sometimes they come back to me because their active lifestyle doesn't permit constant oversight of their portfolio. Sometimes they come back to me because they want better access to low cost products such as Dimensional Funds. Sometimes they just want a third party to manage things in case one of them becomes incapacitated or dies. Whatever the case may be, I believe the best long term solution for individuals looking for investment help is to look for fee-only planners and fee-only investment managers. Once that list is established, one should check backgrounds, fees, disciplinary actions, investment philosophy, etc., but the first step should always be to look for a fee-only fiduciary.

Sometimes people have a plan and just need management. Sometimes people have neither a plan nor management. And occasionally, people have management but no plan. In all cases, going with a full fiduciary, fee-only professional who focuses on the specialty you need will be your best option.

This video, up on YouTube, gives a funny but enlightening look at the difference between fiduciaries and non fiduciaries. Enjoy!

Saturday, August 2, 2014

Money Market Mutual Fund Developments

If you have a money market account, you need to be aware of the latest SEC regulatory changes regarding those money market accounts. Changes will be implemented over a number of years, but individuals, trusts, and small businesses should review their options and the category into which they fall.

For many years, money market mutual funds provided a safe, stable haven for idle funds. In fact, the funds were so stable that many equated money market mutual funds with bank checking accounts. With the 2008 financial crisis in the US, the SEC decided to strengthen money market regulations in order to provide more stability to the market.

For individuals and what the SEC deems "natural persons":
First, U.S. Government issued or guaranteed money market mutual funds will undergo no changes. They will continue to offer $1 net asset value per share stability, and they will not impose any restriction on investor access.

Second, U.S. Government issued or guaranteed money market funds that also include corporate bonds in their fund will continue to offer $1 net asset value per share stability, but they will have the ability to impose restrictions on redemptions in times of what the SEC calls "market stress."

Third, municipal bond money market funds will also continue to offer $1 net asset value per share stability, but they too will have the ability to impose restrictions on redemptions in times of market stress.

For corporations, small businesses, and pension plans:
Funds that are considered "institutional" and cater to other than "natural persons" will be required to transact buys and sells at a floating rate (read "not held at a stable $1 per share) that will be carried out to the 4th decimal place. Also, liquidity fees may be imposed upon redemptions during times of market stress.

The time period for this implementation date is currently scheduled at 2 years. Blue Haven Capital recommends you speak with your advisor and ask specifically what sort of restrictions and changes will be imposed by the money market account you currently hold. Also, there are alternatives you can consider and those should be offered to you as well.

As always, we recommend you have an advisor who acts as a fiduciary at ALL times. That way you know the advisor is legally obligated to put your interest first at ALL times, not just some times.

See this SEC site for more information, or contact us if we may be of further assistance.