Tag: RIA

What to look for when getting financial help

What should you look for when you are searching to financial guidance? Finding the financial advisor that is right for you can be difficult. You want someone you can trust; a fiduciary, someone who will put your interests ahead of his own. In some respects, it’s like getting married because a good relationship is open and long-lasting.
To help you in your search, here are a few things to look for.

  • Compatibility: like a spouse, you want someone you can talk to and who shares your view of life. If you are not compatible, you will always be on the lookout for someone else.
  • Philosophy: what is your advisor’s investment philosophy? Is it capital preservation, beating the market, getting a fair return? Is that compatible with what you’re looking for?
  • Strategy: how does your advisor go about achieving your objectives? Do you understand it? If not, ask more questions.
  • Experience: how many years has he been in business? Try to avoid having a rookie learn on the job with your money.
  • Certifications: does your financial advisor have a certificate from the International Board of Standards and Practices for Certified Financial Planners? The CFP™ designation means that he has completed the coursework and passed the test to become a Certified Financial Planner™ certificant.
  • Affiliation: is your advisor an employee of a large financial firm or is he Independent RIA (Registered Investment Advisor). Employees of large financial firms work for their company, an RIA works for you.
  • Compensation: how is your advisor paid? Fees, commissions, a combination of fees and commissions? It’s important for you to know this ahead of time.
  • Reputation: does your advisor have a good reputation in the community? You can also check to see if he has any mark on his record by checking with FINRA.
  • People like you: does your advisor deal with other people like you? This can make a difference in his understanding of the issues you are dealing with.

Finding a good advisor can make the difference between your financial success and failure. He can keep you from making major investment errors and bring you peace of mind. Twice as many people who get professional advice feel very secure about their financial future as opposed to those who do it on their own.   Korving & Company is an RIA whose principals are Certified Financial Planners™ (CFP™).  We are fiduciaries who put our clients’ interests first.  Our objective is to get a fair return.  We have decades of experience. We are fee-only.  We are proud of our reputation in the community.  Are we right for you?  Find out.

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Finding financial guidance for the middle aged executive

Let’s imagine that you’re now firmly on your career track. You’re an expert in your field and have a team of experts to manage some of the complexities of life outside of work.

  • You doctor gives you regular medical check-ups.
  • Your attorney to reviews your estate plans regularly.
  • Your CPA prepares your taxes and suggests ways to reduce them.
  • But there’s something missing ….

You are putting away some serious money and you are getting nervous about market risk so you want to find a good financial advisor. You don’t want a broker who will call you to sell stocks and bonds on commission. You want someone who will create a plan and give you unbiased financial advice. Someone who will manage your portfolio for you – commission free – so that your retirement plans won’t blow up just as you get ready to enjoy independence.

But there’s a dilemma. Just as you feel more comfortable knowing that the pilot on your next flight has spent thousands of hours flying your plane, you want to find a seasoned financial pro who has experience in all kinds of markets. But those years of experience could well mean that he’ll retire before you do! What’s the solution?

Recognizing that continuity is important in a relationship as personal as financial guidance, many advisors have set up teams.

Korving & Company is a good example. Arie Korving has nearly 30 years of experience as a financial advisor. A Certified Financial Planner, he is the author of numerous articles and books on finance and estate planning, he has experience that includes both Bull and Bear markets. He’s seen the investment world from both sides and knows that honesty and experience is what people want in their advisor.

Stephen Korving received his degree in finance from Virginia Tech with a focus on risk management. After graduation he joined Cambridge Associates, one of the country’s leading investment management consulting firms. Cambridge provides guidance to major institutions and the super-rich. A Certified Financial Planner, he teamed up with Arie ten years ago and in 2010 they founded Korving & Company, a boutique RIA (Registered Investment Advisor) focused on providing holistic financial guidance to executives and retirees.

Together they provide decades of experience and a plan to continue to do so for decades into the future.  Check them out.

If you were widowed, would you fire your husband’s financial advisor?

According to an article in Financial Advisor magazine,

Surviving spouses — statistically, wives — have a habit of firing financial advisors. Most sources peg the rate at about 50%, but the advisor-education website says the rate is closer to 70% if you wait a few years for the penny to drop.

Why is that?  It seems that most advisors have an “unbalanced advisor-client relationship.”  That means the advisor focuses on the half of the couple that seems to be more financially savvy.  This results in the surviving spouse, often the wife, not really thinking that the advisor is “her” advisor.

The article goes on to suggest that the advisor “provide basic, nuts-and-bolts financial advice to the surviving spouse.”

At Korving & Co. we go one better.  We have written a set of books “Before I Go” and the “Before I Go Workbook” anticipating the issues that the surviving spouse will face.

That’s why when our clients lose a spouse, we rarely lose the survivor.  They know that we focus on the family and the surviving widow trust us to take care of her.  In fact, we often find that when both husband and wife have passed on, the children come to us to manage their affairs.

For a personally autographed copy of both books, or more information on how we can help you, contact us.

What Rich People Need to Know

I ran across an article at Market Watch titled “Ten things rich people know that you don’t.”  It listed the usual things:

  • Start saving early
  • Automate your savings
  • Maximize contributions to 401(k)s
  • Don’t carry credit card debt
  • Live below your means
  • Educate yourself about investing
  • Diversify
  • Hire a qualified financial advisor

All of that is something to take to heart when you’re young and just starting in life.  But what do people who are already rich need to know?

Lots of people get rich without following the rules.  They may start a successful business, enter a highly compensated profession, climb the corporate ladder, win the lottery, become a sports star or inherit a fortune.   Once you are rich, the number one objective for most people is to stay rich.  One very successful financial advisor with just 28 very wealthy clients said

“People don’t come to me to get rich, they come to me to stay rich.”

That’s the role of a good financial advisor.   Their job is to  do more than manage their client’s portfolios, it’s to take care that all of the other boxes are checked off:  to diversify the client portfolio, to educate the client about investing, to see to it that they live within their means.  In many cases they take care of family issues, lifestyle issues; the kinds of things that family offices do.

It’s what we do.  It’s what our clients expect.

Have a wealth maintenance question?   Contact us.

Are you flunking the retirement readiness test?

A recent article in Financial Advisor proposed an interesting analogy: “Imagine boarding a jet and heading for your seat, only to be told you’re needed in the cockpit to fly the plane.”

That’s the situation many people are finding themselves in today.  Once upon a time, employers set up pension plans managed by investment professionals.  You worked and when you retired the pension checks began coming for the rest of your life.

That ended when 401(k) plans began replacing defined benefit pension plans.

Once, employers made the contributions, investment pros handled the investments and the income part was simple: You retired, the checks started arriving and continued until you died. Now, you decide how much to invest, where to invest it and how to draw it down. In other words, you fuel the plane, you pilot the plane and you land it.
It’s no surprise that many people, especially middle- and lower-income households, crash. The Federal Reserve’s latest Survey of Consumer Finances, released in September, found that ownership of retirement plans has fallen sharply in recent years, and that low-income households have almost no savings.

But it’s not only the low-income workers who lack basic financial wisdom.

Eighty percent of Americans with nest eggs of at least $100,000 got an “F” on a test about managing retirement savings put together recently by the American College of Financial Services. The college, which trains financial planners, asked over 1,000 60- to 75-year-olds about topics like safe retirement withdrawal rates, investment and longevity risk.
Seven in 10 had never heard of the “4 percent rule,” which holds that you can safely withdraw that amount annually in retirement.
Very few understood the risk of investing in bonds. Only 39 percent knew that a bond’s value falls when interest rates rise – a key risk for bondholders in this ultra-low-rate environment.

If you fall into this category and want to find out what help is available, contact us.  We’ll be glad to chat; no sales pitch and no pressure.

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It’s about making people’s lives better

It’s not just about money.

In most people’s minds the term “financial advisor” has all the emphasis on “financial” and very little about “advisor.” We disagree. We think of ourselves as advisors to the family, helping guide families with a whole range of issues. Some don’t have anything to do with investing.

We have gone car shopping for a client who didn’t want to deal with car salesmen. We have helped people choose the right retirement community.  We help educate young people about investing to make sure they get a good start in life.  We explore vacation destinations for our clients. We review our clients’ estate plans and beneficiary designations to make sure that they are in line with their wishes. We wrote a book designed to help people provide critical information to their heirs before they pass on (Before I Go).

And, of course, we have provided peace of mind to clients who worried about running out of money in their retirement years. This allowed them to do the things they wanted such as travel, spend time with their grandchildren or just relax with a good book.

We do more than manage portfolios. We assist the people who come to us for advice with the deeply personal things in their lives. Making people’s lives better is our goal.

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Benchmarking Inverts the Basics of Investing

The problem with “benchmarking”  – that is measuring your investment performance against market indexes (known as “benchmarks”) – is that it often leads to buying into asset bubbles.

During the tech boom of the last 20th century, billions of dollars went into internet stocks whose values became wildly inflated.  People who participated in this as a way of reaching for high rates of return, found that no one rang a bell when the party was over.  Many lost their retirement savings and saw their 401(k)s devastated.

Certain stocks become wildly popular, industries become wildly popular and investing styles become wildly popular, all of which leads to wildly inflated values.  This almost inevitably leads to financial pain.

But this does not only happen in the stock market.  In the first decade of the 21st century, real estate seemed to be a way of making outsized profits.  Of course, when the housing bubble collapsed, many not only lost money, but their homes.

The focus of serious investors is to align your portfolio with your personal objectives.  The focus should be on long-term – multi-year – performance.  The only benchmark that should concern you is the one you set for yourself.

At Korving & Company we keep our clients grounded and work with them to meet their personal benchmarks.  Contact us to do the same for you.

Financial Planning in the Shadow of Dementia

Alzheimer’s, the most common form of dementia, is an epidemic. More than 5 million Americans are living with Alzheimer’s. It’s irreversible and fatal although some may linger for up to 20 years. And the number is expected to soar.

The Alzheimer’s Association has created a list of the 10 warning signs. These range from memory loss, through confusion to severe mood changes.

Because of the widespread nature of this disease, for people with Alzheimer’s and their families there are a number of things that should be done. Plans should be in place well before the onset of the symptoms.

• Review your insurance policies, especially your Long Term Care policies.
• Talk with your family and your financial advisor to make your wishes known.
• Review your wills and trusts.
• Appoint an advocate who has the legal authority to act on your behalf.
• Make sure you have provided for an appropriate Power of Attorney.

Research shows that declining financial skills is one of the first symptoms of the early stages of Alzheimer’s. This includes anything from difficulty in balancing a checkbook to being victimized by criminals who prey on the elderly. This usually leaves family members to take responsibility for the individual’s finances.

In some cases, people assume these responsibilities without having experience handling money or dealing with financial issues. This is the time to bring in a trusted financial advisor. We can provide practical guidance on both day-to-day and long-term financial decisions.

For a report on this subject, contact Korving & Company – the Financial Planning and Investment Management experts.

Investing like Bill Gates

Bill Gates’ fortune has ballooned to $82 billion according to the Wall Street Journal. It puts him at the top of the Forbes 500 list of the world’s richest people. And it’s not due to the price of Microsoft stock.

Over the years, Bill Gates has done what any savvy investor does, he’s diversified. He has sold about $40 billion of his Microsoft shares and has given $30 billion to charity. So what’s he done to get even richer? He has hired a money manager. The man’s name is Michael Larson and Gates has given him his “complete trust and faith.”

Gates gave a party in Larson’s honor, toasting him by saying that “Melinda [Gates wife] and I are free to pursue our vision of a healthier and better-educated world because of what Michael has done.”

The way Bill Gates has managed his fortune is a lesson for every investor. There are three distinct things that are worth noting.

1. Diversification. The first rule of risk control – making sure you don’t lose your money –  is diversification. This issue has been beaten to death, yet we still see people with portfolios which are concentrated in one or two stocks. This is often the case of an employee who has bought his company’s stock over many years. Small business owners are even guiltier. Often their single biggest asset is their business. It’s even more important for the owner of a chain of dry cleaners, fast food outlets or a real estate developer to build an investment portfolio that will be there if their business declines. Only about 15% of Gates’ fortune is invested in Microsoft stock. If Microsoft were to close up shop tomorrow, Gates lifestyle would not be affected. He would still be immensely wealthy. Many business owners can’t say the same thing.

2. Hire an investment professional to manage your money. Gates knows computers and computer software. He’s smart, savvy and knows that he lacks investment expertise. Gates hired Larson in 1994, realizing that if he was going to diversify he had to hire someone who was an expert investor to manage his money. The Gates fortune grew from $5 billion when he hired Larson to $82 billion today. Larson has autonomy to buy and sell investments as he sees fit. His portfolio includes stocks, bonds and real estate. He has a staff of about 100 people to help him do the hard work of managing the Gates fortune.

3. Focus on what you enjoy and do best. Because they have someone they can trust managing their money, Gates and his wife can pursue their vision. Most people’s interests revolve around their family, their work or hobbies. Managing the family investments is a distraction from what people want to do. Besides, few people are investment professionals. That’s why Gates example is worth following. Unless you have Gates’ wealth you can’t afford your own dedicated, private, investment manager. But there are investment managers – like Larson – who manage the assets of multiple families.  They can take care of your investments while you focus on the things that are important to you.

Gates gets an update on his investments every two months. Not every investment has been successful, but they are good enough to have returned Gates to the top of the wealth list.

If you are still managing your own money, or have an account with a broker who calls you with investment ideas from time to time, isn’t it time to think about the way the richest man in the world handles his money? Call Korving & Company and let us show you what we can do for you.

Creating a better investment portfolio

For many people, “investing their portfolio” means picking out some mutual funds and then leaving them alone. With tens of thousands of funds available most people find selection too confusing. As a result, they “outsource” their investments to a few well know names in the mutual fund industry. But there is a better alternative to turning your financial future over to an organization at the other end of an 800 number or an Internet connection.

The decisions you make as you grow your retirement portfolio has a profound effect on your future. It will determine how well you will live in retirement. It will determine whether you spend your retirement sitting on your porch in a rocking chair, or vacationing in Hawaii. It’s the difference between steak or hot dogs for your cookout.
There is lots of “professional” advice out there. Much of that advice is offered by people who are not trained investment professionals. They are salesmen for large investment firms. Their pay is based on how much they sell. Many of these same salesmen often fail to understand the products they sell, with disastrous results.

Korving & Company is different. We are a team of professional investment managers with decades of experience managing the portfolios of clients ranging from young couples to wealthy families and institutions. We do the “heavy lifting” for those who want professionally managed portfolios.

We’re a father-son team who care for – and take care of – our clients. We are fiduciaries; we put our clients’ interest ahead of our own. We specialize retirement investing, provide estate planning assistance, and help prepare the next generation for the challenges ahead. If your financial future is important to you, check us out. For more information, send us a message or give us a call. We would like to hear from you.

©  Korving & Company, LLC