Trying to Keep Top Talent? This could be your roadmap

 

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Jim Lorenzen, CFP®, AIF®

No, that’s no my picture – I wish I were that young and good looking; but he does look like a happy executive who’s worth keeping…. a key employee!

Key employees don’t have to be executives.  It can be anyone who is valuable to a business, particularly a small business that has to compete to attract top talent – and keep them from jumping ship to join a larger competitor or to start their own business in competition with you (trying to enforce non-compete agreements is no fun and costs far too much time and money, not to mention lost opportunities).

Small business owners often aren’t established enough to offer expensive benefit packages, but they want to find a way they can offer the right incentives to benefit their top people.

You might be interested in learning about the REBA, or GEBA, as some call it.  It’s a Restrictive Executive Bonus Arrangment, or Golden Executive Bonus Arrangement.

They’re pretty simple to set-up and can be designed to provide flexibility for the owner.

You can get a copy of the REBA Report by using the button below.  Hope you find it helpful.
Get My REBA Report!
Enjoy,

Jim


Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER® professional and An Accredited Investment Fiduciary® serving private clients since 1991.   Jim is Founding Principal of The Independent Financial Group, a  registered investment advisor with clients located across the U.S.. He is also licensed for insurance as an independent agent under California license 0C00742. The Independent Financial Group does not provide legal or tax advice and nothing contained herein should be construed as securities or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader. The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriate licensed professional.

Do Advisors Really Add Value?

 

Jim Lorenzen, CFP®, AIF®

For years the media and others have debated the ultimate value of an advisor to the individual investor.   Some believe they either under or outperform; others believe the value is more about providing a disciplined investment process; and, there are still others who believe the value lies in the planning and tax optimization process.

Vanguard – long a champion of the individual investor and low-cost investing – conducted their own study and actually came up with more than a conclusion; they came up with a number.  You may find it interesting.

You can access it here.

Enjoy!

Jim


Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER® professional and An Accredited Investment Fiduciary® serving private clients since 1991.   Jim is Founding Principal of The Independent Financial Group, a  registered investment advisor with clients located across the U.S.. He is also licensed for insurance as an independent agent under California license 0C00742. The Independent Financial Group does not provide legal or tax advice and nothing contained herein should be construed as securities or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader. The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriate licensed professional.

Can You Reduce Risk By Adding To It?

 

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Jim Lorenzen, CFP®, AIF®

Ever wonder why so many “off-the-shelf” allocation engines available today tend to look so much alike?   The reason is pretty straightforward:   The investor’s menu of choices is limited by the engine provider based on similar sets of data inputs and a short risk questionnaire.   When you couple that sameness with a fear of placing “risky” investments in the hands of the general public in a litigious culture, you get what you’d expect:  Off-the-shelf tends to look a lot alike with limited ‘plain vanilla’ investment options and sometimes, if not often, a proprietary product line.

“Plain vanilla” isn’t bad!  However, there are ways a little pinch of something can actually enhance the flavor without causing stomach upset.

You might find this risk report interesting, if not helpful.
Risk Report
Enjoy!

Jim


Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER® professional and An Accredited Investment Fiduciary® serving private clients since 1991.   Jim is Founding Principal of The Independent Financial Group, a  registered investment advisor with clients located across the U.S.. He is also licensed for insurance as an independent agent under California license 0C00742. The Independent Financial Group does not provide legal or tax advice and nothing contained herein should be construed as securities or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader. The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriate licensed professional.

Will My Money Last?

piecing-retirement-puzzle-pathJim Lorenzen, CFP®, AIF®

Scott and Linda (not their real names) are in their 50s and have done a lot of things right:  They’ve worked hard, saved and invested, and they’ve been practical in their spending.

They feel like they’re well on-track to a secure retirement; but, a few “wild cards” do have them concerned:

  • Inflation and longevity:  They know what’s happened to their purchasing power over the last 30 years.  They’re concerned about the next 30+ (maybe 40) when they’re living off their investments.
  • Taxes:  While there may be a temporary reduction coming now, they also know the U.S. is facing a $20 trillion debt and there will be 7 or more presidential elections – not to mention 15 congressional elections – that will take place in the next 30 years.  That spells a lot of potential changes and changes in tax laws.   They want old-age income that will be protected from the politicians.
  • Health costs:  A huge wild-card.  They know the odds are about 50% one of them will need it, but they don’t want to see long-term-care insurance money going down the drain if they don’t need it.  They also want money available if they do have a chronic illness.
  • Liquidity:  They want money available for emergencies during retirement without having to jump through a ton of hoops.

I thought you might like seeing a sample case study about how one couple addressed this issue.

Enjoy!

Jim


Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER® professional and An Accredited Investment Fiduciary® serving private clients since 1991.   Jim is Founding Principal of The Independent Financial Group, a  registered investment advisor with clients located across the U.S.. He is also licensed for insurance as an independent agent under California license 0C00742. The Independent Financial Group does not provide legal or tax advice and nothing contained herein should be construed as securities or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader. The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriate licensed professional.

SELLING YOUR BUSINESS? This may be the best kept secret you’ll need.

Jim Lorenzen, CFP®, AIF®

Ever heard of a “One-Way Buy-Sell” arrangement?  Don’t feel bad.  Few people have.  I know when I was in publishing I hadn’t heard of it, either.  I wish I had.

Here’s the tease:  How to sell your business – in advance, at a price you want, and secure the funding, too!

Most businesses are sold on some form of the installment plan; for closely-held businesses, the ‘all cash’ buyer is virtually a misnomer.  The problem with the installment plan is obvious:  What if the business should suffer reversals during the buyout period?  Do you really want to come out of retirement to save the business and go through another sale all over again?

i806a_One-Way Buy-Sell Agreements_001The One-Way Buy-Out arrangement not only addresses all the issues cited above, it also protects against reversals and can secure your retirement, as well as the security of employees and family if something should happen to you before you get your ducks lined up.

Want to learn more?  You can get my report here!

Enjoy,

Jim


Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER® professional and An Accredited Investment Fiduciary® serving private clients since 1991.   Jim is Founding Principal of The Independent Financial Group, a  registered investment advisor with clients located across the U.S.. He is also licensed for insurance as an independent agent under California license 0C00742. The Independent Financial Group does not provide legal or tax advice and nothing contained herein should be construed as securities or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader. The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriate licensed professional.

Department of Labor Wants Consumers To Know Their Advisor’s Fiduciary Status

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Jim Lorenzen, CFP®, AIF®

The DOL wants investors to know who their “advisors” are and just how they operate when giving advice to consumers regarding their retirement accounts, i.e., 401(k)s, IRAs, etc.

Under the new rules, which are scheduled to be phased-in over time beginning in April, any financial advisor providing advice on retirement accounts must act as a fiduciary – clients’ best interest must be the sole consideration – as opposed to operating under the old “suitability” standard – as long as the investments recommended are suitable, they pass the test, i.e., the recommendation doesn’t have to be in the client’s best interest.

RIAs (Registered Investment Advisors) have been operating under that standard for all client accounts for years; but “dually-registered” financial advisors – those selling securities as registered representatives of broker-dealers who are also registered as RIAs – have been utilizing two different standards, thus providing a confusing landscape for many investors who may find it difficult to determine just when their advisor is wearing which hat.

Commissions aren’t really the issue; however, because of the conflicts commissions can create, any advisor who provides advice or recommendations on retirement account investments for commission compensation will be required to provide the client with a Best Interest Contract Exemption (BICE) agreement.

The DOL has posted a consumer protection piece on their website, containing a more complete explanation, as well as a list of questions consumers should ask their advisor.  See DOL Consumer Protection Rights.

Hope you find this helpful.

Jim

 


6a017c332c5ecb970b01a5116fb332970c-320wiOpinions expressed are solely those of the author.  The Independent Financial Group does not provide legal or tax advice and nothing contained herein should be construed as securities or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader. The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriate licensed professional.  6a017c332c5ecb970b01a51174caed970c-120wiJames Lorenzen is a Certified Financial Planner® professional and an Accredited Investment Fiduciary® in independent practice since 1991.   The Independent Financial Group is a fee-based registered investment advisor with clients located across the U.S.  Jim is also licensed for insurance as an independent agent under California license 0C00742. Jim can be reached at 805.265.5416 or (from outside California) at 800.257.6659.6a017c332c5ecb970b01a51174cbb0970c-120wi

Business Valuation Methods – Which One is Right for You?

business movingJim Lorenzen, CFP®, AIF®

Business valuation is something that most business owners don’t think about until they decide it’s time to sell.

Big mistake.

Business valuation can be a powerful planning tool!

  • How willl this capital expenditure impact the value of my business?
  • If my partner(s) pass away, how can I buy-out the partner(s) spouse(s) interest – they may know little about the business!
  • If I want to leave the business to one of my children, how will I value that child’s inheritance to be fair to other children who may not want the business – and how will everything get funded?

You get the idea.  Your imagination can come up with a lot of reasons for knowing how much a business is worth and how future decisions/events may impact it’s value.

Here’s another one:  You’re key employee dies, or just leaves the business.  When key employees are no longer on the scene, it’s an event that can impact supplier relationships (and terms), as well as banking relationships (and terms), not to mentions client or customer relationships.

But, valuations are expensive.

Are they?  Formal appraisals for sales or mergers and acquisitions can seem expensive; but, informal valuations for planning purposes can be valuable, widely accepted, and far less expensive.

A blog post can’t cover all they types of business valuations; but, it can help in determining which of the move most-accepted methods may be right for you!

Maybe this little chart will help:

 

i601b_businss-valuation-methods_slide

If you’d like to see a sample business valuation report, just click on the button below:
Click Here to get your Sample Business Valuation Report

For more on business valuations, see our Business Valuation Report.

 

Hope this helps!

Jim

 

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Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER® professional and an Accredited Investment Fiduciary® serving private clients’ wealth management needs since 1991.   Jim is Founding Principal of The Independent Financial Group, a Registered Investment Advisor providing wealth management, retirement planning and investment advisory services.  He is also licensed for insurance as an independent agent under California license 0C00742.  Jim’s background includes founding, building, and selling five successful businesses and international consulting.  He has been the headline speaker at more than 500 national and international association and corporate conventions for clients such as Foster Grant, Hobie Cat, CapCities/ABC, H.R. Textron, Hearst Corporation, The National Management Association, the National Newspaper Association, and Cox Communications, as well as scores of state, regional, and national conventions.  Jim has also been heard on American Airlines’ Sky Radio on more than 19,000 flights and has been published in the Journal of Compensation and Benefits.

The Independent Financial Group does not provide legal or tax advice and nothing contained herein should be construed as securities or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader. The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriately licensed professional.  All images used in this communication are in  public domain unless otherwise noted.

 

Will My Annuity Income Really Increase?

piecing-retirement-puzzle-pathJim Lorenzen, CFP®, AIF®

Annuities can play a valuable role in a retirement portfolio; but, often they’re somewhat oversold.

Should equity-indexed annuities serve as a substitute for stocks?

Short answer: No.  And, when making historical performance comparisons, you’d be better off comparing them to CDs and traditional fixed annuities.  An equity-indexed annuity is nothing more than an interest-bearing IOU from an insurance company paying an unpredictable interest rate each year… anywhere from 0% up to the “cap”, which these days can be around 4-5%.   So, do the math:  if you get the maximum cap in two out of three years – let’s assume 5% – and zero in every third year, you’re averaging 3.33%.  It’s up to you to decide whether that’s a good return.  It is tax-deferred until withdrawn, but you also have a liquidity issue.

As I said, in some cases, they can make sense for a portion of a bond portfolio because of downside guarantees from the insurance company; but, you should also see if another alternative might make more sense.

 “My annuity Living Benefit is guaranteed to return 5-10% each year!”

Not likely (translation: No).  Too often, people look at the ‘income benefit base’ in the paperwork and assume (because they see a dollar sign in front of the number) they’re looking at real money.  Not so.

Think of the income benefit base as “sky miles” – it’s a number that’s used to calculate the amount of income that will be generated and has nothing – zero – to do with the return on the policy itself.

Technically, many, if not most, annuity offerings state that if the account value ever exceeds the income benefit base, the purchaser will receive a ‘step-up’ in income.  Realistically, however, it’s not likely (translate: won’t happen) these days, considering the spreads and cap rates the insurance companies are using.  As long as living benefit income is calculated on the income base vs. the account value, you shouldn’t expect anything beyond what’s guaranteed on the first day of the policy.

If you’re considering purchasing an annuity, there are seven things you should consider ahead of time.  You might find this short report worthwhile.

Enjoy!

Jim

Economy Maybe Not So Strong After All

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Jim Lorenzen, CFP®, AIF®

The new jobs report shows 178,000 jobs were created last month – and much of the media has reported that number; however, there’s a number missing:  All but 9,000 were part-time.

While unemployment has dropped from 5% to 4.6% over the past year, the participation rate has remained constant and those eligible workers not in the labor force has actually gone up, as you can see.

All of this, of course, seems to be forming a pattern occurring in an environment of increasing national debt.   If you want to give the politicians your own feedback on this, there are resources you can use.

If you’re one of those trying to navigate retirement planning in the midst of all the media `white noise’ and financial uncertainty, it might help to have a roadmap.  Maybe I can help.  You can begin here.

 

Jim

 


Jim Lorenzen is a CERTIFIED FINANCIAL PLANNER® professional and An Accredited Investment Fiduciary® serving private clients since 1991.   Jim is Founding Principal of The Independent Financial Group, a  registered investment advisor with clients located across the U.S.. He is also licensed for insurance as an independent agent under California license 0C00742. The Independent Financial Group does not provide legal or tax advice and nothing contained herein should be construed as securities or investment advice, nor an opinion regarding the appropriateness of any investment to the individual reader. The general information provided should not be acted upon without obtaining specific legal, tax, and investment advice from an appropriate licensed professional.

Planning to Roll Your 401(k) to Your Own IRA?

Jim Lorenzen, CFP®, AIF®

Getting ready to retire?  Planning to roll your 401(k) into your own IRA?  It will pay to do your homework first.

To help you get started, you might find our 401(k) Rollover Review helpful.  It contains information on changing jobs, retiring, methods, rollover taxation issues, and more.

i303a_ira-rollover-review_overview-report_vsa_001Click Here for your 401(k) Rollover Review!