Okay, I did it again in a recent column. And I got into trouble again. That’s what I get for using the F-word.

“Fiduciary.”

My most recent transgression was to point out the simple fact that insurance agents are compensated by commissions on the products they sell. They have no fiduciary duty to legally act in the best interests of their customers.

Every time I remind readers that sellers of financial products do not have a fiduciary duty to their customers, I get indignant responses from financial salespeople who seem to think I have accused them of being unethical.

Not so. Continue Reading »

“It’s not about the money.” This saying has become almost a cliché among financial planners and therapists who help clients address the emotional aspects of their relationships with money.

We keep using this phrase because it is so true. Overspending, taking unreasonable risks, money conflicts that strain marriages, failing to learn from money mistakes, and a host of other problematic money patterns are not about money. They are about emotions. And since brain researchers tell us that 90% of all decisions are made emotionally, it literally “pays” to pay attention to your emotions. Continue Reading »

BYOB–or not.

Sorry, I’m not inviting you to a “bring your own beverage” party. I’m warning you away from a get-rich scheme called “Be Your Own Banker.”

This idea has floated around the Internet and late-night television for a while now. One of the latest versions is touted on a website that I’m not going to name because I don’t want anyone getting sucked into what is essentially one step from being a scam.

Once you drill down past the initial layers of ambiguity, the basic concept seems simple enough. You buy a large whole-life insurance policy. After you pay into it for several years, it will accumulate a cash value. Then, any time you make a major purchase like a new car, you can borrow against your insurance policy instead of going to a bank.

According to the people selling this concept, you are the big winner here because you’re paying interest to yourself, not the bank.

Continue Reading »

Rapid City, SD – The local wealth planning firm, Kahler Financial Group, Inc, recently announced that Sarah Swantner, Senior Financial Analyst, obtained her Certified Financial Planner (CFP®) Certification by the CFP Board. Swantner also holds a master’s degree in theoretical and applied mechanics earned at Washington University in St. Louis and the University of Illinois at Urbana-Champaign.

Sarah is passionate about analyzing and finding solutions to solve complex problems. She discovered her skills in college as a student of engineering mechanics using math and science to explain and predict behaviors. Prior to discovering her love for financial planning, Sarah spent nine years as an engineer with Hewlett-Packard in Boise, Idaho, developing LaserJet printers.

In 2009, Sarah started engineering financial plans. She loves analyzing complex, real-world client situations and creating financial plans to explain how all the moving parts of the plan – insurance, taxes, estate planning, retirement, investments – interact together.

Swantner moved from Boise to Rapid City, SD, in February 2012, to join Kahler Financial Group, Inc.

No, we are not talking about two countries.  Rather I am referring to our recent company Christmas Party where the Chef d’Cuisine, my wife Marcia, served her Texas style chili and cornbread.  That by itself is not so unordinary, but when you add that she served it on English bone china with gold plated flatware, well, it takes on a bit of eclectivity.

So why stop there with our out of the box celebration?  Most folks would say few drinks go better with chili than beer.  We wondered about wine. So, since we were breaking all the laws of fine dining, we decided to offend all the beer drinkers and have a wine tasting to find what wine pairs with chili. Continue Reading »

One of the biggest adjustments for many people when they retire is making the switch from saving to spending. For years and years, they’ve been putting money away for the future. It’s hard to accept that it’s time to start taking that money out because “the future” has arrived.

Financial planners can help retired clients make this transition more comfortably by helping them decide on a reasonable withdrawal rate to answer the crucial question, “How much can I take out of my portfolio every year?” That rate needs to balance the need to have enough money to live comfortably and the need to make sure there is enough money for the rest of the clients’ lives.

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This is one area of financial planning where pessimism is a virtue. Continue Reading »

Surprisingly, it seems that many advisors and their clients don’t discuss giving as part of an overall financial plan. This was the finding of two new studies by Fidelity Charitable as reported in a June 13 RIABiz article by Lisa Shidler. The surveys, one of financial advisors and one of clients, found that many planners under-estimate their clients’ charitable giving.

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Rick was among the advisors interviewed for the article, which you can read here.

Related Reading:

Even Scrooge Might Like This Way of Giving

Conscious Giving

Does that new employee in your financial planner’s office look too young to know anything about financial planning except how to apply for college loans?

Don’t worry, he or she might have more education in financial planning than you think. According to an article by Jason Kephart published April 29 in Investment News, increasing numbers of colleges are offering majors in financial planning.

This is good news for planning firms and their clients, according to several planners, including Rick, who were interviewed for the article.

Read the entire piece here.

Last week’s column offered four ways to prepare for inevitable financial calamities by building a financial shield against disaster. This week adds four more strategies that are as much about people as about money.

1. Build a good support team before you need one. In the middle of a financial trauma isn’t a good time to find professionals you can trust. This is best done when you are not under pressure and can take the time you need to research, interview, and analyze options. Professionals you need to vet and have on call could include an attorney, accountant, doctor, therapist, financial planner, insurance broker, bookkeeper, and banker.

2. Keep your career skills up to date. Continue Reading »

“Financial advisors, your job—our job—is to take the deep and wide and often perplexing discipline of personal finance and compress, streamline and simplify it for our clients.”

This is the essential point of an article by financial planner and journalist Tim Maurer published February 2 at Forbes.com. Maurer challenges planners to “Do Your Job” more effectively. He includes a suggestion from Rick that planners need to pay more attention to listening to clients.

You can read the full article here.