Glass Jacobson Named Top RIA
July 18, 2011 | 
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Glass Jacobson Investment Advisors has been named to Financial Advisor Magazine’s list of Top Registered Investment Advisors (RIAs). The 2011 survey rankings appeared in the July 2011 issue. This national survey ranks RIAs by total assets under management.
In the accompanying article, Financial Advisor Magazine points out that investors and investment advisors are finally starting to bounce back from the financial collapse of 2008. This year, RIAs grew their average total employees from 16.2 to 17.6, their total client relationships from 458 to 513, and assets per client increased by 6.13%.* Glass Jacobson Investment Advisors is proud to be named on such a notable list of nationally respected firms.
Click here to view the full list.
*source: Financial Advisor Magazine, July 2011
Investors- Keep Your Cool in a Crisis
July 7, 2011 | Subscribe to our RSS Feed
When a crisis creates uncertainty, markets often become volatile, especially when the scope of the disaster isn’t clear. For some investors, it may represent a threat; for others, it may spell opportunity. Not every crisis requires a reaction; sticking to a long-term plan is still the best strategy for most people.
Here are some examples of factors that investors sometimes overlook when miking decisions in crisis mode:
Watch the Global Supply Chain
Companies and economies increasingly operate in a global context. The more heavily an industry or company relies on global partners, the more it might be affected by crisis conditions. Think not only about companies that are affected directly by turmoil, but about other companies that rely on them.
For example, China has become in many ways the world’s factory floor, and many information technology services are now outsourced to India. How would a crisis in either country affect global supply chains or communications infrastructure? Might competitors not affected by the crisis pick up at least some of the slack? How might a particular industry be hit by shortages of parts or raw materials? Is a large multinational so geographically spread out that a crisis in one part of the world may have little impact on its overall operations? Oil is perhaps the most obvious example of how a crisis can affect global supply chains. A perceived threat to supplies can affect prices of other assets.
Consider Currency Fluctuations
Currency fluctuations are another factor to consider. Crises in one part of the world can affect that region’s currency. That in turn can affect companies located elsewhere. The 2010 panic over potential default by several eurozone countries strengthened the dollar, and though that may sound like good news, a stronger dollar can hurt U.S. exports.
Currency issues are also important because of what’s called the “carry trade.” This happens when investors use money from a country where interest rates are relatively low–the Japanese yen and the U.S. dollar have been prime examples in recent years–to invest elsewhere at a better rate of return. However, if the cheaper currency suddenly increases in value, the carry trade can reverse as investors put their capital back into the so-called funding currency. That can affect assets denominated in other currencies. For example, the yen soared as investors anticipated that money would be repatriated to deal with Japan’s earthquake/tsunami/nuclear disaster. Some investments denominated in other currencies suffered when investors sold them to invest in yen.
Think Both Long Term and Short Term
Nothing lasts forever. A crisis could create opportunities that eventually peter out, or challenges that later seem trivial. Or it could have little short-term impact but mean profound change over a period of years. When considering whether a crisis represents a challenge or an opportunity, think both short term and long term.
A crisis with potentially long-term opportunities or harmful consequences may mean you may be able to take more time with a decision. If the window of opportunity is smaller or the potential devastation more short term, remember that there are alternatives to an all-or-nothing approach. For example, you could take a small position and see how your investment thesis plays out before committing more. Even if the window of opportunity slams shut, new opportunities often emerge during even the worst of times; missing one now doesn’t mean you won’t find others later. If you’re worried about a potential downturn, you could use other investments to hedge your exposure while retaining a long-term stake, or take profits to protect part of your holdings but leave some money invested in case the crisis is short-lived.
Questions?
Women- Make Retirement Planning a Priority
June 22, 2011 | Subscribe to our RSS Feed
Women face special challenges when planning for retirement. Because their careers are often interrupted to care for children or elderly parents, women may spend less time in the workforce and earn less money than men in the same age group. As a result, their retirement plan balances, Social Security benefits and pension benefits are often lower. In addition to earning less, women generally live longer than men, and they face having to stretch limited retirement savings and benefits over many years.
What can you, a woman in Baltimore, do? Make retirement planning a priority. This Women and Retirement Planning article details steps you should take.
Questions?
vanessa.duchman@glassjacobsonia.com or visit our Women in Business section.
4 Open Estate Planning Windows (closing soon!)
June 9, 2011 | Subscribe to our RSS Feed
As many of you know, Congress enacted legislation late in 2010 (the 2010 Act) that extended many of the Bush income tax cuts that were due to expire on December 31, 2010. The 2010 Act also included many favorable estate and gift tax provisions.
The 2010 Act provides for an increase in both the estate and gift exclusions to $5 million. The Generation Shipping Transfer Tax (GSTT) exemption is also increased to $5 million and indexed for inflation. The top tax rate for taxable estates is 35%.
However, in usual Congressional fashion, these provisions are only in effect for 2011 and 2012, creating the same planning dilemma we experienced last year. Without further Congressional action, on January 2013 we will go back to the pre-Bush tax cut estate and gift rules that provide for $1 million estate and gift tax exclusion, a $1 million GSTT indexed exemption and a top estate tax rate of 55%.
Therefore, the 2010 Act gives us a limited window of opportunity for planning in 2011 and 2012. Planning opportunities include:
- Substantial Gifts to Heirs: Since the $5 million gift exclusion is per individual, a married couple has a combined limit of $10 million. Even if they previously used their prior combined limit of $2 million, a couple now has an additional $8 million gift exclusion remaining. Coupled with the increased GSTT exclusion, direct gifts could be made to grandchildren or great grand children. This could include forgiving loans previously made to heir
- Maryland Estate Tax Considerations: Maryland previously de-coupled from the federal law and still has a limited $1 million estate exclusion with a top estate tax rate of 16 percent. However, Maryland does not have a gift tax, which provides an opportunity to give away assets up to $10 million for a couple and avoid Maryland estate taxes without incurring any federal gift tax.
- Life Insurance Trust: Substantial gifts could be made to life insurance trusts to fund current and future premium payments. The trusts could contain generation skipping provisions allowing the trusts to provide support for generations of heirs.
- Leveraging Technique: There are a number of more sophisticated gift discounting techniques available. These strategies are very attractive in our current low interest rate environment and work best with assets that are expected to increase in value.
This is just a brief summary of some of the planning opportunities available in 2011 and 2012. For a more complete discussion of your particular situation, please contact your Glass Jacobson representative.
Questions?
gary.anderson@glassjacobsonia.com
Marina Sidelnikova Earns Prestigious CPWA Designation
May 6, 2011 | Subscribe to our RSS Feed
Glass Jacobson’s Marina Sidelnikova recently earned the Certified Private Wealth Advisor designation. The CPWA designation, delivered by Investment Management Consultants Association (IMCA), is the only advanced designation designed for financial advisors and consultants who work with high-net-worth clients on the life cycle of wealth. Marina has worked at Glass Jacobson since November 2007 and is responsible for serving the firm’s individual investment clients.
The CPWA marks identify those individuals who have met the experience requirements, have successfully completed coursework in advanced wealth management strategies and applied concepts at The University of Chicago Booth School of Business, and have passed a comprehensive examination covering the following areas: advanced tax planning, asset protection, executive compensation plans, stock options, tax efficient portfolios, business planning, retirement planning, charitable planning, and estate planning. CPWA licensees must also agree to meet ongoing continuing education requirement, uphold IMCA’s Code of Professional Responsibility, and adhere to the Rules and Guidelines for the use of the marks.
IMCA was established in 1985 to set the standards and practices for the investment management consulting profession and provide investment consultants with the credentials and tools required to best serve their clients. IMCA serves more than 7,500 members. For more information about the IMCA or CPWA designation, visit www.IMCA.org.