Cortburg Speaks Retirement

Measuring the Value of a Financial Advisor

October 28, 2020 Miguel Gonzalez, MBA, AIF®, CPFA®, CRC® Season 2020 Episode 7
Cortburg Speaks Retirement
Measuring the Value of a Financial Advisor
Chapters
0:00
Introduction
1:05
Weekly Educational Update
3:45
Week on Wall Street
8:56
Weekly Tax Tip
10:41
Healthy Lifestyle Advice
12:21
Green Living Idea
14:22
Quote of the Week
15:16
Conclusion
Cortburg Speaks Retirement
Measuring the Value of a Financial Advisor
Oct 28, 2020 Season 2020 Episode 7
Miguel Gonzalez, MBA, AIF®, CPFA®, CRC®

Cortburg Speaks Retirement

Cortburg Speaks Retirement / Investment in Stock Market, Financial Planning, Retirement Planning, Money Management

1.Educational Update = Measuring the Value of a Financial Advisor
 
 2. Week on Wall Street


3. Tax Tip =  You Have the Right to Confidentiality

4. Healthy Lifestyle Advice = Get Lost in a Book for National Book Month

5.Green Living Idea = Swap out These 3 Items for a Greener Kitchen

6. Quote of the Week

Show Notes Transcript Chapter Markers

Cortburg Speaks Retirement

Cortburg Speaks Retirement / Investment in Stock Market, Financial Planning, Retirement Planning, Money Management

1.Educational Update = Measuring the Value of a Financial Advisor
 
 2. Week on Wall Street


3. Tax Tip =  You Have the Right to Confidentiality

4. Healthy Lifestyle Advice = Get Lost in a Book for National Book Month

5.Green Living Idea = Swap out These 3 Items for a Greener Kitchen

6. Quote of the Week

INTRODUCTION

Welcome to Cortburg Speaks Retirement

An audio podcast about investing in the stock market, financial planning, money management and retirement planning.  Each Wednesday, we help investors at all stages of life learn how to grow and preserve their money from first job through retirement.

Now here is your host, Miguel Gonzalez.

 

HOST

Hello and welcome to the CORTBURG SPEAKS RETIREMENT audio podcast.   On this episode, I am going to help you measure the value of your financial advisor and recap last week on Wall Street.  Our weekly tax tip is all your protection your privacy while my green living idea involves a greener kitchen.  In addition, this is National Book Month, so our lifestyle advice and quote of the week is dedicated to reading books.

 


1st – weekly educational update

Measuring the value of a financial advisor

What is a relationship with a financial advisor worth to an investor? A 2019 study by Vanguard, one of the world’s largest money managers, attempts to answer that question.    

Vanguard’s whitepaper concludes that when an investor worked with an advisor and received professional investment advice, they saw a net portfolio return about 3% higher over time.[i]

How did this study arrive at that conclusion? By comparing self-directed investor accounts to an advisor model, Vanguard found that the potential return relative to the average investor experience was higher for individuals who had financial advisors.1

Vanguard analyzed three key services that an advisor may provide: portfolio construction, wealth management, and behavioral coaching. It estimated that portfolio construction advice (e.g., asset allocation, asset location) could have added up to 1.2% in additional return, while wealth management (e.g., rebalancing, drawdown strategies) may have contributed over 1% in additional return.1

The biggest opportunity to add value was in behavioral coaching, which was estimated to be worth about 1.5% in additional return. Financial advisors can use their insight to guide clients away from poor decisions, such as panic selling or accepting excessive risk in a portfolio. Indeed, the greatest value of a financial advisor may be in helping individuals adhere to an agreed-upon financial and investment strategy.1

Past performance does not guarantee future results. This study provided feedback and estimates based on customer experience. The value of advice is not a guarantee of performance. Actual returns will fluctuate.

Of course, financial advisors can account for additional value not studied by Vanguard, such as helping clients implement wealth protection strategies, which protect against the financial consequences of loss of income, and coordinating with other financial professionals on tax management and estate strategies.

After years of working with a financial advisor, the value of a relationship may be measured in both tangible and intangible ways. Many such investors are grateful they are not “going it alone.”

 

2nd – Week on Wall Street

 

The failure to reach an agreement on a new fiscal stimulus bill soured investor sentiment and sent stocks modestly lower for the week.

 

The Dow Jones Industrial Average fell 0.95%, while the Standard & Poor’s 500 lost 0.53%. The Nasdaq Composite index slipped 1.06% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, declined 0.44%.[ii],[iii],[iv]

 

Markets Disappointed with Stimulus Impasse

Stock prices ebbed and flowed all week, pulled by the gravity of fiscal stimulus talks in Washington, D.C. As investors saw improving prospects for a new fiscal stimulus bill, stocks rose. As prospects dimmed, stocks turned lower. 

 

Hopes for striking a deal were raised late in the week as comments from a key negotiator suggested that a deal might be getting closer to fruition. The week ended, however, without an agreement, cementing a disappointing week of performance. 

 

Market sentiment was further weighed down by the continued rise in COVID-19 cases in the U.S. and Europe, though anxieties were tempered by the belief that a full economic lockdown was unlikely.

 

New Jobless Claims Fall

Markets have been focused on weekly initial jobless claims as an important input into the state of economic recovery. After weeks of 800,000+ new jobless claims, last week’s report reflected an improving labor market, as new jobless claims rose by 787,000, below consensus estimates of 875,000, while continuing jobless claims fell by more than one million.[v]

 

The report wasn’t entirely positive, however, as more than 500,000 individuals were added to the emergency assistance program that extends unemployment benefits to those who have run out of state unemployment benefits.[vi]

 

THIS WEEK: KEY ECONOMIC DATA

Monday: New Home Sales. 

Tuesday: Durable Goods Orders. Consumer Confidence.

Thursday: Gross Domestic Product (GDP). Jobless Claims.

Friday: Consumer Sentiment.

 

Source: Econoday, October 23, 2020

The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

 

THIS WEEK: COMPANIES REPORTING EARNINGS

Monday: Twilio, Inc (TWLO). 

Tuesday: Microsoft (MSFT), Pfizer (PFE), Caterpillar (CAT), Merck (MRK), Eli Lilly (LLY), 3M Company (MMM), Corning Inc. (GLW)

Wednesday: General Electric (GE), The Boeing Corporation (BA), Ford Motor Company (F), Visa (V), Mastercard (MA), Gilead Sciences (GILD), Blackstone Group (BX), Amgen (AMGN), United Parcel Services (UPS), EBay (EBAY), Norfolk Southern (NSC)

Thursday: Apple (AAPL), Facebook (FB), Twitter (TWTR), Alphabet, Inc. (GOOGL), Southern Company Airlines (SO), Shopify (SHOP), Comcast Corporation (CMCSA), AnheuserBusch InBev (BUD) 

Friday: Abbvie (ABBV), Chevron (CVX), Charter Communications (CHTR)

 

Source: Zacks, October 23, 2020

Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

 

3rd – weekly tax tip
You Have the Right to Confidentiality

According to the Taxpayer Bill of Rights, the IRS won’t share any information that a taxpayer gives with outside parties unless allowed by the taxpayer themselves or the law. This right to confidentiality is one of the 10 rights found in the Taxpayer Bill of Rights.

Also included in the confidentiality clause:

●       The IRS can’t contact third parties, including employers, friends, or banks, for information without giving the taxpayer reasonable notice first.

●       The same confidentiality you have with an attorney also applies to tax professionals working with the IRS on your behalf. 

 

Confidential communications include conversations, messages, and documents that are considered private or restricted between a taxpayer and their attorney or the IRS. 

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov[vii] 

 

 

4th – healthy lifestyle advice
Get Lost in a Book for National Book Month

 

Did you know that October is National Book Month? There’s no better time to get lost in a great story because not only is reading entertaining, but there may also be some health benefits to getting lost in a good book, as well. 

Here are some potential health benefits of reading:

●       Reading may bring existing neural pathways in the brain to life and help the brain remain elastic and active.

●       Reading may decrease mental decline, especially for older adults. 

●       Reading may improve short-term memory and recall capabilities. 

●       Reading may reduce stress and depression

●       Reading may help you fall asleep when used as a bedtime ritual. But, this only applies to reading real books, not e-readers or tablets.  

Reading may have health benefits for people of all ages, from children to older adults!

Tip adapted from Business Insider[viii]

 

5th – Green Living Idea
Swap Out These Three Items for a Greener Kitchen

 

You don’t have to go entirely waste-free to make some beneficial and eco-friendly changes in your kitchen. Just a few substitutions can go a long way towards making your kitchen healthier for you and the environment.

Here are three items you can easily swap out to help make your kitchen greener:

●       Replace single-use plastic containers with glass. Single-use plastic can be found everywhere in your kitchen, from your dish soap to foods in your pantry and fridge. Replace pasta sauce and drink containers with glass instead. Glass containers can be reused in your kitchen afterward or recycled.

●       Turn old t-shirts into cleaning towels. Don’t throw your old t-shirts away, but give them a second life as cleaning towels. Use them to help keep your kitchen clean without using disposable sponges or paper towels.

●       Use what you have until it wears out. Rather than replacing all your existing plastic containers and water bottles with glass or eco-friendly options, use what you have until it wears out. Then feel free to replace them with more environmentally friendly options.

Get creative! What else can you do in your kitchen to make it more environmentally friendly?

Tips adapted from MyModernMet.com[ix]

 

6th – quote of the week

“A reader lives a thousand lives before they die. The person who never reads only lives one.”

– George R.R. Martin

 

Make sure to visit our website, www.CortburgRetirement.com.  Our site is filled with educational videos, eBooks, publications, and financial calculators designed to help you learn more about your finances.  As you search our site, send us a note regarding any questions you may have about any particular investment concepts or products. We will get back to you quickly with a thoughtful answer.

This is Miguel Gonzalez, Retirement Specialist and Managing Partner, with Cortburg Retirement Advisors signing off for this week’s educational update.  

 

DISCLOSURES  

Opinions expressed are subject to change without notice and are not intended as investment advice or a solicitation for the purchase or sale of any security. Please consult your financial professional before making any investment decision. 

All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

CRC conferred by The International Foundation for Retirement Education.

Securities offered through LPL Financial. Member FINRA/SIPC. Investment advice offered through Private Advisor Group, LLC, a registered investment advisor.  

Private Advisor Group, LLC and Cortburg Retirement Advisors, Inc. are separate entities from LPL Financial.

Investing involves risk including possible loss of principal.


[i] https://advisors.vanguard.com/iwe/pdf/ISGQVAA.pdf
[ii] The Wall Street Journal, October 23, 2020
[iii] The Wall Street Journal, October 23, 2020
[iv] The Wall Street Journal, October 23, 2020
[v] CNBC, October 22, 2020
[vi] CNBC, October 22, 2020
[vii]  IRS.gov, October 9, 2020
[viii] BusinessInsider.com, October 9, 2020
[ix] MyModernMet.com, October 9, 2020

Introduction
Weekly Educational Update
Week on Wall Street
Weekly Tax Tip
Healthy Lifestyle Advice
Green Living Idea
Quote of the Week
Conclusion