Monthly Archives: January 2016

What is Fee-based Financial Planning?

Money can’t buy these financial plans.

One question we are often asked is, “What is fee-based financial planning?”

This is because fee-based financial planning is our approach to helping clients manage their money, and they want to know what it means and how it affects them.

Of course, the term is a bit of a misnomer; it suggests that clients pay a fee for our financial planning services. But in fact, it means so much more.

When a financial planner or advisor invests a client’s funds into an account, they are paid a percentage of the assets under management. That is, the advisor receives payment by managing your investments.

Benefits of Fee-based Financial Planners

The real benefit of fee-based planning is the advisor’s incentive to grow your account. Because they only get paid more when they manage more, they are motivated that much more to work toward your investment goals. This typically works to the client’s advantage, because it eliminates the conflict of interest when advisors only recommend products that pay a commission.

Fee-based financial planning is typically more holistic. Rather than focusing on just investments or just insurance, the fee-based model encompasses all aspects of a client’s financial needs. This can include estate planning, cash-flow planning, taxes, retirement, insurance, and investments – all of which affect your goals in different ways, at different points in your life.

Most importantly, our approach to financial planning helps to address some of the pressures to buy or sell investments. This is because our compensation in our financial planning accounts is not tied to trading activity or the sale of investment products.

Simply put, fee-based financial planning strives to keep your best interests at the forefront of the planning process rather than focusing on a specific investment.

If you would like to discuss the fee-based model and how it impacts your financial goals, please feel free to contact Guidant Wealth Advisors at (847) 330-9911.

 

What’s the difference between wills and living trusts?

Wills are not the same as living trusts, though they both offer distinctive benefits. Let’s answer the question once and for all: What’s the difference between a will and living trust?

Difference between Will and Living Trust

When someone wants to leave certain assets behind for a third party – often, a family member or close friend – they may consider drafting a will or setting up a living trust.

Unfortunately, these two terms are sometimes used interchangeably, leading to confusion about which estate plan is most beneficial.

To help you understand the difference between wills and living trusts, we offer the following guidelines:

Wills

A will is a legal document that defines how a person wants to distribute his or her assets after death.

Creating a will is fairly easy; in Illinois, for example, you can write your own will and validate it with your signature and those of two witnesses. Other states may have additional requirements.

The cost of setting up or changing a will is low, so it may be a good option if your financial situation isn’t complex or you want to be able to modify the will quickly and without a lot of hassle.

Wills usually require probate court and can be challenged after you die, which are a couple things to consider before deciding to create a will or living trust.

Living Trusts

A living trust is a collection of your assets, which can include your cash, property, investments, and other items of value. When you create a living trust, you have to re-title these assets to be owned by the trust, so that the trust owns your assets. When you pass away, the assets of the trust are distributed to your beneficiaries.

Creating a living trust is more complex than creating a will. In fact, it may be helpful to work with a financial planner and estate planning attorney to ensure the trust is set up correctly and legally. Living trusts are usually more expensive to set up, due to their complexity.

When you create a living trust, you usually avoid probate court and have greater control over the way your assets are distributed. They are also more flexible than a will, and generally help your heirs avoid certain estate taxes.

Want to know more about the differences between wills and living trusts?

Contact Guidant Wealth Advisors to learn about certain estate plans and how they impact your financial situation, now and after your death.   

– This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.

4 Hidden Costs of Retirement

What is the Cost of Retirement? – Plan for Retirees

Planning for retirement means a lot of discussion about finances, so knowing exactly what to expect when you get there can help you set realistic goals.

Most pre-retirees have a good grasp on their day-to-day living costs and monthly bills, but many do not think about the larger expenses that occur less frequently.

These irregular expenses can place a financial burden on retirees who live on a fixed income, but they don’t have to if you educate yourself now and prepare for their arrival.

Let’s take a look at four of the hidden costs of retirement:

Healthcare

Most pre-retirees expect to pay Medicare premiums and routine medical bills, but what some may not plan for are hidden costs like new glasses or hearing aids, dental and vision care – things that are still necessary and maybe even more so as you age.

If you are currently employed, you can explore setting up a Health Savings Account (HSA) with your employer and continue to use it after you enroll in Medicare. This willmay help defray the costs of these medical services and devices.

Major Home Repairs

When planning for retirement, you may want to think past the usual home maintenance like painting and landscape. Roofing specialists tell us that most roofs need to be replaced every 20 to 50 years depending on the material. Windows, especially if they are drafty, might need to be replaced to help you save money on energy bills. You may need a new air conditioner or water heater. All of these replacements can be significantly expensive for retirees, so it can be helpful to save for them from the beginning.

New Car

Even if you begin retirement with a fairly new model vehicle, eventually you will need to pay for repairs and maintenance. Some day, you may need a new vehicle or want to purchase a second one. Pre-retirees can startconsider saving every month, so that when the time comes they are financially prepared to repair or replace the vehicle.

Vacation

Yes, even though you are in retirement, you may still want to get away to somewhere warm (if you are in a colder climate) or take that trip abroad. Talking about your travel plans in retirement – before you retire – can make it easier to take off when you want to do so.

An important thing to consider here is that every person has different financial circumstances, obligations and goals. To learn how to make a plan for retirement, you can speak with a financial advisor about your unique situation.

Going Green in 2016

2016 is finally here! The New Year gives us an opportunity to set, but more importantly keep, our New Year’s resolutions. We at Guidant Wealth Advisors have decided to set our own resolution for 2016.

We pride ourselves in always striving to do our very best for our clients, but in 2016 we want to also focus on “becoming green.” Paperless statements, increased email communication and electronic signatures will not only increase efficiency and accessibility for our clients, but also allow us to help protect the environment we all live in.

Here are some of the ways you can help us reach our goal of becoming paperless in 2016:

  1. Receiving and sending documents or forms via email rather than regular mail
  2. Signing documents electronically using eSignature
    • eSignature enables you to complete paperwork in a much more efficient manner, avoiding a trip into the office or to the mailbox. The information transmitted is secure and protected. eSignature also allows our advisors to sign off on documents while traveling or out of the office, which helps to lower the amount of processing time for certain procedures.
    • Opening and signing eSignature documents is very simple. You will receive an email from Docusign; the contents of that email can then be opened using a secure password (usually the last four digits of your social security number). Once the email is opened, a signature can be generated by a click of the mouse. You, too, can take advantage of the many benefits of eSignature as long as we have your email address and a valid Driver’s License on file.
  3. Signing up for Account View Access and becoming paperless
    • Account View Access (AVA) is an online platform, which will allow you to view your investment account(s) Once registered, you will be able to view account values, account positions, transactions, and all of your monthly and quarterly statements. Please contact Klaudia Gryfik at Klaudia.Gryfik@guidantwealth.com to sign up or ask any questions about AVA.
    • After your AVA profile is activated, you will have the option to receive monthly and quarterly statements, prospectuses and trade confirmations electronically rather than in the mail. You can become paperless on all four, or pick and choose between the four types of documents.
  4. Receiving an electronic rather than a hardcopy of your Meeting Presentation
    • Instead of providing you with a hard copy of the presentation, we encourage you to receive an electronic version after your meeting.

Guidant Wealth Advisors would like to strive to become paperless, but we understand some of our clients are not comfortable with receiving documents via email or signing forms electronically. With that in mind, we will continue to send you paperwork via regular mail if that is your preferred delivery method.