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fiduciary

What is Regulation Best Interest?

By | 2020, Money Moxie | No Comments

By now, if you have accounts with SFS, you have received a new form called Customer Relationship Summary (CRS) from Securities America and an ADV Part 3 from Smedley Financial Services. So, why are you getting these forms, and what do they actually mean to you?

There is a new regulation that is designed to put your best interest first. It is called Regulation Best Interest, or Reg BI for short, and it went into effect on June 30th, 2020.

Reg BI requires an investment professional to act in your best interest and hold themselves to high standards of disclosing all important information, caring for their client, reporting any conflicts of interest, and maintaining strict compliance.

Form CRS is intended to explain the customer relationship with our Broker-Dealer, Securities America. This form clarifies the difference between investment services and advisory services and explains the difference between brokerage and advisory fees. It also details how the Broker-Dealer makes money and any disciplinary history for Securities America.

Form ADV Part 3 is specific to Smedley Financial. This form is intended to clarify the types of services we can provide, the fees you may pay, our fiduciary obligation to act in your best interest, any conflicts of interest, how we make money, and the fact that we do not have any disciplinary issues.

These forms are a good step forward towards putting a client’s best interest first. However, in my experience, most clients already expect this of their financial advisor.

The good news is that since the beginning, Smedley Financial has been a fiduciary and has always strived to put our clients’ best interests first. And we will continue to do so. For our clients, Reg BI should not have any meaningful impact. It should raise the bar for other “advisors” to make sure they hold themselves to the same fiduciary standard.

Reg BI also clarifies the sometimes-muddy waters of who can call themselves “advisors.” Professionals who just sell insurance or a product, or who only process trades as a stockbroker, cannot call themselves “advisors.” An “advisor” is someone who has the appropriate securities license to purchase stocks and bonds and is also licensed to give clients advice.

At Smedley Financial, we hold ourselves to an even higher standard by not only being investment advisors but also financial planners and life-centered planners. Our financial planning helps you figure out what resources you have, will have, and will need in order to meet your goals. Our life-centered planning helps you figure out how to live the life you want with the time you have left on this planet.

We appreciate you as clients, especially during these unusual times. If you have any questions regarding the forms provided or would like to review your plan, don’t hesitate to call us.

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Our Passion Is Your Financial Success

By | 2019, Executive Message, Money Moxie, Newsletter | No Comments

At Smedley Financial all of our efforts are focused on one thing: Your Financial Success! Let’s specifically define what those words mean. Financial planning is ultimately about getting you to where you want (and need) to be. It is using what you have to accomplish your goals.

How do we view our role as your financial fiduciary?

Being Your Financial Bodyguards: As your financial bodyguards, we strive to protect you from unscrupulous people. We strive to protect you from those that wish to separate you from your money permanently. At the other extreme, we strive to be your financial bodyguards between well-meaning friends and family. Simply put, few people can afford to lose any money. Loans to loved ones seldom get repaid. This is especially true if you have retired or lost a spouse. Hint: That’s why we need you to call us about any and all requests for money.

Taking the Right Types of Risk: Specifically, we strive to help you take more of the right types of risk and avoid the wrong types of risk. If you are too aggressive (greedy) or too conservative (fearful), you may end up broke. Caution: Being too extreme, either way in your risk-taking, may be dangerous to your wealth.

Protecting and Growing Your Assets: Protecting your assets is imperative for your financial success. The majority of people tell us they don’t want to lose what they have already worked for and accumulated. Hence the adage: First, do no harm.

Growing your assets is crucial going forward. We have had several clients live well into their 90s, and one even made it to 100! Hint: Our job is to strive to manage your personal wealth. Your job is to manage your emotions, never getting too high or too low.

By using Smedley Financial, what does this mean to you? It means we are fully invested in you. We not only put your interests ahead of ours, but we also strive to offer you our best advice, knowing what we know, based on what we would do in your same position. Our passion is your financial success.

Bullish Best Wishes,

Roger M. Smedley, CFP®
Chief Executive Officer

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Why You Should Care About The Fiduciary Standard

By | 2016, Money Moxie, Newsletter | No Comments

There has been a great deal of media attention surrounding the Department of Labor’s (DOL) recent ruling regarding the “Fiduciary Standard,” and with good reason. Tony Robbins, self-help author and motivational speaker, recently asked random people walking down Wall Street, “What is a fiduciary?” With the exception of one individual, the answer was, “I don’t know.”

This made me wonder – Do our clients understand the benefits of working with a fiduciary?

When Smedley Financial Services, Inc.® began back in 1982 as a registered investment advisor, we became a fiduciary. We have always believed that putting our clients’ interests before our own is the best way to create a lasting partnership with the people we serve.

fiduciary standard

What is the Fiduciary Standard?
The Fiduciary Standard requires that we avoid conflicts of interest. Our recommendations must meet your needs and be in your best interest.

In contrast, financial professionals such as brokers, insurance salespersons, and other advisors operating under the “suitability standard” are merely required to ensure an investment is suitable for a client when purchased. There is little obligation to offer a better investment nor a requirement to monitor those investments in the future.

Why the big concern?
As company pension plans have diminished, Americans now must set aside more of their income to help supplement their own retirement income. This can be a daunting, time consuming task.

At the same time, the retirement investment landscape has only grown more complicated. Lack of investor savvy and awareness regarding retirement account types, not to mention the emerging number of investments available within those accounts, has led investors to rely on the counsel of professionals.

Unfortunately, not all professionals are alike. The new DOL rule seeks to level the playing field, requiring all financial professionals to follow the new Fiduciary Standard. Isn’t it sad that a law must be put in place forcing financial professionals to do the right thing?

Will the rule protect investors?
The new DOL rule will require more work for financial professionals, but hopefully it will also protect investors saving for retirement.

The DOL also states that cheaper is not always better. Price cannot be the only determining factor when making a decision, especially one as important as your financial future.

Consider what you are getting for the fee you are paying. Does your fee include an advisor that will help you determine your financial goals, prioritize those goals, and design a plan to help reach your goals? Will you get ongoing monitoring of your goals and the investments you are making? What if something changes? Who will be there to help address the changes in your life that may impact your financial destiny? What will happen during periods of increased market volatility and who will help you determine if your investments are too aggressive or too conservative?

These are just a few of the concerns that must be considered, but are often overlooked when the primary focus is having lower fees.

You are our primary concern. We invite you to call or come in and sit down with us anytime you have questions. We welcome your call.

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Complacency through Success, Be Warned!

By | 2016, Executive Message, Money Moxie, Newsletter | No Comments

Dear Valued Financial Partners and Friends,

Managing your retirement dollars is truly a two-stage process. During your accumulation phase—in your younger years—your saving and investing process is pretty much on automatic. You sign up for your employer’s 401(k) plan by marking a few boxes and signing a few forms. You basically set it and forget it. Right or wrong, your 401(k) is on autopilot without you making many adjustments.

The accumulation process can be dangerously deceptive. The years of automatic saving and investing could set you up mentally and emotionally for something we affectionately call the “Complacency through Success Syndrome,” exactly at the wrong time.

At retirement, complacency through your savings success may lull you to sleep. Like many people, you may suffer from financial hypothermia. At retirement you have to wake up from your successful accumulation days and become actively involved. Specifically, you have to take your retirement funds off autopilot and switch to being proactively involved in making multiple and intertwined financial decisions. For many people this is very uncomfortable and not easy. It is fraught with so many moving parts and numerous and dangerous landmines and booby-traps. And, you don’t get a do over!

For you, your retirement distribution phase doesn’t have to be ominous and painful. Because helping you succeed financially is what we do. And we’ve done this for 34 years. Believe it or not, protecting clients from themselves in making unwise and imprudent financial decisions is one of the most important things we do!

Here are some of the landmines that can blow up (or undo) your lifetime-savings nest egg: elections and timing on pensions, Social Security, Medicare, IRAs, and 401(k)s to name just a few.

Other potential problems include not dealing with a fiduciary (not all financial professionals are required to put your interests first), promises of high returns, meaningless guarantees, and so forth. Smedley Financial Services, Inc.® has been a fiduciary since our first day in business, June 4, 1982. We can help you avoid financial landmines and scams. We put your interests first and are bound by law to do so.

So don’t self-sabotage what you have worked for all of your financial life. If you think financial planning is expensive, try ignorance! None of us can afford to make financial mistakes at retirement. Your financial success is our passion!

Bullish Best Wishes,

Roger M. Smedley, CFP®
President

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