Our Blog

DWM is committed to learning for its team, clients and friends. In this changing world, it’s extremely important to stay current in all areas impacting your financial future.

We encourage all of team members to “drill down” on current topics important to you and contribute to our weekly blogs.  Questions from our clients and their families are often featured in our blogs.  

Financial literacy for clients and their families is very important to us.  We generally hold an annual wealth management seminar for all of our clients.  We encourage regular, at least semi-annual, meetings in person with our clients to review family updates, progress on financial goals, asset allocation and performance of investments.  We’re happy to assist younger members of the family as part of our total wealth management program.

Here’s our latest blog:

 

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What’s Ahead for the Global Economy and Financial Markets?

Written by Les Detterbeck.

2017-0318-global economy 002Last week, the Federal Reserve raised rates- the third increase since the financial crisis.  Yet, despite world economic growth and the stock markets surging since President Trump’s election (until yesterday), the Fed is still cautious about the future.

The world economy has been picking up.  The Economist reported last week that “today, almost ten years after the most severe financial crisis since the Depression, a broad-based economic upswing is at last underway.”  This is a big change from the early months of 2016 when stocks were down 10% or more due in part to anxiety about China’s economy and related plunging raw material prices.  Fortunately, China, through controls and stimuli, turned things around and by the end of 2016, China’s nominal GDP was growing again.

At the same time, global manufacturing has gotten stronger.  Factories are much busier in the U.S., Europe and Asia.  Taiwan and South Korea are rocking.  Worldwide equipment spending is up; growing at an estimated annualized rate of 5.5% in 4Q16.  American companies, excluding farms, added 235,000 workers in February.  The European Commission’s economic-sentiment index is at its highest since 2011.  Japan, whose growth has been anemic, has revised their 2017 forecast from 1% to 1.4%.

The stock markets have, until yesterday, risen dramatically based on both current economic growth stats and expectations about the future.  With Mr. Trump’s election, there has been hope that taxes and regulations will be reduced which would help businesses and increase corporate profits.  Further, the expected return of $1 trillion of untaxed cash held overseas by American companies could be coming back (repatriated) at new low tax rates.  These funds could produce a big boom in business investment.  And, then add to this the possibility of a $1 trillion private-public infrastructure push for America. Mr. Trump has been talking about growth of 3.5-4%.  There’s been lots of optimism.

Yet, Fed officials forecast growth of only 2.1% this year; about where it has been for 8 years.  So, what’s their cause for relative skepticism?

The list of concerns includes fears about protectionism stifling trade, political disruption in Europe, China’s ability to sustain strong growth, and closer to home, whether or not the White House and Congress can work together to get legislation passed.  If the repeal of Obamacare gets sidetracked, there is concern that tax reform and infrastructure will endure the same fate.  And, of course, we haven’t even talked about a black swan- an unexpected event of large magnitude and consequence.  All bets are off in the case of major problems such as war, terrorism or some other major catastrophe.

We could be on the precipice of a new era with the cutting of taxes and regulations and a huge infrastructure boom creating a turbocharged economy.   Or, we could have a repeat of the many times in the past decade when optimism at the start of the year faded as the year progressed.  No one knows what the future holds.

Yesterday’s stock market declines of roughly 1% were, in large part, a concern about the ability of the White House and Congress to enact their legislative agenda, starting with the repeal of Obamacare.  People are nervous that if the health-care bill doesn’t pass or gets delayed, what will that mean for other policies.    Tax cuts could be delayed and even face a tougher fight in Congress.  Treasury Secretary Steven Mnuchin had earlier thought that tax reform would pass Congress by August and now he is hoping for early next year.  And, infrastructure would come after that.

With all of that in mind, the Fed understandably is cautious and we at DWM are as well.

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Why is Alphabet Soup Important to You?

Written by Nick Schiavi.

GettyImages-155361454-56a636d83df78cf7728bdb9aWhen I first joined the Detterbeck Wealth Management team, I knew it would not be long until I started my designation pursuit. Three of the most respected designations in the financial services industry are the CFA (Chartered Financial Analyst), CPA (Certified Public Accountant), and the CFP® (Certified Financial Planner). Each of these designations are considered to be the best of the best in their niche. “The CFA designation is considered the gold standard among financial professionals worldwide (Finance Professional Post, New York Society of Security Analyst); meaning someone who holds this designation is a chartered professional when it comes to portfolio and investment management. If the CFA is considered the gold standard of finance, it is easy to see the CPA has the same importance with respect to accountancy. Where the CFA and CPA focus on portfolio management and accountancy/tax, respectively, the CFP® focuses on comprehensive financial planning as a whole.  Someone who holds a CFP® designation has proven competence in all areas of the financial planning process including: financial statement preparation and analysis, investment planning, income tax planning, education planning, risk management, retirement planning and estate planning. DWM founders, Brett and Les Detterbeck, understand the importance of continuing education and have set the bar high for the rest of the team. Brett holds his CFA, CFP®, and AIF; while Les holds his CPA/PFS, MBA, CFP®, CFA, and AIF®. They understand what it takes to become true financial planning experts and help pave the way for the rest of the DWM team.

The CFP® or CERTIFIED FINANCIAL PLANNER™ certification is the most respected financial credential for financial planners, financial firms, and those seeking the advice of a financial planner. Therefore, the CFP® is a designation new DWM team members set their sights to obtain, however, there are many other well respected designations in the industry as well. Rather than jumping right into the CFP®, the team and I decided to go after a different designation; one that is specific to our clients and is a great stepping stone to the CFP®. I decided to pursue becoming an Accredited Wealth Management AdvisorSM (AWMA®).

“The AWMA® professional education program is the nation’s original and most well-respected designation for providing financial advice to high net worth clients”. The coursework consists of roughly 2,000 pages of material, 25 hours’ worth of video sessions, and a 4 hour examination that must be taken within 6 months of signing up for the class. DWM team member Grant Maddox is also pursuing the AWMA® and will be sitting for his test later this month.

While the AWMA® is a great program and allows a individual to become specialized in working with high net worth clientele, it is not the only path to becoming a financial planning professional. For example, DWM team member Ginny Wilson took a different path by obtaining the CRPC® or Chartered Retirement Planning Counselor℠. The CRPC® is the nation’s premier retirement planning credential and someone who holds it is considered to have mastered every step of the retirement process and can create a “roadmap to retirement” for almost any client.

As the entire DWM team knows, it is a bit of an adjustment working during the day and studying at night/mornings/on the weekends, but most of the information is very interesting and gives us the knowledge to help clients on their path to financial freedom. I learn something new every time I sit down to study. While I find investment strategies to be the most interesting coursework topics, I probably benefitted the most from learning all of the different estate planning techniques, as I had zero experience with this aspect of financial planning prior to joining DWM. The most eye-opening part of this entire process is just how complicated financial planning can be. If someone does not have the correct asset allocation funded in the proper kind of account, proper estate planning, or doesn’t fully understand all of the different tax ramifications that can come with financial planning, etc., it is possible they could hamper or damage their plan. Planning for your money must be done thoroughly and correctly.  The entire DWM team has dedicated thousands of hours on continuing education, and we are still all learning every day. Working with an advisor who lacks the proper credentials could end up costing you money.

Even though I am still just starting my wealth management journey, I am thrilled I was able to obtain my first designation, AWMA®, two weeks ago. On top of that, I realize now more than ever how important it is to work with a firm like DWM because the alternative could mean working with someone who is not as qualified, thus, costing the client money, servicing and care.  Continuing education is a valued process at DWM and we recognize its importance to our clients. All designations require continuing education classes, seminars, etc., which we welcome as an opportunity to expand our knowledge and be in a position to provide even greater value to our clients.

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Safe and Sound

Written by Grant Maddox.

internet-securitySecurity, or a lack thereof, has been a hot topic in the news lately, ranging from high-tech hacking scandals to sensitive information leaks. During a time of such concern, we can all agree that security is a top priority in our lives and cannot be overlooked or taken for granted. Whether it is national security, personal security or investment security, one thing is for sure - security is essential in our lives.

The trusted preferred custodian of DWM, Charles Schwab, has always found new ways to implement innovative security functions to protect both the advisor and the client. In addition to a focus on low-cost trading, Schwab has also always focused on investment security and client interests.

Charles Schwab takes multiple steps to ensure the security of client and advisor accounts, and to guard against any potential unauthorized access. Let’s examine some of these key security measures in depth.

Login Authentication and Encryption

SchwabSafe is collection of security measures that ensures the security of your information and accounts. Schwab.com uses advanced encryption technology, such as 128-bit Secure Sockets Layer encryption, to guarantee private communication and secure authentication on all accounts. The website also uses the highest level of Extended Validation certificate. This means that when you’re logging into the website, you will see a green web address bar that indicates all of your information is being protected by SchwabSafe.

Security Tokens

Charles Schwab also offers a free token, available in the form of a key fob or as a phone application, that makes each login as secure as possible. A token creates a six-digit number that serves as an additional numeric password each time you log in to your account. This token provides peace of mind and as a great security measure for clients and advisors. You can order a free or set up your phone application token from Schwab by calling 800-435-4000.

Monitoring Unauthorized or Suspicious Activity

Another great security feature is that Schwab monitors suspicious account activity 24/7. Schwab utilizes pattern analysis and advanced monitoring systems to constantly scan for suspicious or potentially unauthorized activity on your account. SchwabSafe fraud teams are specifically dedicated to ensuring that your account activity is authorized and they will call us and/or you if they detect any unusual behavior, or want to confirm third party checks and other distributions.

Security Tips

If you’re still worried about the security of your financial accounts, there are a few helpful tips you can utilize to put your mind at ease. Make sure that your contact information on your account is current and accurate, so you can be immediately updated in case of suspicious activity. Be wary of using public computers when logging into sensitive accounts. Always make sure to log out of your account when you are finished and do not use computers you don’t trust. As mentioned earlier, using a token when logging in each time is also a very effective way to ensure the security of your personal information.

Make sure your password is unique and has not been used for any of your other accounts. You should always try to change your password every six months. Admittedly, it can be difficult to keep track of multiple different passwords so it may be a good idea to have a system for keeping track of these. However, a sheet of paper does not qualify as a safe and effective system! If you are tech savvy, there are a multitude of phone applications that can maintain your passwords.

In addition to many added security features, accounts held at Charles Schwab are insured by the Securities Investor Protection Corporation (SIPC) in the event of a broker-dealer failure. The SIPC provides up to $500,000 and up to $250,000 for uninvested cash equivalents of protection for each separate account held at Charles Schwab. Furthermore, excess SIPC in an aggregate amount of $600 million in protection is provided for Schwab customers through underwriters at Lloyd’s of London and London insurers.

Here at DWM, we take our clients’ security very seriously. For compliance reasons we are not allowed to hold anyone’s login password for any reason. We operate through cloud based technology to streamline our process and provide increased security. For any questions or concerns regarding security, please feel free to contact us at DWM anytime.

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