An Innovative Approach to your Emergency Fund

Contributed by: Timothy Wyman, CFP®, JD

Innovation isn’t a word you generally hear from financial planners. I have to admit my DNA is more about consistency and research-based practices.  However, at times new thinking and methods might just be what the (financial) doctor calls for.

Traditional Emergency Fund Approach

Take the old Emergency Fund – Financial Planning 101.  You’ve heard the advice; place 6-12 months of living expenses in a safe and liquid vehicle (think savings account or Certificate of Deposit) so funds are available should there be an emergency such as a leaky roof, need for a new hot water heater, kids medical bills, etc.  My sense is that this is a good strategy especially for younger folks starting their careers and families.  This strategy provides discipline and limits the chances of abusing credit, which hampers many young families today.

Innovative Emergency Fund Strategy

However, for more seasoned folks like me, perhaps a change in strategy is in order.  Partly due to very low interest rates (that may even become negative soon) as well as hopefully more financial discipline from years making mistakes, you might consider using a ROTH IRA, Home Equity Line of Credit (“HELOC”), or Securities Based Line of Credit (“SBL”) for your emergency fund needs. Here’s a closer look at all three.

Roth IRA in an Emergency

While the ROTH is intended for retirement savings, they do offer some flexibility in that contributions (but not earnings) may be withdrawn penalty and income tax free at any time.  Hopefully the money is not needed and your so called emergency money can grow tax free.  The downside is that not everyone qualifies due to income limitations - that is, of course, unless your financial advisor is not innovative enough to know about the “Back Door Roth”…we do! If you haven’t yet, read this blog on Back Door Roth IRA Conversions.

Home Equity Line of Credit (“HELOC”) in an Emergency

A HELOC can provide flexibility or access to immediate cash if needed, thus perhaps eliminating or reducing the amount you need to set aside in an emergency fund earning close to zero.  If you are required to use the line of credit, make plans to pay it down or off with other assets over time.

Securities Based Line of Credit (“SBL”) in an Emergency

A SBL is a line of credit secured by a taxable investment account.  In many respects it is very much like a HELOC except that it is secured by an investment account rather than your home equity.  Like a HELOC, the rates are very competitive currently; however they are normally variable rate products.

In the great words of Forrest Gump “IT happens”. The key is to be prepared prior to a crisis by having an emergency fund established, whether it be a traditional savings account, Roth IRA, HELOC, SBL or combination of all three. We’re always here to help you be ready to deal with IT.  

Timothy Wyman, CFP®, JD is the Managing Partner and Financial Planner at Center for Financial Planning, Inc. and is a contributor to national media and publications such as Forbes and The Wall Street Journal and has appeared on Good Morning America Weekend Edition and WDIV Channel 4. A leader in his profession, Tim served on the National Board of Directors for the 28,000 member Financial Planning Association™ (FPA®), mentored many CFP® practitioners and is a frequent speaker to organizations and businesses on various financial planning topics.

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The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment or financial decision, and it does not constitute a recommendation. Any opinions are those of Center of Financial Planning and are not necessarily those of Raymond James.

The Value of Knowing Where You’re Going

Contributed by: Timothy Wyman, CFP®, JD

Recently one of the most quotable fellas of our time, Yogi Berra, passed away. It is impressive how much meaning can be captured in a short sentence like, “You can observe a lot by just watching” or “It ain’t over till it’s over.” One of my favorite quotes is from Roy E. Disney, brother of Walt Disney who is credited as saying, “When your values are clear to you, making decisions becomes easier.” If you have been to our web site and visited my profile, you have seen a play on the quote that I use:

"When your vision is clear, your decisions are easy."

 I know, you’re thinking: Sir, I knew Roy E. Disney and you are no Roy E. Disney.  However, whenever faced with a challenging issue, whether it is personal or business related, I find it helpful and even therapeutic to go back to vision or values as Roy suggests.

The Center developed a set of values years ago to help us make decisions and we not only talk about them but strive to live them each day. Recently during an All Staff meeting we reviewed and discussed our values, what they meant to us, and how we could embrace them even more.

Our values are more than words; they serve to guide us in our everyday actions. Everything that we do is about our clients and our team with values leading the way. Our Center values include:

• Congruence between Words & Deeds

• Compassionate and Effective Leadership

• Passion for Excellence

• Strong Work Ethic

• Professionalism & Competence

• Balanced Life

• Commitment to the Financial Planning Process

• Continuous Learning and Personal Growth

At our meeting recently we dug into the meaning behind a few of these values:

Compassionate & Effective Leadership

We are compassionate leaders to our clients, to our communities, and to our families.  Leadership isn’t bestowed by position or title – one can exhibit compassionate and effective leadership regardless of role or “boss” title.

Passion for Excellence

One team member shared, “It is all encompassing.”  A passion for excellence means you act with integrity, continuously learn, have strong work ethic, etc.

We also talked about giving future space to consider other values such as Service to Others/Servant Leadership and Intellectual Curiosity.

Without a strong set of values and vision of what’s important in your life – you might just live out one of Yogi’s classic observations:

“If you don't know where you are going, you'll end up someplace else.”

Timothy Wyman, CFP®, JD is the Managing Partner and Financial Planner at Center for Financial Planning, Inc. and is a contributor to national media and publications such as Forbes and The Wall Street Journal and has appeared on Good Morning America Weekend Edition and WDIV Channel 4. A leader in his profession, Tim served on the National Board of Directors for the 28,000 member Financial Planning Association™ (FPA®), mentored many CFP® practitioners and is a frequent speaker to organizations and businesses on various financial planning topics.

Matt Wyman Kickin’ It At The University of Kansas

Contributed by: Timothy Wyman, CFP®, JD

Many of you know Matt’s football story by now, but if you don’t, it goes something like this:

Student watching football games freshman year thinks he can do better. Non-recruited walk on makes KU’s team and earns starting role as field goal kicker. He goes on to kick 52-yard game winner in 3rd game and is later benched by the 8th game. Then he winds up re-winning the job. 

Somehow Matt’s path at KU reminds me of the US stock market. Though there are ups and downs, both have gone up over time. Watching Matt persevere and succeed has been an experience that truly money can’t buy. As Matt begins his junior season, he’s slated to be the kickoff specialist and +40 yard field-goal kicker. 

For more on Matt’s story and how he prepared for this season, check out this column How to Kickstart a Kansas Kicker and this KU Football Update Two-Minute Drill: Boomin’ It.

Timothy Wyman, CFP®, JD is the Managing Partner and Financial Planner at Center for Financial Planning, Inc. and is a contributor to national media and publications such as Forbes and The Wall Street Journal and has appeared on Good Morning America Weekend Edition and WDIV Channel 4. A leader in his profession, Tim served on the National Board of Directors for the 28,000 member Financial Planning Association™ (FPA®), mentored many CFP® practitioners and is a frequent speaker to organizations and businesses on various financial planning topics.

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Past performance is not a guarantee of future results. Investing involves risk and investors may incur a profit or a loss. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members.

Why Investors Get Serious at Age 40

Contributed by: Timothy Wyman, CFP®, JD

In my experience, folks tend to get “serious” about financial planning when they near age 40. The earlier you start the better, but when you near the age of 40, you may have a variety of financial issues (sometimes disguised as challenges) you are dealing with.   For the 40+ crowd retirement is no longer simply an event that is way out in the distance.  It’s time to put pencil to paper, take stock of where you are financially today, and make real plans for ultimate financial independence.

4 Steps to Getting Started at 40

During a recent consultation a new client simply needed some guidance on where to prioritize savings.  Fortunately, they had both the desire and cash flow to start feeding the retirement nest egg. Even with the ability to save, the options available can be somewhat overwhelming.  If you find yourself in a similar situation – here are 4 ideas that might help:

1. Make maximum contributions to employer sponsored retirement plans such as 401k or 403b plans.  Under current law, you are able to contribute up to $18,000 per year to said plans.  For those over the age of 50, an additional $6,000 may be contributed.  The idea is that most people are in a higher marginal tax bracket during their working years than in retirement and these plans can provide tax leverage in addition to tax deferred growth of any earnings.

2. Make use of ROTH IRAs if eligible.  Higher income earners (singles earning over $116,000 and married/filing jointly over $183,000) may not be able to make an annual contribution to a ROTH IRA. However, we have assisted some people in making “Back Door Roth IRA” contributions.  Not only is the name cool – it can add a real punch to tax free income. We’d enjoy discussing if this is a potential strategy for you.

3. Consider Taxable Brokerage Accounts. While the contributions or deposits are not tax favored, having after tax investments can provide great flexibility, especially if you are considering retirement before age 59.5.

4. Look at tax deferred annuities and life insurance.  For some higher earners using either of these tax-favored vehicles may provide additional savings opportunities.  Generally, the first three vehicles mentioned above should be utilized first.

We are here to help you prioritize and make the best use of each and every dollar. Give us a call today.

Timothy Wyman, CFP®, JD is the Managing Partner and Financial Planner at Center for Financial Planning, Inc. and is a contributor to national media and publications such as Forbes and The Wall Street Journal and has appeared on Good Morning America Weekend Edition and WDIV Channel 4. A leader in his profession, Tim served on the National Board of Directors for the 28,000 member Financial Planning Association™ (FPA®), mentored many CFP® practitioners and is a frequent speaker to organizations and businesses on various financial planning topics.

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This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Center for Financial Planning, Inc. and not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Investing involves risk and investors may incur a profit or a loss. Investments mentioned may not be suitable for all investors. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted.

Making Sense of Market Volatility

Contributed by: Timothy Wyman, CFP®, JD

Dear Clients & Friends:

At the risk of stating the obvious, the equity markets experienced some wild swings toward the end of August.  When I was interviewed by Channel 4’s Rod Meloni on August 25th – the 2nd consecutive day of the stock slide – I talked about opportunities I see.  But Rod described it best when he said Cedar Point had nothing on the US Stock market – quite a rollercoaster. 

I’d like to walk you through where the equity markets stand as of September 1, 2015, share some insights as to some of the factors that may have led to such volatility, discuss what may occur in the near future, and importantly what you might do.

Where do equity markets stand on September 1, 2015?

The three major domestic indexes plunged and rallied in quick succession, but ended the month down more than 6%, with the broad-market Standard & Poor’s 500 marking its worst month in three years. International stocks, as measured by the MSCI EAFE index fared a bit worse than their US counterparts.

What combination of factors got us here?

It is natural to seek “causes” or an explanation when stocks go on a wild ride (which is more often than we think). Though there’s no easy answer, here are 4 contributors:

1. China: As my colleague Angela Palacios shared in our August 25th Investment Commentary, weak or at least slowing growth in China is the most widely cited cause of the stock market pullback. After decades of rapid economic growth, recent evidence has shown that China’s growth is slowing. The central bank of the world’s second-largest economy devalued its currency in an attempt to stimulate growth and thwart a stock-market bubble. After those efforts proved futile, Chinese stocks dropped and concerns about growth in China and across the globe sent stocks around the world plunging soon after. The primary Chinese stock exchange, the Shanghai Composite Index, has dropped roughly 40 percent since its June peak.

2. Falling oil, commodity prices: Oil prices are hitting lows not seen in years due to falling demand, oversupply and concerns over global economic growth. Other commodity prices have also declined due to economic growth fears.

3. Interest rate uncertainty: Short-term interest rates have hovered near zero since the 2008 financial crisis. The U.S. economy has recovered enough that the Federal Reserve has indicated it will raise interest rates and return to more normalized monetary policy in the months ahead. Uncertainty over the timing has weighed on investor sentiment, further muddying the timeline for a hike. Falling values in U.S. and world equities complicate the Fed’s decision.

4. Natural market cycles: Markets are cyclical in nature. Declines, though unsettling, are normal and necessary when asset prices climb too high. The S&P 500 index has steadily risen since March 2009, but hadn’t experienced a 10 percent correction since mid-2011. Analysis by Raymond James experts shows the S&P 500, on average, endures three 5-percent pullbacks and one 10-percent correction every year.

Certainly no one knows for sure – but we believe that the four forces above provide a significant part of the explanation or cause.

Will there be a retest of the recent market lows?

After seeing a nearly 10% drop in stocks, stocks rebounded rather quickly by what Jeffrey Saut, Chief Investment Strategist at Raymond James, would term a “throwback rally” – something that is rather normal from a historical standpoint.  Jeff also points out:

“The follow-up from a 2 – 7 session ‘throwback rally,’ from a massively oversold condition, typically leads to a downside retest.”

Moreover, it looks like that retest began Monday 8/31/15. According to Jeff Saut, a key factor will be whether a retest brings about new lows (below 1867); which could mean further losses.

Another market commentator and Wharton finance professor, Jeremy Siegel, opined recently:

“When there’s a sharp decline and then a rally, usually you’ll get another downward leg that will test that decline.”

According to Professor Siegel, the Dow Jones may ultimately drop 15% from recent highs before recovering to around 19,000 by year-end. He doesn’t see a recession in the US or a bear market.  Time will tell – Saut and Siegel are veterans with vast historical perspective.

While some of the more negative news is grabbing the headlines, as you would expect there are a variety of balancing factors at play.

Recent data reports continue to suggest moderately strong growth in the U.S. economy. Consumer spending improved in July, durable goods orders increased, the housing market is strengthening, and household income advanced. The estimate of second quarter GDP growth was revised to a 3.7% annualized rate (from 2.3% in the advance estimate).

Oil prices reached a six-year low in recent weeks, which should be good for the American consumer, but less so for energy companies. Still, as energy prices stabilize, inflation should move somewhat higher and Federal Reserve policymakers will begin to raise short-term interest rates ahead of that.

The Federal Reserve’s annual symposium in Jackson Hole, Wyoming saw central bankers discussing inflation, the global economy and the fallout from China’s economic woes, but officials provided no clear guidance as to the timing of the first increase in the federal funds target rate. The St. Louis and Cleveland Fed Bank presidents reiterated, ahead of the retreat, that U.S. fundamentals remain strong and a September rate hike is still a possibility.

“It shouldn’t really matter whether the Fed begins to raise rates in September, late October, or mid-December,” noted Raymond James Chief Economist Scott Brown on August 31st. “The important thing is the pace of tightening beyond that first move …The economy has made enough progress and is strong enough that it can easily withstand a small increase in rates.”

A retest is certainly possible, but recession is not imminent and many see higher stock prices by year-end.

What to Do?

During volatile times, dispensing the advice of “Do nothing because you’re a long term investor” almost seems pedestrian and stale.  As shared by Angela, a few things to consider include (1) Make sure your long-term allocation is still appropriate, (2) Double check that your time frame is correct for the investments in your portfolio, and(3) Review and consider your risk tolerance for those investments.  Additionally, while all of the news on bonds in general is negative due to expected interest rate increases – US Treasuries and high quality corporate bonds still provide some of the best diversification or negative correlation when stocks slump.  Additionally, this is a good reminder to review expected cash needs and set aside the appropriate amount.

I’m sharing all this with you to keep you informed about global economic movements and market events. I understand that seeing the short-term impact of volatility on your portfolio can be unsettling. During uncertain times, it can be assuring to stick to the investment strategy that we have developed together. For 30 years now, The Center’s focus has remained on disciplined investing and it has served generations of clients. In the meantime, we’ll continue to monitor market developments and update you accordingly.  Should you have any questions about the markets or your long-term financial plan, feel free to contact us. We are here to help.

Sincerely,

Timothy Wyman, CFP™, JD

Timothy Wyman, CFP®, JD is the Managing Partner and Financial Planner at Center for Financial Planning, Inc. and is a contributor to national media and publications such as Forbes and The Wall Street Journal and has appeared on Good Morning America Weekend Edition and WDIV Channel 4. A leader in his profession, Tim served on the National Board of Directors for the 28,000 member Financial Planning Association™ (FPA®), mentored many CFP® practitioners and is a frequent speaker to organizations and businesses on various financial planning topics.

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The opinions expressed in this update are those of Timothy Wyman and not necessarily those of RJFS or Raymond James, and is subject to change without notice.

Investing involves risk, and investors may incur a profit or a loss. Past performance is not an indication of future results and there is no assurance the trends mentioned will continue or that any forecasted events will occur. Investors cannot invest directly in an index. The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ National Stock Market. The S&P 500 is an unmanaged index of 500 widely held stocks. The MSCI EAFE (Europe, Australia, Far East) index is an unmanaged index that is generally considered representative of the international stock market. International investing involves additional risks such as currency fluctuations, differing financial accounting standards, and possible political and economic instability. These risks are greater in emerging markets. The performance noted does not include fees or charges, which would reduce an investor's returns. The process of rebalancing may result in tax consequences.

Raymond James Financial Services does not accept orders and/or instructions regarding your account by e-mail, voice mail, fax or any alternate method. Transactional details do not supersede normal trade confirmations or statements. E-mail sent through the Internet is not secure or confidential. Raymond James Financial Services reserves the right to monitor all e-mail. Any information provided in this e-mail has been prepared from sources believed to be reliable, but is not guaranteed by Raymond James Financial Services and is not a complete summary or statement of all available data necessary for making an investment decision. Any information provided is for informational purposes only and does not constitute a recommendation. Raymond James Financial Services and its employees may own options, rights or warrants to purchase any of the securities mentioned in this e-mail. This e-mail is intended only for the person or entity to which it is addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this information by persons or entities other than the intended recipient is prohibited. If you received this message in error, please contact the sender immediately and delete the material from your computer.

Tim Wyman: Now is the Time to Rebalance Your Portfolio

Contributed by: Timothy Wyman, CFP®, JD

The end of August for investors might have felt like a ride at Cedar Point. The downs were jarring, the ups exhilarating. In the midst of consecutive days of corrections, Detroit News Financial Editor Brian J. O’Connor interviewed The Center’s managing partner Tim Wyman.

“We investors have been pretty spoiled the last few years with low volatility, and these corrections are certainly more common than people think,” Tim said. “This latest correct is certainly nerve-wracking, but it’s common. This time it’s not different and a prudent, long-term focus will  prevail.”

Shifting investors’ focus from immediate headlines about China, Europe, the Federal Reserve and oil to the long-term may be easier in a bull market. But Tim says concerns should stiffen your resolve.

How Should I React?

When it comes to your next move, Tim told Detroit News that history suggests now is the time to rebalance your portfolio. Taking a look at your mix of stocks, bonds and assets on a quarterly basis is always a good practice, but doing it now makes sense.

“Research suggests that if you rebalance when there are large swings you get the biggest bang,” Tim said. “So this is an ideal time to be rebalancing. Some of that will mean increasing your stock allocation at this time. It’s hard to do, but we know it’s the right thing to do.”

Is the six-and-a-half year historic bull market over? The indicators aren’t pointing to a recession. But during this seesaw of the market, it is time to focus on the long term and consider rebalancing. If you’re ready to take a look at your portfolio, we’re here to help.

Timothy Wyman, CFP®, JD is the Managing Partner and Financial Planner at Center for Financial Planning, Inc. and is a contributor to national media and publications such as Forbes and The Wall Street Journal and has appeared on Good Morning America Weekend Edition and WDIV Channel 4. A leader in his profession, Tim served on the National Board of Directors for the 28,000 member Financial Planning Association™ (FPA®), mentored many CFP® practitioners and is a frequent speaker to organizations and businesses on various financial planning topics.

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The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Tim Wyman and not necessarily those of Raymond James. Past performance may not be indicative of future results. Diversification and asset allocation do not ensure a profit or protect against a loss. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Rebalancing a non-retirement account could be a taxable event that may increase your tax liability. You should discuss any tax or legal matters with the appropriate professional.

Live Your Plan: 35 Years of Printmaking

Contributed by: Timothy Wyman, CFP®, JD

There’s nothing more satisfying than seeing a client turn a dream into reality. To me, that’s what financial planning is all about. My clients Norm and Susan Stewart are a shining example. They turned creative talents into a successful 35-year printmaking business in Bloomfield Hills. At Stewart & Stewart, Norm is the Master printer and partner Susan is the graphic designer. If you have ever driven down Wing Lake Road between Maple & Quarton, you may have seen their workshop. Their collection resides not only in Michigan, but all across America and Europe.  And now they’ve been featured in the Journal of the Print World. I’m proud to serve folks like the Stewarts each day. On behalf of everyone at The Center – Congrats!

For another inspirational story of clients living their plans, check out this blog about two more of my clients who authored “A Poetic Life”. Their insight on living each day to the fullest could have you thinking about intentional living.

Timothy Wyman, CFP®, JD is the Managing Partner and Financial Planner at Center for Financial Planning, Inc. and is a contributor to national media and publications such as Forbes and The Wall Street Journal and has appeared on Good Morning America Weekend Edition and WDIV Channel 4. A leader in his profession, Tim served on the National Board of Directors for the 28,000 member Financial Planning Association™ (FPA®), mentored many CFP® practitioners and is a frequent speaker to organizations and businesses on various financial planning topics.

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Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members.

Raymond James is not affiliated with Stewart & Stewart.

Inspiration from “A Poetic Life”

Contributed by: Timothy Wyman, CFP®, JD

How will you live your life, now and in retirement? Will you live each day to the fullest – regardless of circumstances? Do you take the long way home in order to enjoy the sights, even if the GPS says there is a faster way?  I am fortunate to have so many interesting clients that inspire me to continuously think about and plan for an intentionally lived life. In that spirit, and with permission from the authors, long-term clients of mine, I share “A Poetic Life”.  I hope you enjoy it as much as I did.

A Poetic Life

We live a poetic life. It’s not at all that we are poets. But our lives together are frequently “two cats in the yard” easy but it is always “til death do us part” solid. We live on two acres in an older home filled with the daily rhythms of dappled tree and leaf shadows.   We have some lovely habits: coffee and clipboard plans, well-paced errands, walking, wine time, and evening talk time. We have other not so lovely habits too but we discuss and curb and respect. A poetic life was never meant to be flawless.

Like many of you we had very busy professional lives. Dan as a long-term parish minister of a large congregation and Cathy as pediatric chaplain and hospital department manager in Detroit. We encouraged. We witnessed incredible suffering.  We did all we knew how to do.

In wedding ceremonies Dan included the phrase “may your home be an island where the pressures of a cluttered world can be sorted out and brought into focus; where accumulated tensions can be released and understood; where personal needs do not tower over concern for others; where the immediate does not blur more distant goals; where the warmth of humor and love puts both crisis and dullness into perspective.” It is the heart and soul of our poetic life.

We live love consciously. We give thanks for incredible beauty. We do not turn from sorrow. We intentionally notice the unexpected. We allow for honest contrasts. We make hard decisions. We embrace enoughness. We acknowledge unfinishedness. Poetic enough for us.

We had always known that we’d retire early, though we hadn’t decided exactly when.  Then one day the mail brought a copy of the UUMA News and a copy of Cook’s Illustrated.  Dan sat down with Cook’s.  The time had come for us. Time for others to make their mark. Since retirement, we get great joy from the slower pace.  We savor.  We reflect.  We appreciate.  We live a poetic life.

That doesn’t insulate us from life’s trouble, pain and suffering: a cerebral hemorrhage, cancer, family disappointments, making difficult decisions.  The poetic life, to paraphrase Picasso, washes the dust off the daily life of your soul.

 “time is a tree (this life one leaf)

but love is the sky and I am for you just so long

and long enough.”

e.e. cummings

Timothy Wyman, CFP®, JD is the Managing Partner and Financial Planner at Center for Financial Planning, Inc. and is a contributor to national media and publications such as Forbes and The Wall Street Journal and has appeared on Good Morning America Weekend Edition and WDIV Channel 4. A leader in his profession, Tim served on the National Board of Directors for the 28,000 member Financial Planning Association™ (FPA®), mentored many CFP® practitioners and is a frequent speaker to organizations and businesses on various financial planning topics.

The Secret to Our 30-year Success

Contributed by: Timothy Wyman, CFP®, JD

So where were you in 1985? You may have been in high school or college. You may not have even been born yet. Like our Center founders, you may have been starting your own business or career and sought out a financial planner to help in financing higher education for your kids and planning for a successful retirement. It was in the mid-80s that Center for Financial Planning got started.

Our 3 Secrets to Success

A professional services firm can’t survive, let alone thrive, over 30 years without at least three key ingredients:

1. The loyalty and support of clients. Many of The Center’s clients have been with us from the start. Our success is based of their continued relationships and the introductions they’ve made to others we can help.
2. The loyalty and hard work of our staff. It has been said that great performance can never come without great people and culture.  Our current staff is filled with a deep bench of top-notch technicians.
3. The hard work, vision and generosity of founding partners Estelle Wade (retired 2003), Marilyn Gunther (retired 2014), and Dan Boyce (retiring at the end of 2015).

Building a sustainable business requires lots of hours. Not 9-5 and no weekends kind of hours. There were sacrifices, and rewards, and I am sure our founders would agree that their success was in large part due to the support of at least 3 special people - their spouses: Gene Wade, Ron Gunther, and Sue Boyce.

Building a Foundation

Estelle, Marilyn and Dan didn’t set out to create a company. Financial planning was more like a calling. You see, in 1985, much like today, financial advice was often the pretense to selling a high commissioned investment or insurance product.  Our founders saw a new & better way to help people achieve their financial goals. The new (back then) process was called financial planning – and they quickly experienced that the financial planning process had the power to improve lives and make a difference for people. So, The Center really started with a purpose – a calling – to make a difference in people’s lives.

Estelle, Marilyn and Dan also lead by example. They always put clients’ interests first. They were always first to lend a hand around the office, no matter the task. And they were always committed to lifetime learning and personal growth. Our founders also invested in people and relationships – both clients and team members. The three are some of the most generous folks I have ever met with their time, talent, and financially. Over the years they have mentored folks both inside The Center as well as outside.  They had the foresight to begin transitioning leadership to others such as current partners Matt Chope, Sandy Adams, Laurie Renchik, Melissa Joy and me as long as 10 years ago. The foundation they provided has given our current team a platform to take The Center to new heights and further strengthen the firm for the next 30 years.

Timothy Wyman, CFP®, JD is the Managing Partner and Financial Planner at Center for Financial Planning, Inc. and is a contributor to national media and publications such as Forbes and The Wall Street Journal and has appeared on Good Morning America Weekend Edition and WDIV Channel 4. A leader in his profession, Tim served on the National Board of Directors for the 28,000 member Financial Planning Association™ (FPA®), mentored many CFP® practitioners and is a frequent speaker to organizations and businesses on various financial planning topics.

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Any opinions are those of Timothy Wyman, CFP® and not necessarily those of Raymond James. Investing involves risk and investors may incur a profit or a loss. Past performance is not a guarantee of future results.

The Truth You Need to Hear: The value of a Dutch Uncle

Contributed by: Timothy Wyman, CFP®, JD

Recently, during a preliminary meeting with a new client, he told us that what he really wants us to be is his Dutch Uncle.  I vaguely recalled hearing the term before, but I asked him to clarify -- just to be sure we were on the same page.  The gentleman, in his 70’s, shared that what he really valued most was to work with someone who would give him frank advice, challenge his assumptions on some important financial issues he was wrestling with, and tell him what he needed to hear rather than what he wanted to hear – and do it with compassion. 

The interaction left quite an impression on me. I am glad that I asked for clarification, because if I would have just waited to Google “Dutch Uncle” after the meeting, I may have only seen definitions that address, “frank, harsh, blunt, stern and severe.” I might have missed out on the “with compassion” part; which is very important.

Frank, Candid & Compassionate

A few years ago I read “The Last Lecture” by Randy Pausch.  First, if you haven’t read it, get a copy now. Along with a box of tissue. Second, if you have teenage or adult children, get them a copy too. Third, if you’d rather watch the video, it’s here on YouTube with over 17 million views. You won’t be disappointed. Randy was a professor at Carnegie Mellon University in Pennsylvania. After being diagnosed with pancreatic cancer, he gave his last lecture titled “Really Achieving Your Childhood Dreams.” That was on September 18, 2007. He passed away on July 25, 2008. One of Randy Pausch’s experiences included a man he referred to as his Dutch Uncle. One day, this Uncle took him for a walk to share the truth that he needed to hear (that Randy’s arrogance was getting in the way of his long term success) in a frank, candid and compassionate way and it became a turning point in Randy’s life.

Sales vs. Advice

The Dutch Uncle analogy can also be used to illustrate the difference between sales and advice -- or perhaps, those acting in your best interest and those that do not.  An advisor, or someone interested in your wellbeing, will provide candid and frank feedback; because they want to see you succeed.  In my profession and from my perspective, this is the true litmus test of an advisor: Are you willing to lose a client relationship because you act as their Dutch Uncle (compassion included)?  If you are worried about losing a client because they might not like what you have to provide, share or recommend in your learned professional opinion; then you are really acting in a sales capacity and not an advisory role. Which is fine, just don’t refer to yourself as an advisor.

Nowhere is there a need more for a Dutch Uncle than in financial planning and investment management. Our brains, frankly, are wired to make the easy or wrong decision too many times.  Here’s one familiar example: Buy low and sell high.  But how difficult is this mantra to follow?  Studies suggest it’s extremely difficult. Can you think about what you were feeling and hopefully not implementing in March 2009 during the Great Recession? I bet a Dutch Uncle was pretty valuable.  Or, how about the question can I retire now? Sometimes the correct feedback is you are ready to retire – unfortunately your money isn’t!  A Dutch Uncle might suggest some tradeoffs such as continuing to work but at reduced hours, trading time for income. A Dutch Uncle might also say, sure, go buy X and accumulate additional debt; but also acknowledge that this action will have an impact on your financial independence.  It’s still your choice, but the funds need to come from somewhere.

If you don’t have a Dutch Uncle perhaps it’s time to seek one out – your success might just depend upon it.

Timothy Wyman, CFP®, JD is the Managing Partner and Financial Planner at Center for Financial Planning, Inc. and is a contributor to national media and publications such as Forbes and The Wall Street Journal and has appeared on Good Morning America Weekend Edition and WDIV Channel 4. A leader in his profession, Tim served on the National Board of Directors for the 28,000 member Financial Planning Association™ (FPA®), mentored many CFP® practitioners and is a frequent speaker to organizations and businesses on various financial planning topics.

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This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Timothy Wyman, CFP® and not necessarily those of Raymond James.