Are Fair and Equal the Same When It Comes to Gifting Children?

Contributed by: Sandra Adams, CFP®

I have had several client conversations in recent months about gifting to children. Parents are always concerned about making sure that they are being fair to all their children as they gift. As these discussions evolve, the definition of “fair” in the minds of parents often means “equal.” But do gifts to our children always need to be—and should they always be—equal?

Think back to when your children were younger. For some reason, many of us drive ourselves crazy making sure each of our children had the same number of pictures taken, received the same number of holiday gifts each year, got offered the same number of extra-curricular activities, got the same amount for each tooth from the Tooth Fairy...the list goes on and on. Why do we do this?

Our children are individuals, and their situations and needs are different. As our children reach adulthood and we are ready to gift them from our accumulated wealth (or plan to give to them in the future through inheritance), we should consider each of their situations and needs when gifting. For instance, providing more to a child who struggles to support their family on a modest income than one who is financially successful and has no children. Or to offer more to a child who has decided to give more of their time and career to help with a parent’s care versus one who is more focused on their career. There are families with special needs children that must devote more time and resources to that child than the others. Or simply taking into consideration the types of gifts given based on need, such as helping to pay off student loans for one versus contributing to the purchase of a home for another.

Getting out of the mindset that gifts to our children must be monetarily “equal” to be “fair” is one we should all consider. It allows us to give better thought and intent to the gifts we give to our children based on their actual needs, and it takes the stress off us to ensure that every cent is accounted for to monetarily make things equal. When the gifts are meaningful, there are few of your children that will be counting!

If you or someone you know are working on your gifting or legacy plan and have questions, please reach out. We are always happy to help Sandy.Adams@centerfinplan.com

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

Opinions expressed in the attached article are those of the author and are not necessarily those of Raymond James. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Center for Financial Planning, Inc.® Center for Financial Planning, Inc.® is not a registered broker/dealer and is independent of Raymond James Financial Services.

The Center Social Strategy: How We Construct Values-Based Portfolios

Contributed by: Jaclyn Jackson, CAP®

In honor of Earth Day, we’ve used the last couple of weeks to highlight environmental, social, and governance (ESG) investing.  We began by explaining why ESG investing has grown in popularity.  Then, we explored the variety of approaches used to support values-based investing.  This week, we’ll cap our blog series with a Q&A style discussion about how The Center designs social strategies.

What are the first steps of building a values‐based investment strategy?

Construction fundamentals form the foundation of any investment strategy. First, we assure that asset allocation aligns with investment time horizons and investment goals. Even the most conservative research attributes 40% of investment performance to asset allocation. Liberal evaluations attribute as much as 90% of performance to asset allocation. Another fundamental philosophy applied to the construction process is being fee sensitive. The reality is that investment costs add up and the compounding effect of those costs diminish returns. Therefore, considering the costs of values‐based funds is a vital part of developing social strategies. In short, values‐based investing adds layers to the construction process, but it certainly does not change the foundational layers of that process.

What’s the difference between ESG Investing and Socially Responsible Investing (SRI)?

A: In the past when investment managers tackled values‐based investing, many used Socially Responsible Investing (SRI) methods. SRI takes a hard stance on eliminating industries from one’s investment strategy that do not match their ethics. However, there are consequences for taking such a black and white investment approach. Research has shown that completely eliminating industries from investment strategies undermines diversification and ultimately, erodes longevity. We strive to set clients up for the best possible outcomes (from a financial and values alignment perspective in this instance). For that reason, we prefer ESG investing; it has a values‐driven agenda, but doesn’t compromise performance (because investors can maintain diversification). At the end of the day, we want you to both uphold your values AND be able to retire. Our goal is to provide strategies that include longevity and diversification while protecting your values.

How we sift the wheat from the shaft when it comes to choosing ESG funds?

ESG investing is gaining popularity. As a result, we are seeing more and more ESG funds on the market. On one hand, it helps value‐aligned investors with diversification. On the other hand, it can set the stage for trendy, superficial products that don’t truly meet the needs of values‐aligned investors. To combat this, we make an effort to work with companies that have a reputation for walking the walk. Companies like Parnassus Investments, PAX World Funds, and Calvert Research & Management are companies that have demonstrated a longstanding commitment to values‐based investing. They actively engage with companies to improve behavior. Pax, for example, uses its shareholder voting power to advocate for better company governance.

How are ESG product inconsistencies navigated during the strategy construction process?

When faced with complex decisions, we ultimately consider what brings the most value to clients.  Last week we learned, all ESG funds aren’t created equal.  Values-based funds can excel by some measures, but fail by others.  It’s a tough negotiation to build a strategy and as a result, there is some give and take involved.  When faced with complexity, we launch internal research initiatives to identify best practices.  Ultimately, data dictates what we believe is the right thing to do for the overall strategy.

Admittedly, we’ve only scratched the surface of how The Center develops social strategies.  Luckily, the conversation doesn’t have to end.  We are happy to chat more about our process and support you in integrating values into your investment plan.  We hope you enjoyed our ESG blog series and have a Happy Earth Day!

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All investments are subject to risk, including loss. There is no assurance that any investment strategy will be successful. Asset allocation and diversification does not ensure a profit or protect against a loss. It is important to review the investment objectives, risk tolerance, tax objectives and liquidity needs before choosing an investment style or manager. Sustainable/Socially Responsible Investing (SRI) considers qualitative environmental, social and corporate governance, also known as ESG criteria, which may be subjective in nature. There are additional risks associated with Sustainable/Socially Responsible Investing (SRI), including limited diversification and the potential for increased volatility. There is no guarantee that SRI products or strategies will produce returns similar to traditional investments. Because SRI criteria exclude certain securities/products for non-financial reasons, utilizing an SRI investment strategy may result in investment returns that may be lower or higher than if decisions were based solely on investment considerations. Utilizing an ESG investment strategy may result in investment returns that may be lower or higher than if decisions were based solely on investment considerations. Raymond James is not affiliated with and does not endorse the opinions or services of Parnassus Investments, PAX World Funds, and Calvert Research & Management.

The Final Four 'Stocks': A Center Spin-Off Competition

Contributed by: Jeanette LoPiccolo, CFP®

To celebrate the annual college basketball tournament, The Center Team hosted an internal spin-off competition. We set aside our favorite teams and adopted individual stocks instead. You may be thinking – that sounds kooky! It is a bit. Our celebration is a mash-up of internal team education, some charitable giving, and a bit of friendly competition. 

How It Works

Our investment strategies contain mutual funds and ETFs that are comprised of individual stocks. The stocks are our basketball teams. Nick Boguth, our trusted portfolio administrator, highlighted 30 of these stocks within our carefully chosen strategies. Each stock was then selected by a team member and entered into our March “Market” Madness brackets. While the Center takes a long-term approach to investing, we are tracking these stocks for a short period just for fun. The top four winners will receive a donation to their favorite nonprofit organization.

To kick off our competition, our amazing team members, Lauren Adams, Nick Boguth, and Jaclyn Jackson led a Zoom presentation on the fundamentals of stock investing, valuations techniques, and where those 30 stocks fit within client portfolios. It was a great opportunity for all team members–not just those in investment or planning roles—to “check under the hood” of our most commonly used investments to see the stocks that help determine the fund’s performance. Each team member then selected their best guess to “win”. The Center will donate $1,000 to the final four nonprofits. Go team!

Our Final Four Winners

1. Josh (HD), Alex's Saints Foundation

2. Kelsey (TGT), Ruth Ellis Center

3. Sandy (JNJ), Haven (Oakland County)

4. Matt T. (LB), Methodist Children's Home (Redford, MI)

P.S. Want to know more about The Center’s charitable giving? 

Check out our Center Cares page. Our internal Charitable Committee is made up of 6-8 team members who help coordinate charitable giving activities, volunteer events, and promote donations of our time and talent to local nonprofits. We believe in supporting our local community, building relationships with nonprofits, and promoting financial education to underserved communities.

Jeanette LoPiccolo, CFP® is an Associate Financial Planner at Center for Financial Planning, Inc.® She is a 2018 Raymond James Outstanding Branch Professional, one of three recognized nationwide.

The RJFS Outstanding Branch Professional Award is designed to recognize support professionals in RJFS branches who contribute to the success of their advisors and teams. Each year, three winners are selected and recognized during this year's National Conference for Professional Development. To be considered for this award, Branch Professionals must have been affiliated with Raymond James for at least one year and could not have won the award in the past.

International Women’s Day Celebration with The Center

Contributed by: Laurie Renchik, CFP®, MBA

On behalf of The Center team we want to thank everyone who participated in our First Annual International Women’s Day event!  The energy in the room of 200+ women on March 8th was an inspiration sure to carry on throughout the year.  Celebrating women’s success and making a difference in other women’s lives carries a message of community and mutual support; a WIN-WIN with staying power.

Our keynote presentation by Laura Vanderkam was a gift of wisdom and practical application as she helped us understand how to focus on aligning our time with priorities.  Before, during and after the presentation it’s no surprise that networking conversations were abundant from start to finish.  A truly remarkable exclamation point on the morning was the generous spirit in which financial donations were made for Haven’s Spark program. 

DONATION RESULTS

An amazing result for Haven’s Spark program:

$5,295 (so far!)

RESOURCE DIRECTORY

Networking connections are an essential ingredient to success.  If you have not already reached out to new connections we are happy to provide this resource directory of the companies and organizations who were participants in our Women’s International Day event.

KEYNOTE TO-DO LIST LINK

Laura’s advice hit home as evidenced by all of the head nodding going on in the room!  If you missed the link to our “more balanced life” To-Do list click here to open your personal copy!

PHOTO GALLERY

Smiles and memories of our time together at The Center sponsored Women’s International Day event. Click to view.

SAVE THE DATE 

Plan to celebrate International Women’s Day with us again next year on Friday March 8th 2019!  You can mark your calendar and we will take care of all the details!  

IN CLOSING

Women celebrating women is one example of pooling resources around a common goal.  We are grateful to have so many professional connections and women advocates in our circle of friends.  In our world of financial planning, it is not uncommon to work with accomplished women who are seeking guidance to ensure that their present plan for financial security is on track for future success.  One hurdle is that many times they don’t know someone …… consider that we might be that someone!

Laurie Renchik, CFP®, MBA is a Partner and Senior Financial Planner at Center for Financial Planning, Inc.® In addition to working with women who are in the midst of a transition (career change, receiving an inheritance, losing a life partner, divorce or remarriage), Laurie works with clients who are planning for retirement. Laurie is a member of the Leadership Oakland Alumni Association and is a frequent contributor to Money Centered.

Funding the Future - A Rockin’ Good Time

Contributed by: Clare Lilek

On April 18th, The Center proudly sponsored the band Gooding, through the non-profit Funding for the Future, to play at Hazel Park High School. The event was a little over an hour and involved fun rock music, excited high schoolers, and important lessons in financial literacy.

Funding for the Future is a nonprofit that coordinates bringing the band Gooding to different high schools, student groups, and kid oriented organizations to not only provide a free concert, but also give a crucial and entertaining lesson in financial literacy. All too often, some of our children reach adulthood without ever hearing about the impact of weekly savings, the perils of credit cards and credit scores. “Put your money away and let it work for you,” was a common sentiment that was said throughout the event, encouraging students to save money each week in an account like a Roth IRA, in order to let that money grow over time—a practice we heartily support at The Center!

The band Gooding is passionate about financial literacy and sharing that message with music. Their songs aren’t about stocks and bonds, however; they play exciting and down to earth rock music which endears them to the kids, allowing their message after the songs are over to sink in with more credibility. The band is inspired to bring financial literacy to students all over the country because of their own lack of education when it came to handling money as they grew up. We see examples of celebrities and pro-athletes that go broke shortly after making it big. The band explained that mindset comes from growing up and thinking one check, one lottery ticket, one record deal is going to change it all; but he encourages the kids to realize that change is within them and doesn’t come from the outside.

Gooding also talked about the perils of opening up too many credit cards, of not knowing your credit score and what affects it. He stresses, though, that money isn’t bad, it’s our lack of knowledge around money that can mess us up financially. That’s why he encourages good financial behavior, like putting $50 a week in a Roth IRA once you start working. You start young and have that money grow for you exponentially over time. He showed the students real examples and charts in order to encourage the students to take the idea of retirement savings seriously. He also talked about creating SMART goals; having Specific, Measurable, Attainable, Realistic, and Time oriented goals in order to plan and budget successfully. It was a lesson mixed with long term planning and tangible strategies the students could implement right away.

After thirty minutes of fun rock music and a thirty minute crash course in basic financial literacy, the students left smiling and so did we! It’s a part of The Center’s mission to spread financial literacy to the community around us, and sponsoring Funding for the Future and the band Gooding was just one way in which we do so. We look forward to many future partnerships in order to spread the word!

Clare Lilek is a Challenge Detroit Fellow / Client Service Associate at Center for Financial Planning, Inc.®

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Any opinions are those of Clare Lilek and not necessarily those of Raymond James.

Leadership Oakland Day of Service Experience is Truly Humbling

Contributed by: Sandra Adams, CFP®

Imagine decorating six houses all in one day! On Saturday, May 16th, I joined my 25 fellow Leadership Oakland classmates, former Leadership Oakland Alumni, and friends, along with employees and volunteers from Humble Design, a Pontiac-based 501c3 nonprofit organization. Together we helped fully furnish and decorate 6 existing homes for Grace Centers of Hope. The day was filled with home decorating, spring lawn clean up, and ended with a park celebration with volunteers and the families that were moved into the homes from former homelessness.  The day was particularly special as we helped Humble Designs move their 500th family into a home!

Humble Design started in 2009 and assists families in need who are transitioning out of homeless and domestic abuse shelters by providing furnishings and design services in their new place of residence.  They use donated furniture and in kind goods to turn bare rooms into a fully furnished and decorated home.  Many of their clients leave the shelter with just the clothes on their back and do not have the means to furnish their new space.  That’s where Humble Design steps in, turning the house into a livable, comfortable home.

Grace Centers of Hope is a non-profit Christian organization committed to positively changing the lives of the homeless, addicted, and unwanted through the Gospel of Jesus Christ, personal accountability, life skills education, and work-related programs. The foundation of change is the local church which encourages residents to become strong in faith and independence while it lovingly promotes a sense of belonging within a community that truly can be called “home”.

The day was filled with hard work, camaraderie, emotion and deep fulfillment as we witnessed the true joy and gratefulness of the families seeing the homes designed just for them for the first time. It was truly a HUMBLING experience!

Sandra Adams, CFP® is a Partner and Financial Planner at Center for Financial Planning, Inc. Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In 2012-2014 Sandy has been named to the Five Star Wealth Managers list in Detroit Hour magazine. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.

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Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

Raymond James is not affiliated with any of the organizations/charities mentioned. 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.

The Center Supports Gleaners’ Vine and Dine Fundraiser

2014 marks the third year Center for Financial Planning has helped sponsor the Birmingham Bloomfield Chamber’s Vine and Dine event to benefit Gleaners Community Food Bank.  Vine and Dine allows guests to experience music, wine, and food from some of the best artists, caterers, and restaurants in metropolitan Detroit.This year’s event was held at the Cranbrook Institute of Science where guests were treated to a special “behind the scenes” tour of the museum as well as see National Geographic’s touring exhibition, Women of Vision.

As a part of The Center’s 2020 Vision, we are deeply committed to community service and aim for our combined sweat equity and financial contributions to create $100,000 of community support each year.  The Vine and Dine event is one on the ways we are building up to our 2020 Vision goal.  This year, The Center team has also volunteered with Gleaners to donate and assemble food packages because we are moved by their commitment to fight against hunger in southeastern Michigan.  Gleaners has successfully collaborated with the Feeding America network, member agencies, and program partners to deliver millions of pounds of food to the people who need it most.  

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 web sites or their respective sponsors. Raymond James is not responsible for the content of any web site or the collection or use of information regarding any web site’s users and/or members.

Reinventing Michigan Retirement

 At a conference tailored to Michigan residents age 50 and up, Sandy Adams, CFP® and Laurie Renchik, CFP® volunteered their professional retirement planning expertise. Sandy and Laurie were part of the team of volunteers at the Reinventing MI Retirement conference hosted by the Michigan Department of Insurance and Financial Services.

The event was held at the Michigan State University Management Education Center in Troy. It was one of nine conferences put on across the state to help Michigan residents learn more about how to potentially achieve financial security in your later years.

Sandy and Laurie provided attendees with one-on-one financial check-ups.  Governor Rick Snyder made an appearance and delivered a message about living well and aging well. The Reinventing MI Retirement initiative is funded by contributions and grants from the Michigan Securities Investor Education and Training Fund.

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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 web sites or their respective sponsors. Raymond James is not responsible for the content of any web site or the collection or use of information regarding any web site’s users and/or members. C14-038753

SRI: Investing in your Ideals & Values

Socially responsible investing (SRI) is a rapidly expanding option in the investment arena.  This includes Environment, Social and Governance (ESG) criteria in the stock and bond selection process.  This approach to investing looks beyond simple financial return, allowing individuals and institutions to express their personal values and ideals with their investments.

Millennials more interested in ESG strategies

We are starting to see generational differences in investing as younger high net worth investors are more interested in expressing their values through investing.   For example, in a survey conducted by U.S. Trust Insights, 63% of Millennials (individuals born between 1980 and 2000) are interested in owning socially responsible strategies versus just 35% of the total number of responders.  These investors believe that they also don’t have to give up returns in order to do so as 60% believe it is possible to achieve market rates of returns while investing in ESG strategies.

Source: U.S. Trust Insights on Wealth and Worth Annual Survey

The Center Expands ESG Recommendations

Based on increasing demand from our clients, our investment committee and research department have expanded our recommended list to include companies that offer these types of investment strategies.  Having applied our same rigorous due diligence process to these selections, we feel we have an excellent combination of managers in a variety of asset classes that will allow our clients to express their ideals in the way they invest their assets (see our recent blog on this).  If you are looking for ways to express your values through your investments don’t hesitate to contact us!

Angela Palacios, CFP®is the Portfolio Manager at Center for Financial Planning, Inc. Angela specializes in Investment and Macro economic research. She is a frequent contributor to Money Centered as well as investment updates at The Center.

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. Investing always involves risk and you may incur a profit or loss. No investment strategy can guarantee success. Material is provided for informational purposes only and does not constitute a recommendation. C14-040265

Save the Date: May 4, 2014 Cystinosis Fun Run/Walk

 On May 4^th we will hold the 8^th Annual Cystinosis Fun Run/Walk in honor of Kacy Wyman. In the past we have had over 400 walkers and runners support the event and Kacy. We understand that there are many worthy causes and feel very fortunate that so many have chosen to support Kacy’s cause in the past – and appreciate you considering a financial contribution for our May 4^th event.  All proceeds benefit Cystinosis Research Network. CRN is an all-volunteer, non-profit 501(c)(3) organization. The CRN Federal Tax ID# is 04-3323789.

Thanks to 37 pills a day, eye drops 8-10 times per day and 7 liters of water Kacy’s condition is stable – but we need a cure. Community supporters raised near $30,000 for the Cystinosis Research Network last year. These funds help with continued research projects to improve the quality of life for those dealing with Cystinosis and other rare diseases, and ultimately a cure! Your financial support is making a difference in Kacy’s life and all of the children enduring this rare disease called Cystinosis (Sis-ta-know-sis). Your support drives research and gives us hope that a cure will be found during Kacy’s lifetime. Thank you again for considering.

Checks should be made payable to:
Cystinosis Research Network

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