You have many options for receiving advice. You may therefore be asking yourself “Why should I work with Craig DuVarney, CFP?” The answer to that question is a bit different for everyone, but there are many similarities. Here are the main reasons why we believe clients work with us:
As a consumer, you need to know who your advisor really works for. Many financial services representatives of large insurance or investment firms are employees of that firm. This means that, in many cases, their legal obligation is to act in the best interest of the firm, not necessarily the client. Most of these large firms see financial planning only as a tool to increase their insurance and investment sales. As a result, many financial services representatives are under a great deal of pressure to promote these products, rather than to provide their clients the advice they need to achieve their goals.
We believe that you should always receive advice that is in your best interest. Furthermore, if you hire Craig DuVarney, CFP to prepare your financial plan, you can rest assured that the advice you receive is independent, and not product-orientated. Should you wish to work with Craig DuVarney, CFP to manage their investment portfolio, as so many of our existing clients have already done, you can be certain that our broker-dealer, Royal Alliance Associates Inc., has no input whatsoever on the kinds of investment recommendations we make or products we use with you.
Retirement Distribution Planning
The single biggest fear for those people approaching retirement is “Will we outlive our money?” While we can certainly help you address this question, we have found that once clients begin retirement, they have even more questions, such as “How much can I afford to withdraw each month?”, “Which account should I withdraw from (IRA, Roth IRA, Retirement Plan, Taxable)?” and “Which investment position within the account should I withdraw from?”.
For those who have literally spent years accumulating their wealth, suddenly shifting gears and spending it in retirement can be intimidating. Without a clear understanding of how much you can afford to withdraw every month, you could either be living well beyond your means or living well below your means. Furthermore, each of your investment accounts has different tax and estate consequences. Many retirees choose to delay withdrawals from their IRAs and retirement plans as long as possible, because in most cases the withdrawals will be taxed at ordinary income tax rates. They choose instead to withdraw from their Roth IRAs and/or taxable investments as much as possible, because they will pay less in taxes at the time they withdraw from these accounts. While implementing a “tax-deferral” strategy may have made sense while you were in the accumulation phase of your life, it may not make sense while you are in the distribution-phase of your life.
We believe that each of our clients should have their investment portfolio structured according to an asset allocation model that is tailored to their risk tolerance and time horizon. We then work with clients to coordinate their asset allocation with their retirement distribution strategy. We also examine the projected tax consequences and growth potential of each investment, and work to position each holding in the account (IRA, Roth IRA, Retirement Plan, Taxable) that we feel would be most appropriate, based upon how that account is treated by income and estate taxes. Finally, we review all of this annually, based upon changes in your life, as well as changes in the income and estate tax code.
Of course, there is no guarantee that a diversified portfolio will outperform a non-diversified portfolio in any given market environment. No investment strategy, such as asset allocation, can guarantee a profit or protect against loss in periods of declining values. However, we believe that coordinating your asset allocation with your retirement distribution strategy and investment tax strategy is the most powerful way we can help you plan for and make the most of your retirement.
Tax & Estate Planning
Most “investment advisors” in the industry today are simply focused on the average annual return of their clients’ portfolios. We believe this approach is oversimplified, and ignores such key variables as tax planning and estate planning.
Tax planning is important for everyone, no matter what tax bracket you may be in. However, for most people their tax planning goal is simply to pay the least amount in federal income taxes that year. Our belief is that the goal of tax planning should be to pay the least amount in all taxes over the rest of your life, or in some cases, your heirs’ lives as well. We define “all taxes” as including federal income taxes, state income taxes (if applicable), capital gains taxes, alternative minimum taxes (AMT), social security taxes (FICA), federal estate taxes, and state estate taxes (if applicable).
We believe that our view on tax planning is more comprehensive than that of our peers in the financial services industry. We are not only concrned with the rate of return our clients earn on their investments – we are also interested in “how” that return was achieved. Investments in taxable accounts that produce tax-qualified dividends and long-term capital gains are, in many cases, more tax-efficient than similar investments than produce ordinary dividends and short-term capital gains. Furthermore, we believe in implementing pro-active tax planning strategies, where appropriate. This may include realizing long-term capital gains, funding Roth IRAs (if eligible), as well as converting IRA assets to Roth IRAs (if eligible).
We believe that most of our clients are fundamentally better off executing and funding trust-centered estate planning documents. By establishing and funding revocable living trusts during their lifetime, they are able to, in many cases, completely bypass probate, while also increasing the amount they can pass to their heirs without a federal or state estate tax. Furthermore, they are able to keep most of their financial affairs private. While we are not a law firm and cannot draft legal documents, Craig has years of experience working with estate planning attorneys in coordinating clients’ financial plans with their estate plans. Of course, this information is not intended to be a substitute for specific individualized tax and/or legal advice.
Wealth Annual Review Program™
Many large financial services firms believe that financial planning is all about the actual document that the client receives. We believe that financial planning is a process, and that the actual financial plan is merely a snapshot in time. The relationship that the client develops with the advisor is far more important than any document. Over time people’s lives change. Likewise, tax and estate planning laws will continue to change and evolve. To ensure that clients meet with Craig annually, we have introduced the Wealth Annual Review Program™. We have also hired Keri Castro as Craig’s scheduler. One of Keri’s main responsibilities is to periodically contact clients and suggest that they schedule a complimentary WARP™ meeting. In these meetings Craig will typically review a client’s progress toward their goals, and address any actions that should be taken. He will also answer any questions or concerns the client may have, as well as discuss whether it is appropriate to rebalance their investment portfolio. The single biggest reason that clients stop working with an advisor is lack of service. While some advisors say they do annual reviews with their clients, only a select few have hired a scheduler and implemented a process for ensuring that this process is actually carried out year after year.