Building arks before the rain – Part one

We face risks in every area of our lives, and the realm of personal finance is no exception. Successfully managing financial risk is key to achieving a comfortable and secure lifestyle. At its core, managing financial risks starts with identifying them, determining what could go wrong and how bad it could get. Only then can we construct a risk management plan to protect against potentially catastrophic events. Sensible people learn to take calculated risks that propel them toward their most important life goals and protect against those whose consequences are too great to bear. Read more

Paying for college? What’s your plan?

Helping your children pay for college is one of the biggest and most important challenges that you will face. Currently, a four-year education (tuition, fees, room and board, supplies and personal expenses) can range from almost $100,000 at a public college to over $230,000 at some of the most expensive private institutions such as Boston University and The University of Chicago. With expenses expected to continue to rise at the current rate of 5% per year, the costs could skyrocket to $150,000 for a public college and over $360,000 for a private institution for a student matriculating in 2019. Making matters worse, planning for college gets more complicated each year because of the ever-changing rules, regulations and tax laws. Feeling overwhelmed and confused, many parents fail to develop an effective plan, leading to burdensome debt affecting both parents and students for years to come. Read more

Sales pitch or sound advice – Part Two

In my previous blog post, I talked about the basic differences between brokers and Registered Investment Advisor (RIAs) including how they are governed, their compensation arrangements and their legal obligations to clients.  In this article, I’ll explain the affect that suitability and fiduciary standards can have on an investor’s financial security.

Objective industry experts have long argued that while in theory both suitability and fiduciary standards limit self-serving behavior, in practice the suitability standard provides such wide latitude for brokers’ recommendations that it is meaningless in protecting the consumer. Read more