WrapManager's Wealth Management Blog

Total health care spending is expected to reach $4.8 trillion in 2021, up from $2.6 trillion in 2010 and $75 billion in 1970. As consumers of health care, it’s everyday investors that have to absorb these rising costs over time.1 What investors need to do: factor rising health care costs into your investment plan, so you can measure how these expenses could affect your retirement income and portfolio growth over time. An Investment Portfolio Designed to Keep Up With Rising Health Care Costs The simple fact is, most investors need growth in their portfolio to keep up with rising health care costs. This growth becomes even more critical as health care costs become a larger percentage of living expenses with age. [+] Read More

Money manager Federated Investors’ Strategic Value Dividend managed account strategy falls into this category, and has some of the qualities an income-seeking investor is after. The strategy’s objective is to provide a high level of current income, long-term capital appreciation driven by dividend growth, and lower downside risk.2 Why Does Federated Focus on Dividend Paying Stocks? Research conducted by Federated Investors shows that over the period from July 1, 1996 to June 30, 2013, a high dividend paying stock strategy generated an average annualized total return of 10%, which is 278 basis points higher than the 7.22% annualized return realized by the S&P 500. [+] Read More

Here’s a statistic that may catch your eye (or make it shed a tear): since 1980, total mutual fund assets have increased by 135 times, but the total expenses paid to equity mutual-fund managers has increased 141 times ($170.8 million to $24,143 billion).1 Have your investment fees, or the fees you pay to your financial advisor, been going up as well? 3 Actions You Should Take to Examine Your Investment Fees 1) Get a Clear Sense of What Your Investment Fees Actually Are Depending on what type of investments you have, the way you pay financial advisor fees can vary greatly. Mutual funds have “expense ratios” that might give you a good sense—but not always a clear picture—of what your fees are. [+] Read More

In order to build someone a comprehensive investment plan, a financial advisor has to understand some of the intricacies of that person’s financial life, risk tolerance and goals. If a financial advisor focuses on the investments without understanding a client’s full picture, it could result in a subpar investment plan. Here are seven questions your financial advisor should have already asked you: 1) How is Your and Your Spouses Health? This question sets the stage for the length of time that a retirement plan might need to provide for you and your spouse, and it also will spur a discussion about potential medical expenses that might need to be factored into the investment plan. [+] Read More

Financial Advisors should run a detailed analysis of your current financial situation before creating an investment plan for you. Part of that analysis includes taking a look at your portfolio’s asset allocation and examining each investment’s purpose, efficacy, and cost. When was the last time you asked a third-party investment professional to take a look at your portfolio, examine its investment fees, and offer their thoughts? Get a Second Opinion on Your Current Investment Portfolio Like going to a doctor for a second opinion, it makes sense to have an investment professional (other than the one that advises you) take a look at your current portfolio and provide you with an analysis of what you pay in investment fees. [+] Read More

A good financial advisor can help you choose smart investments, map out your income needs in retirement, give you advice on estate planning, and maybe even help you save some money in taxes along the way. In other words, he or she can help you form a solid investment plan that changes with you. A not-so-good financial advisor might not do all—or any—of those things well. Here are five signs your financial advisor isn’t doing a good job. 1) The Investment Strategy is the Same for Every Client If your financial advisor is applying the same—or even just a very similar—investment strategy for every client, then chances are your unique financial situation and goals aren’t being taken into consideration. Lots of folks have similar goals, but a one-size-fits-all approach indicates that pretty much everyone has the same financial objectives, which is usually not the case. [+] Read More

Here are three approaches to generating the desired amount of retirement income. When deciding which option – or combination of options – is right for you, we’d encourage you to seek the help of a financial advisor. 1) Get the Most Out of Your Social Security Retirement Benefits There are several strategies to consider when trying to optimize how you activate your social security retirement benefits. We’ve written about two methods in particular that may help you increase the size of your Social Security check, if executed correctly. The first is the Restricted Application for Spousal Benefits, and the other is the File and Suspend Strategy. [+] Read More

According to a study conducted by benefit consultant Aon Hewitt and advice firm Financial Engines, investors who did not use the help of a financial advisor tended to underperform with their investments. The study looked at the 401(k) returns of more than 425,000 savers from 2006 through 2010, and found that the median annual return of those who got professional help was almost 3% higher than the return for those who invested on their own, even after taking fees into account.1 Why Did Investors Without a Financial Advisor Underperform? According to the study, one of the reasons for the performance gap was that the investors who self-managed were far more likely to be too aggressive or too conservative, instead of a diversified balance of the two. [+] Read More

One of an investor’s main goals in retirement is to have his or her income needs met for as long as they live. But sometimes folks forget to plan for how their spouses and families will have their income needs met as well. The central question to ask yourself, and it’s a difficult one, is: “If I pass away tomorrow, will my nest egg be able to support my family’s financial needs?” Here are four steps investor’s should take to find out how prepared they are, and whether or not their nest egg is big enough to support their family’s needs. 1) Take an Inventory of All Valuable Assets This can be a rather exhausting exercise, but it’s crucial to the planning process. You should have a full list of all of your assets (property, stocks, jewelry, anything with material value) as well as your debt (if any). You can use this list when creating an investment plan, to keep track of how much everything is worth over time. Make the list once, and then have your financial advisor ask you about it regularly to make sure it’s all there and accurately valued. [+] Read More