Who Is Camarda?
Founded in 1993, Camarda Wealth Advisors has been repeatedly recognized as a “top advisor*” by financial publications, is rated “A/Accredited” by the Better Business Bureau, noted as a “5-Star Advisor” by the independent Paladin Registry, and named a “Premier Advisor” by the National Association of Board Certified Advisory Practices.
Firm founder Jeff Camarda is the author of hundreds of published articles, whitepapers, and columns on wealth matters, and has been personally named as one of the best financial advisors in America by Barron’s** and WORTH magazines. His advice has been repeatedly featured in the Wall Street Journal, and he has been featured or quoted in Investor’s Business Daily, SmartMoney, USA Today, Business Week, Investopedia, Reuters, and other national publications. He hosts Wealth Education Radio, holds eight financial designations or degrees, including CFA®/Chartered Financial Consultant, a Masters in financial planning, and is a PhD (Financial and Retirement Planning) candidate with completion expected Fall of 2016.
The firm believes very deeply that advanced and continuing financial education is the key to exceptional wealth advice, and actively encourages its advisors and staff to continually expand their knowledge. Camarda Wealth has been providing no-commission portfolio management to clients since 1998, and accepts no compensation for securities investments or portfolio management other than fully disclosed fees. While Camarda Wealth is a fiduciary legally obligated to put clients first, this is not generally true for stockbrokers, bankers, and insurance agents, who legally represent their employers, not clients. We feel this combination of education/expertise, fiduciary “clients must be first” obligation, and national recognition to be a powerful force to help clients attain their goals, and control costs and conflicts of interests.
Who is Jeff Camarda?
Jeff Camarda founded Camarda Wealth in 1993, and it has been advising successful families and managing their investment portfolios for many, many years. Firm Chairman Jeff Camarda has been repeatedly named by Barron’s as “one of the best financial advisors in America.” Barron’s calls ranked advisors like Jeff “the best people in the business” and “truly great financial advisors” and says that they are “accepted in the industry” as the “top 1%” who set “the highest standards of their profession.”* He was also named one of WORTH Magazines’ “Top 250 advisors” in the US, had his advice featured in the Wall Street Journal for years, and been quoted as a financial expert in the national press for decades. He has earned many financial and investment designations, including Chartered Financial Analyst (CFA®), MSFS®, and the E.A. tax credential, as well as the Certified Funds Specialist (CFS®), Board Certified, Mutual Funds (BCM™) and Chartered Life Underwriter (CLU®) designations. Jeff has written hundreds of articles and dozens of financial reports, whitepapers, and guides, and is currently at work on his dissertation for a PhD in financial and retirement planning. The firm, based in metro Jacksonville, serves clients across the country, and has been A+ rated by the Better Business Bureau for years. Jeff is personally “certified background checked” by the National Ethics Association. * (Barrons July 18 2016 p S2).
What sets Camarda apart?
We feel that several distinctions set us apart from other financial advisors.
First and foremost, Camarda Wealth is a fiduciary, legally required to put the interests of its clients first. This is not the case for stockbrokers, insurance agents, bankers and other advisors – who are permitted to put themselves and their employers before clients. While most customers of non- fiduciary advisors are not usually aware of this, we think it’s a pretty big deal. This is the reason we charge fees only for portfolio management, and don’t accept any commissions or other compensation from the investments we recommend – we feel this keeps us objective and acting in clients’ best interest.
We also believe very strongly that advanced financial education is the key to excellent advice. Unlike medicine, for instance, where everyone understands the difference between a doctor and a drug store clerk, the distinction for financial advisors is not clear, and the highly-trained do not stand out as well. Most folks don’t appreciate that the securities or insurance licenses required to legally act as a financial advisor are relative easy to obtain in a short period of time, and that even designations* like ChFC® - which only a minority percentage of advisors even have – are really just the beginning stepping stones of advanced financial training. As examples of this, firm founder Jeff Camarda has earned the ChFC®, CFA®, E.A., CLU®, CFS®, & BCM™ designations, has a Masters degree in financial planning and is completing coursework toward a PhD in financial and retirement planning. These credentials cover detailed investments, insurance, tax, estate and asset protection planning, and advanced financial planning and wealth management. All firm advisory staff are encouraged and incented to follow the Camarda’s education example, and we reimburse tuition.
The next thing we feel sets us apart is the fruit of the advanced training. While we feel we are excellent investment advisors, we believe we are also quite rare in understanding the various wealth management disciplines and helping clients to craft planning that drives holistic results, instead of piecemeal planning that may work well on one level (like tax) but poorly on others (like investment results.)
Finally, we feel honored by the press, awards, and other national attention we have received as a firm (like being named a “Premier Advisor” by the National Association of Board Certified Advisory Practices) and as individuals (like Jeff Camarda’s being named by Barron’s as “one of the best financial advisors in America”). For instance, according to Barron's, "it is accepted in the industry that the advisors ranked by Barron's represent the top one percent (1%) of their profession." Barron's determines the “best” advisors based on "assets under management, revenue, quality of practice and philanthropic work," as well as "client retention and time in the business." Barron's also notes that "critically important, we also carefully check the regulatory record of each advisor we rank." *Masters of Science in Financial Services (financial planning), Chartered Financial Analyst (CFA®, investments, stock and bond quantitative analysis), Chartered Financial Consultant (ChFC®, financial planning), Chartered Market Technician (CMT™, investments, technical, timing and chart analysis), Certified Private Wealth Advisor (CPWA®, advanced financial planning), E.A. (a personal, business, & estate tax credential allowing unlimited representation of clients before IRS), Certified Funds Specialist (CFS®, investments), Board Certified in Mutual Funds (BCM™, investments), and Chartered Life Underwriter (CLU®, focused study of life insurance and annuity contracts).
What is Camarda’s Mission?
I founded Camarda Wealth in 1993 with the objective of providing objective, expert financial guidance that makes a real difference in achieving outstanding wealth results. To do this, I have spent decades on my financial education, earning the ChFC, CLU, CFS, BCM, EA and MSFS credentials and, as of the summer of 2016, having nearly finished the requirements for my PhD in financial and retirement planning, expecting completion in Fall of 2016. I believe that by integrating very smart investment, tax, estate, asset protection, retirement income, and risk control planning, people, families and businesses can achieve their wealth goals faster, safer ,and more cost-effectively. I feel fortunate to have been twice recognized by Barron's as "one of America's best financial advisers," and to have the Wall Street Journal feature my advice four times. WORTH Magazine's called me a "Top 250 Wealth Adviser," and the firm's been named a Premier Adviser by the National Association of Board Certified Advisory Practices, a “Top Wealth Manager” by Bloomberg's Wealth Manager Magazine, and a “Top Investment Adviser” by Financial Adviser Magazine.
What is Camarda’s Business Philosophy?
This is best described by our Constitution, which hangs in our board room: “This Camarda Wealth Constitution is a long-term, guiding document intended to express the highest, most enduring values that Camarda and its people represent. It reflects our reason for being, not only for now, but also for the generations to come. Our reason for being, quite simply, is to be the best at delivering objective, professional/academic-grade, risk-controlled investment advice & integrated wealth management advice specifically and exclusively designed to serve the needs, goals and financial security of our clients. We exist, in a nutshell, to help make the dreams of our clients and their families come true. In this, our clients and their interests come indisputably first. We exist solely to serve them in an expert, conscientious, unfailingly ethical manner, which targets the results they want and need. It is not enough to do what is expected or required; we are called to do what is right, and what needs to be done.”
What are your company values?
There are many wealth managers, but only one Camarda. Aside from the tenets of our Constitution, we believe we’re quite rare in our ongoing quest for advanced financial knowledge, and a culture that nurtures continuing advanced education. In an industry where most operators have spent only the minimum study required for regulatory licensing, we embrace and encourage our advisory staff to make the pursuit of continuing advanced financial credentials an integral component of their professional lives. This concentration of knowledge benefits clients by giving us a sophisticated, global perspective, help us offer advice that integrates investments, tax control, asset protection, advanced estate planning, insurance/risk control, and other aspects, that can deliver results that are more efficient and powerful in attaining client goals, especially in completed fact patterns for business owners and those with larger and more complicated asset structures.
How does Camarda manage money?
Camarda Wealth uses a Portfolio Board management approach. All portfolios are proprietary to Camarda, meaning we have developed the methodology internally, and operate the portfolio discipline ourselves – we do not use sub-advisors or other outsiders to directly manage our clients’ money, as some other advisors do. We feel this helps us to better control quality, risk control, and costs, and means that our unique portfolios are only available from Camarda. This board develops and executes specific portfolio management rules for each model portfolio it manages, from individual stock deep value and income styles, to mutual fund and ETF asset allocation styles. This board is chaired by Jeff Camarda. Investment decisions affecting Camarda managed portfolios require board voting; generally the Board meets at least monthly, with interim discussions and votes as required. The Board’s decisions are executed across applicable client accounts as decisions are made by a dedicated non- Board member human trader. These Board-overseen portfolios can be combined on a customized basis to satisfy individual clients’ needs and tastes, while still maintaining Board-driven discipline and uniformity. Camarda believes this offers a more rigorous, effective, and coordinated investment approach than is typically offered by other advisors.
Our proprietary fee-only portfolios can be built using individual securities like stocks, CEF’s (closed end funds) ETF’s and no-load (no-commission) mutual funds. Our individual stock portfolios typically hold twenty “names,’ which we believe is enough for risk-controlled diversification (since only about 5% of the portfolio is in any given stock) but still concentrated enough that exceptional stock picks can make meaningful impacts to overall performance. Our stock portfolios use a value approach – looking to buy stocks that we believe are trading for less than they are worth – and are designed to target growth, current income, or a mixture of growth and income. We also manage a number of asset allocation/”pie chart” portfolios using mutual funds, CEF’s, ETF’s or combinations. These types of portfolios attempt to control risk and enhance returns by diversifying into different types of asset classes, such as non-US stocks, small caps, natural resources, and so on. These portfolio styles range from conservative to aggressive, and in configurations designed for general application, as well as special applications like 529 plans, 401k’s, no-load variable annuities, and so on. Finally, we oversee and advise on clients’ existing legacy positions that they transfer in to us but do not want to see because of tax impact or other reason.
How long have you been practicing? What is your experience? What are your qualifications?
Firm founder Jeff Camarda began his financial career as a stockbroker in New York in 1984, and began serious financial study by entering the CFP® program in 1990, when he entered the financial planning field as a life insurance agent. Since then, he has been engaged in near-continuous study of wealth matters, earning the ChFC® (financial planning) CLU® (life insurance and annuities), CFA® (quantitative investments analysis), CFS® & BCM™ (mutual funds), E.A. (a tax credential allowing unlimited IRS practice rights like CPA’s and attorneys) and a Masters in financial planning (MSFS®); he is currently a doctoral student pursuing a Ph.D. in financial and retirement planning. Prior to devoting himself primarily to no-commission portfolio management in 1998 as a result of the knowledge gained in his CFA® studies, Camarda was a top-producing insurance agent for such firms as John Hancock. He also has extensive real estate investing experience, having bought his first investment house in 1982, and at one time owning and managing as many as 100 rental units, primarily single family houses. Jeff also holds Florida insurance broker and real estate broker licenses.
How does Camarda charge for services?
For virtually all services, fees are the only source of compensation Camarda receives. Fee-only services include portfolio management and investment planning, tax advice and planning, estate and asset protection planning, real estate analysis and advice, advise on business services like accounting, tax control, and buy/sell planning, college, retirement, and risk management planning, and executive benefit planning. Overwhelmingly, these services are provided at no extra charge to fee-only investment management clients, and fees alone remain the almost exclusive source of Camarda’s revenue. It is important to note, however, that Camarda owns affiliates – Florida real estate and insurance brokerages – that investment clients may choose to work with. Such services are offered on a commission basis, primarily due to our belief that this is cheaper for clients, since in most cases commissions can’t be avoided for real estate services or the most competitive insurance products, and charging fees would typically just increase total client expense. We offer these services primarily as accommodations for clients who want them because of our deep experience in insurance and real estate, but stress that no investment client is obligated or even expected to use them.
What services does the Camarda Wealth Advisory Group offer?
Camarda Financial Advisors is an SEC-Registered Investment Advisor (RIA) providing fee-only, fiduciary investment and portfolio management services to its clients, using a Portfolio Management Board and disciplined, rules-driven investment methodology as described in other FAQ’s in this section. Briefly, Camarda has developed a number of proprietary portfolio strategies to address various clients’ different investment needs and tastes. Investment advice is provided through Camarda Financial Advisors, a registered investment advisor. Unlike some investment advisors, Camarda Financial develops its own portfolio management systems, research protocols, and regular review/adjustment procedures. It also offers – typically at no additional charge – sophisticated, integrated wealth management services to these clients intended to help clients more easily achieve optimal wealth results, considering portfolio management, asset protection, estate planning, income and estate tax control, retirement income planning, insurance and risk control, real estate investment aspects, and other individual goal areas such as special needs, charitable/philanthropic desires, and others. Importantly, we believe our systems allow us to provide all this for a relatively small asset management fee, typically similar or lower than that which many investors pay for (sometimes hard to spot!) embedded product costs in current investments on which they may receive no real management or advice. Our goal is to actualize your financial life – to target better results, more wealth and income, with less risk, less tax, less uncertainty, and less work for you. By coordinating the critical aspects of your wealth management planning we strive for a synergy where your goals and situation can be more clearly understood and more effectively targeted. Our planning model is to be a “quarterbacking” organization that can leverage your financial goals and situation to target better results, faster and with less cost and error, than may be possible with the traditional multiple-advisor approach, where each professional has only a small “piece of the puzzle,” and may communicate only imperfectly – or not at all – with your other advisors. Our intended objective is to deliver sophisticated wealth advice that fits all the pieces together so that your resources work in harmony – getting you the lifestyle and planning results you want from your wealth – instead of on an uncoordinated, redundant, or conflicted basis, which we frequently find to be the case when we first met new people. We strive to help you get it done faster, more cost-effectively, and with far less headache and hassle.
I already have tax and other advisors. What kind of value can Camarda add?
Existing relationships can be very valuable, and personally very rewarding. We heartily encourage you to work closely with advisors you trust to do a good job for you. We have found, however, that in some cases a lack of coordination between separate advisors can lead to losses in efficiency. Investment decisions may not be synchronized with tax control planning, producing avoidable taxation. The cost of excessive or inappropriate insurance may divert funds from more critical areas like retirement income funding. The lack of an estate plan that is regularly reviewed to keep up with changes in the law can cost huge sums, and outmoded asset titling can expose a family’s wealth to dangerous threats that can be easily planned for. The list goes on, but the point seems clear: an informed, coordinated approach can optimize results and help avoid expensive – or devastating – pitfalls. We have also found that by acting as one centralized “quarterbacking” organization we can help reduce errors, speed completion, avoid redundant efforts and expense, and save clients a lot of time and unpleasant follow-up work. Very often our insight can help you and your other advisors to take advantage of new opportunities to improve your situation. Also, for those clients that wish it, we are happy to politely chat with existing advisors, and report back to you on how effective we believe they can be for you.
Will Camarda refer me to tax, legal and other advisors?
Camarda is eager to work with your tax, legal, accounting, insurance, investments, employee benefits, 401(k), and other advisors to help them produce the best financial results for you. We can also gently ping your other existing advisors and give you our opinion of their range of expertise. We are also frequently asked to refer clients to other advisors such as CPA’s and estate attorneys, and, while any such ensuing relationships are directly between the client and the referred professional they may choose, we aim to match clients with other advisors who have the skill sets we believe are needed, are reasonably priced, good “chemistry”/personality matches, and appear to be highly competent practitioners.
What do you mean by coordinated wealth management?
We believe that wealth is managed best when all of a clients advisors – legal, tax, insurance, investments, etc. – have a seat at the table and can work together – and sometimes debate vigorously! – to search for the best path to the clients’ goals. We cannot emphasis enough how important we feel this is, or how often we see families or businesses with critical planning shortcomings, like huge capital drains to avoidable taxes, estate plans that are outdated, won’t work as intended, or will ensure high, needless probate costs, or virtually non-existent asset protection plans that create huge holes for financial predators to attack and take wealth.
Unfortunately, while many excellent advisory teams across the country create brilliant results, our experience is that such coordination is lacking for most people. While they may have several specialized advisors, it often seems as if they don’t coordinate their work, or even share information or brainstorm planning. This situation is depicted in the “isolationist” “wealth management” graphic below. Often, it can seem as if they are territorial, and mistrustful of other advisors who may “steal” “their” client. This is most unfortunate – these “isolated” advisors seem to be floating alone in space with force fields around them, and don’t talk much or seem to coordinate advice at all. For instance, we remember a business owner wanting tax relief once being told by their CPA to see their insurance agent to open a small-dollar IRA, when a much bigger deduction could have been had using a more specialized retirement plan. Most clients seem to feel they’re not getting the proactive advice they need, even if they can’t put a finger on it. Also, many professionals may work in fairly narrow bandwidths, but clients assume they “know everything” which can be a big mistake, such as the CPA who was not as up on retirement plan options as the client assumed they were.
We much prefer “coordinated wealth management,” and are often asked to serve as the wealth team manager as depicted below. Since our training spans so many areas, we are often in an excellent position to help build and coordinate advisory teams, with the objective that each specialty reinforces the others, producing a synergy – where the whole is greater than the sum of the parts – that drives greater wealth for clients. For instance, when taxes can be sharply reduced, the resulting free cash flow can drive wealth and client goals much faster. Not only can this help reduce advisory fees, but it can help to build wealth much faster, with more protection and less work for the clients.
Are you a fiduciary obligated to put my interests first?
Yes. The fee-only investment advisory and management services offered by Camarda Financial Advisors are founded on a fiduciary duty to put clients’ interests first. This is a much stronger standard than the “suitability” standard generally required of “financial advisors” who are really stockbrokers, insurance agents and bankers, though most of those folks seem to call themselves financial advisors these days. For instance, suitability standard “advisors” can sell you investment products on commission, and they way the standard is written, a high commission product can be just as “suitable” as a low or no commission product that is essentially equivalent. Since the commissions ultimately come out of your pocket, this typically creates a huge conflict of interest where it can become impossible for the advisor to be objective, or to put you first, since by taking a bigger commission they clearly put themselves and their employer’s interests ahead of serving yours.
The U.S. Government Accountability Office, in a report to Congress entitled Regulatory Coverage for Financial Planners Generally Exists, But Consumer Protection Issues Remain noted that “broker dealer suitability…rules do not…require that the clients’ best interests be served…(and) up-front disclosure of…conflicts of interest is not required…conflicts of interest can exist when…(a broker) earns a commission on a product sold…under the fiduciary standard, financial planners must mitigate conflicts of interest…but under a suitability standard applicable to broker-dealers, conflicts may exist and…not be disclosed up- front…financial planners functioning as broker-dealers may recommend a product that provides them with a higher commission, as long as the product is suitable…because the same individual can offer a variety of services – “hat switching” - …consumer groups…have expressed concern that consumers may not fully understand which standard of care, if any, applies to a financial professional.”
Again, we believe this is a very serious, but widely under-appreciated issue, which may cause great harm to achieving families’ financial goals. Fiduciaries have to put you first – others don’t, and act on a standard similar to car sales.
How are my accounts protected?
Client accounts, in the clients’ names, are held at independent custodians, like Charles Schwab, and TD Ameritrade. These independent institutions – not Camarda – take custody of client funds. Camarda has authority to manage accounts (and deduct its fees, if the client wishes) at these custodians, but not to move money or transfer assets – this only occurs at the client’s instruction. These custodians carry Securities Investors’ Insurance Cooperation (SIPC) insurance, as well as typically much additional coverage, to protect clients’ securities in the event of disruption at the custodian. Clients can check accounts balances and activity 24/7 online at the custodian, and separately receive account statements from the custodian, which match the statements Camarda produces (however you may find ours more informative with regard to performance calculation and other information).
Contrast this with criminals like Bernie Madoff, who directly accepted client funds, took custody themselves, and were able to make up anything they wanted on the statements. Long before Madoff’s fraud became well known, since its inception in the 1990’s, Camarda has never accepted custody, and always used independent institutional custodians, as well as internal security policies and protocols, to protect client assets.
For portfolio styles that function better with pooled funds, an independent trust company would hold title to pooled accounts, which would be custodied at an independent financial institution as above; such accounts are typically restricted to “accredited investors” and audited at least annually by an independent public account that is both registered with and subject to regular inspection by the Public Companies Accounting Oversight Board.
What’s a portfolio stress test?
Stress testing is a way to analyze how a given system – like the portfolios on which you rely for financial security – may behave when conditions become unfavorable. Systems like your computers or the electrical networks that power your house may work fine under many circumstances, but break down utterly when things change. Computers crash, breakers blow, and sometimes wires melt with disastrous consequences. A metal component – shiny and flawless to the naked eye – may seem perfect, but in fact be riddled with internal flaws and microscopic cracks which could cause it to crumble, even under the loads for which it was designed. Also true for the heart which pumps oxygen and nutrients to your brain and body, the wheels on which you ride or the plane in which you fly, and the nest egg on which you depend for the money you need to live and accomplish the things you want and dream about.
A stress test applies “what if?” conditions to a system, and considers what might happen. An important point is that these “what if?” conditions are generally not extreme ones. They are the kinds of things that can be reasonably expected to happen sooner or later, that the system was – or should have been – designed to control. New Orleans’ tragic experience with Hurricane Katrina is a good real- world example of a deeply flawed system crushed by real world stresses when they finally came into play. It is important to note that had New Orleans’ water control systems been stress-tested and fortified before Katrina, much damage, cost, and misery could have been avoided. The fallacy of expecting mud walls to hold hurricane-force flooding was entirely predictable and correctable, had it been addressed in advance.
In the world of portfolio construction, sadly, many of these entirely predictable conditions are routinely overlooked by both the marketers and buyers of investment advice. Everything on your statements may look bright and shiny and fine, until a 9-11, technology bubble, housing bubble, 2008 “black swan” event, “flash crash,” or something else yet unanticipated hits the weak points, the system crashes, and your wealth oozes out into the mud, perhaps to never be reclaimed.
We believe that conditions at this point in time may be subjecting many investors to significant risks that are unappreciated by them, and by their advisors.
Our stress test is intended to help alert you to the hidden dangers that have be burrowed into your portfolio, giving you a chance to take corrective action before encountering the kind of catastrophic conditions that could devastate your financial security. Click below if you would like to take the opportunity for this free service.
How do I open investment accounts with Camarda Financial?
The process is very simple. Brokerage accounts are opened in your name with the independent custodian of your choice and funded by check or account transfers from other institutions. Your funds go directly from your bank or old advisors to your new accounts at your new custodian. Accounts are titled in your name, and you can review balances and activity 24/7. Camarda has access to review and manage for only as long as you wish.
How do your clients use your services?
Some use us for only one function, like investment management. Others just have us also do estate plan blueprinting, tax reviews, business or real estate consulting, retirement income planning or asset protection planning. Some will start with one advisory area (usually investment management), and then add others. Others ask us to address multiple concerns simultaneously, to really maximize the synergy of their wealth management planning. It’s a very individualistic process, driven entirely by what clients feel they need and want, with prompting from us as to areas for which we see high potential impairment opportunities. Typically all advisory work is included in your investment management fee.
What do you mean by asset protection planning?
For most people, this means protecting assets from attacks like lawsuits, divorces (especially children’s!), unwarranted creditor actions, and other financial predators. Risks – from businesses, real estate holdings, driving, professional practice, children’s actions, and other sources – can be more severe than many people may realize. Often asset protection planning is incorporated into estate planning, especially to protect children’s inheritances – or their parents retirement income security! While business owners and higher-risk professionals like physicians are most sensitive to the need for this, in today’s society it is prudent for nearly everyone who has accumulated some measure of wealth to consider asset protection planning. Actual plans can vary from very simple to quite sophisticated. Some types of assets, in some states, have excellent built in protections based on state law, and sometimes this can be enough. Other cases call for advanced techniques, like family holding companies, exotic trust planning, and other specialized entities. In many cases, dramatic improvements can be obtained at nominal cost in time or money. Most importantly, asset protection planning works well if conducted before threats appear – after the danger presents, much less can be done
What’s Camarda’s tax philosophy?
Camarda endorses a fairly high-touch tax strategy that tends to be time and labor-intensive and designed for those who want a proactive approach designed to take advantage of significant opportunities for tax savings on a customized basis. Business owners, executives, athletes and entertainers, and those with somewhat complicated tax and investment situations often find this sort of advice quite valuable. Camarda firmly believes that as the US Tax Code becomes increasingly more complicated and burdensome for the well-off, proactive, expert tax guidance becomes an ever more critical factor in effective wealth management. Our tax advice, in conjunction with your chosen tax advisor/preparer, is intended for those who value careful review and planning to maximize opportunities for tax control. In many cases, the differences can be astonishing.
Why do you think tax planning is important to investment clients?
The primary reason is that capital lost to taxes can erode – sometimes cripple – wealth building. Since there are often so many opportunities to reduce taxes – thus transforming cash outflows into net savings/wealth growth. This can make an incredibly powerful difference that is too little-appreciated by many investors and advisors alike.
Beyond this, many clients seem to like the convenience of “big picture” financial advice. And since we keep detailed investment tax data for investment clients (including investment income, and both realized and unrealized gains and losses, short and long term), your other tax advisors can generate “on the fly” mid-year tax planning advice from our investment records quickly, which are often quite helpful to business owners, professionals, executives with options packages, real estate investors, and others with capital assets decisions to make before the end of the tax year. Of course, at tax time, your tax advisors and preparers can have access to investment tax data from us very quickly and conveniently.
What do you mean by estate planning?
In most cases, the primary objectives of estate planning are: 1) maintaining control and continuity of retirement income and lifestyle, and protecting clients against guardianship issues later in life if Alzheimer’s or other cognitive issues occur; 2) engaging in dialog to help clients precisely express their goals, and then setting things up so that your assets go to whom and in what manner you wish (including children from previous marriages if desired) and building in protections for heirs to guard against attack from divorce or other cause; 3) minimizing taxes and probate costs; 4) providing a easy- to-follow roadmap so clients can quickly understand and implement their estate plan, and make the tweaks to their financial structure so the plan actually will work. In many, many cases, we find that clients have previously set up trusts and other estate plans, but for some reason never actually implemented the plan by titling assets in the trust’s name, changing beneficiaries, and doing the myriad other things required to make the plan work. In these cases, they can often wind up with an “empty shell” – effectively with no estate plan, exposed to needless risks, fees, or taxes, and left with nothing but a false sense of security that their affairs will be properly settled. In other cases, the estate planning is old and based on prior law, from another state, or has other significant opportunities for improvement that an astute review by a skilled lawyer can bring to light. In others still, they think they have set up trusts, but actually have designed trusts in their wills, which not only guarantees the risks and expense of probate, but offers no guardianship and other important protections.
In some cases, a simple, proper will suffices, and in others, more complicated planning involving asset protection planning, charitable considerations, business reorganizations, or the use of income and estate tax free wealth creation devices are indicated. As in most other planning areas, we have found that an expert, highly customized approach to estate planning can very effectively target client objectives, especially when combined with integrated investments, asset protection, tax, and other planning.
I’ve had a will and trust done for some time now – why would I want to review it?
There are lots of good reasons. For one, State and Federal laws change – sometimes frequently – and often create opportunity for more effective plans, and additional probate, tax, or other savings. Sometimes people think they have a living trust (one that exists now) but instead have a testamentary trust (one that will not be set up until after their death) that can expose them to needless probate fees, will contests, and even fraud since probate is a matter of public record, and criminals have been known to search probate records for valuable assets. Your wishes about what to do with your estate may change. Important asset protection opportunities may exist that have been overlooked. You may have done an estate plan that might not work because you had not been guided to make the proper changes to asset titling, beneficiaries, and other items. And so on. We often are able to uncover many of these issues, and help determine if an existing estate plan is sufficient, or if changes should be considered. These free review sessions are designed to give you an overview of your current planning situation, generate an outline of plan improvements based on your wishes and the opportunities we see for you.
How do you use a trust?
Trusts are probably the most flexible and powerful estate and asset control tools around. While they can get complicated real fast, the basics are pretty simple to understand. They can be far more effective than wills for most estate planning.
Think of a trust as a bucket you put assets into, with the trust wording controlling what happens to the assets, who can use them, and how. When you put assets into a trust, they will be titled in the name of the trust, not yours or in joint titling anymore. You statements will read something like John Jones, trustee, of the Jones Living Trust dated July 4th 2017, instead of John Jones or John and Jane Jones. Revocable trusts can be changed, and you can take the assets out, spend them, do whatever you please. With irrevocable trusts you can’t, unless you build in a back door called decantability. Most of you will only be interested in revocable trusts. A living trust is just one that is created and functions while you are still alive, compared to testamentary ones that are created at death by your will. Living trusts have a number of distinct advantages, and most of you will want to use them. These include confidentiality, strong protections against cognitive issues and avoiding guardianships later on, and big savings on probate fees. Legal costs are typically the same, so living trusts can be real bargains, and are far superior in my view.
There are three important titles in trust lingo. The first is the grantor, or settler, which just means the person or persons who dump the assets into the trust. The trustee is the manager, who gets statements, writes checks, hires investment managers, and operates the trust according to the trust rules. The beneficiaries – and there can be one or hundreds – are the people or entities for whose benefit the trustee runs the trust. These three players can all be initially the same people, and this is typical of most family trusts.
Here is a typical pattern. John and Jane, as grantors, put their non-IRA assets into their new living trust. The trust also has special language to allow it to be the IRAs’ beneficiary and still preserve important tax advantages. This is called conduit language. It is important to prevent the kids from getting a ton of money too fast and blowing it. John and Jane are co-trustees, and can each direct accounts and write checks. John and Jane are also the primary beneficiaries, and use the trust to fund their retirement income. If one of them loses cognitive capacity, the other still runs the trust as trustee. If they both do, their daughter June takes over as contingent trustee, using a doctor’s note or whatever test is prescribed in the trust. This can save a ton of cost and hassle avoiding guardianship. When John and Jane both pass, the trust splits into three sub-trusts, for June, James, and Julian. If the children are smart, they leave the assets in their new trusts instead of taking them out and putting them in joint names with their spouses. This protects against divorce risk, and makes sure the grandkids – Julia, Justin, Jan, Juno, and the others – eventually get the family wealth. These kids’ trusts have special language to protect the assets against lawsuits, creditors, and other threats. Naming the siblings as protectors of the others trusts – Julian as June’s protector, for instance, can offer additional protection from financial predators and divorce, and help keep the family fortune intact. Camarda’s free 7-Point Wealth Health Checkup report can give you more information on this and other important areas. Click on the link for it now, it’s free!
Why does your affiliate offer insurance services?
In many cases, proper insurance planning is critical to overall wealth planning. Clients may have the wrong type or amount of insurance, or have insurance they no longer need. Frequently, appropriate insurance can be sourced that not only provides better coverage, but actually results in lower premium costs. Overpaying for the wrong kinds of coverage is a common problem. Insurance can also have important tax, cash flow, estate planning, and asset protection aspects that can make a major impact in certain situations. Insurance is a critically important wealth planning area, but still largely dominated by non-fiduciary commission operators. Beyond this, most products are still primarily offered using a commission distribution model, such that consumers can not be best served on a fee-only basis since this sharply limits product choice, and some of the best products are only available as commission versions. While we feel that this will change over time, we also feel that the most client-centric approach springs from accessing the universe of insurance products – including commission products – but in a way that is not primarily compensation driven. We call this a semi-fiduciary approach, which we believe is the best possible where commissions remain a consideration. Still, we feel that access to all products represents a better platform to target best outcomes for consumers, and are committed to putting clients’ best interests ahead of our compensation in cases where we are asked to provide insurance services.
What about real estate?
Real estate comprises a core asset class for many people, from their homes, to in some cases extensive portfolios of investment commercial or residential real estate. Quality advice regarding real estate can have a critical impact on overall planning. From transaction services, to advice on mortgage management, income taxes, investment aspects, and reducing property taxes, real estate decisions can have significant consequences – good and bad – to overall financial management. Please bear in mind that while real estate advice is typically included at no charge for investment clients, our affiliate real estate brokerage charges traditional commissions for its brokerage and real estate management services. Founder Jeff Camarda has extensive personal experience in the tax and investment attributes of both residential and commercial real estate, beginning in 1982.
What business advice do you offer?
Besides working with your existing accountants and providing advice for overall tax, accounting, and financial management matters, we also consult and offer benefits, primarily fee-only/fiduciary 401(k)’s, and customized retirement plans intended to produce the maximum value and tax savings for the owner; in many cases, the differences in owner benefits can be surprisingly large. We do retirement plan investment management, as well as cost control and compliance review. We can help with risk/lawsuit control and asset protection planning, appraisal/valuation, business succession and buy/sell planning, advice, and documents, as well as negotiation and business brokerage services. In all matters, our prime objective is cutting taxes and maximizing business efficiency, value and cash flow to owners.
What’s your privacy and confidentiality policy?
Camarda Wealth Advisory Group has adopted various policies and procedures with regard to privacy and confidentiality of the data it maintains. The firm conducts reviews to monitor and ensure that the firm's policy is observed, implemented properly and amended or updated, as appropriate.
Camarda Wealth Advisory Group maintains safeguards to comply with federal and state standards to guard each client's non-public personal information ("NPI"). Camarda Wealth Advisory Group does not share any NPI with any nonaffiliated third parties, except as discussed in our actual policy, which can be found here.
Employees are prohibited, either during or after termination of their employment, from disclosing NPI to any person or entity outside Camarda Wealth Advisory Group. Access to NPI is restricted to those employees who need to know such information to provide services to our clients.
Safeguarding standards encompass all aspects of the Camarda Wealth Advisory Group operations that affect security. This includes not just computer security standards but also such areas as physical documents and machines security and personnel procedures.
What’s your client data security policy?
Safeguarding standards encompass all aspects of Camarda Wealth Advisory Group operations that affect security. This includes not just computer security standards but also such areas as physical security (including paper documents and machines which store information) and personnel procedures. Examples of important safeguarding standards that Camarda Wealth Advisory Group may utilize, as appropriate, include:
- access controls on customer information systems, including controls to authenticate and permit access only to authorized individuals and controls to prevent employees from providing customer information to unauthorized individuals who may seek to obtain this information through fraudulent means (e.g., requiring employee use and rotation of user ID numbers and passwords, etc.);
- access restrictions at physical locations containing customer information, such as buildings, computer facilities, and records storage facilities to permit access only to authorized individuals (e.g., intruder detection devices, employee access codes, cameras, use of fire and burglar resistant storage devices);
- dual control procedures, segregation of duties, and employee background checks for employees with responsibilities for or access to customer information (e.g., require data entry to be reviewed for accuracy by personnel not involved in its preparation; adjustments and correction of master records should be reviewed and approved by personnel other than those approving routine transactions, etc.);
- measures to protect against destruction, loss, or damage of customer information due to potential environmental hazards, such as fire and water damage or technological failures (e.g., use of fire resistant storage facilities and vaults; backup and store off site key data to ensure proper recovery); and
- information systems security which incorporates system audits and monitoring, security of physical facilities and personnel, the use of commercial or in-house services (such as networking services), and contingency planning;
- Methods of disposal to ensure that the information cannot practicably be read or reconstructed that Camarda Wealth Advisory Group may adopt include: 1) procedures requiring the burning, pulverizing, or shredding or papers containing consumer report information; 2) procedures to ensure the destruction or erasure of electronic media.
Do you have a succession plan to insure firm continuity?
Camarda believes that substantial planning to facilitate firm continuity over time is critical for clients who rely on Camarda for long term portfolio management and ongoing wealth optimization. To work to accomplish this, Camarda has adopted planning and specific development procedures to cultivate subsequent generations of firm leadership and Portfolio Board management; we have embraced a century-plus continuity planning horizon, and intend to remain independent and untainted by potential acquirers in order to remain true to our firm values and dedication to the pursuit of excellence.
What’s Camarda’s disaster recovery plan?
Camarda Wealth Advisory Group has adopted various procedures to implement the firm's policy with regard to disaster recovery and business continuity and conducts internal reviews to monitor and ensure each policy is observed, implemented properly and amended or updated, as appropriate. Our Disaster Recovery plan covers the following areas:
- Telecommunications Services and Technology
- Alternative Locations
- Preparedness of Key Vendors
- Regulatory Obligations
- Key Personnel
- Policy & procedure review and testing
- Threat Awareness