A Registered Investment Advisor
I NTRODUCTION
T ODAY ’ S P RESENTATION Protecting & Educating Parishioners • Vista Senior Center Volunteer in 2015 started office hours, gave fraud talk • Late in 2015: Euthanasia Law Passed, New Soc Sec Law, Consumer Reports article “Crying Shame” • OK God I get it! Bring this to faithful. • Warn the public that mainstream financial services on you rather than rallying for your success.
T ODAY ’ S P RESENTATION Handouts • OWA brochure – sensible, prudent investing • Catholic Health Care Directive • “Protect Yourself from Fraud” • Free Smoke Alarm Program SD County • Catholic/Secular Portfolio summaries • Blog post on our web site with everything; read online, share with others, print it • We’ll mail you copies of anything you request. Just let us know.
T ODAY ’ S P RESENTATION “From Scams to Prudent Practices” - Topics • Senior Fraud • Spousal Benefit phasing out – what to do? • Misunderstood & Valuable Medi-Cal LTC • Euthanasia: Protect yourself, Catholic values • Catholic Investing – prudent investing wins and this can be done in a Catholic way . • The key to all of this – holistic planning with a prudent advisor held to a fiduciary level of care. Someone who orchestrates for you. • We will keep discussion to a minimum.
T ODAY ’ S P RESENTATION From Scams to Prudent Practices • Holistic Planning • Indep. Experts–advice review RIA, CFP, CPA • Less chance of ommission. • Valuable advice: “ collective wisdom ” • Understandable/Actionable Documents • Gentle & kind accountability to executing the sound advice provided through consistent progress meetings. • Steady progress. “Lather, rinse, repeat”
T ODAY ’ S P RESENTATION From Scams to Prudent Practices • What are the steps to holistic planning? • Step 0: Discovery meeting with OWA. • Five elements are documented that are critical before you hire someone to assemble your first written plan or DIY - valuable 1. Values – More important than $$/goals -your ”why” 2. Goals – specific tangible financial goals 3. Where are you now financially – starting point 4. Who is currently on your team 5. What are your preferences in an advisor
T ODAY ’ S P RESENTATION Focus on “Fiduciary Hiring Skills” • What advisor attributes to look for? • Are they driven by discovering your values/goals and maximizing achievement? • Fiduciary duty? (Follow the money!) • Confident Cowboy? or Fiduciary Project Mgr? • Have specific processes to deliver sound advice? (to deliver sound to achieve your goals not sell their products) • Independent & surrounded with same?
V IDEO #1 • Let’s begin with a video that demonstrates the difference between a broker (think Merrill Lynch, Morgan Stanley, UBS, etc.) and a fiduciary Registered Investment Advisor – think O’Reilly Wealth Advisors…. • https://goo.gl/lNUJ7
M EDI -C AL L ONG T ERM C ARE ( IS NOT A POVERTY PROGRAM )
W HAT IS L ONG T ERM C ARE ? • ADL’s – need help with 2 or more. • Medicare covers “repairs” – you are sick or injured, you get better again. • Medicare does not cover long term care. • Besides physical needs – a rapidly increasing concern is dementia. • Long term care is expensive (e.g. $72k/yr) • Long term care insurance is also expensive and can be hard to get.
M EDICAID , M EDI -C AL • The states have various programs to help citizens pay for long term care for those that cannot afford it. • Cali is known to have perhaps the most luxurious program of all 50 states • The published requirements for qualification are based on assets not income. • Many assets are exempted: home, auto, certain businesses, vacation property, retirement accounts…
M EDICAID , M EDI -C AL • The challenge is non-qualified taxable accounts – bank, portfolio, stocks, bonds • Most people think of “spending down” to qualify. • The rules for spending down and moving assets are very specific and cannot be violated. • Turns out you can get it done much easier. • You need an estate planning attorney that knows this specific field. (elder care lawyer)
M EDICAID , M EDI -C AL • The atty goes to the court and documents that you need “x” amount over and above SS and your other income. • Let’s say the judge says OK to $4,000/mo or 48,000/year. • Then they use CD’s to determine how many assets. If they use a 12 month CD paying 1%, then you need $4,800,000 in your portfolio – and you are approved despite having a $4.8M portfolio. Once approved, they do not re-visit the approval process.
M EDI -C AL : E STATE P LANNING • There’s more to it though. • After the second spouse dies, the state will come back seeking repayment of the potentially hundreds of thousands of dollars. • Your estate planning work requires some special tweaks for this strategy and the last tweak is that your revocable trust is converted to an irrevocable trust and the government cannot access it. They can get access to a revocable or “living” trust. • Guidance from “elder care law attorney”
O THER I MPORTANT CONSIDERATIONS • This only works in a facility that accepts Medi-Cal. The trick is to find one that suits you and get your foot in the door without mentioning Medi-Cal. • The very best/newest facilities may not accept Medi-Cal. • If you demand top notch facilities, this may not work for you and you may want to consider a two-pronged approach. • Be careful with consultants – the nursing may pay them for the referral – conflict of interest
S ENIOR F RAUD
C ONSUMER R EPORTS November 2015 • Case Studies – Nov. 2015 issue Consumer Reports. Available on-line. • Protect Yourself From Fraud • Scams avoided – great – what about “legal scams”….(these are the larger issue) • How to recognize conflicts of interest which are legal but usually result in poor results. • How to make the smartest choices about your money. (Yes, holistic planning)
C ONSUMER R EPORTS November 2015 • Philip Deeb, 77, unscrupulous financial advisor bilked him out of $186,000 • Edna Schmeets, 86, $297,000- swindler with “prize” • Fr. Michael Ortiz, 86, $40,000 swindler with $1.6M prize • Rev. Al Cadenhead, 68, $16,000 IRS imposter • Wade Gardner, 62, $3,000, promised project work • Beth Baker, 87, $65,000 fraudsters say she was saving her son overseas • Marjorie DeGrace, 77, $9,000, fraudulent contractor • Louise Brown, 68, Man met through dating site, $60,000 to help him with business troubles abroad.
C ONSUMER R EPORTS November 2015 • 2010 survey: 1 in 5 taken advantage of financially • FTC reports: Fraud complaints rose 47% 2012-14 • Victims are often deeply ashamed • Victims are afraid of reprisals from scammers who threatened them, • Some may fear losing their independence • Scammers use seniors isolation to take advantage – so get out in the community like you are now!
CA D EPT OF B US . O VERSIGHT Protect Yourself from Fraud • This document categorizes different types of fraud and activities that may be a sign of fraud. The focus is on how to recognize it could be fraud. • A critical step is to “investigate before you invest” • “An investment in knowledge pays the best interest.” Benjamin Franklin • The most important part of the document is found in the center – the Check before you Invest form. • Demand that anyone selling you financial products & service fills the form COMPLETELY and signs it. • Then check them out using the list of authorities provided.
CA D EPT OF B US . O VERSIGHT Protect Yourself from Fraud • Never, ever be shy to ask: exactly how much they get paid, when and how. It’s an absolutely fair question. • OWA says do your due diligence! Ask to be placed into contact with at least 2 current clients – and once in contact – don’t be afraid to ask direct questions about the experience and results. • OWA says: Yep, you got it – holistic plan that contains the wisdom of several experts.
L EGAL S CAMS
I NVESTING , YOU HAVE A CHOICE • Investing – Registered Investment Advisor (RIA) – Choose to work with someone that must act in your interest not theirs. When it comes to investing, you have a choice to work with a financial products salesperson who has conflicts of interest or an RIA who must fully disclose if they have any conflicts and most do not. – US Gov’t. video (1:05) – Mutual Fund A vs. Mutual Fund B.. – Happens every single day, THOUSANDS of times. – https://goo.gl/L9xtoq
Y OU HAVE A CHOICE Conflicts of interest • Most “financial advisors” earn commission selling products or conducting transactions. • Conflict-of-interest; sell products that are NOT in your best interest. Max commission, gives tangible rewards or boss is pushing. • “Follow the money” is always a good idea! • Products are “opaque” – fine print -Annuities. • Front end loaded, back end loaded or other awful terms & conditions, penalties. • Use emotion selling, products die off regularly
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