The 7 Common Wealth Management Mistakes Many Small Business Owners Are Making and How to Avoid Them

Transcription

1 The 7 Common Wealth Management Mistakes Many Small Business Owners Are Making and How to Avoid Them Derek Moffatt, President Moffatt Financial Strategies 4150 International Plaza Suite 600 Fort Worth, TX Phone: Fax: Moffattfinancial@lpl.com Securities and Advisory services offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC. This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

2 Introduction The world has changed dramatically in the recent decade, but the way most small business owners and their families prepare for harvesting their business equity and preserve their personal wealth and retirement nest egg has not. At Moffatt Financial Strategies, we believe that most small business owners are missing out on opportunities for enjoyment and financial well-being while exposing their wealth and investments to unnecessary risks. Consider the example of a manufacturing process. As you are aware, manufacturing companies have very specific plans in place to create their products and a process for making sure end products and their quality are managed, measured, and monitored. In our experience, most owners of small companies are working without a system. Their retirement finances are like a manufacturing operation with no guidelines for production, where each working makes the product as they see fit each day, with no overall checks along the way for worker quality or consistency. No wonder many business owners and their families risk ending up failing to reach their financial goals! This report identifies 7 Common Wealth Management mistakes that small business owners and their families make. While working, saving, and accumulating your wealth, you may give little thought to how your money is invested, especially in your 401(k) or retirement plan at your business. In the long term this can be costly, particularly as you approach retirement or want to slow down. As you focus on your overall Wealth Management Strategy and try to coordinate your advisors by yourself without a guiding professional, you may miss opportunities to manage against common risks, save on taxes, navigate volatile markets, and properly plan for selling your business or retiring on your terms. Without both business equity maximization and retirement investing strategies, you could be forced to work longer, lower your lifestyle in retirement, have less for future generations, or not be able to afford the things you really want. We offer a proactive vision for Investing and Wealth Management to help small business owners protect business equity and invest for retirement as well as mange the major Wealth Management mistakes. Let me tell you, when I started working with business owners, I had to introduce most of them to the principles and processes for the first time. For example, most small business owners fail to take advantage of the power of dividends in equity investing, 1 which by some studies can account for almost 50% of total portfolio appreciation. That s why I decided to create and share with you this Free Report. This report, The 7 Common Wealth Management Mistakes Many Small Business Owners Are Making and How to Avoid Them, reveals key risks most of us face in relation to our wealth. In addition, it introduces our 5-Step Wealth Management System for Small Business Owners designed to help you save, invest, and harvest your business equity to help you pursue your financial goals. 1 The payment of dividends is not guaranteed. Companies may reduce or eliminate the payment of dividends at any given time. Moffatt Financial Strategies The 7 Common Wealth Management Mistakes

3 You can benefit from understanding the issues and strategies found in this vital report whether you are a partner in a small to medium-sized professional services firm, a business owner who has saved over a lifetime and wants to make the most of your investments before retiring, or someone with multiple advisors simply seeking reliable wealth management advice and an overall, coordinated strategy. I urge you to read The 7 Common Wealth Management Mistakes Many Small Business Owners Are Making and How to Avoid Them. Then, I recommend you set-up a no-obligation Financial Health Check and Goals Discovery where we can get to know you and your goals and see if we can help you protect and harvest your business equity, and make the most of your retirement investments. 7 Common Mistakes Many Small Business Owners Make Which Can Put Your Wealth at Risk There are more hazards than ever that threaten your hard-earned money. Risks can come from unexpected health issues or from failing to do proper tax, wealth management, and retirement planning. Risks to your personal investments can come from a global recession, bear markets, and ongoing market volatility. It can come from inflation, uncertain tax reform, or an overallocation of your portfolio to one sector, one asset class, or one part of the world. Many business owners may have experienced a net loss in their portfolios over the recent decade, especially after accounting for taxes and inflation. They cannot afford more of the same without putting their lifestyle and long-term retirement goals at risk. How about you? Furthermore, many may have not updated their long-term, business plans and their advisors aren t working from the same sheet of music. Because of this overall situation, their current business and investment plans may no longer be appropriate for their goals. Within that overall context, let s examine in greater detail 7 common wealth management mistakes small business owners are making. 1. Paying Too Much in Taxes As government deficits continue to rise, the path of least resistance for politicians can be higher taxes, a threat that can loom over small business owners and wealthier individuals into the foreseeable future. For those who have spent a lifetime creating business value, it is vital to ensure that their Wealth Management plans are up-to-date in order to help reduce paying taxes. Taxes can come in many forms. Most business owners place a large amount of time and thought into managing business and personal income for income tax purposes while failing to take advantage of more advanced planning which can include qualified contributions to retirement accounts, estate and succession plans, and the use of insurance. Moffatt Financial Strategies The 7 Common Wealth Management Mistakes

4 Equally vital is planning ahead for an equity harvest and then managing the transaction to help ease your tax burden. Common Wealth Management Tax Mistakes include: Failing to properly structure the organization for long-term tax advantage Not accounting for the tax consequences of business distributions Failing to take advantage of the tax benefits of 401(k) or cash balance profit sharing plans 2. Not Proactively Managing and Maximizing Your Own 401(k) and Failing to Coordinate It with the Rest of Your Investments For many, 401(k) accounts and other employer sponsored retirement plan accounts can make up the majority of your retirement nest egg. Yet many small business owners treat their 401(k) account separately from the rest of their investment accounts such as IRAs, Roth IRAs, and taxable accounts. They do not create a holistic investment plan that encompasses ALL of their investment accounts including their 401(k) into a unified, tax efficient investment portfolio. Most new clients I meet can t even tell me why they purchased their investments and what the purpose was for the account. They have no exit strategy in the event that their investment doesn t work out the way they d hoped. Even worse, they may have investments that are no longer appropriate for their current goals. Often we find that changes in other investment accounts outside the 401(k) necessitate rebalancing your 401(k) so it is consistent with your overall target asset allocation and risk criteria. After reviewing your portfolio, we will discuss what is in your 401(k) account, why you own it, and what fees you are incurring. It is vital to have an understanding of your overall goals and the risks and fees associated with your 401(k), IRA, or other qualified retirement plans, so that you have an appropriate portfolio that s in line with your goals and objectives. Common Retirement Plan Mistakes include: Not understanding the real cost of retirement Not understanding what the retirement plan options are, and which one is right for you Not valuing the business retirement plan correctly 3. The Average Investor Cannot Beat the Market, Especially When They Don t Have an Investment Strategy Study after study shows that the average investor cannot beat the market. You may have heard that fear and greed drive the markets. Those investing on emotion risk being fearful at the wrong time and selling at the bottom, or being greedy at the wrong time and buying at the top. As a result of this fear and greed cycle, many investors do far worse than the average market return. Moffatt Financial Strategies The 7 Common Wealth Management Mistakes

5 Research shows that on average, investors without a disciplined process will significantly under-perform the stock market. Consider the chart below from independent research firm Dalbar. Over the twenty (20) year period ending December 31, 2010, the S&P 500 Index achieved a 9.14% annualized return, while the Average Equity Fund Investor received a 3.83% return. This is known as the behavior gap. For the stated time period this is an emotional penalty of 5.31%. That s a lot of money lost to making investment decisions based upon emotions of fear and greed. DALBAR Quantitative Analysis of Investor Behavior Ending values and average annual total returns of hypothetical $100,000 initial investments for 20 years ended 12/31/10 $575, % Investor returns Invesment returns $379, % $100,000 initial investment $212, % $122, % Equity Investor S&P 500 Index Fixed-Income Investor Barclays Capital U.S. Aggregate Index Source: DALBAR (average equity and fixed-income investors data). DALBAR uses data from the Investment Company Institute, Standard & Poor s and Barclays Capital index products to compare mutual fund investor behavior with an appropriate set of benchmarks. These behaviors are then used to simulate the average investor. Hypothetical equity and fixed-income investor investments are based on average annual total returns. The indexes are unmanaged, and their results include reinvested dividends and/or distributions but do not reflect the effect of sales charges, commissions, account fees, expenses or taxes. This chart shows that, especially with today s volatile markets, investors working off of emotion rather than from discipline can be their own worst enemy. Most individuals don t want to spend the time, nor do they have an interest or the experience, to create and follow a disciplined investment system that is going to give them a reasonable chance of accomplishing their most important goals. It s not their fault though. The financial industry is designed to make transactions (and fees) by selling new products or ideas. Because of this industry-induced reality, even successful business owners are left to their emotions to drive their investment behaviors. Common Retirement Investing Mistakes include: Not understanding that investment behavior drives results Not fully understanding asset allocation and diversification, and how to apply it Not understanding how to transition from accumulation to distribution in retirement Moffatt Financial Strategies The 7 Common Wealth Management Mistakes

6 4. Thinking Your Investments Are Diversified When They Are Not We take the investment portfolio of a prospective client through a thorough review as part of our initial discovery process. This review is important because no one, not even an extraordinary investor like Warren Buffet, has a crystal ball on his or her desk to predict the future and grasp precisely what each world event will mean for the markets. The markets are too complex for that. We ve all been told that diversification reduces risk, which is true. So it s no surprise that small business owners will purchase many different stock or bond funds in an effort to create diversification. However, upon close inspection we often find that they hold the same underlying stocks or bonds. Or they fail to periodically rebalance their portfolios so one investment class can suddenly become a large portion of their portfolio. When we subject the portfolios of new clients to an analysis of their ability to survive under certain scenarios, the portfolios simply don t meet expectations. This is news to most, as they think just because they own a basket of stock and bond funds that they are diversified. We come from the school of thought that can be summarized in the spirit of Protect the portfolio from the downside and the upside will likely take care of itself. This sounds like common sense. We have discovered, though, that this philosophy is rarely guiding the portfolios of the new clients we meet. Common Diversification Mistakes include: Having too much of your net worth tied-up in the business Failing to leverage business cash flow into creating true wealth Failing to account for inflation and taxes with your investments 5. Thinking You Are Protected When You Are Actually at Risk 2 Business Wealth Management, Business Risk Management, and Retirement Planning would be relatively easy if we knew the future, but unfortunately unknowns that need to be factored into your wealth management plan often surprise business owners. We can categorize these unknowns into common risks which include (but are not limited to): Longevity Risk Because we are living longer, the challenge from a planning perspective is that a longer lifespan means we have to pay for it. And the more years that money needs to last, the more likely we risk running out of money. Market Risk Markets rarely move in a predictable pattern; they can be down significantly one year and up the next. If you exposed all of your money to the ups and downs in the public markets year after year, you could put your entire nest egg at risk as you approach or enter retirement. This is a risk most clients want to avoid. 2 There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. Moffatt Financial Strategies The 7 Common Wealth Management Mistakes

7 Inflation Risk Many approaching or in retirement forget that price inflation means the same amount of money purchases less every year. And even a small annual inflation rate over years or decades can mean a significant hit to the purchasing power of a given nest egg or income stream. Health Risk What would happen to your family if you or a key employee experienced an accident and could no longer work in your business? Or what if the unthinkable happened to you? We find that most of our new clients are either under or over-insured for their current financial situation. Risk from Lawsuits Simply stated, we live in a litigious society. Yet many small business owners have not taken some easy steps to protect themselves and their assets from predators or lawsuits. We find most business owners have not identified, quantified, or strategized for the common risks they face today, and as they transition or sell the business and move into retirement. There are many strategies designed to deal with these risks ones our planning clients can take advantage of. Common Wealth Management Risks include: Failing to protect from premature death of an owner or key employee Failing to protect your estate from a significant tax burden Failing to protect your assets from potential lawsuits 6. Failing to Plan to Harvest Your Business Equity A recent ROCG survey of business owners and former business owners found that less than 40% said they successfully transitioned their business. The primary reason given? Improper or no planning. (Source: Business Transition Success Report, October 2008.) If you have not yet extracted all or a major portion of the wealth from your business, you face a host of challenges that most business owners have only limited experience in overcoming. Many business owners may have a hard time getting accurate answers to all of the following questions: 1. When should I sell all or a significant stake in my business? 2. What price should I expect to receive? 3. How should I structure the transaction? 4. What transaction strategies will maximize exit values and limit personal liabilities? 5. What personal tax and wealth management strategies are critical BEFORE the transaction? Very few business owners truly understand what they can expect to get from a sale of their business and whether it s enough. The consequences can be dire: consider for example, the business owner who Moffatt Financial Strategies The 7 Common Wealth Management Mistakes

8 structured his business as a C-Corp for all of the tax advantages it provided him during its existence. Because of the unique characteristics of the company, when the owner sold, the transaction was structured as an asset-sale, rather than a stock sale. Consequently, before the sale proceeds could make their way into the owner s pocket, they were taxed at the corporate level and then again at the individual level. After debt repayment and transaction costs, the owner ended up with less than 50% of the sale price. (For Illustrative Purposes Only.) Whether you are contemplating an offer, trying to navigate the transaction for YOUR best advantage, or attempting to salvage the most from a recent transaction, there are usually personal and often business strategies you can use to maximize your after-tax proceeds. For instance, current trust strategies may be available to you to help save on taxes and gain protection. Common Reasons Owners Fail to Properly Monetize their Business Equity include: Failing to properly build cash flow and increase the value of the business Failing to find a proper buyer for a small business 7. Failing to Work from a Retirement or Transition Plan or Process One of the traps small business owners fall into is to put off planning for a windfall until they already have it in hand. Or they set-up a wealth management or estate plan and file it away for 5 years or more while it becomes out-of-date. In fact, according to financial research firm CEG, even among those wealthier families who do have estate plans in place, 80% are likely to be out of date. (Footnote 1 CEG Worldwide 2007.) The reality is that most business owners we meet have it within their means to both enjoy their life today AND save and invest for their later years. But without a plan, they may be putting their nest egg in jeopardy or failing to take advantage of tax-advantaged accounts, investment opportunities, or trusts. Another mistake is when a change in your personal or financial situation is not reflected in your plans and investments. Avoid this trap: Make sure your wealth plan is in place today and actively monitored and updated by an experienced professional. Common Retirement Planning Mistakes include: Failing to plan for retirement Failing to work from a process to pursue your retirement goals Waiting until it is too late to start planning for retirement So what is the antidote to this self-destructive behavior that can help you avoid the equivalent of the Financial Emergency Room? A system! Without a system to rely upon investors are left to make emotionally-charged decisions about their investments. With a system investors can set aside their emotions and prevent imprudent decisions. Moffatt Financial Strategies The 7 Common Wealth Management Mistakes

9 Avoid These Common Wealth Management Risks, Navigate to a Healthy and Happy Retirement There are many other pitfalls and mistakes beyond what we discussed above. Rarely do we find, for example, that the investment strategy, business plan, and financial plans are coordinated with the CPAs, tax strategy, and the attorney s estate plan all working in your best interest and with each one up-to-date. One of the other traps small business owners fall into is to put off planning entirely. They see it as important but not urgent. Another example is they set up a wealth management or an estate plan without ongoing review, only to have their hard work soon become out of date. Another mistake is a failure to update their plan when a change in their personal or financial situation occurs. The reality is that if you are like most small business owners that we meet, you have it within your means to both enjoy your life today AND save and invest for their later years. Simply, without a well-coordinated plan you may be putting your financial well-being in jeopardy. Avoid these traps at all costs. Make sure your investment and wealth plan is in place today, your advisors are actively managed by a central strategist, and the plan is updated by an experienced professional. It comes down to this: Retirement investing and business wealth planning can be challenging and put your dreams of a comfortable retirement at risk. The challenges to having the lifestyle you want in retirement include: Retirement investing and volatile markets put a premium on having a disciplined process and not making emotional mistakes, The forces of inflation as well as the risks from volatile markets can make it much more difficult to create the income most people will need throughout retirement to support their lifestyle, Your own 401(k) retirement plan at the business cannot be ignored; it needs to be coordinated with the rest of your investing strategy. Actively managed and monitored, your 401(k) plan could have a significant impact on your retirement assets or cash flow in retirement, Major investment losses right before or after retirement, based on the math-of-getting-even, can set you back many years, or worse, jeopardize your lifestyle in later years, and Volatile markets can quickly expose flaws in your diversification strategy and tactics. (We have found most feel as if they are truly diversified when they are likely exposing themselves to more investment risks than desired.) Thus, while wealth management and investing in today s volatile markets throws tough challenges at us, the good news is there is a way to smoothly navigate in rough seas. Next let s examine our proactive vision for wealth and investment management for small business owners like you. Moffatt Financial Strategies The 7 Common Wealth Management Mistakes

10 A 5-Step Wealth Management System for Small Business Owners Helping You Save, Invest, and Harvest Wealth Today The world is dramatically different from what it was 20, or even 10, years ago. We see, however, that the way most people in our industry practice Wealth Management has changed very little, if at all. That is why we developed a 5-Step Wealth Management System for Small Business Owners which encompasses three key areas: 1 Protecting Small Business Owners from the Common Wealth Management Risks, 2 Getting the More from 401(k) Retirement Plan and Personal Investments and Managing Market Risks Where Possible, and 3 Ongoing Wealth Planning and Management to Help Harvest Your Equity Step 1 Wealth Management Discovery Review A successful business wealth management plan begins with your values, goals, and personal compass. Derek Moffatt, President, Moffatt Financial Services The start of the journey is you encompassing your overall financial goals, what you value most, how you like to spend your time outside your business, what you want for your family, how you see your legacy, and more. With our Discovery process we leverage the power of questions. For example, we ll ask you: 1. What concerns you most about your company, your wealth, and the future? 2. How would you spend your time if money weren t an issue? 3. Have you considered the legacy you ll leave, and if so, what is your desired legacy? 4. Would you like to save on business, personal, and eventually, estate taxes? 5. Do you have charitable intent, and if so, would you like to optimize the impact of your contributions and gifts? Preserving and harvesting wealth from your business and making the most of your investments requires comprehensive diagnosis of the current situation. If you haven t had these conversations with your current advisors, they may not all be working towards your goals and in your best interest. Moffatt Financial Strategies The 7 Common Wealth Management Mistakes

11 Step 2 Your Wealth Management Plan We then review and analyze how your current business and personal assets and income fit with your needs and lifestyle goals. Many of our new clients had avoided this type of analysis because they think they still have many years before they retire or sell the business. Or they feared the potential outcome that they would need to cut back on their current lifestyle to fund their retirement. For virtually all of our clients, we find this is not the case. They can typically do more than they realize with their current retirement accounts and business cash flow. In addition, they find the process can provide clarity and confidence as we often find relatively easy strategies to both help protect their business interests and family and move towards the eventual goal of selling or transitioning the business. We believe business or retirement planning cannot be done without Comprehensive Financial Planning. Your retirement plans and investments must be managed with tax planning considerations in mind. The outcome is that you are likely able to save on taxes and properly use your business cash flow to fund the right accounts. You also need to consider estate considerations, unexpected health issues, key-man insurance, insurance for death or disability, and other issues specific to you, your company, and your family situation. Step 3 Protecting and Maximizing Your Business Equity and Retirement Plan (401(k)) We are largely in the business of creating and managing a custom wealth management plan for each business owner one that can vary year-to-year and with changes in a client s business or life. Our focus on process, along with our team of experienced professionals constantly working for a client contributes to our client s financial future. Derek Moffatt The average small business owner starting to plan to sell or transition the business, or small business owner approaching retirement has several moving pieces that need to be considered and most often addressed annually. We commonly address questions such as: What advanced trusts and wealth planning structures are available today to help preserve and manage wealth? 1. How can we avoid unnecessary taxes? 2. How can we better manage our assets against lawsuits and predators? 3. What estate and wealth transfer strategies can we employ to leave money to our heirs and to the causes we care about? Moffatt Financial Strategies The 7 Common Wealth Management Mistakes

12 As we manage the process, we also coordinate your team of specialists, often including tax, estate, and legal team members, and keep you updated as needed. The outcome: You gain the advantage of having a team of experienced professionals at your disposal while avoiding the headaches of spending time trying to manage the process. Risk management is key creating the right holistic strategy for your situation, reviewing what kind of insurance you have currently, and making changes to fit your goals and needs. Considerations include life, health and disability, and long term care insurance. Your Retirement Investments often go well beyond your 401(k) plan at work, but we often start there. We review your existing plan from an independent perspective. This includes analyzing historical performance, investment choices, and fees associated with the account. If the plan itself needs to be changed, we can help with that switch to a better plan. To help get the most from your retirement investments, we often create an investment strategy which cuts across both personal accounts and the company 401(k). This is the guiding strategy for your investments and helps us target a specific return with the minimum risk possible. It also helps us establish an efficient portfolio, so that you avoid needless fees where possible. Today for most of our clients, estate planning is another potential strategy to preserve assets for the longterm and for future generations. We make sure our clients go beyond simple wills and trusts and have proper titling of assets. In addition, we help them consider such issues as durable power of attorney and generational transfer strategies. Step 4 Getting the Most from Your Retirement Investments An investment strategy is unique to each individual, much like a fingerprint. Derek Moffatt A key component of your Wealth Management success is managing your investments with your goals and your tolerance for risk in mind. This important step, which many fail to take, requires a basic understanding of your comprehensive wealth management plan. We have developed what we feel is a sound investment system that helps to produce: 1. Predictable growth potential to help you save and invest FOR retirement. 2. Wealth preservation and income creation IN retirement. Predictable Growth Potential for Those Saving and Investing for Retirement For those accumulating wealth and investing for retirement, we create a diverse, custom portfolio according to both your goals and how you would like your money to behave. We help you to stay invested and potentially benefit from the power of the markets over the long-term. For example, we use a strategy of seeking dividends as well as growth in underlying equity values. According Moffatt Financial Strategies The 7 Common Wealth Management Mistakes

13 to Miller Howard Investments, this strategy produced almost twice the total portfolio return of a growth alone over during the period. (Why Dividends Matter, Miller Howard Investments, Inc., 2012) Key benefits of this strategy include helping you 3 : Create a custom investment portfolio based on your goals for retirement, Stay invested to potentially benefit from the long-term growth trends of the markets, and Select from available investment options with only your goals in mind. Wealth Preservation and Income to Fund Your Lifestyle in Retirement For those in retirement, we structure your nest egg to help create the long-term growth potential you will need for the future and to fight the eroding power of inflation. We also set up the short-term income streams you need to fund your lifestyle. Key benefits of this strategy include helping you: Transition into retirement and manage your portfolio through the retirement years, Balance the need for short-term cash flow and long-term preservation and growth, and Avoid big market downturns by diversifying your investments and managing risk. As we handle in Step 5, your business wealth management and investment plans are not set once and forgotten. Step 5 Monitoring and Updating Your Wealth Management Plan The essence of investment management is the management of RISKS, not the management of RETURNS. Well managed portfolios start with this precept. Benjamin Graham As a client, you can benefit from our constant monitoring of all major aspects which affect your business risk management plan, your retirement investments, and your overall wealth management plan. Once your plan is in place, we check its progress and, if necessary, make adjustments to keep you on course to working toward your goals. 3 The payment of dividends is not guaranteed. Companies may reduce or eliminate the payment of dividends at any given time. Past performance is no guarantee of future results. Moffatt Financial Strategies The 7 Common Wealth Management Mistakes

14 The Case for Proactive Wealth Management and Its Benefits for Small Business Owners First and foremost, we feel these strategies can help small business owners save more of what you earn and maximize what you can do with your investments and wealth. For most, that means to preserve your wealth for yourself and future generations and also to be able to focus on enjoying your busy company and personal life with greater control over your future. In our experience, most small business owners and their families will continue to make costly mistakes both with their investment and risk management strategies. These errors, however, can often be avoided through proper planning and proactive wealth and investment management. You don t have to make the same mistakes that so many others are making. The good news is you can get started right now to move along an appropriate path for yourself and your family. Our goal is to create and manage ongoing investment and wealth management plans designed to help business owners: support your desired lifestyle now and in retirement, give to future generations and the causes you care about, and know that you are sticking to sound strategies that are appropriate for you and your family. And, of course, we want to help to make sure you gain greater control over your financial future so that you can truly relax and enjoy life in the process. So here s what you can do right now... How To Avoid Costly Financial Mistakes In Today s Unhealthy Economy With A No-Obligation Second Opinion Review of Your Business Wealth Management Plans and Retirement Investment Portfolio We invite you to schedule your individual, no-obligation Second Opinion Consultation with Derek Moffatt. At this meeting, you ll experience a frank discussion about your personal financial situation and business goals to start to analyze where you are relative to where you want to be. You will be able to see all of your current investments and business wealth management strategies in context. As we go through this 5-Step Process for Saving, Investing, and Harvesting Wealth Today, we may recommend that you stay the course or that you consider new directions. Moffatt Financial Strategies The 7 Common Wealth Management Mistakes

15 What can you gain from this Financial Health-Check and Second Opinion Consultation? It can enable you to: 1. Gain Clarity on What Your Retirement Investments Need to Do for You and Whether You Are On Track Complete a simple questionnaire to achieve greater understanding of your needs and discover where you stand relative to your retirement goals and aspirations. 2. Review and Benchmark Your Investments so that You Know How They Stack Up We ll analyze and review your current investments so that you understand what you have, including their strengths and weaknesses. Then, we will discuss (without financial jargon) how the entire portfolio, including your 401(k), currently positions you for the long-term and retirement. 3. Understand a Process for Preserving Assets through Retirement What is most valuable to many small business owners and their families is how we collaborate with you to prioritize the recommendations and then produce a set of action steps with the goal of making the most of your money. The key questions we answer for you in addressing your specific goals and investments can include: What do you own today, and what are the common risks with these investments? Are you positioned right now to successfully sell or transition your business? Do you need to update your estate plan, your insurances, or your investment strategy? What should you do when it comes to your 401(k), IRA, or other retirement investment accounts? How can you get, and stay, on a path to fund your retirement lifestyle and not run out of money? If you are concerned that your retirement investments are going in the wrong direction, or if you are starting to prepare for selling or transitioning the business or if you simply want a fresh, independent perspective you deserve to know whether you are on track to achieve your long-term financial goals. Don t Wait Get Started on Your Second Opinion Review Today Meet with Derek Moffatt, President and Wealth Manager of Moffatt Financial Strategies, for 60 minutes and explore your current situation. Don t put it off. Call directly at or moffattfinancial@lpl.com to schedule your no-obligation Second Opinion Consultation right now. Moffatt Financial Strategies The 7 Common Wealth Management Mistakes

16 Meet Derek Moffatt Derek Moffatt has a client-centered vision. He founded Moffatt Financial Strategies, LLC in order to educate, empower, and enrich the lives of clients through comprehensive investment planning and wealth management services. His clients appreciate his analytical mind, accessible manner, and clear style of communication. Derek prides himself on his strategic expertise, his exceptional organizational skills, and the individualized attention he gives to each and every client. He specializes in working with retirees (and people near retirement), as well as small business owners, helping them to maximize the wealthbuilding potential of their companies. Derek Moffatt With over sixteen years of combined experience in business and financial planning, Derek understands the needs of both businesses and individuals. During his early career as Director of Advertising at the San Angelo-Standard-Times, he led strategic initiatives for a multi-million dollar department. Later, during his tenure as a financial planner for firms like Edward Jones Investments, he helped individual clients work toward their financial goals, assessing their circumstances and objectives and providing customized, highly strategic investment consulting. In addition to his business and financial expertise, Derek has over twenty years of public speaking experience. A sought-after speaker and facilitator, he has a unique ability to connect with different types of audiences and explain intricate financial strategies in an easy-to -understand manner. Derek has presented to churches, clubs and civic groups ranging in size from ten to over 450 attendees. Derek is a graduate of Angelo State University, an Accredited Wealth Management Advisor (AWMA), and an avid self-learner. He s constantly studying the industry and learning how new trends translate into opportunities for his clients. Derek s also active in the community: He is a member of the Fort Worth Rotary Club, a board member of Ryan Family YMCA and an active member of his church. In his off hours, he plays jazz guitar, and spends time with his wife and three children. Moffatt Financial Strategies The 7 Common Wealth Management Mistakes