Full Service Brokerage

• Financial Planning
• Mutual Funds
• Stocks
• Bonds
• Brokered CDs
• Foreign Issues
• Precious Metals
• Unit Investment Trusts (UITs)
• Real Estate Investment Trusts (REITs)
• Options
• Custodial Account
• Fiduciary
• Restricted Stock

Investment Management

• Financial Planning
• Mutual Funds
• Fee Based Advisory Program
• Tax Efficient Investing
• Portfolio Management (Active & Passive)
• Wrap Accounts

Retirement Plans

• Qualified Plans
• Non-Qualified Plans
• Employee Sponsored Plans
  • Defined Benefit Plan
  • 412(i)
  • Cash Balance Plan
  • Money Purchase Pension Plan
  • Defined Contribution Plan
  • Profit Sharing Plan (PSP)
  • 401(k) Plan
  • SOLO (K)
  • ESOP
  • LESOP
  • SIMPLE IRA
  • SEP- IRA
  • 457 Plan
  • 403(b)
• Individual Retirement Accounts
  • Traditional IRA
  • Roth IRA

  College Savings

• 529 College Plans
• UTMA
• UGMA
• Coverdell Education Savings Account (ESA)

Insurance Products

• Life Insurance
  • Estate equalization
  • Key Man Insurance
• Long-Term Care
• Disability Insurance
• Deferred Annuities
• Immediate Annuities

Trust & Estate Services (services to be offered through a preferred service provider)


 

Full Service Brokerage

Financial Planning – The process of understanding financial goals and creating a plan to take an individual, family or business from their current situation to their desired financial situation through systematic processes.  Frequently includes annual reviews to evaluate progress toward the stated goals and consideration of any circumstances that may result in changing goals (such as the birth of a child).

Mutual Funds – are investment companies that continually offer new shares and stand ready to redeem existing shares from the owners.  Because the shares are purchased directly from and are sold directly to the mutual fund, there is no secondary market in for mutual funds.  Individual mutual funds vary substantially in terms of the types of investments, sales charges and management fees.  The prospectus should be reviewed to determine the specific goals and expenses of a particular fund.

Stocks - are ownership shares or ownership shared in a corporation. Two types of stocks are:

• Listed - a security traded on any of the national or regional securities exchanges. Listed securities are generally more liquid than securities that trade only in the over-the-counter market.
• OTC - over-the-counter market; widespread aggregation of dealers who make markets in many different securities. Unlike an exchange on which trading takes place at one physical location, OTC trading occurs through telephone or computer negotiations between buyers and sellers. Virtually all government and municipal bonds and most corporate bonds are traded in the OTC market

Bonds - are long-term promissory notes. Bonds vary widely in maturity, security, and type of issuer.

• Corporate-relating to a bond issued by a corporation as opposed to a bond issued by the U.S. Treasury or a municipality.
• Municipal-the debt issue of a city, county, state, or other political entity. Interest paid by most municipal bonds is exempt from federal income taxes and often from state and local taxes as well.
• Mortgage Backed Securities/CMOs - security collateralized with mortgage loans and issued by the Federal Home Loan Mortgage Corporation.
• Government/Agency - all bonds issued by the U.S. Treasury or other agencies of the U.S. government.

Brokered CDs – a certificate of deposit of a commercial bank or savings and loan that is sold though an intermediary rather than directly by the savings institution itself.

Foreign Issues – by a company incorporated in a foreign country, as opposed to investments in shares of local companies by foreign entities. An important feature of an increasingly globalized economic system.

Precious Metals – an investment in silver, gold, and other precious metals.

UITs – unit investment trust; an unmanaged portfolio of investments put together by an investment adviser and sold in units to investors by brokers.

REITs – are real estate investment trust; a trust that purchases and manages real estate and real estate loans and sells shares.

Options – a contract that permits the owner, depending on the type of option held, to purchase or sell an asset at a fixed price until a specified date.

Custodial Account – An account which is created for the benefit of a minor, usually at a bank, mutual fund, or brokerage, with an adult as the person who holds and safeguards the assets for them.

Fiduciary – A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets for the benefit of the other person rather than for his or her own profits.

Restricted Stock – Insider holdings that are under some other kind of sales restriction. Restricted stock must be traded in compliance with special SEC regulations.

Investment Management

• Financial Planning – The process of understanding financial goals and creating a plan to take an individual, family or business from their current situation to their desired financial situation through systematic processes.  Frequently includes annual reviews to evaluate progress toward the stated goals and consideration of any circumstances that may result in changing goals (such as the birth of a child).
• Mutual Funds – are investment companies that continually offer new shares and stand ready to redeem existing shares from the owners.  Because the shares are purchased directly from and are sold directly to the mutual fund, there is no secondary market in for mutual funds.  Individual mutual funds vary substantially in terms of the types of investments, sales charges and management fees.  The prospectus should be reviewed to determine the specific goals and expenses of a particular fund.
• Fee Based Advisory Program – Managed accounts involving a consultative process that includes setting specific objectives, developing a personal investment policy, selecting money managers and ongoing professional management of account assets.
• Tax Efficient Investing – utilizes investments with lower tax consequences than other similar investments.  Investors in high tax brackets benefit from investments with tax advantaged returns because the net return (after taxes are considered) is greater than they would achieve with fully taxable investments.
• Active Portfolio Management – management of investment portfolio that involves actively trading securities in an attempt to produce above-average returns on a risk-adjusted basis.
• Passive Portfolio Management – method of managing an investment portfolio that seeks to select properly diversified securities with the intent of holding the securities over long period of time.
• Wrap Accounts – an investment account in which all of the account’s assets are entrusted to a professional money manager.  All expenses related to this account are wrapped into a single annual fee.

Retirement Accounts

Retirement plans provide an important aspect of the financial security individuals need for their retirement years.  Retirement plans are separated in several distinct ways.  They may be Qualified or Nonqualified.  They may be established by individuals or sponsored by an employer. 

• Qualified Plans – satisfy the Internal Revenue Code requirements for being “tax-qualified”.    Generally, contributions by an employer and/or employee accumulate without being taxed until payouts funds are distributed.  Tax qualification provides tax benefits that may include current tax deductions for contributions and tax deferred growth of assets.  Qualified “ROTH’ accounts do not provide for deductions for contributions but qualified withdrawals are tax free.
• Nonqualified Plans – A retirement plan that does not meet the IRS requirements for favorable tax treatment.   Nonqualified plans are typically provided to supplement qualified plans for key employees and others who are highly compensated.  Although Nonqualified plans do not receive favorable tax treatment employers are able to use them to reward specific employees without being required to provide the same benefits to all employees.

Employer Sponsored Plans

• Defined Benefit Plan – A plan that is fully paid for by the employer.  Benefits are determined by the plan document and typically consider the years of service, annual salary and age of the employee.  Employers are subject to minimum funding requirements.  Benefits are insured (up to limits) by the Pension Benefit Guarantee Corporation (PBGC).  Benefits may vest to employees on a graduated scale or a cliff vesting schedule of up to five years.  The employer retains the investment risk in a Defined Benefit Plan.
• 412(i) – A "Defined Benefit 412(i) plan" is a special type of defined benefit pension plan, with three significant characteristics: 1) Fully guaranteed retirement benefit, 2) Must be funded with insurance contracts (primarily annuities), and 3) usually generates largest possible tax deduction of all defined benefit plans as  deductible contributions in excess of 25% of compensation are allowed.   These plans ideal for a small business employer (6 or less employees) wants to put away a very large, tax deductible contribution. In addition to providing funding for future retirement income, tax deductible 412(i) contributions reduce current taxable income. Self employed individuals, with expectations of stable future income, may find the features beneficial.
• Cash Balance Plan - A Cash Balance Plan is a defined benefit plan that defines the benefit in terms that are more characteristic of a defined contribution plan. In other words, a cash balance plan defines the promised benefit in terms of a stated account balance. In a typical cash balance plan, a participant's account is credited each year with a "pay credit" (such as 5 percent of compensation from his or her employer) and an "interest credit" (either a fixed rate or a variable rate that is linked to an index such as the one-year Treasury bill rate). Increases and decreases in the value of the plan's investments do not directly affect the benefit amounts promised to participants. Thus, the investment risks and rewards on plan assets are borne solely by the employer. When a participant becomes entitled to receive benefits under a cash balance plan, the benefits that are received are defined in terms of an account balance. The benefits in most cash balance plans, as in most traditional defined benefit plans, are protected, within certain limitations, by federal insurance provided through the PBGC.
• Money Purchase Pension Plan - a plan that requires fixed annual contributions from the employer to the employee's individual account. Because a money purchase pension plan requires these regular contributions, the plan is subject to certain funding and other rules.
• Defined Contribution Plan – There are a variety of defined contribution plans (DC plans).  DC plans are characterized by the contributions are known but the ultimate benefits available at retirement are not known during working years since they are dependent upon earnings.  The employee retains the investment risk in a Defined Contribution Plan.
• Profit Sharing Plan (PSP) – A Profit Sharing Plan or Stock Bonus Plan is a defined contribution plan under which the plan may provide, or the employer may determine, annually, how much will be contributed to the plan (out of profits or otherwise). The plan contains a formula for allocating to each participant a portion of each annual contribution. A profit sharing plan or stock bonus plan includes a 401(k) plan.
• 401(K) Plan – the most popular Defined Contribution Plan.  It is employer provided retirement plan that permits an employee to set aside a portion of salary in a tax-deferred investment account.  The employer may also make contributions.  Most plans offer the employee the choice of various investments and some allow a brokerage option that allows employees a wider range of investment choices.  Plan loans and hardship withdrawals may be allowed depending on the wishes of the plan sponsor and the plan document.  401(k) plans are somewhat portable as they may be rolled over to the plan at a new employer or to an IRA when the employee leaves employment with the plan sponsor.  Employee contributions are immediately vested.  Employer contributions may be subject to a vesting schedule.  Employer contributions are tax deductible.  Employee contributions are made pre-tax unless the contribution is designated as an after tax contribution by the employee or as a ROTH 401(k).  Benefits grow tax deferred in most plans.  Benefits in a ROTH 401(k) are tax free if qualified withdrawal rules are followed.
• SOLO (K) – a 401(k) plan established for an employer with one employee
• ESOP – a form of defined contribution plan in which the investments are primarily in employer stock.
• LESOP – Leveraged ESOP
• SIMPLE IRA – employers with less than 100 employees are permitted to establish SIMPLE IRA plans with required employer contributions and salary reduction contributions by employees.  Under current IRC rules allowed contributions are greater than those for IRAs established by individuals but less than those allowed in 401(k)s.
• SEP- IRA – A Simplified Employee Pension Plan (SEP) is a relatively uncomplicated retirement savings vehicles. A SEP allows employees to make contributions on a tax-favored basis to individual retirement accounts (IRAs) owned by the employees. SEPs are subject to minimal reporting and disclosure requirements. Under a SEP, an employee must set up an IRA to accept the employer's contributions. Employers may no longer set up Salary Reduction SEPs. However, if an employer had a salary reduction SEP, the employer may continue to allow salary reduction contributions to the plan.
• 457 Plan – for government employees and employees of non-profit entities.  Similar to a 401(k) but with some variances.  For a tax-exempt organization that is not a governmental entity, the plan must provide that all compensation deferred and all earnings on that compensation remain the property of the employer, subject to the employer's general creditors, until paid out to plan participants.  Amounts deferred under a 457 plan maintained by a state or local government must be held in a trust, a custodial account, or an annuity contract for the exclusive benefit of plan participants and their beneficiaries.   Some government plans allow participants to “purchase” additional “years of service” that impact retirement benefits.
• 403(b) - A 403(b) plan, also known as a tax-sheltered annuity (TSA) plan, is a retirement plan for certain employees of public schools, employees of certain tax-exempt organizations, and certain ministers. Individual accounts in a 403(b) plan can be any of the following types 1) An annuity contract, which is a contract provided through an insurance company, or 2) A custodial account, which is an account invested in mutual funds, or 3) A retirement income account set up for church employees.  Contributions are tax deductible and earnings grow tax deferred until withdrawal.

Individual Retirement Accounts

Traditional and ROTH IRAs are established by individuals as a retirement savings vehicle.  Accounts may be funded with current earned income or with rollovers from other types of retirement accounts.  Many employer sponsored plans may be rolled over into an Individual Retirement Account without tax consequences at the time the employee separates from service with the employer.  Some employer sponsored plans also allow “in service” distributions for employees of a certain age (i.e. ESOPs have this feature to allow greater diversification as retirement age nears).

·         Traditional IRA - Contributions to the Traditional IRA may be tax deductible depending on the taxpayer's income, tax filing status and coverage by an employer sponsored retirement plan.  A wide range of investment choices are available.  Earnings grow tax-deferred until withdrawal.  Minimum required distributions must begin no later than age 70 1/2.

·         ROTH IRA – Contributions to a ROTH IRA are not tax deductible and are limited based upon the taxpayer's income, tax filing status and coverage by an employer sponsored retirement plan.  A wide range of investment choices are available.  Earnings grow tax-deferred and may be withdrawn tax-free through qualified withdrawals.  There are no minimum required distributions from ROTH IRAs.  ROTH IRA contributions are a popular “gift” from parents and grandparents following a gifting strategy for estate tax minimization.  Such gifts may be made if the IRA beneficiary has earned income during the tax year and satisfies the qualifications to make contributions.

College Savings

• 529 College Plans – A plan that allows for the prepayment of qualified higher education expenses at eligible educational institutions. Also known as a "qualified tuition program.  Tax benefits vary depending on whether investments are in the state of residence or elsewhere.
• UTMA – Uniform Transfers to Minors account with a custodian.
• UGMA – Uniform Gifts to Minors account with a custodian
• Coverdell Education Savings Account (ESA) - an account created as an incentive to help parents and students save for education expenses.  The total contributions for the beneficiary of this account cannot be more than $2,000 in any year, no matter how many accounts have been established. A beneficiary is someone who is under age 18 or is a special needs beneficiary.  Contributions to a Coverdell ESA are not deductible, but amounts deposited in the account grow tax free until distributed.  The beneficiary will not owe tax on the distributions if they are less than a beneficiary’s qualified education expenses at an eligible institution. This benefit applies to qualified higher education expenses as well as to qualified elementary and secondary education expenses.

Insurance

• Life Insurance – provides a stated death benefit to the named beneficiary(ies) upon the death of the insured.  Life insurance is used for a variety of purposes, some of which include helping a family maintain their standard of living after the loss of a loved one, ready cash to pay estate taxes, estate equalization, fund a buy/sell agreement, pay off debt or to fund trusts established to fulfill the donor’s wishes.
  • Estate equalization - involves providing benefits to all heirs in a substantially equal manner. This method is especially important to prevent heirs who do not inherit the family business or family farm from feeling disinherited.
  • Key Man Insurance - An insurance policy on the life of a key employee whose death would cause the employer financial loss, owned by and payable to the employer.
• Long-Term Care – An insurance policy that provides benefits to individuals who are unable to perform some activities of daily living for themselves such as bathing, dressing, transferring, continence, etc. Coverage provides funds to cover costs of in-home care or nursing home care. Newer policies may include a great deal of flexibility concerning care options, including options such as adult day care which allows the caretaker to continue their career and know their loved one is cared for while they are at work.
• Disability Insurance – An insurance policy that replaces a portion of an individual's income in the event they are unable to work.
• Deferred Annuities – contracts issued by an insurance company that allow accumulation of monies for retirement on a tax-deferred basis. There are tax penalties for withdrawals before age 59 1/2 with limited exceptions. Deferred annuities may be fixed (insurance company determines rate of return) and variable (value is invested in sub-accounts which are similar to mutual funds). Deferred annuities may also be qualified (contributions are tax deductible [e.g. IRA]) or non-qualified (contributions are made after-tax).
• Immediate Annuities – contracts issued by an insurance company that provide income to the annuitant. Income may be guaranteed for the life of the individual (or beyond). Immediate annuities may be fixed or variable. Fixed annuities have a guaranteed benefit amount. Benefits from a variable annuity can change over time based upon the performance of the underlying sub-accounts. Once elected, these contracts are irrevocable and may not be changed.