Aviance Capital Partners | Financial Advisor Florida

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Discover essential tips on how to approach discussing money with aging parents, enhancing their financial well-being and family stability during transitions.

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Discover effective strategies to manage difficult estate planning emotions as you plan for the future, and gain a smoother process and more peace of mind.

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When consumers are feeling good, they are typically spending money. Further, when consumers transition from feeling quite cautious to feeling better, what often follows is the start of a new economic growth cycle. Last July, we saw record-low levels of consumer sentiment as measured by the University of Michigan’s Index of Consumer Sentiment. Since then, … Investment Commentary: August 2023 Read More »

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Explore three estate planning questions to help you uncover the significance of creating a comprehensive estate plan to ensure your wishes are honored.

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Discover key elements to building a happy and healthy retirement that you can use as you build a post-work life full of joy and well-being.

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Discover strategies to help effectively prepare for healthcare costs in retirement.

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Strategies for Raising Kids and Caring for Aging Parents SimultaneouslyIf you’re raising children or caring for your aging parents, you know that either role can be stressful, often causing financial pressure, too. However, if you’re a member of the “Sandwich Generation” it means you’re managing both challenging roles at the same time.

According to the Pew Research Center, approximately one in seven Americans between the ages of 40 and 60 are caring for minor children and aging parents simultaneously, while also balancing their own career and personal matters. This juggling act can be taxing – both financially and emotionally – but this article is meant to provide guidance on financial strategies that can help those in the Sandwich Generation support their loved ones while also saving for retirement and their own financial futures.

Sandwich Generation Tip: Set PrioritiesWhen you have multiple financial responsibilities, it is essential to set priorities. Decide which expenses are most critical and allocate your money accordingly. For instance, if your aging parent needs expensive medical care, prioritize that over other expenses that can wait. Similarly, if your child’s education is a priority, allocate funds to your 529 Plan before making other investments. Don’t neglect to think about your own financial future, too. Oftentimes, it’s smarter to save for your own retirement before funding higher education for your children, though every person’s circumstances are unique.

SEE ALSO: The Importance of Estate Planning at Any Adult Phase of LifeSandwich Generation Tip: BudgetingAs you’re clarifying your financial priorities, it can also be critical to create a realistic budget for your household. This will help you track your spending and ensure that you don’t overspend from month to month so that you can continue to provide for the basic care needs of both your children and your aging parents. Make sure to include all expenses, such as housing, utilities, food, medications, insurance needs, and more. Remember also to budget for any non-essential or entertainment expenses you expect. If you don’t yet have a fully funded emergency fund, it’s also smart to add a savings plan to your monthly budget so you can be better prepared for unexpected expenses, such as medical bills and home repairs.

Sandwich Generation Tip: Save for RetirementIt is often tempting for caregivers to focus solely on immediate financial responsibilities. After all, you only have so much bandwidth and managing the day-to-day can require a great deal of energy and other resources for those in the Sandwich Generation. However, it is essential to make basic plans for the future, including planning for your retirement. Set aside funds for your retirement savings account, such as a 401(k) or IRA. Planning ahead means a better chance of achieving a more comfortable retirement, and potentially having to rely less on your children once you reach your parents’ age.

Sandwich Generation Tip: Utilize Assistance ProgramsThere are various assistance programs available for the Sandwich Generation that can help reduce financial stress. For instance, you may be eligible for tax breaks, healthcare subsidies, or caregiver support programs. Do your research and take advantage of these programs to help reduce your financial burden. Working with a financial professional can help you gain greater awareness of programs and strategies that work in your financial favor.

SEE ALSO: Do Stay-At-Home Parents Need a Retirement Plan?Sandwich Generation Tip: Consider Long-Term Care InsuranceLong-term care insurance can help pay for expenses related to aging, such as nursing home care, in-home care, and medical expenses. This insurance can help ensure that you and your loved ones are protected in the event of an unexpected medical crisis, while mitigating costs, as well. However, long-term care insurance tends to be expensive, and it won’t be the right strategy for every family. Speak with a financial advisor to determine whether this investment may be best for your personal circumstances.

Sandwich Generation Tip: Communicate with FamilyIt is essential to communicate with your family members about your shared financial situation. Discuss your financial priorities and responsibilities and seek their support and buy-in. This can help reduce any misunderstandings or conflicts and ensure that everyone is on the same page and moving forward in a like-minded way.

Would You Like Professional Guidance on Navigating Your Financial Situation?If you’re a part of the Sandwich Generation, you may be facing unique financial challenges that require careful planning and prioritization. By setting priorities, budgeting, saving for retirement, utilizing assistance programs, considering long-term care insurance, and communicating with family members, you can more successfully manage your finances and provide for your loved ones.

It may also serve you well to work with a trusted financial advisor in order to form a stronger financial foundation today and into the future. At Aviance, our team of experienced financial professionals stands ready to provide friendly, personalized wealth advice and investment solutions for your family. Schedule a conversation with us today to learn more about how we can help you achieve your financial goals. We look forward to hearing from you!

Aviance Capital Partners, LLC (“ACP”) is an SEC registered investment adviser located in Naples, Florida. Registration as an investment adviser is not an endorsement by securities regulators and does not imply that ACP has attained a certain level of skill, training, or ability. While information presented is believed to be factual and up-to-date, ACP does not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. Not all services will be appropriate or necessary for all clients, and the potential value and benefit of the ACP’s services will vary based upon the client’s individual investment, financial, and tax circumstances. The effectiveness and potential success of a financial plan depends on a variety of factors, including but not limited to the manner and timing of implementation, coordination with the client and the client’s other engaged professionals, and market conditions. The tax and estate planning information provided is general in nature, which should not be construed as specific financial planning or tax advice tailored to an individual reader. ACP suggests that readers consult a financial professional, attorney or tax advisory professional about their specific financial, legal or tax situation. Customized financial planning indicates that financial planning will be informed by the material financial and investment circumstances of the client, as communicated by the client to the adviser, but may not consider literally all aspects of a client’s financial affairs. Past investment performance does not guarantee future results. All investment strategies have the potential for profit or loss, and different investments and types of investments involve varying degrees of risk. There can be no assurance that the future performance of any specific investment or investment strategy, including those undertaken or recommended by ACP, will be profitable or equal any historical performance level. Additional information about ACP, including its Form ADV Part 2A describing its services, fees, and applicable conflicts of interest and its Form CRS is available upon request and at https://adviserinfo.sec.gov/firm/summary/146597.

For current ACP clients, please advise us promptly in writing, if there are ever any changes in your financial situation or investment objectives, if you wish to impose any reasonable restrictions to our management of your account, or if you have not been receiving at least quarterly account statements from your account custodian.

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Learn Important Nuances as you Plan for Your Company’s FutureSome small business owners may mistakenly believe that succession planning and exit planning are interchangeable terms with the same meaning. While both involve planning for the future of the business, they are actually two separate and distinct processes. We think it’s important to understand the difference between the two to help ensure that you’re taking the right steps to prepare for the future of your business. Read on to learn more about some of the differences between succession planning and exit planning for small business owners.

What Is Succession Planning?Succession planning is the process of identifying and developing potential leaders or successors within your organization. The goal is of a succession plan is to ensure a smooth transition of leadership in the event of retirement, disability, or unexpected departure of the current business owner. Succession planning is all about identifying and nurturing talent within the organization, so that when the time comes, there are people ready to step into the shoes of the current owner.

Some key elements of succession planning include:

Identifying potential successors: This involves assessing the skills and capabilities of existing employees, and identifying those who have the potential to take on leadership roles.
Developing potential successors: An effective succession plan will include training, mentoring, and coaching to develop the skills and abilities of potential successors.
Creating a plan for transition: Lastly, a succession plan should outline the steps that will be taken when the time comes for the current owner to step down, including the transfer of ownership, management responsibilities, and other key tasks.

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Aviance Capital Partners

March 29, 2023 | 7 PM
Potentia Academy 4784 Melaleuca Ln Greenacres, FL 33463 Aviance Capital Partners & Anchors Aweigh ABA are co-hosting a Special Needs Financial Planning Roundtable event at Coastal Compass Executive Suites; 4210 Valley Ridge Blvd, Ponte Vedra, FL 32081 on February 8, 2023.

Financial Planners, Samantha Beauvais, and Brian Cotroneo, ChSNC, will present on and discuss the details around issues such as Special Needs Trusts, 529 ABLE accounts, Social Security & Medicaid financial eligibility, Estate Planning for special needs, and more.

*Please feel free to reach out to Samantha Beauvais, sbeauvais@aviancepartners.com, with any questions or concerns.*

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Aviance Capital Partners &
We Rock the Spectrum – Davie

March 8, 2023 | 7 PM
We Rock the Spectrum – Davie 5159 S University Drive Davie, FL 33328 Aviance Capital Partners will be hosting a Special Needs Financial Planning Workshop event at We Rock The Spectrum -Davie on March 8, 2023.

Financial Planner, Samantha Beauvais, will present on and discuss the details around issues such as Special Needs Trusts, 529 ABLE accounts, Social Security & Medicaid financial eligibility, Estate Planning for special needs, and more.

Please feel free to reach out to Samantha Beauvais, sbeauvais@aviancepartners.com, with any questions or concerns.

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Women play many roles in today’s society—from breadwinners to caretakers, to family chefs, to event planners, to business owners, to mothers, sisters, wives, and friends, women often feel immense pressure to “do it all”. But even with all that going on, it still seems that we’re often left out of the conversations around wealth. How can that be? And why does that matter? Here are three reasons why women’s wealth matters and what Aviance Capital Partners is doing to change the conversation.

Women Play a Growing Part in America’s WealthWomen currently control over $10 trillion in total U.S. wealth.[1] While this still only accounts for one-third of the nation’s total household financial assets, that number is expected to triple by 2030.1 As aging baby boomers pass their wealth to their female spouses, who are often younger and live longer than their male counterparts, women are projected to control more than $30 trillion in assets over the course of the next decade. This is a staggering level of wealth transfer that rivals the GDP of the entire country, which was $22.99 trillion in 2021!

On top of that, women are already taking center stage. Over the last 5 years alone, there has been a 30% increase in the number of married women who have taken over the household financial decisions, and women currently make between 70-80% of all consumer spending decisions.

It seems that more and more women are taking on the financial responsibilities of their households, yet many of them—45% overall and 54% of women over the age of 55—don’t feel confident in their ability to do so. We believe that should change.

Financial Planning Tips for Growing FamiliesIf you want to prepare your growing family for financial success, consider these financial planning tips to help set a strong foundation for the future.Women Think Differently Than MenIf the title of this section made your eyes roll, you’re not alone. Sorry to point out the obvious, but the differences between how women and men think, particularly about money, can’t be overstated. Here are just a few to keep in mind:

Only 33% of women see themselves as investors and only 19% feel confident in selecting investments that align with their goals.
Just 9% of women think they make better investment decisions than men, whereas men are twice as likely to believe their investment decisions are outperforming the stock market.
Research shows that women often earn better investment returns—Fidelity reports that women’s portfolios perform better than men’s by 0.4% on average.
Women also tend to be less impulsive and take less risk when it comes to investing. They make fewer trades and review their investment accounts less often than men.
Women seek personalized, outcome-oriented investments like real estate. Whereas, men seek investments they believe will lead to higher returns, typically stocks.
Social impact is an important consideration for women—only 19% of women will invest in a company that is not socially responsible, compared to 51% of men.

It’s clear that women have different needs than men, which means the wealth management solutions they receive should also be different.

At Aviance Capital Partners, we are proud of the personalized planning and investment management we provide. From our detailed discovery meetings where we get to know you, to our thorough investment analysis where we seek to find your best investment fit, with the Aviance WealthPlan, we aim to provide you a customized solution that is tailored to your unique needs.

The SMART Goal-Setting FrameworkIf you’re feeling confused about the status of student loan debt relief, read on to learn where things stand and how you might proceed.Women Are Still Underrepresented in Wealth ManagementIt wouldn’t be a complete discussion of women’s wealth if we didn’t take time to talk about how women are still underrepresented in the wealth management industry—as both consumers and advisors. In fact, only 15-20% of financial advisors are women. Yet, many women consumers prefer to work with female advisors.

This shouldn’t come as a huge surprise, especially when you think about the rocky history between women and wealth.

It wasn’t until 1974, with the passage of the Equal Credit Opportunity Act, that women were allowed to have credit cards in their own names. Before that, most women could not even take out a loan without a male cosigner, and some lenders even went so far as to ask women for written promises that they would not get pregnant during the loan’s repayment period. The first female CEO to lead a major U.S. bank didn’t happen until 2020, when Jane Fraser took over as the CEO for Citigroup and women are still earning just 83 cents for every dollar that men make.

If women stand to inherit trillions of dollars in wealth over the next 10 years, but 70% of women change financial advisors within a year of their partner passing away, it’s clear that something’s got to give in the wealth management industry. That’s why we’re committed to bridging the gap and being a part of the push for better representation. Our commitment extends beyond the work we do with our clients. We also have ongoing relationships with:

Women in Insurance and Financial Services – National and Gold Coast Chapters
Women in Distress of Broward County
Purse Strings Network

Learn More About Women’s Wealth at AvianceWomen often carry the weight of doing it all, but it’s a lot to manage on your own. At Aviance Capital Partners, want to help you feel educated and empowered in your financial decisions, and we are here to provide specialized solutions to your wealth planning needs. Whether you are a stay-at-home mom, a working professional, a divorcée, or a widow, we are dedicated to helping women feel confident and comfortable in their long-term financial futures.

As a Purse-Strings Approved Professional, I am deeply passionate about helping women become financially fearless. If you’re ready to take the first step toward a confident financial future, schedule a complimentary discovery call to see if we’re a good fit to work together. You can also learn more about me here or connect with me on LinkedIn.

Aviance Capital Partners, LLC (“ACP”) is an SEC registered investment adviser located in Naples, Florida. Registration as an investment adviser is not an endorsement by securities regulators and does not imply that ACP has attained a certain level of skill, training, or ability. While information presented is believed to be factual and up-to-date, ACP does not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. Not all services will be appropriate or necessary for all clients, and the potential value and benefit of ACP’s services will vary based upon the client’s individual investment, financial, and tax circumstances. The information provided is general in nature, which should not be construed as specific advice tailored to an individual reader. ACP suggests that readers consult a financial professional, attorney or tax advisory professional about their specific financial, legal or tax situation. All investment strategies have the potential for profit or loss, and different investments and types of investments involve varying degrees of risk. There can be no assurance that the future performance of any specific investment or investment strategy, including those undertaken or recommended by ACP, will be profitable or equal any historical performance level.

ACP is not affiliated with the Purse Strings Network, Women in Distress of Broward County, or Women in Insurance and Financial Services.

Additional information about ACP, including its Form ADV Part 2A describing its services, fees, and applicable conflicts of interest and its Form CRS is available upon request and at https://adviserinfo.sec.gov/firm/summary/146597.

[1]Women as the next wave of growth in US wealth management | McKinsey

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Our current view of the economy and markets is:

Corporate earnings may be heading for a quarter or two of low growth;
Consumers appear to be in better shape than feared heading into 2023; and
The investment setup looks to favor low-risk opportunities such as short-term bonds and higher quality and dividend-paying stocks.

Corporate Earnings Under PressureBusinesses began borrowing more money in 2022. This tends to happen for good reasons, such as a pickup in economic activity, or bad reasons, such as a more difficult climate to raise stock or equity capital. 2022 was a bit of a mixed bag as we had seen companies rebuilding inventory at a time when revenues were growing though stock prices were falling.

As lending volume picked up, banks began charging more interest on loans compared to their own funding costs (i.e. related to deposits).

The net effect is businesses have taken on more debt at a higher cost in a rising interest rate environment. When this happens, company balance sheets become more leveraged. As the following chart illustrates, companies have fewer short-term assets relative to short-term liabilities. This tends to eventually pressure profit margins.

Over the long run, we see corporate earnings growth essentially match the nominal growth (including inflation) of the economy. Meaning businesses tend to grow at about the same rate as the economy over time.

Since 2020, earnings have rallied arguably above their long-term trend. This combined with the idea that borrowing costs seem to be going up, leads us to believe earnings growth could be slow for a significant portion of 2023.

Consumers are in Better Shape than FearedMany people worry 2023 will be a rough year for the economy. We see this concern play out in different ways with one of them relating to consumer sentiment. As the next chart shows, consumer sentiment reached an all-time low in July 2022. While this sounds bad on the surface, a sentiment many times improves at a rapid pace when reaching a low point. Rising from troughs is typically associated with economic growth (and not the start of a recession). As a result, 2023 may be a year when consumers begin to feel better about their economic conditions.

Some of the low sentiment may be attributed to inflation rising faster than income. This can be observed in 2022 as demonstrated by the next chart. However, as this relationship normalizes, income would rise faster than inflation with a combination of higher interest rates on investments, higher wages, and lower inflation. Generally speaking, all three of these concepts are playing out.

One area of inflation that has tended to remain stubbornly high has been related to housing (as measured by rents and owner-equivalent rents). However, we believe housing prices are extended and the growth in housing prices (and rents, etc.) will be low over the next several months, possibly longer.

As a result, we believe it’s reasonable to expect housing-related inflation measures to be part of the lower inflation story in 2023.

Further, we expect overall inflation to be lower than the Federal Funds rate sometime in the 1st half of 2023. One of the positive implications is that short-term debt investments such as short-term bonds and many money market funds will outpace inflation for the first time in a while.

Yields Favor Low RiskInterestingly, we already see short-term bonds providing higher yields than long-term bonds and the overall dividend yield of the stock market (as shown in the next chart).

Investor dollars tend to flow toward higher yields. The current environment indeed leads us to believe short-term predictable bonds make more sense than usual.

While it looks relatively expensive from an income standpoint, the lower dividend yield of the stock market consists of many individual stocks with both lower yields and higher yields. We believe stock investors will continue to look for stock opportunities though avoiding more speculator or expensive portions of the stock market. Instead, stock investors will likely favor higher dividend-yielding stocks or stocks with relatively attractive valuations.

Overall, we believe 2023 is positioned to be a decent year for both lower-risk bond investments and attractively priced, higher-quality stock investments.

Aviance Capital Partners, LLC (“ACP”) is an SEC registered investment adviser located in Naples, Florida. Registration as an investment adviser is not an endorsement by securities regulators and does not imply ACP has attained a certain level of skill, training, or ability. While information presented is believed to be factual and up-to-date, ACP does not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. Not all services will be appropriate or necessary for all clients, and the potential value and benefit of ACP’s services will vary based upon the client’s individual investment, financial, and tax circumstances. ACP suggests that readers consult a financial professional, attorney or tax advisory professional about their specific financial, legal or tax situation. Past investment performance does not guarantee future results. All investment strategies have the potential for profit or loss, and different investments and types of investments involve varying degrees of risk. There can be no assurance the future performance of any specific investment or investment strategy, including those undertaken or recommended by ACP, will be profitable or equal any historical performance level. The S&P 500 is the Standard & Poor’s index calculated on a total return basis. Widely regarded as the benchmark gauge of the U.S. equities market, this index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. Any index performance data directly or indirectly referenced in this report is based on data from the respective copyright holders, trademark holders, or publication/distribution right owners of each index. The indexes do not reflect the deduction of transaction fees, custodial charges, or management fees, which would decrease historical performance results. Indexes are unmanaged, and investors cannot invest directly in an index. Additional information about ACP, including its Form ADV Part 2A describing its services, fees, and applicable conflicts of interest and its Form CRS is available upon request and at https://adviserinfo.sec.gov/firm/summary/146597. For current ACP clients, please advise us promptly in writing, if there are ever any changes in your financial situation or investment objectives, if you wish to impose any reasonable restrictions to our management of your account, or if you have not been receiving at least quarterly account statements from your account custodian.

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Cash Balance Plan: Learn the Advantages and Drawbacks of this Hybrid Retirement PlanAs a small business owner, you likely have a lot on your plate. Between making sure the day-to-day operations of your business run smoothly and scaling your services in the most efficient way, it can be easy for your personal retirement planning to fall by the wayside.

The good news is that even if you’ve fallen behind in your personal savings, there are ways to catch up. One way for small business owners to accelerate their savings is by utilizing a cash balance plan. Read on to learn more about what this plan entails and how to tell if it’s right for you.

What Is a Cash Balance Plan?A cash balance plan is a hybrid retirement plan that has characteristics of both a defined benefit (pension) plan and a defined contribution (401(k)) plan. Unlike a typical pension plan, cash balance plans are managed at the employee level. Each participant will have their own account to which the employer will contribute every year. Contributions consist of both a “pay credit” which is a percent of the employee’s salary and an “interest credit” which is a guaranteed rate of return to the participants.

AdvantagesCash balance plans are technically defined benefit plans because employees are promised a certain benefit amount at retirement, regardless of the investment performance of their account. Because of this, there are technically no annual contribution limits. Rather, the business must commit to contributing whatever amount is actuarily necessary to produce that benefit in retirement. The maximum retirement benefit amount under a defined benefit plan is the lesser of the:

100% of the participant’s average compensation for his or her highest 3 consecutive calendar years, or
$265,000 in 2023

That means a business owner could potentially contribute hundreds of thousands of dollars in a single year to their own cash balance plan, depending on their age and specific circumstances. For high-earning small business owners, this can be an extremely effective way to accelerate retirement savings especially if combined with a 401(k) or another profit-sharing plan.

Small Business Owner Retirement PlanningSmall business owner retirement planning can require considerable preparation including creating a business succession plan in writing and thinking about your goals.For comparison, 401(k) plans have a combined employer and employee contribution limit of just $66,000 in 2023. This jumps up to $73,500 if you are over the age of 50.

What’s more, contributions to a cash balance plan are fully tax-deductible. So not only are small business owners increasing their retirement savings, but they are also reducing their current year tax liability—often by a significant amount.

DrawbacksDespite the benefits of these plans, there are important drawbacks to consider before you decide if it’s right for you. As the owner, you are required to contribute to the accounts of all eligible employees. If you have an inconsistent cash flow, or too many employees to sustain that level of contribution, then a cash balance plan may not be the best option.

Not only that, but employers must also adhere to extensive requirements to maintain qualified status which can add to the cost and complexity of plan administration. For instance, cash balance plans require the use of actuaries to determine the annual contribution amount for each participant’s account. Not utilizing an actuary or not contributing the correct amount to each participant can result in fines, penalties, and plan disqualification.

Small Business Owner Financial Planning: Benefits of Using a Financial AdvisorSmall business owners have a lot to manage, from day-to-day operations to bigger-picture plans for the company’s future. As you lean into your expertise and passions to bring your business vision to life, it can be helpful to lean on a financial advisor to help you manage things like your tax strategy, optimizing your cash flow, or building a budget that can help meet all your major milestones.Additionally, the investment risk of each account is borne by the employer. Ultimately, the retirement benefit you pay each employee is dependent on the amount promised in the plan document. If the accounts do not perform well in the years leading up to retirement, you are still required to pay a set amount. This may not be a big deal if you have little to no employees and most of the contributions are going to your own personal account. If you have many employees, on the other hand, this can be an unnecessary burden to bear depending on the size and profitability of your business.

Making the Right Decision as a Small Business OwnerAt Aviance Capital Partners, we can help you make the right decision for your small business. No matter where you are in your business journey, we have the tools and expertise to help you navigate your retirement decisions. To learn more about financial planning for small business owners, or if you have questions about your specific situation, please email us at wealthrelations@aviancepartners.com, or schedule a complimentary call. We can’t wait to hear from you!

Aviance Capital Partners, LLC (“ACP”) is an SEC registered investment adviser located in Naples, Florida. Registration as an investment adviser is not an endorsement by securities regulators and does not imply that ACP has attained a certain level of skill, training, or ability. While information presented is believed to be factual and up-to-date, ACP does not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. Not all services will be appropriate or necessary for all clients, and the potential value and benefit of ACP’s services will vary based upon the client’s individual investment, financial, and tax circumstances. The effectiveness and potential success of planning strategies discussed in this publication depends on a variety of factors, including but not limited to the manner and timing of implementation, coordination with the client and the client’s other engaged professionals, and market conditions. The information provided is general in nature, which should not be construed as specific advice tailored to an individual reader. ACP suggests that readers consult a financial professional, attorney or tax advisory professional about their specific financial, legal or tax situation. All investment strategies have the potential for profit or loss, and different investments and types of investments involve varying degrees of risk. There can be no assurance that the future performance of any specific investment or investment strategy, including those undertaken or recommended by ACP, will be profitable or equal any historical performance level. Additional information about ACP, including its Form ADV Part 2A describing its services, fees, and applicable conflicts of interest and its Form CRS is available upon request and at https://adviserinfo.sec.gov/firm/summary/146597.

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SMART Goals: Use This Savvy Strategy to Help Meet Your Money Aspirations This YearWhen it comes to achieving your financial goals, it can be helpful to reflect once or twice a year on where you are and where you’d like to see yourself in the future. The goal-setting process can feel like an uphill battle at times, especially when it comes to bigger or longer-term goals, but it’s an important ingredient in your financial success. If you’ve struggled to set and achieve financial goals in the past, you may want to try setting “SMART goals” this time around.

What Does it Mean to Set SMART Goals?“SMART” is an acronym that stands for Specific, Measurable, Actionable, Realistic, and Timely. Coined by George T. Doran in 1981, this formula is said to be ideal for goal-setting because it helps you visualize and plan for your end result and determine the steps you need to take, all within a framework that helps you stay on track, as well.

Below we’ll walk you through each element of setting SMART goals and share tips on how you can use the process to help you set and achieve your own financial goals.

Get as SPECIFIC as PossibleAdding specificity to your financial goals makes the planning process easier. You’re also more likely to follow through. Begin by thinking about a goal you have and simply describing it to yourself. For example, say your goal is to ‘buy a new home’ – describe what that looks like to you. What kind of home? How do you want to pay for it? How old do you want to be when you buy it? In answering those questions, you’ll be able to move your general goal into something more specific, such as ‘buy a $300,000 home with a $50,000 down payment before I turn 40.’ Adding more details to your goal gives you a blueprint you can follow as you begin working toward achieving it.

Smart Financial Moves for Empty NestersWhen your children move out, you are suddenly faced with a different home situation and it’s a good time to revisit your finances and make smart empty nester financial moves.Make Sure Your Financial Goals are MEASURABLEAfter getting specific with your goal, the next step is to make sure that you can measure your progress. You’ll want to think about methods you can use to determine whether you’re progressing forward and staying on track.

If we revisit the home purchasing goal, how would you measure your progress? An easy way would be to keep track of your savings to ensure you’re getting closer and closer to that $50,000 down payment. Can you take it further than that, though? What about tracking your spending to be sure that it remains under a certain threshold each month so you can contribute more to your savings? The key is to choose measurements that provide you the opportunity to celebrate small successes and boost your motivation as you work toward your goal. If tracking expenses is part of how you’re measuring your goal,

Choose Goals that are ACHIEVABLEWhile shooting for the stars is admirable, your chances for success are better if you’re setting SMART goals that are achievable basedon your current situation and the resources available to you. It can be a discouraging to dial down or change your goals, but you may feel better achieving something meaningful in the long run, rather than setting yourself up for failure from the beginning.

Going back to the home purchasing goal, if you’re 35 now and without much in savings, then saving $50,000 for a down payment by the time you’re 40 may not be a truly achievable goal for you. If you’re realizing that one or more of your financial goals needs adjusted, try these steps:

Set your sights lower (for now). Perhaps you need to spend less on a home or set SMART goals to save a smaller down payment.
Change the timeline. You could keep the $50,000 down payment goal for a $300,000 dream home but give yourself until you’re 45 to accomplish the goal.
Break down your goal into smaller, interim SMART goals. Instead of working toward the big-picture goal of purchasing a home, you could focus instead on paying off all your debt so that you can eventually save more money at a faster pace.

It’s important to note that setting achievable goals is not the same as setting easy goals. Your SMART goals should be challenging, but they need to be something that you’re capable of reaching. Otherwise, you may be setting yourself up for disappointment. On the other hand, achievable financial goals provide you with motivation and encouragement.

Be REALISTIC with Your GoalsThis may sound like making your goals achievable, but it’s not quite the same. Setting a goal that’s achievable means asking yourself whether you can accomplish it now or in the future, even if you need to make changes to the overall goal. Being realistic with your SMART goals means determining whether your goal makes sense for your life circumstances now and in the future.

When it comes to financial goals, being realistic looks a lot like living within your means. So, you want to leave a margin of error, knowing that life is unpredictable. We can never be sure what the future may throw at us, including financial setbacks. This is especially the case for long-term financial goals.

Young Professional Financial Planning ConsiderationsYoung professional financial planning can be challenging but using these tips can help you set a firm foundation for your financial future.Give Yourself a Set Amount of TIMEAll the SMART goals you set should have a detailed timeline. Giving yourself deadlines means you’ll be more likely to take consistent action rather than letting time slip away – which can easily happen if there’s no timeframe in place for achievement. Having a timeline can also help you with goal measurability, especially if you set periodic check-ins for yourself to assess your progress.

Revisiting our home buying example, the timeframe of the goal is to purchase a home by 40 with a $50,000 down payment. You could take that even further by setting deadlines for smaller savings intervals to ensure you’re staying on track. In this way, time is one of the best indicators of whether you’re making progress.

Set Yourself Up for Success with SMART GoalsUsing the SMART goals framework to set your financial goals can take some getting used to. However, if you stay committed to the process, you may be surprised with the results you can achieve.

At Aviance, our team is committed to helping our clients meet their financial goals and achieve lasting financial freedom. If you think that you may benefit from professional guidance with your financial planning, please consider scheduling a call with us to discuss your unique financial situation.

Aviance Capital Partners, LLC (“ACP”) is an SEC registered investment adviser located in Naples, Florida. Registration as an investment adviser is not an endorsement by securities regulators and does not imply that ACP has attained a certain level of skill, training, or ability. While information presented is believed to be factual and up-to-date, ACP does not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. Not all services will be appropriate or necessary for all clients, and the potential value and benefit of the ACP’s services will vary based upon the client’s individual investment, financial, and tax circumstances. The effectiveness and potential success of planning strategies discussed in this commentary depends on a variety of factors, including but not limited to the manner and timing of implementation, coordination with the client and the client’s other engaged professionals, and market conditions. The information provided is general in nature, which should not be construed as specific advice tailored to an individual reader. ACP suggests that readers consult a financial professional, attorney or tax advisory professional about their specific financial, legal or tax situation. All investment strategies have the potential for profit or loss, and different investments and types of investments involve varying degrees of risk. There can be no assurance that the future performance of any specific investment or investment strategy, including those undertaken or recommended by ACP, will be profitable or equal any historical performance level. Additional information about ACP, including its Form ADV Part 2A describing its services, fees, and applicable conflicts of interest and its Form CRS is available upon request and at https://adviserinfo.sec.gov/firm/summary/146597.

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Cutting Through the Confusion and Thinking Long-TermAmid multiple legal challenges, President Biden’s student loan relief program has been temporarily blocked by federal courts. On December 1st, the Supreme Court agreed to hear oral arguments on the case in February 2023, with a final decision expected by June. Here’s what that means if you’re one of the millions of borrowers who qualify for student loan forgiveness.

What’s Going on With Student Loan Relief?Several lawsuits have been filed against the student loan relief program since it was first announced in August 2022. Though many have been dismissed, there are currently two legal challenges to the program that the Supreme Court has agreed to hear.

First, six states (Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina) filed suit claiming that the President does not have legal authority to forgive the debt and that the program would also threaten the revenue of debt servicers. This case was initially dismissed, but the decision has since been overturned by an appellate court.

On December 13th, the Supreme Court agreed to hear another challenge to the program. This one was brought by two student loan borrowers with outstanding debt who did not qualify for forgiveness. They claim that the relief program was implemented improperly. Specifically, it did not follow the notice-and-comment rule which allows individuals to comment on proposed programs before they are enacted.

The U.S. Department of Education has stopped processing applications for debt relief and those that have already been approved have had their relief paused in light of the pending legal challenges. Borrowers will have to wait at least until the Supreme Court’s decision for an answer on their relief status.

Do You Qualify for Student Loan Forgiveness?A new federal program allows many borrowers to take advantage of student loan forgiveness so learn whether you are eligible to benefitWhat Can You Do in the Meantime?In response to the temporary block against relief, President Biden has extended the payment pause which was originally set to resume in January 2023. The latest repayment freeze will last until 60 days after the litigation is resolved. If the program has not been implemented and/or the lawsuits have not been resolved by June 30, the payments will resume 60 days after that point.

For those who are eligible for student loan relief, you are likely in a holding pattern until there is a clear answer on the legality of President Biden’s program. Here are a few ideas to consider to help plan for possible repayment.

Budget for repayment: Budgeting is crucial. Student loan payments have been paused since March 2020, which means many people have gotten used to spending these funds elsewhere. The sooner you can start reincorporating this expense back into your budget, the easier it will be when the time for repayment comes.
Continue making payments during the freeze: If you can afford to do so, consider continuing to pay down your loan during the payment freeze. Not only does the pause stop all required payments, but it also prevents interest from accumulating on the outstanding balance. Where your payment would usually be split between principal and interest, during this time it is possible to make principal-only payments once any previously accrued interest is paid off.

Young Professional Financial Planning ConsiderationsYoung professional financial planning can be challenging but using these tips can help you set a firm foundation for your financial future.3. Monitor your student loan account for important updates and repayment dates: Since this round of the payment pause is dependent on the how and when the Supreme Court rules on the pending litigation, it’s important to stay up to date on what’s happening with the program. Your student loan servicer, and the U.S. Department of Education, should both issue statements and notifications regarding the status of your loan. Be sure to follow along and adjust your budget accordingly. 4. Consider an income-based repayment plan: If you don’t think you’ll be able to afford your monthly payments if/when they resume, consider applying for an income-based repayment plan or Public Service Loan Forgiveness. Any previous defaults or delinquencies will be reversed, and good standing will be repaired during the repayment pause, which will allow more borrowers to access these programs.

Keep Your Long-Term Plan in MindIf you are a student loan borrower hoping for debt relief, don’t wait until the last minute to start planning ahead. It’s important to keep your long-term financial plan in mind and make wise decisions about your student loans in the meantime. At Aviance Capital Partners, we’re here to help through our comprehensive Aviance WealthPlan process. To learn more, email us at wealthrelations@aviancepartners.com or set up a complimentary call here.

Aviance Capital Partners, LLC (“ACP”) is an SEC registered investment adviser located in Naples, Florida. Registration as an investment adviser is not an endorsement by securities regulators and does not imply that ACP has attained a certain level of skill, training, or ability. While information presented is believed to be factual and up-to-date, ACP does not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. Not all services will be appropriate or necessary for all clients, and the potential value and benefit of ACP’s services will vary based upon the client’s individual investment, financial, and tax circumstances. The effectiveness and potential success of planning strategies discussed depends on a variety of factors, including but not limited to the manner and timing of implementation, coordination with the client and the client’s other engaged professionals, and market conditions. The information provided is general in nature, which should not be construed as specific advice tailored to an individual reader. ACP suggests that readers consult a financial professional, attorney or tax advisory professional about their specific financial, legal or tax situation. All investment strategies have the potential for profit or loss, and different investments and types of investments involve varying degrees of risk. There can be no assurance that the future performance of any specific investment or investment strategy, including those undertaken or recommended by ACP, will be profitable or equal any historical performance level. Additional information about ACP, including its Form ADV Part 2A describing its services, fees, and applicable conflicts of interest and its Form CRS is available upon request and at https://adviserinfo.sec.gov/firm/summary/146597.

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Anchors Aweigh ABA

February 8, 2023 | 7 PM
Coastal Compass Executive Suites; 4210 Valley Ridge Blvd, Ponte Vedra, FL 32081 Aviance Capital Partners & Anchors Aweigh ABA are co-hosting a Special Needs Financial Planning Roundtable event at Coastal Compass Executive Suites; 4210 Valley Ridge Blvd, Ponte Vedra, FL 32081 on February 8, 2023.

Brian Cotroneo, ChSNC, will present on and discuss the details around issues such as Special Needs Trusts, 529 ABLE accounts, Social Security & Medicaid financial eligibility, Estate Planning for special needs, and more.

If you are interested in attending in person or cannot attend but would like to receive the event’s presentation materials, please let us know using this form.

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How to Prepare Your Family for Long-Lasting Financial SuccessWhen it comes to finances, current research suggests that millennials who are growing their families are facing unique challenges that previous generations never had to encounter. While financial responsibilities are nothing new for adults, things like inflation, a competitive job market, and overwhelming student debt are posing very real and serious threats to the financial security of millennials. For young adults who are planning to start or grow their families, we find it crucial to develop savvy and disciplined money habits. The financial planning tips below can help you to build a foundation to weather modern challenges and seek to build financial security.

Be Specific When It Comes to Your GoalsBefore you can make a plan for your growing family’s future, it helps to be clear about what, exactly, you want that future to look like. The first step to developing a financial plan is to consider the bigger picture and set goals for what you want to achieve with your money. That could mean determining a specific amount that you want to save for retirement or putting aside enough money to support your children’s educational pursuits. Knowing exactly what you want to do with your money can go a long way in helping guide you as you build a wealth management plan for your growing family.

The key is to be as specific as possible with your goals. For example, you wouldn’t just set an amount you want to save for retirement. Rather, you’d also determine by what age you’d want to have that set aside. Then, you could break it down even more. How much will you need to save each year to hit that goal? What about each week? Specific number goals and deadlines can make it easier to hold yourself accountable and help make large and overwhelming goals seem more achievable. For example, saving $500,000 can seem like a herculean task, but breaking that goal down into savings of $1,050 per month can feel much more approachable.

Once you have a clear understanding of all your goals and the steps you need to take to achieve them, then you’ll be able to build out a budget that incorporates these steps into your everyday financial life.

Young Professional Financial Planning ConsiderationsYoung professional financial planning can be challenging but using these tips can help you set a firm foundation for your financial future.Create a Budget and Honor ItSpeaking of budgets, creating one is one of the most important financial planning tips you can follow when your family is growing. However, the key is to make your budget realistic so that you can truly honor it. A budget means nothing if it only lives on paper. Additionally, don’t “set and forget” your budget. You’ll want to continue to track your earnings and spending so that you can fine-tune your budget as you go to ensure that it’s working for you. Any time you experience a big life change or change in your financials, such as a new baby or a new job, sit down and revise your budget.

If you’re finding yourself overwhelmed or unsure how to proceed with your budget building, there are a plethora of online resources available at your fingertips to help you stay on track. You can use a budgeting app that will automatically track your expenses for you, or there are online budgeting tools if you need help getting started with building your budget.

Build a Cash Reserve for EmergenciesThis is often repeated among financial planning tips, but it’s critical for growing families to have money set aside in the event of an unexpected financial emergency. This often becomes increasingly important if you have children who are depending on you. Having a cash reserve set aside can protect your financial health in multiple ways, the main one being that you won’t have to dip into your savings or go into serious debt to cover an unexpected expense.

You can start by working toward saving three to six months’ worth of living expenses. This is a general baseline for an emergency fund, though your unique circumstances may merit saving more. To determine the appropriate amount, we suggest considering factors such as your job security, your health status, and the number of debts you’re working to pay off.

Any time that your financial situation changes, we recommend you review your emergency fund to ensure that it still matches your circumstances. Life changes such as having a baby or buying a new home may mean that you add a bit more to your emergency nest to ensure your family remains protected.

Don’t Let Your Debt Get Away from YouAs you may know from experience, debt can be a serious detriment to your financial security, especially for growing families. Sometimes loans and credit cards are useful at the moment – and even necessary at times – but they can lead to a cycle of debt that is difficult to get out of. No matter how good a credit card company’s offer is, be cautious and think through the repercussions of opening a new credit card. Read the terms and conditions closely, be sure you know exactly how the interest rate will be calculated and what hidden fees may be applied to your account.

What’s more, having good credit can be helpful, whereas having poor credit can severely hinder opportunities – for instance, buying a larger home as your family grows. So, as you consider financial planning tips to implement, be careful not to do anything that puts your credit at risk.

Take Steps Toward Financial FreedomCelebrate this Independence Day by committing to taking steps to help build your financial resilience and achieve long-lasting financial freedomUtilize All the Resources Available to YouIf you’re a young professional with a growing family, one thing you have that previous generations did not is a plethora of easy-to-access resources to help you make informed financial planning decisions. If you struggle to pay your bills on time, look into setting up auto-pay. If you struggle to track your spending, download a budget app that automatically tracks the comings and goings of your account for you. If you’re stressed about the idea of saving for retirement while raising a family, ask your employer how to make the most of the retirement savings accounts they offer. If you’d like a partner you can trust to help you navigate each phase of your family’s financial life, talk with a professional financial advisor.

Using Financial Planning Tips to Set Your Growing Family Up for Lasting Financial SuccessIf your family While the financial planning tips in this article can assist you in creating a thoughtful financial plan as your family grows and evolves, we believe strongly in the value of working with a professional financial advisor to build a more personalized strategy. At Aviance, we provide personalized wealth advice and investment solutions based on your needs and goals. Please contact us today to talk to one of our financial planners about building a financial strategy designed to support your growing family while also growing your wealth.

DisclosuresAviance Capital Partners, LLC (“ACP”) is an SEC registered investment adviser located in Naples, Florida. Registration as an investment adviser is not an endorsement by securities regulators and does not imply that ACP has attained a certain level of skill, training, or ability. While information presented is believed to be factual and up-to-date, ACP does not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. Not all services will be appropriate or necessary for all clients, and the potential value and benefit of the ACP’s services will vary based upon the client’s individual investment, financial, and tax circumstances. ACP suggests that readers consult a financial professional, attorney or tax advisory professional about their specific financial, legal or tax situation. Past investment performance does not guarantee future results. All investment strategies have the potential for profit or loss, and different investments and types of investments involve varying degrees of risk. There can be no assurance that the future performance of any specific investment or investment strategy, including those undertaken or recommended by ACP, will be profitable or equal any historical performance level. Additional information about ACP, including its Form ADV Part 2A describing its services, fees, and applicable conflicts of interest and its Form CRS is available upon request and at https://adviserinfo.sec.gov/firm/summary/146597. For current ACP clients, please advise us promptly in writing, if there are ever any changes in your financial situation or investment objectives, if you wish to impose any reasonable restrictions to our management of your account, or if you have not been receiving at least quarterly account statements from your account custodian.

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We Rock The Spectrum

January 23, 2023 | 7 PM
9060 Kimberly Blvd Boca Raton, FL 33434 Aviance Capital Partners will be hosting a Special Needs Financial Planning Workshop at We Rock The Spectrum in Boca Raton on January 23, 2023.

Financial Planners, Samantha Beauvais and Brian Cotroneo, ChSNC, will present on and discuss the details around issues such as Special Needs Trusts, 529 ABLE accounts, Social Security & Medicaid financial eligibility, Estate Planning for special needs, and more.

If you are interested in attending in person or cannot attend but would like to receive the event’s presentation materials, please let us know using this form.

Register Here

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Year-End Tax Planning ChecklistTaxes are inevitable, but overpaying doesn’t have to be. With the holiday season in full swing, taxes are likely the furthest topic from your mind. And while it’s tempting to put them on the back burner until January 1st or April 15th, doing so could increase your tax bill. There are several actions you can take before year-end to minimize your tax liability. Use this year-end checklist to help you start 2023 off on the right financial foot.

Income & DeductionsFirst and foremost, it’s important to understand the types of income you received in 2022 and potential deductions. Most year-end income and deduction forms will be made available no later than January 31st.

Form W-2: This document outlines income earned from wages, salaries, bonuses, and tips.
Form 1099-DIV: This form reports dividends and investment distributions.
Form 1099-R: This form reports any distributions taken from various retirement accounts including annuities, profit-sharing plans, IRAs, insurance contracts, and pensions.
Form 1099-INT: This document is used by financial institutions and other entities to report interest income paid. If you received interest of at least $10 throughout the year, you should expect to receive a copy of this form.
Form 1099-MISC: This form outlines various forms of miscellaneous income, including rent, prizes, awards, healthcare payments, and payments to an attorney. If you were paid at least $10 in royalties, or $600 in miscellaneous income throughout the year, you should expect to receive a copy of this form.
Form 1099-NEC: If you are an independent contractor, freelancer, sole proprietor, or self-employed individual, you will receive this form from any businesses that have paid you at least $600 during the year.
Form 1095-A: This is the Health Insurance Marketplace Statement and it is sent to individuals who have qualified coverage through a Health Insurance Marketplace carrier. Those who receive coverage from the Marketplace may be eligible for subsidized coverage or a tax credit.
Form 1098: This document outlines any mortgage interest or property taxes paid over the previous year. It will be sent to you by your lender, if applicable. Mortgage interest and property taxes are deductible expenses if you itemize.
Form 1098-T: This statement reports any qualified educational expenses paid throughout the year. This includes tuition, fees, and required course materials. If you paid qualified educational expenses for yourself or a dependent child, you may be eligible for certain education tax credits.
Form 1098-E: If you paid more than $600 in student loan interest throughout the year, you will receive this form. Student loan interest is an above-the-line tax deduction.

InvestmentsAside from the income received from investments, there are several other ways investing can impact your tax liability. Consider the following:

Tax Loss Harvesting: If you have unrealized losses in your taxable investment accounts, you may be able to offset the taxes owed on capital gains. If you have capital losses greater than your total capital gains, you can use the loss to reduce ordinary income by up to $3,000. Any unused loss can be carried forward to future years.
Net Investment Income Tax: You may be subject to an additional 8% tax on net investment income if your modified adjusted gross income exceeds $200,000 for single taxpayers or $250,000 for married taxpayers. If you know you will be subject to this tax, consider deferring investment income to other years if possible.
Rebalance Asset Allocation: Consider rebalancing your asset allocation if it is no longer in line with your investment objectives. This is particularly important if you have a concentrated equity position that may expose your portfolio to unnecessary risk.
Stock Options and AMT: Certain investments, like incentive stock options, can impact your alternative minimum tax liability. It’s important to review this before finding yourself caught off guard during tax season. Be sure to consult a qualified financial professional if you have questions about AMT.

RetirementPlanning for retirement is a great way to save for the future while also minimizing your tax liability. Here are some things to keep in mind as you head into the new year.

Maximize Retirement Contributions: If you have access to a 401(k), 403(b), or 457 plan, maximizing your retirement contributions can save you on taxes. That’s because contributions are considered pre-tax and will directly reduce your taxable income at the end of the year. You can contribute up to $20,500 with additional catch-up contributions of $6,500 for those over the age of 50. Contributions must be made before December 31st to qualify for the 2022 tax year.
Roth Conversion: Converting pre-tax funds to a Roth account can be a tax-efficient strategy if you are in a lower tax bracket than normal. Since the funds will be taxable in the year of conversion, do your due diligence when it comes to timing. Once funds are converted, they will enjoy tax-free growth and no required minimum distributions.
Required Minimum Distributions: Once you reach age 72, RMDs must be taken from all qualified retirement accounts except Roth IRAs. You have until April 1st of the year following the year in which you turn age 72 to take your first distribution. Every year thereafter, you must take your RMD by December 31st. Be sure to stay on top of these, as the penalty is steep if you miss a distribution. The IRS will charge a 50% penalty on the amount that should have been taken.

InsuranceInsurance is a commonly overlooked planning area that could have important tax benefits if reviewed before the end of the year.

HSA Contributions: If you are enrolled in a high-deductible health plan, you should have access to a health savings account (HSA). These accounts have triple tax benefits: (1) contributions are tax-deductible (2) earnings grow tax-free and (3) withdrawals are tax-free if used for qualified medical expenses. You can contribute up to $3,650 for individual coverage and $7,300 for family coverage in 2022.
FSA Funds: If you’re not eligible for an HSA, your employer may have a flexible spending account instead. Contributions are tax-deductible and can be used to pay for out-of-pocket medical expenses. Keep in mind that only $570 is allowed to carry over into 2023, unlike HSAs which have no carry-over limits. If you have more than $570 in your FSA, consider spending down the account before the end of the year.
Healthcare Deductible: Have you met your healthcare deductible for the year? If so, consider incurring additional medical expenses before the end of the year, otherwise, your deductible will reset in 2023.

Charitable GivingIf philanthropy is something you want to incorporate into your overall wealth plan, there are many strategies that can be used to give to causes you care about while also reducing your tax bill. Consider the following:

Gifting Appreciated Assets: Appreciated assets that have been held for longer than one year can be gifted directly to a charity and you will receive a current-year tax deduction. Not only that, but these assets would avoid capital gains tax if given directly to a charity instead of being sold first and the proceeds being donated.
Bunched Giving: Thanks to the increased standard deduction, it can be difficult to receive tax benefits from donating to charity. Bunching multiple years’ worth of donations into one tax year can help you exceed the standard deduction threshold and make itemizing worth it.
Qualified Charitable Distribution: If you are required to take RMDs but don’t necessarily need the money for day-to-day expenses, consider donating the funds to charity. QCDs allow donors to contribute up to $100,000 from a traditional IRA to a qualifying charity. The best part is these donations count toward your RMD but are not taxable to you.
Donor Advised Funds: If you know you want to contribute to charity this year, but you’re not sure which charity or charities to choose, a donor-advised fund (DAF) may be the right choice for you. In this case, you would make a charitable contribution to the fund by December 31st. Depending on how much you contribute, it could qualify for a current year’s charitable deduction.

Small Business OwnersSmall business owners have their own set of tax considerations to keep in mind:

Qualified Business Income: A portion of your income may be considered tax-deductible if your business produces pass-through income and certain conditions are met.
Control Business Expenses: Deferring or accelerating business expenses can be used as a tax-mitigation strategy. Consult with a tax professional for more information.
Retirement Plan: If your business follows the calendar year tax year, consider starting a retirement plan before the end of the year. Certain startup costs may be tax-deductible.

Estate PlanningEstate planning isn’t just for aging families. It can be used every year to improve your financial situation and potentially reduce taxes.

Lifetime Gifting: If you want to make gifts to friends or family this year, you can give up to $16,000 per person gift-tax-free.
529 Plan: If you have a child or grandchild who is planning to attend college, consider contributing to a 529 plan. You can utilize the $16,000 annual exclusion to contribute money gift-tax-free. There is also a special election you can make to contribute 5 years’ worth of contributions all at once. That means you could give up to $80,000 or $160,000 if you are married and gift-splitting. Contributions are not tax-deductible, but they are gift-tax-free.
Any Major Life Events: If you experienced any major life events, consider reviewing your estate plan and updating beneficiaries and estate documents. A change in marital status can also have a significant impact on your tax liability.

Do You Have Questions on Any of These Items?Tax planning is not as simple as going down a checklist. This list is not comprehensive and should always be reviewed in the context of your overall financial plan. If you have any questions on the above considerations, or if you would like a second opinion on your current plan, Aviance Capital Partners is here to help. Click here to schedule a call or reach out to us at wealthrelations@aviancepartners.com for a complimentary consultation.

Disclosures: Aviance Capital Partners, LLC (“ACP”) is an SEC registered investment adviser located in Naples, Florida. Registration as an investment adviser is not an endorsement by securities regulators and does not imply that ACP has attained a certain level of skill, training, or ability. While information presented is believed to be factual and up-to-date, ACP does not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. Not all services will be appropriate or necessary for all clients, and the potential value and benefit of the ACP’s services will vary based upon the client’s individual investment, financial, and tax circumstances. The effectiveness and potential success of a tax strategy, investment strategy, and financial plan depends on a variety of factors, including but not limited to the manner and timing of implementation, coordination with the client and the client’s other engaged professionals, and market conditions. This should not be construed as specific investment, financial planning or tax advice tailored to an individual reader. ACP suggests that readers consult a financial professional, attorney or tax advisory professional about their specific financial, legal or tax situation. Past performance does not guarantee future results. All investment strategies have the potential for profit or loss, and different investments and types of investments involve varying degrees of risk. There can be no assurance that the future performance of any specific investment or investment strategy, including those undertaken or recommended by ACP, will be profitable or equal any historical performance level. The index and sector performance data appearing or referenced above has been compiled by the respective copyright holders, trademark holders, or publication/distribution right owners. Historical performance results for investment indexes or sectors represented are for illustrative purposes only and do not represent actual portfolio performance. Additional information about ACP, including its Form ADV Part 2A describing its services, fees, and applicable conflicts of interest and its Form CRS is available upon request and at https://adviserinfo.sec.gov/firm/summary/146597. For current ACP clients, please advise us promptly in writing, if there are ever any changes in your financial situation or investment objectives, if you wish to impose any reasonable restrictions to our management of your account, or if you have not been receiving at least quarterly account statements from your account custodian.

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Are You Making the Most of Your Philanthropic Efforts?Philanthropy is one of the most direct, effective ways to change the lives of others for the better, and this article is full of charitable giving tips to help you make the most of your generosity in this season of giving. Taking a strategic approach to how and when you give can help you save on taxes while making the greatest impact for your favorite charities, too.

Charitable Giving Tip: Give a Gift That’s AppreciatedIn addition to outright cash gifts, remember that you can also choose to donate stocks, bonds, and other appreciated securities. While it’s a bit more work than a check or credit card, these giving vehicles still provide financial support to the recipients and can offer you some valuable tax benefits as well.

When gifting appreciated securities, neither you nor the charitable organization owes capital gains tax on the growth. Not only will your gift help you avoid that tax, but it will also be eligible as a tax deduction equal to the fair market value of the security and up to 30 percent of your AGI.

Charitable Giving Tip: Try an Alternative to an RMDIf you are 72 years or older, you are likely taking out your Required Minimum Distributions (RMDs) each year. Nearly all retirement accounts, with the exception of Roth IRAs, require you to take out RMDs as the government does not allow you to keep your money in a retirement account indefinitely. To meet that RMD, you could consider a qualified charitable distribution, known as a QCD, which is a donation made directly from your IRA. Unlike appreciated security, this giving strategy doesn’t qualify as a charitable donation, but it does decrease your taxable income.

While effective, this strategy is more complex with strict requirements, so we recommend you involve your financial advisor if you are considering a QCD. In addition to decreasing your taxable income, it can also be beneficial for Medicare premiums. You must be at least 70 ½ years old to make a QDC, but it may be wise to wait until you reach 72 when you will be required to take RMDs. The maximum allowable amount per year for a QCD is $100,000, but recent tax changes mean that this maximum could be different if you have made deductible contributions to your IRA.

Laws surrounding taxes always seem to be in flux. That’s why it is essential to work with a professional who can advise you on the best strategy for your unique financial situation and future goals by offering the most up-to-date charitable giving tips.

Smart Financial Moves for Empty NestersWhen your children move out, you are suddenly faced with a different home situation and it’s a good time to revisit your finances and make smart empty nester financial moves.Charitable Giving Tip: Establish Your Own Donor-Advised FundYou can create your own charitable entity by establishing a donor-advised fund (DAF), which comes with immediate charitable tax deduction benefits. A DAF is essentially a personal charitable giving fund with great flexibility.

As the donor, you put your money into the fund, and then you recommend when gifts should be made from that fund to your favorite charities. While your money sits in the account, it is invested, and any growth from those investments is tax-free. In addition to cash, you can use appreciated securities (stocks, bonds, etc.) to fund your donor-advised fund and reap even greater tax benefits.

Charitable Giving Tip: Take a Strategic Approach to ItemizingMany people avoid itemizing because it is too time-consuming. In addition to that, the Tax Cuts and Jobs Act of 2017 nearly doubled the standard deduction, making the benefits of itemizing applicable to fewer Americans. If you are interested in itemizing, add up your home mortgage interest, property, local and state taxes and other allowable deductions, such as student loan interest, healthcare expenses, and more. If that number is more than the standard deduction, itemizing might be the right strategy. For 2022, the standard deduction is $12,950 for individuals and $25,900 for married couples filing jointly. The standard deduction is slightly higher for those 65 years and older.

The Difference Between Having an Estate Plan and a Wealth Transfer PlanHaving an estate plan without a wealth transfer plan in place could lead to unintended outcomes so learn why your family may need a wealth transfer plan.Charitable Giving Tip: Pay It Forward – and Ahead of ScheduleWith the recent hikes in the standard deduction threshold, it may be difficult for many people to exceed that figure and derive the tax benefits of itemizing. One strategy to increase your deduction is to make more than one year’s worth of charitable gifts in the same tax year. This is sometimes referred to as “bunching” your charitable gifts, and appreciated securities are often used for this approach.

Closing Thoughts on Charitable Giving TipsCharitable giving can be an important component of your overall financial strategy. We’ve outlined some charitable giving tips above, but your plan should consider your unique circumstances. A financial adviser can review your portfolio and other relevant factors, including your age and the amount you can give, to help craft your charitable giving strategy.

At Aviance, we aim for a deep understanding of our client’s circumstances to help develop a plan that’s tailored to their specific financial goals. If you’re interested in discussing any of the strategies described above that can transform lives and communities, please reach out to us. We are here to partner with you to make a difference.

Disclosures: Aviance Capital Partners, LLC (“ACP”) is an SEC registered investment adviser located in Naples, Florida. Registration as an investment adviser is not an endorsement by securities regulators and does not imply that ACP has attained a certain level of skill, training, or ability. While information presented is believed to be factual and up-to-date, ACP does not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. Not all services will be appropriate or necessary for all clients, and the potential value and benefit of the ACP’s services will vary based upon the client’s individual investment, financial, and tax circumstances. ACP suggests that readers consult a financial professional, attorney or tax advisory professional about their specific financial, legal or tax situation. Past investment performance does not guarantee future results. All investment strategies have the potential for profit or loss, and different investments and types of investments involve varying degrees of risk. There can be no assurance that the future performance of any specific investment or investment strategy, including those undertaken or recommended by ACP, will be profitable or equal any historical performance level. Additional information about ACP, including its Form ADV Part 2A describing its services, fees, and applicable conflicts of interest and its Form CRS is available upon request and at https://adviserinfo.sec.gov/firm/summary/146597. For current ACP clients, please advise us promptly in writing, if there are ever any changes in your financial situation or investment objectives, if you wish to impose any reasonable restrictions to our management of your account, or if you have not been receiving at least quarterly account statements from your account custodian.

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What to Know About the Uses and Benefits of This Type of Adult GuardianshipIf you’ve been following our Special Needs Financial Planning series, you know we’ve covered government benefits, special needs trusts, ABLE accounts, and more. In this month’s article, we continue the conversation around lifetime planning by diving deep into the topic of special needs conservatorships. Read on to learn more about what they are, and why they may be necessary to protect your loved one as they age.

What Is a Special Needs Conservatorship?A special needs conservatorship is a type of adult guardianship used for individuals with special needs who are unable to make decisions for themselves.

Parents have natural guardianship over their children until the age of 18. They can make medical, financial, and legal decisions on their behalf until that point. At age 18, however, a child becomes a legal adult, and their parents will not have a say in how their legal affairs are conducted. While this transition of legal decision-making makes sense in most cases, it can be challenging or even dangerous for individuals with special needs.

In this case, a conservatorship may be a crucial component of lifetime planning, especially if an individual experiences symptoms that make decision-making difficult or impossible. In general, a conservatorship is only granted in instances where a person is deemed to be mentally incapacitated and unable to know or understand their actions.

Types of ConservatorshipsThere are several types of conservatorships, including:

General Conservatorship: A court arrangement where a conservator has complete control over an individual’s medical, financial, and legal decisions. This is the most comprehensive type of conservatorship.

Limited Conservatorship of the Person: A court arrangement where a conservator cares for and protects an individual with special needs and provides for the requirements associated with daily life. Less restrictive than a general conservatorship, this arrangement only appoints certain rights to the conservator and allows the individual with special needs to maintain a degree of independence.

Limited Conservatorship of the Estate: A court agreement where a conservator handles an individual’s financial needs only. This includes paying bills and collecting income. Similar to a limited conservatorship of the person, this arrangement provides more independence than the general conservatorship.

The most appropriate option depends on your child’s specific circumstances.

Who Can Be a Conservator?Any responsible adult can be a conservator, but typically this role is filled by a parent, sibling, or relative. Usually, the person who filed the conservatorship petition with the court is also the person who is named as the conservator, but this is not true in all cases.

When Should You Apply?If you believe your child could benefit from conservatorship, we generally recommend that you start the legal process at least two or three months before they turn 18.

If the court has not approved the conservatorship by the individual’s 18th birthday, their parents or guardian will no longer be able to make critical decisions on their behalf. This could harm individuals who don’t have the capacity to make decisions for themselves and make the conservatorship process more difficult to complete.

Conservatorship vs. GuardianshipThere is often confusion around conservatorship versus guardianship and many people use the terms interchangeably. That being said, a conservatorship is not the same as a guardianship. Here’s why:

Conservatorships remove rights from the individual and grant them to the conservator instead. For instance, if a limited conservatorship of the estate is in effect, then the conservator can make financial decisions while the individual with special needs will no longer have the right to do so.
A guardianship is a court arrangement in which a person is appointed to make decisions about an individual’s place of residence, financial support, daily care, and medical treatment. It is similar to a conservatorship, but it does not necessarily limit or terminate the individual’s right to consent to the decisions made. For instance, depending on the specific arrangement, an individual may still be allowed to refuse medical treatment or establish their own place of residence.

Learn MoreChoosing to pursue conservatorship for your child with special needs is not an easy decision. But it may be an essential decision that could protect your loved one for years to come. That’s why it’s so important to learn more about your options and start the process as early as possible.

If you would like more information about conservatorships, Special Needs Financial Planning, or you would like to set up a time to review your specific situation, we would love to hear from you. Please click here to schedule a complimentary introductory call, or reach out to us at wealthrelations@aviancepartners.com.

Aviance Capital Partners, LLC (“ACP”) is an SEC registered investment adviser located in Naples, Florida. Registration as an investment adviser is not an endorsement by securities regulators and does not imply that ACP has attained a certain level of skill, training, or ability. While information presented is believed to be factual and up-to-date, ACP does not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. Not all services will be appropriate or necessary for all clients, and the potential value and benefit of the ACP’s services will vary based upon the client’s individual investment, financial, and tax circumstances. The tax and estate planning information provided is general in nature, which should not be construed as specific financial planning or tax advice tailored to an individual reader. ACP suggests that readers consult a financial professional, attorney or tax advisory professional about their specific financial, legal or tax situation. All investment strategies have the potential for profit or loss, and different investments and types of investments involve varying degrees of risk. There can be no assurance that the future performance of any specific investment or investment strategy, including those undertaken or recommended by ACP, will be profitable or equal any historical performance level. Additional information about ACP, including its Form ADV Part 2A describing its services, fees, and applicable conflicts of interest and its Form CRS is available upon request and at https://adviserinfo.sec.gov/firm/summary/146597.

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If you’re looking for a meaningful way to give back at the end of the calendar year then use these five charitable gifting strategies as you plan your philanthropy.

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As a parent of a child with special needs, you may have considered or already set up a Special Needs Trust (SNT). These vehicles can help provide a better quality of life for individuals with special needs by paying for many day-to-day costs that are not covered by government benefits.

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Small business owners have a lot to manage, from day-to-day operations to bigger-picture plans for the company’s future. As you lean into your expertise and passions to bring your business vision to life, it can be helpful to lean on a financial advisor to help you manage things like your tax strategy, optimizing your cash flow, or building a budget that can help meet all your major milestones.

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Here’s to the veterans in our lives and may November 11th be an ever-lasting symbol of the strength and courage it takes to serve in the military. May your sacrifice be acknowledged, remembered, and respected for generations to come.

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Aviance Capital Partners is pleased to announce that Brian J. Cotroneo, ChSNC®, has successfully completed the Chartered Financial Analyst® (CFA®) Program and has earned the right to use the Chartered Financial Analyst® designation granted by the CFA Institute.

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If you are a veteran or an active duty servicemember then the VA Home Loan program may be an advantageous way to finance the home of your dreams.

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It can be difficult to know how to handle a large inheritance, especially if you’re grieving the loss of a loved one, but taking these steps can help you move forward.

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A brief review of the past two years helps set the stage for where things may be headed over the next several months: What started as an isolated case of limited supplies of toilet paper, eventually, morphed into empty shelves for all sorts of goods. More frustrating was the knowledge that fleets of cargo-packed ships … Investment Commentary: October 2022 Read More »

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A new federal program allows many borrowers to take advantage of student loan forgiveness so learn whether you are eligible to benefit

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Raising a special needs child is more expensive than raising a neurotypical child, meaning it’s even more important for you to plan for your financial future.

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When your children move out, you are suddenly faced with a different home situation and it’s a good time to revisit your finances and make smart empty nester financial moves.

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These military financial planning tips will help retired servicemembers and veterans gain financial confidence and peace of mind for their futures.

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Young professional financial planning can be challenging but using these tips can help you set a firm foundation for your financial future.

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President Biden signed the Inflation Reduction Act into law on August 16 so learn the details of this new legislation and how it may impact your financial plan

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Having an estate plan without a wealth transfer plan in place could lead to unintended outcomes so learn why your family may need a wealth transfer plan.

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Use this guide on Special Needs Trusts to determine whether Special Needs Trusts (SNT) can help you better plan for your loved one’s financial future

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These college preparation tips can help your new college student succeed in academics, finances, and life as they strike out on their own.]

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Hosted by Aviance Capital Partners September 8, 2022 | 7 PM Jacksonville 9357 Philips Hwy #3, Jacksonville, FL 32256 September 22, 2022 | 11 AM 633 N Orlando Ave Winter Park, FL 32789 September 22, 2022 | 7 PM 633 N Orlando Ave Winter Park, FL 32789 REGISTER Aviance Capital Partners will be hosting Special … Special Needs Financial Planning Workshops | September 2022 Read More »

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Take these steps to help your special needs child feel more confident and less anxious during the back-to-school season and the first day of school

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Take these steps to help your special needs child feel more confident and less anxious during the back-to-school season and the first day of school

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We guide special needs families through special needs planning steps to help you improve the quality of life for your loved one with special needs.

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Military families can improve their financial security and create more peace of mind using these six financial tips for active duty service members.

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Small business owner retirement planning can require considerable preparation including creating a business succession plan in writing and thinking about your goals.

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Celebrate this Independence Day by committing to taking steps to help build your financial resilience and achieve long-lasting financial freedom

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Special needs planning requires a long-term financial plan that takes into account special needs government benefits, which you can maximize in four ways.

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Special needs planning requires a long-term financial plan that takes into account special needs government benefits, which you can maximize in four ways.

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Estate Planning Guidance for Those Without Heirs

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Financial planning doesn’t end once you retire – in fact, it’s the beginning of a new phase of your money journey that requires a thoughtful strategy.

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Hosted by Aviance Capital Partners & Redeemer Church June 20, 2022 | 6 PM 190 S Roscoe Blvd, Ponte Vedra Beach, FL 32082 Aviance Capital Partners will be hosting a Special Needs Financial Planning Workshop at Redeemer Church in Ponte Vedra Beach on June 20, 2022. Brian Cotroneo, Chartered Special Needs Consultant (ChSNC) and Financial … Special Needs Financial Planning Workshop | 6.20.22 Read More »

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Does money make you happier? The answer may be both yes and no. Planning ahead can give you more choices, reduce stress and give your money a greater purpose.

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This financial advice for new college graduates can help the young people in your life navigate the transition from college to the real world and remain on solid financial ground

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Military service is fraught with risk, so it’s important to make sure your SGLI coverage is enough to mitigate your level of risk.

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Does this sound like you? Your days are consumed with managing, sustaining, and growing your small business, and your nights are spent sleeplessly analyzing all the details no one else thinks about. Your energy and focus are spent on the day-to-day, leaving you little time to consider the big picture of your small business’ financial wellness.

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We work with many parents, guardians, and family members of individuals with special needs, as well as the individuals themselves. We believe the most important part of the work we do for them is to create and execute on a personalized plan tailored to their unique needs.

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Money is a sensitive topic for many people, which can feel a bit taboo to discuss. However, if you’re not an expert in financial matters, we believe it’s important to partner with a financial advisor to help you make thoughtful decisions for your future.

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Are You Worried About Inflation in 2022? Gas prices are soaring. Food costs are rising. It seems like everything is getting more expensive. If you’re feeling the pinch as U.S. inflation nips at your wallet, you’re not alone. Americans across the country are foregoing everyday purchases to make their money last. Check out this article … Inflation has you concerned? Read More »

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The month of April typically brings thoughts of tax returns due, but there is a lot more to this month. April is also Autism Awareness Month, a topic we feel passionate about here at Aviance Capital Partners. As a financial planning and investment advisory firm working with both individuals with autism as well as their … April is Autism Awareness Month: Here’s How You Can Get Involved Read More »

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The month of April typically brings thoughts of tax returns due, but there is a lot more to this month. April is also Autism Awareness Month, a topic we feel passionate about here at Aviance Capital Partners.

As a financial planning and investment advisory firm working with both individuals with autism as well as their families, we believe it is important to highlight this month and bring awareness to a community that is often overlooked. First observed in 1972 by the Autism Society, Autism Awareness Month is meant to call attention to the condition itself and promote acceptance and inclusivity of the individuals whose life it effects.

In this article, we explore what autism is and what you can do to raise awareness, promote acceptance, and support the community.

What is Autism? Autism, also known as autism spectrum disorder (ASD), is a complex condition characterized by neurodevelopmental delays, difficulties communicating, and impairment in social interactions. Autism is considered a spectrum because each person experiences the condition in a unique way.

Though there is a common set of criteria that define ASD, there is no single way in which these characteristics are expressed. For instance, one child may display no outward indications of ASD while another may require significant assistance with everyday tasks, making their condition more observable.

Common signs of ASD include (1):

Reduced eye contact
Lack of facial expressions
Does not engage in imaginative play
Repeats words, phrases, or movements
Hyperactivity or inattentive behavior
Obsessive interests
Delayed cognitive, movement, and/or language skills

There is no cure for autism, but there are many therapeutic and educational resources that can help alleviate the challenges associated with the condition. Common treatment methods include Applied Behavior Analysis (ABA), Cognitive Behavioral Therapy (CBT), Occupational Therapy, Speech Therapy, Physical Therapy, and early childhood intervention.(2)

Why is Awareness Important? People often assume a person with autism is “high-functioning” or “normal” if they are able to speak and interact with the world in a relatively easy way. Conversely, people also assume that a person who doesn’t speak or who requires substantial every day support is abnormal or incapable of expressing themselves meaningfully. This is the stigma that Autism Awareness Month aims to erase.

Individuals with autism are just that—individuals. They come in all shapes and sizes, with likes, dislikes, skills, and challenges. Promoting Autism Awareness Month is a way to celebrate the individuality of those who make up the ASD community and let them know they are valued for more than just their condition.

Considering ASD is one of the most common childhood disabilities, with 1 in 44 children diagnosed,3 it’s more important than ever to support and uplift the community through acceptance, inclusion, and awareness.

What Can You Do to Help? If you want to get involved, there are several ways to give back to the ASD community and work toward a more inclusive world. Here are some options to consider:

Donate: If you would like to make a charitable contribution to an organization that researches ASD or provides support to those with the condition, here are 20 charities that are worth looking into. Before donating, be sure to thoroughly research the organization to ensure your contribution is spent in a way that aligns with your charitable goals.
Participate: Many organizations have local chapters that host events or need volunteers. Connect with your local organizations to find out how you can get involved.
Educate: One of the best ways to support Autism Awareness Month is to learn more about the condition and educate those around you. Learning to recognize autism and the attached stigma is the first step in raising awareness and keeping the ASD community safe from shame, myths, and assumptions.
Advocate: Support legislative bills that aim to protect and improve the quality of life for people with autism. Contact your local representatives to share your thoughts and express the importance of legislative action.

How We Help As a firm, we are dedicated to helping individuals with autism and their families by providing comprehensive financial planning focused on their unique needs. During the month of April, we are showing our support by raising awareness among our peers and clients. To learn more about how you can get involved, please contact us at wealthrelations@aviancepartners.com or (239) 598-4747.

(1) Signs and Symptoms of Autism Spectrum Disorders | CDC

(2) What are the treatments for autism? | NICHD – Eunice Kennedy Shriver National Institute of Child Health and Human Development (nih.gov)

Aviance Capital Partners, LLC (“ACP”) is an SEC registered investment adviser located in Naples, Florida. Registration as an investment adviser is not an endorsement by securities regulators and does not imply that ACP has attained a certain level of skill, training, or ability. While information presented is believed to be factual and up-to-date, ACP does not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. The information provided is general in nature, which should not be construed as specific advice tailored to an individual reader. Hyperlinks are provided as a convenience. ACP is not responsible for and does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, functionality, or relevance of any information and webpages published by any unaffiliated third party. Additional information about ACP, including its Form ADV Part 2A describing its services, fees, and applicable conflicts of interest is available upon request and at https://adviserinfo.sec.gov/firm/summary/146597.

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After serving our country, military families and veterans deserve the peace of mind that comes with financial security. Unfortunately, there is often a huge gap between the financial planning resources military families need and what they have access to. At Aviance Capital Partners, we strive to bridge that gap by offering comprehensive financial services with … Why We Work with Military Families & Veterans Read More »

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Brian Cotroneo, ChSNC

After serving our country, military families and veterans deserve the peace of mind that comes with financial security. Unfortunately, there is often a huge gap between the financial planning resources military families need and what they have access to. At Aviance Capital Partners, we strive to bridge that gap by offering comprehensive financial services with the needs of military families and veterans in mind. Here are three reasons why we work with this group and how we can make a difference in your financial future.

We Have a Shared Experience Aviance is a firm founded by veterans, employing veterans, and working with veterans. Others of us without direct military experience are proud to have friends and family who do. No matter which branch you were part of or where you served, we believe there is a wide set of shared values based on these experiences.

We also believe that veterans can feel better working with someone who has been in their shoes. We have personal experience navigating issues like VA medical processes, Service/Veterans Group Life Insurance, Pensions with Disability payments, etc. We are a firm who knows how to deal with these matters because we deal with them ourselves—and you can trust we will treat your situation with at least the same level of care.

We Speak the Same Language If you’ve ever caught yourself having to explain military acronyms and hierarchy to the civilians in your life, then you know firsthand that serving in the military comes with its own distinct language. At Aviance, we speak this language as well as you do. You’ll never have to worry about explaining what TSP, SBP, or BRS is. We already know. This gives us the ability to bond with our clients because we understand more than just their finances. We understand the people, families, veterans, and military servicemembers behind the financial accounts and what they have gone through to earn their benefits.

We Understand Your Financial Needs No matter which phase of military life you’re in, we can create a plan for you that is narrowly tailored to your needs, but based on our broad understanding about the financial implications of serving in the military. From active duty to reserves or retirement, the Aviance WealthPlan is designed to help you find peace of mind and financial security throughout every stage of life.

We help military servicemembers and veterans navigate topics like:

Learn More About the Aviance WealthPlan When asked why we work with military families and veterans, our answer is it just makes sense. Between our shared experiences and our deep understanding of the financial considerations of serving in the military, we can offer comprehensive planning tailored to your needs. To learn more about the Aviance WealthPlan and its applications for military families, reach out to us at 239-598-4747 or email wealthrelations@aviancepartners.com today.

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Aviance Capital Partners, LLC (“ACP”) is an SEC registered investment adviser located in Naples, Florida. Registration as an investment adviser is not an endorsement by securities regulators and does not imply that ACP has attained a certain level of skill, training, or ability. While information presented is believed to be factual and up-to-date, ACP does not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. The information provided is general in nature, which should not be construed as specific advice tailored to an individual reader. ACP suggests that readers consult an attorney or tax advisory professional about their specific legal or tax situation. Additional information about ACP, including its Form ADV Part 2A describing its services, fees, and applicable conflicts of interest is available upon request and at https://adviserinfo.sec.gov/firm/summary/146597

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Tax season officially started on January 24th, and while you still have some time to file your return, it’s not helpful to leave it until the last minute. Several COVID-19 related tax provisions were either started or extended in 2021, so you might be somewhat unfamiliar with this tax return. There’s no need to panic, … Are You Ready for Tax Season? Read More »

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Tax season officially started on January 24th, and while you still have some time to file your return, it’s not helpful to leave it until the last minute. Several COVID-19 related tax provisions were either started or extended in 2021, so you might be somewhat unfamiliar with this tax return. There’s no need to panic, though. With plenty of time until the April 18th deadline, here are four things we suggest you consider as you get ready for this tax season.

The Tax Brackets Have Changed The tax brackets increased this year to account for inflation. The top tax rate is still 37%, but the amount of income it takes to reach this bracket has increased to $523,600 for single taxpayers and $628,300 for married couples filing jointly. This is good news and could mean that you may owe less than you have in previous years.

The standard deduction has increased as well, and it is now $12,550 for single taxpayers and $25,100 for married filing jointly. Keep this increase in mind as you consider whether to take the standard deduction or itemize your deductions instead.

Review Your Itemized Deductions If you don’t plan to take the standard deduction, make sure you are getting the most out of your itemized deductions, including:

Medical Expenses – These expenses are generally deductible only if they exceed 7.5% of your Adjusted Gross Income (AGI).
Charitable Deductions – The deductible limit was temporarily increased to 100% of your AGI for qualified cash donations. You can also take up to a $300 deduction (or $600 for married filing jointly) if you donate but still choose to take the standard deduction.
Taxes – State and local income tax, property tax, and sales tax is deductible up to an aggregate limit of $10,000.
Mortgage Interest – Mortgage interest paid on a primary residence is deductible up to $750,000 of debt.

Remember that itemizing only makes sense if you have enough deductions to exceed your standard deduction.

COVID-Related Considerations There were many COVID-related tax provisions that occurred in 2021, including:

Advance Child Tax Credit Payments – In response to the pandemic, the IRS began sending advance payments of the Child Tax Credit to help families in need. If you received payments in 2021, be sure to reconcile these amounts against the total credit you are eligible to receive. This may have an impact on what you owe. The IRS will send you a copy of Letter 6419 which will provide information crucial to this reconciliation. Learn more at “Child Tax Credit Update Portal Site.”
Recovery Rebate Credit – If you didn’t get the full economic stimulus payment you were entitled to, this credit is for you! If you did receive all your stimulus checks, don’t worry. They will not be counted toward your taxable income.
Paycheck Protection Program (PPP) – This program ended in May 2021, but if you took out a PPP loan, you will need to make sure your loan forgiveness application is approved by the Small Business Administration. If this step is not completed, you may be on the hook for repayment.

Required Minimum Distributions Are Back The SECURE Act of 2019 temporarily paused required minimum distributions (RMD) from traditional IRAs and other qualified retirement plans. This provision officially ended in 2021 and if you are 72 or older, you will have to once again withdraw and pay tax on a minimum amount of money from your retirement accounts to stay compliant with the tax law. You have until December 31st of each tax year to make these distributions. If not made by the deadline, you could face a stiff 50% penalty on the amount you should have withdrawn.

How We Can Help Don’t let this tax season catch you off guard. With all the COVID-related changes and updates to the tax code, planning ahead is the best thing you can do to set yourself up for success. If you have questions or concerns about your tax return, reach out to us at (239) 598-4747 or email wealthrelations@aviancepartners.com to help review your tax plans. Time is of the essence, so please do not hesitate to reach out as soon as possible.

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Aviance Capital Partners, LLC (“ACP”) is an SEC registered investment adviser located in Naples, Florida. Registration as an investment adviser is not an endorsement by securities regulators and does not imply that ACP has attained a certain level of skill, training, or ability. While information presented is believed to be factual and up-to-date, ACP does not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. The tax and estate planning information provided is general in nature, which should not be construed as specific tax advice tailored to an individual reader. ACP suggests that readers consult an attorney or tax advisory professional about their specific legal or tax situation.

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International Women’s Day is celebrated globally on March 8th. First observed in America in 1909, it is meant to uplift women and all that they have achieved both personally and professionally. It highlights the road to equal rights, including the fight for voting rights and gender equality in the workplace. In honor of this day, … International Women’s Day with Aviance Capital Partners Read More »

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(photo: Samantha Beauvais, Casey Farrow, Alisha Danno)

International Women’s Day is celebrated globally on March 8th. First observed in America in 1909, it is meant to uplift women and all that they have achieved both personally and professionally. It highlights the road to equal rights, including the fight for voting rights and gender equality in the workplace. In honor of this day, we wanted to take a moment to recognize the Ladies of Aviance: Alisha, Casey, and Samantha with an interview about what’s most important to them. Get to know our team and learn more about how we are working hard every day to support those around us!

How did you get your start in the financial industry? Alisha: I have a degree in Administration both business and healthcare. When I relocated to Naples, FL from Texas, a position at Aviance Capital Partners became available. With my background of working in fast-paced environments, building a solid foundation with clients, and knowledge of all office functions, my qualifications were a match.

Casey: For as long as I can remember, I have always been interested in businesses and the flow of money. I grew up with strong entrepreneurial role models in my life, both my parents and grandparents built multiple business from the ground up. I grew up learning about the fundamentals of a business and all it takes to be successful. Naturally, that extended into being interested in personal finance and the underlying operations of other companies in different industries.

I sought to extend my knowledge and learn more about the economy and the stock market by studying “Finance – Financial Management and Analysis” in college. While learning more about personal and corporate finance, I grew an added interest in the real estate industry and decided to minor in Real Estate, focusing on real estate investment analysis.

Samantha: I started working as a bookkeeper in 2013 while I was still in college pursuing a completely unrelated degree (Anthropology & Psychology). In 2015, I started working for a small telecommunications company where I worked my way up to Financial Project Manager & Customer-Owned Asset Manager over 6 years.

I loved working with numbers, analyzing profit and loss statements, and planning for future expenditures. I was surprised how interested I became in finance since I’ve always been more “right-brained” with a focus on creative studies like anthropology, psychology, philosophy, writing etc. During my time as a Financial Project Manager, I started creating custom budgets for myself and my friends and family. I realized I much preferred planning and forecasting for individuals instead of companies and, in 2020, started the process to become a Certified Financial Planner.

What brought you to Aviance? Alisha: I answered the job posting they had placed online by calling in and simply introducing myself. After speaking with Jack Brown, he invited me to come in for an interview. I felt a strong rapport and a comfortable “family-like” feel with the team. Aviance places high value on employees while encouraging them to learn and grow within the company which was important to me.

Casey: While at Florida Gulf Coast University, I was introduced to the CFA (Chartered Financial Analyst) Institute. A handful of my influential professors are a part of this organization and knew Jack Brown as he is a former President for the CFA Society of Naples. I was impressed with Jack’s qualifications and track record, as well as those of Aviance’s other team members. One of my professors informed me about a position opening at Aviance. I reached out to Jack and after meeting the team, I knew it was the perfect fit. I was looking for a position that would allow me to grow as both a person and a professional, and Aviance is a great place for that. There is an emphasis on teamwork and camaraderie that makes coming to work each day unique and enjoyable.

Samantha: I finished my coursework for the CFP certification and was looking for practical experience working with clients and building financial plans. Aviance was looking for an Associate Financial Planner to help with the daily administration of financial plans and someone who could eventually transition to a lead planning role. It was a perfect fit!

I was really drawn to the mentorship mentality and Aviance’s focus on helping underserved communities like veterans and individuals with special needs. I felt so welcomed from day one even though I work remotely, and I know I can learn a lot from the team about establishing long-lasting relationships with clients.

What are your goals for the future? Alisha: Finding and keeping a healthy work-life balance with time for family and friends and being honest and open with others. To keep growing and learning in my position by taking full advantage of the educational resources available.

Casey: My goal is to further my education by obtaining the CFA certification and establishing my own personal investment philosophy. I continue to incorporate myself in the investment community and strive to learn from those around me and all who have come before me.

Samantha: My immediate goal is to pass the CFP exam on the first try in March 2022 and obtain my CFP certification in 2023 after having completed the three-year experience prerequisite. After that, I look forward to working with my clients in planning for their future goals. I also have a dream of one day writing a book because writing has always been my passion. I’m not sure if it will be a novel or a personal finance book, but I hope to make it a reality in the next 5-10 years or so!

Who is your biggest inspiration? Alisha: My mother is my biggest inspiration in all facets of life. My mother is a retired Vietnam Veteran Nurse. She inspires me to humble myself, to be strong, independent, optimistic, to have confidence, to be loving, kind and to be aware of the abundance of blessings I have and knowing how precious life is. Mom always says to try and take an hour for myself daily. I still call her for advice and am so grateful for my mother.

Casey: My biggest inspirations are my parents. It’s honestly difficult to summarize the impact they’ve had on my life and very much still do. They taught my sisters and I to be strong independent individuals and thinkers. They encourage us to always work hard towards our aspirations, to be respectful, kind, understanding of others, and true to ourselves.

They lead by example in all facets of life: family, faith, work, etc., and inspire me every day to be the best person I can be.

Samantha: My mom is my biggest inspiration. She passed away from cancer in 2020. It was the hardest thing I’ve ever experienced. She worked full time while earning a master’s degree, taking care of three daughters, and helping my dad start a successful A/C business. We butted heads a lot growing up, but she was the strongest person I’ve ever met, and she always seemed invincible to me. I think of her when I’m worried that I won’t be able to accomplish something, and she gives me the strength to do it anyway.

What do you do when you’re not working? Alisha: You can find me on Saturdays in Naples, FL helping my brother Stephan T. Nedwetzky Pit Commander Central Texas Barbecue and his wife Yolanda at the Commissary. I really don’t call this work. I love interacting with their customers and learning their business. It brings us closer together as a family, and we really make it fun!

I also love to spend time with my husband and daughter and to explore around SW Florida.

Casey: As a Floridian, I am surrounded by beautiful beaches and a wonderful climate. When I’m not working, I try to enjoy the outdoors as much as possible. You can often find me riding my bike, walking a nature preserve trail, or out on a kayak soaking up the sun.

The remainder of the time, I spend with my loving and supportive family and friends.

Samantha: When I’m not working, I’m studying for the CFP exam or working on financial services copywriting! Very fun, I know. When I do have free time, you can find me kayaking, camping, and doing all things nature related. I especially love hiking. Since FL is notoriously flat, I like to travel to the national parks throughout the United States to hike in the mountains. One day, I hope to visit all 59 national parks and hike the Pacific Coast Trail from Mexico to Canada.

Say Thank You to the Women in Your Life At Aviance Capital Partners, we are proud to spotlight our hard-working Ladies of Aviance and celebrate International Women’s Day together. We encourage you to do the same for the amazing women in your life. To learn more about International Women’s Day, click here. To learn more about our firm, visit our website or give us a call at (239) 598-4747.

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Why Panicking About the Stock Market Is Not Worth It If you’ve been following the ongoing market volatility and watching with worry as the value of stocks plummet, you are not alone. Given recent events, it’s not unreasonable to feel anxious about the future of your investments. You may be asking yourself questions like, “Should … Why Panicking About the Stock Market Is Not Worth It Read More »

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Samantha Beauvais

If you’ve been following the ongoing market volatility and watching with worry as the value of stocks plummet, you are not alone. Given recent events, it’s not unreasonable to feel anxious about the future of your investments.

On January 27th, many people were shocked to see multi-day sell-offs that rivaled those of the pandemic-related drops in March and October 2020. But by the end of the day, the Dow Jones Industrial Average, the S&P 500, and the NASDAQ were closing in the green [1]. If you sold your position early in the day, chances are you were kicking yourself by 4 PM, showing how futile it can be to make market decisions based on emotion.

We recognize it’s hard to separate emotions from investing, especially when it’s your hard-earned money on the line. Nevertheless, here are three reasons why we think panicking about the stock market is not worth it.

Short-Term Fluctuations Are Normal No matter how many times you hear that the ups and downs are just an inherent part of the market, it can still be scary to see a major market drop. We think it’s helpful to understand why these short-term fluctuations are normal and what you can do instead of panicking.

Every time you buy a stock, you are essentially betting against the person who sold it to you. The seller is assuming that the stock is not worth holding onto and by buying it, you are assuming that the seller is wrong. This creates an environment in which rumors, emotions, and current events can significantly affect the price of stock. The market is constantly adjusting to new information, and Monday’s volatility was no exception. With concerns about inflation, rising interest rates, and geopolitical events between Russia and Ukraine, it would be surprising if the market didn’t react.

Selling During a Drop Will Lock in Your Losses Part of what drives the volatility of the market is the panic buying and selling that accompanies market fluctuations. It’s a natural reaction to see huge drops and think you are better off returning to a cash position. After all, cash is very often associated with a sense of safety and security. But selling at the bottom of a market drop will lock in your losses.

Over the long term, the S&P 500 has risen an average of 10% over the last 95 years! [2] And while past performance cannot be used to predict future results for a specific stock or portfolio, historical data from the market as a whole is often used to point out why reacting to a sudden market downturn is not the best decision for your overall portfolio. In fact, a study conducted by the Schwab Center for Financial Research has shown that the S&P 500 has risen an average of more than 24% within 12 months of every market correction bottom since 1974 [3].

So, if you sold at the bottom of those corrections, you would have missed out on the ability to earn money on the upswing. Selling at the bottom is often seen as selling yourself short.

A Long-Term Outlook Is Key to Reducing Panic Despite the facts and figures, emotion can still play a significant role in how clients react to market downturns. Just as market fluctuations are normal over the long term, so are the strong reactions you might experience. We believe the key to reducing anxiety and remaining level-headed is to keep a long-term outlook and make sure your portfolio is properly diversified. This means that the different investments within your portfolio move in different directions in reaction to market variables. So, when one stock drops significantly, the others may gain or stay the same, ensuring that your overall portfolio is kept afloat. A long-term asset allocation strategy that is properly aligned with your risk tolerance and your overall financial goals is a much stronger remedy for market volatility than panicking. Like the age-old saying: “Keep calm and carry on,” at Aviance we like to say: “It’s not timing the market, it’s time in the market.”

How We Can Help At Aviance Capital Partners, we strive to provide our clients with the information and resources necessary to weather every market downturn with confidence. If you have questions about the recent market volatility or would like to review your portfolio, please reach out to us at (239) 598-4747 or email wealthrelations@aviancepartners.com.

[1] INX 4,523.50 -63.68 -1.39% : S&P 500 – MSN Money

[2] https://www.officialdata.org/us/stocks/s-p-500/1926?amount=100&endYear=2021

[3] https://intelligent.schwab.com/article/stock-market-corrections-not-uncommon

While information presented above is believed to be factual and up to date, Aviance Capital Partners, LLC (“ACP”) does not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change. This article does not serve as the receipt of personalized advice from ACP or its affiliated investment professionals. Readers should not use any of this content as the sole basis for any investment, financial planning, tax, legal or other decisions. Rather, ACP recommends that readers consult a professional adviser and conduct independent due diligence before implementing any of the options referenced above. Past performance does not guarantee future results. All investment strategies have the potential for profit or loss, and different types of investments involve varying degrees of risk. There can be no assurance that the future performance of any specific investment or investment strategy, including those undertaken or recommended by ACP, will be profitable or equal any historical performance level. Any index performance data referenced above is based on data from the respective copyright holders, trademark holders, or publication/distribution right owners of each index. The indexes do not reflect the deduction of transaction fees, custodial charges, or management fees, which would decrease historical performance results. Additional information about ACP, including its Form ADV Part 2A describing its services, fees, and applicable conflicts of interest is available upon request and at www.adviserinfo.sec.gov.

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Samantha Beauvais

With the New Year comes new resolutions and promises to save more money, spend less, and get in financial shape. These goals are admirable but can often be difficult to maintain throughout the entire year, especially as life gets in the way. Research shows that the easiest way to achieve resolutions to approach the goal with a plan1,2. At Aviance Capital Partners, we focus on financial planning. Whether you have a current financial plan or not, here are six ways you can get started on achieving your goals for the New Year.

Identify & Define Your Goals

Before you can pursue your goals, we think it’s important to make sure they are well-defined. This can help keep you motivated at times when sticking to a plan is the last thing you want to do. It can also help you to see tangible results along the way. To begin, we want your goals to be SMART:

- - Specific – take some time to brainstorm the details of what you want to accomplish. The more you can visualize the end result, the more likely you can be to set realistic benchmarks along the way. - Measurable – goals should be trackable so that results can be seen along the way. For financial goals, figuring out the true cost of the plan is a great way to get started. - Achievable – as fun as it is to dream big, your goals should be realistic to your specific situation. Falling short of unattainable ideas can demotivate you and derail your entire plan. - Relevant – the goals you develop should be relevant to your internal values and long-term financial objectives. When your morals and your goals align, staying motivated to achieve your plan can be easier. - Timely – goals should have a time frame for achievement so that you can work toward it with the right mindset and pace.
Cover Your Bases

The next step is to make sure all your bases are covered. This includes things like building an emergency fund with enough money to cover 3-6 months of nondiscretionary expenses, as well as paying off high-interest consumer debt, and ensuring your life, health, disability, and property insurance coverages are all up to speed. Your long-term goals should be a guide when assessing whether you are properly prepared.

Other financial bases to consider include establishing a detailed estate plan, especially if you have significant assets you hope to pass on to your children or grandchildren, or if you are the parent of a special-needs child. Additionally, documents like wills, powers of attorney, health care proxies, and trusts are essential to keeping you and your family protected in the event you become incapacitated, or you are unable to handle your own affairs.

Align Your Investments with Your Goals

After you develop your goals and covered your bases, the next step is to build an investment plan. We believe the best way to do this is to invest based on your time horizon.

- - Short-Term Goals – These are goals that will be accomplished within the next two years. Because they are right around the corner, we usually suggest you save for these goals using highly liquid assets like high-yield savings and money market accounts. While you wouldn’t realize the highest return, the point is that the money will be there when you need it. - Intermediate-Term Goals – Between 3-10 years away, these goals give you leeway to take a little more risk with your investment plan. We’d often suggest you consider CDs and short-to-intermediate high-quality bond funds for this portion. - Long-Term Goals – These are goals that will be accomplished in 10+ years. Because of the long time horizon, the focus is on growing your funds so that they can keep pace with inflation. This usually involves investing in assets like stocks, which are intended provide growth and income over the long term. Keep in mind that investing in the stock market is inherently risky and never a one-size-fits-all solution. Any investment decisions should be made in the context of your entire financial plan.

When you are investing, we also generally suggest that your portfolio is well-diversified to mitigate overall risk.

Don’t Forget About Taxes

Taxes are one of the only guarantees in life and they will greatly impact your investment returns as well as your ability to meet your long-term goals. Proactive tax planning is one of the best things you can do to create a solid financial plan. It’s important to understand the tax characteristics of your income, investments, retirement accounts, and how they will affect your tax bracket, and your ability to qualify for deductions and credits.

To learn more about what you can do to prepare for tax season, read our upcoming article here.

Avoid the Set-It-And-Forget-It Mentality

It can take a lot of work to create a solid financial plan and there is often a common misconception that once it’s in place, there’s nothing more to do. This couldn’t be further from the truth. Life changes constantly, and so your plan will need to adapt if it is going to keep you on track. Whether it’s a new job, a new business, getting married, or having a child, there are many life events that can affect your ability to save and invest. Changing legislation is also another key factor as decisions by Congress can greatly impact your overall financial plan, especially when it comes to taxes. In the last two years alone, we’ve seen significant legislative output in the response to the pandemic. We believe changes like these should be fully incorporated into your financial plan if it is going to be effective.

Work with a Professional

Having a second set of eyes reviewing your plan can be invaluable to helping you stay on track for the future. A financial advisor can identify key areas and potential pitfalls to consider as you build your financial plan, providing the expertise needed to navigate complex areas like estate planning, business succession planning, and advanced tax strategies. If you do not already have a plan in place, or if you would like to review your existing plan, we would love to connect with you! To learn more about the Aviance WealthPlan, reach out to us at (239) 598-4747 or wealthrelations@aviancepartners.com to get started today.

1Schippers, M. C., Morisano, D., Locke, E. A., Scheepers, A. W. A., Latham, G. P., & de Jong, E. M. (2020). Writing about personal goals and plans regardless of goal type boosts academic performance. Contemporary Educational Psychology, 60, 101823. https://doi.org/10.1016/j.cedpsych.2019.101823

2Latham, G. P., & Arshoff, A. S. (2015). Planning: A mediator in goal setting theory.

Aviance Capital Partners, LLC (“ACP”) is an SEC registered investment adviser located in Naples, Florida. Registration as an investment adviser is not an endorsement by securities regulators and does not imply that ACP has attained a certain level of skill, training, or ability. While information presented is believed to be factual and up-to-date, Retirement Planners of America does not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. The tax and estate planning information provided is general in nature, which should not be construed as specific tax advice tailored to an individual reader. ACP suggests that readers consult an attorney or tax advisory professional about their specific legal or tax situation.

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With the New Year comes new resolutions and promises to save more money, spend less, and get in financial shape. These goals are admirable but can often be difficult to maintain throughout the entire year, especially as life gets in the way. Research shows that the easiest way to achieve resolutions to approach the goal … How To Create a Solid Financial Plan for the New Year Read More »

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Inflation is now at the front-and-center of today’s economic story. The Federal Reserve’s (the Fed’s) ability to control inflation is generally thought to be a function of lowering and raising overnight lending rates (the Fed Funds rate) and through open market operations (buying and selling securities). Currently, inflation stands at levels higher than we’ve seen in 40 years (1982). In 1982, the Fed’s effort to control inflation was reflected by a Fed Fund rate above 10% which was significantly higher than inflation at the time. This stands in sharp contrast to today’s Fed strategy which is to target the Fed Funds rate at 0% and continue to buy back billions of bonds each month. Together, these policies actually act in a pro-inflationary manner.

While the current policy reflects emergency measures taken in 2020 to offset the risks of a pandemic-related slowdown, it is also as pro-inflationary as ever, in our opinion. We are seemingly stimulating our way into more inflation.

In acknowledgment of inflation pressures, the Fed has announced it will begin to fight inflation by increasing the Fed Funds target rate and by slowing down the bond purchasing program. The members of the Fed expect the Fed Funds rate will be 0.9% by the end of 2022 (Source: FOMC; St. Louis Fed as of 01/21/2022). This expectation is still quite low and implies the Fed is still quite concerned about an economic slowdown. It also demonstrates the Fed is more concerned about the consequences of raising rates than it is about the absolute rate level.

The amount by which inflation is higher than the Fed Funds rate is historic (see chart below).

Pro-inflationary policies are believed to stimulate:

The supply of money
Borrowing and lending
Interest rates and long-term bond yields

Indeed, we are beginning to see impacts on each of these variables.

Money Supply

The M2, a measure of the money supply that includes cash, checking deposits, and easily-convertible near money such as money market funds, has risen above its long-term levels following the 2008 financial crisis and has climbed well-above record levels since 2020. As this chart compares money supply to overall economic activity (Gross Domestic Product or GDP), it should be observed that the increase in money supply has not been offset by an increase in GDP.

On the other hand, the potential for increased spending has risen – which favors higher overall economic activity and further price increases (i.e., inflation) as the demand for goods and services exceeds the overall level of supply.

Borrowing and Lending

Consumer liabilities are growing at higher rates today than in the past 12+ years (refer to the red line in the above chart). From 2008 to 2021, consumers were conservative in managing their balance sheets overall. Before 2008, however, this rate was higher (in the 5-10% range) which is more consistent with current consumer liability levels.

Businesses, on the other hand, remained a bit more aggressive following the 2008 financial crisis by taking advantage of low-interest rates and thereby borrowing more funds.

While a pick-up in lending activities might seem irresponsible, household balance sheets are in better shape today than over the past several years in our opinion. More borrowing is associated with economic growth (and inflation). From this perspective, the Fed’s battle with inflation may be getting a bit more intense.

Rates Are Starting to Increase

Eventually, investor consensus about long-term inflation expectations leads to a rise in long-term interest rates. This contrasts with the Fed’s target of short-term, or overnight lending rates. Coming off a historic low of approximately 0.5% in August of 2020, long-term rates have effectively tripled, and they are now at 1.8%. However, current levels are still historically low when looked at from a multi-decade standpoint.

When compared to inflation, long-term rates are especially low. Based on the chart below, substantial moves in either long-term rates or inflation (or both) will have to occur for this relationship to normalize.

As a result of a rapid pick-up in money supply, increased consumer borrowing, and rising long-term rates, we believe the Fed will have to act more forcefully than the rate hikes expected from Federal Reserve members (see above at 0.9% by end of 2022).

The Fed’s current priority of battling inflation seems to be managing the pace of rate hikes which places a lower priority on the absolute level of rates needed to dampen inflation. The implication is that the Fed is more concerned about the fallout of spooking the market than stabilizing prices (inflation).

What Should Investors Do?

Consistent with most scenarios, investors who adhere to long-term asset allocation strategies should use moments of weakness to consider rebalancing. Investors who have a considerable allocation to stocks would benefit by holding businesses with good long-term economics, financial flexibility, and that are not overvalued. We endorse this approach on a long-term basis consistently in a variety of markets.

The current market implies inflation and rising rates may have an outsized impact on returns. Our view is that excessively overvalued stocks, such as ones with high price-to-earnings ratios, are subject to continued pricing pressures. Further, businesses that cannot maintain profit margins in the face of inflation (and higher borrowing costs associated with higher rates) may struggle more than average.

The good news for 2022 is the economy is growing. Long-term investors whose asset allocations are aligned with their financial plans and objectives should be comforted with the insight that businesses are also growing which tends to be favorable to stock prices over time.

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Please join us as Michael and Jack discuss supply-chain issues, inflation, the potential for rising interest rates, and opportunities in the stock market. Also, it’s year-end tax planning time and whether you’re in a unique situation or not, Brian and Matt provide an overview of some key areas to focus on.

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Please join us as we discuss a variety of topics related to the economy, markets, and potential changes in taxes.

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“I can probably handle it.” Famous last words (mine to be exact) regarding more than one home improvement project I attempted to save some money on by doing it myself. With HGTV a constant reminder of how cheap “DIY” is, it’s hard not to consider it a legitimate alternative to hiring a professional. With some projects it makes sense – I can give up an afternoon to paint a room and if I prepare well enough, it will look great. But build a deck, install crown molding, or construct a feature wall? My garage is littered with the remnants of these and other delusions of grandeur that serve as object lessons to a central truth: many times it is cheaper, easier, and better to hire a professional.

I learned the hard way that if you don’t know how to do something, it’s best to ask for help. So, you can guess what my reaction is when I hear people describe how much they need financial planning and lack familiarity with advanced financial planning, investment advisory strategies, and markets in general, only to end the conversation with “but I can continue to do it myself.” Yes, you can – but should you? The easy things like contributing to retirement accounts or creating a household budget are analogous to painting a room – spend enough time doing it and you can do a great job. But the complex issues – tax optimization, portfolio rebalancing, estate & trust work – let’s just say they have more in common with my non-existent crown molding.

If you search “Reasons Not to DIY” on Google you come up with over 329 million hits, mostly about why home renovations are a bad idea to deal with personally. But the reasons why are just as applicable to managing your own finances. So, in the interest of highlighting why “Financial DIY” might not be a good idea, here are 8 things to consider before deciding to handle it yourself.

You Don’t Have All the Tools: Contractors have trucks full of specialty tools – so do financial advisors. Professional financial planning and investment management typically require access to a wide variety of software and information that is unavailable to the average consumer. While trading platforms like Robinhood might be free and accessible most of the time, the axiom of “you get what you pay for” rings true in moments of exuberance – as evidenced by their back-to-back crashes in March of 2020.1 Additionally, many low-cost investment platforms offer only a smattering of investments – certain mutual funds or ETFs. This contrasts with a typical registered investment advisor (RIA) who can utilize the entire investment universe to build portfolios, often with more favorable expense ratios or limited transaction costs depending on the client and the type of investment.

It Costs More Than You Think: Maybe you want to buy all the tools necessary to do a job (which will vastly increase the cost of the project, but ok). Assuming you are interested in paying for first-class research and execution options, it is quite possibly outside your budget. In my experience, just the necessary software packages for financial planning, analytics, trading, and charting to be a semi-professional day trader will cost roughly $1,000 month – and that is before transaction and account fees. You could operate without these costs, but that would be analogous to building a deck with only a hammer and screwdriver. Not to mention you’ll be learning valuable lessons as you go – which is a nice way of saying losing money by making mistakes.

It Takes Longer Than It Should: Last year I had to build three identical bookshelves from Ikea. The first one took me an hour; the second one about 30 minutes; the third was done in 20. This is because once I knew what to do, I didn’t have to look at the instructions between each step or triple check that I read things correctly. If you do something repetitively you typically improve the speed and accuracy with which you do it. The same is true of tasks in the financial markets. If you know what to look for when researching stock positions or rebalancing portfolios, you can do it quickly enough to take advantage of opportunities. If you don’t, you are likely to waste precious time learning what it is you should be doing in the first place.

You Don’t Have the Time: Even if you know what you should be doing, that doesn’t mean you have the time to do it. The financial markets are most active during the standard workday when you are most likely unavailable. While that might not seem like a big deal, those are the times you want someone engaged with your portfolio. High-frequency and algorithmic trading have changed the way the markets operate in the twenty-first century, opening the door for “flash-crashes” and periods of tremendous volatility. Not being available could mean being exposed when something happens. Worse, it could mean pulling yourself away from your real job to handle your personal finance needs.

You Have No One to Help You: Some jobs require more than one person. If you doubt this, try to mount a ten-foot piece of crown molding without an extra pair of hands – it is not likely to go well. I believe the same is true of investing or any other complicated process. To do something alone is to exist in an echo chamber of your own thoughts; there is no one to confirm or challenge your positions. With no devil’s advocate it is easy miss vulnerabilities that could otherwise be addressed; that is why many successful firms use committees to determine portfolio changes.

You Don’t Know if You Can Trust It: Even before I learned my lesson about DIY, there were some projects I knew to call a professional for. Case in point, the ceiling fan above my daughter’s bed. I have installed ceiling fans before and I could probably have installed hers – but how do I know 100% that it would never fall and hit her at night? How many hours of sleep or work would I lose worrying I didn’t tighten the screws enough or wondering if the blades were attached properly? Self-doubt is a common tendency when we are doing the unfamiliar, and just because it looks right doesn’t always mean it is. I would have never known if that fan was attached properly until something happened – the same way an individual with portfolio exposures might not realize they exist until something catastrophic occurs in the market. It’s important to ask yourself if the cost savings of managing your own finances is worth the anxiety of “am I sure I did this right?”

You Can’t Afford to Get it Wrong: Failing to complete a home improvement process stings – you have likely wasted time, money, and bruised your ego in the process. But you are unlikely to be ruined if your feature wall is lobsided and needs to be rebuilt by a professional. But your financial life? Messing that up can mean years of time and savings lost – just ask anyone who intended to retire in 2009. It took years for the equity markets to recapture the losses experienced during the last financial crisis, and not everyone can afford to lose that kind of time.

You Don’t Know What You Don’t Know: It takes years of formal and on-the-job training to become a master craftsman – and I believe the same is true of good financial advisors. I would never pick up a “Carpentry for Dummies” book, read it, and expect to be at the Master level – there are so many nuances and techniques that you can’t learn by reading a book. So, I fear that anyone who thinks they can do the same for financial planning or investing is in for a rude awakening. The financial industry has dozens of advanced degrees, certifications, and licenses for a reason: it is an incredibly complex industry with very high stakes. A 12-year bull market has made plenty of amateur investors overconfident in their abilities, but all bull markets eventually come to an end, and when the mean reversion occurs it would appear that many individual investors are going to be exposed.

DISCLOSURES

While information presented above is believed to be factual and up-to-date, Aviance Capital Partners, LLC (“ACP”) does not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. Due to various factors, including changing market conditions, the above information may no longer be reflective of current positions or recommendations. All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change. Viewing this article does not serve as the receipt of, or a substitute for, personalized advice from ACP or its affiliated investment professionals. Readers should not use any of this content as the sole basis for any investment, financial planning, tax, legal or other decisions. Rather, a professional adviser should be consulted and/or independent due diligence should be conducted before implementing any of the options referenced above. Past performance does not guarantee future results. All investment strategies have the potential for profit or loss, and different types of investments involve varying degrees of risk. There can be no assurance that the future performance of any specific investment or investment strategy, including those undertaken or recommended by ACP, will be profitable or equal any historical performance level. Economic factors, market conditions, and investment strategies will affect the performance of any portfolio and there are no assurances that it will match or outperform any particular benchmark. Further, changes in investment strategies, contributions or withdrawals may materially alter the performance of an individual’s portfolio. Additional information about ACP, including its Form ADV Part 2A describing its services, fees, and applicable conflicts of interest is available upon request and at www.adviserinfo.sec.gov.

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Jack Brown, CFA

We suspect inflation will be above average for the next couple years ~ perhaps in the 2% to 5% range. The inflationary factors we believe are present are:

Stimulative Federal Reserve (monetary) policies,
Stimulative fiscal spending policies,
Large amount of savings built up in money-market, savings, and checking accounts,
Supply-chain bottlenecks,
Accelerated spending as the economy re-opens.

While the intensity of these factors will change over the next several months, we believe these factors will remain largely in place – helping to drive consumer expectations towards an inflationary mindset that incentivizes buying “now” before prices increase further.

On the other hand, the forces that limit inflation remain in place. Specifically, if the rapid pace of technological improvements continues, consumers ultimately get a “bigger bang for the buck.” Second, high levels of global trading and production capabilities tend to keep prices in check. Finally, the Federal Reserve has plenty of tools at their disposal to slow down spending – halting the inflationary mindset.

Currently, however, the Federal Reserve has the exact opposite approach which is to increase the inflationary mindset. The three main policies driving this approach have been 1) keeping overnight “Fed Funds” rate near 0%, 2) flooding the market with money by buying bonds, and 3) communicating to the public that they will allow inflation to rise above the 2% target for some time before taking action.

The problem with this policy is it ensures that “cash is trash.” In the chart below, we compare inflation (as measured by Core CPI – the Consumer Price Index excluding food and energy prices) represented by the dark blue line to the 3-month Treasury Bill (the “T-Bill”) represented by the red line.

T-Bills tend to be heavily influenced by Fed policy and are a good proxy to measure what savers receive, in general, from money market funds and other cash substitutes at banks and in investment accounts. Since 2009, inflation (the blue line) has been higher than T-Bills (red line) indicating investors holding cash have indeed been losing out to inflation. Surprisingly, this is not normal. Prior to 2009, investors would typically receive money market rates, CD rates, or other cash products that would more than offset inflation.

Today, the disadvantage of holding cash appears to be near record levels; enticing savers to take risks beyond the safety of cash or similar investments. Additionally, with an ascending inflationary mindset, investors and consumers are also incentivized to accelerate spending.

Many of the same factors driving inflation are also pro-growth, economically speaking, with the consensus view being the economy will continue to grow at a healthy clip for some time. As this growth and inflation view spreads among consumers, businesses, and investors, a typical byproduct would be rising long-term bond rates.

Below, we look at Nominal Growth Domestic Product (“Nominal GDP”) (blue line) which includes economic growth and inflation and compare it to long-term bond yields as represented by 10-year Treasury bonds (red line). While the relationship between these two lines is far from perfect, there does appear to be a significant one. In fact, higher levels of nominal GDP seem to be associated with higher long-term bond yields. Consistent with consensus, our view is nominal GDP will rise. Given the preceding observation, we further believe long-term yields, coming off record low levels, will also rise over the next couple years – perhaps more consistent with the 2000 to 2020 average (~3%).

While rising rates would provide some headwinds for investors who hold interest-rate sensitive bonds, they will continue to receive stable income (all else equal) and the opportunity to reinvest at higher rates.

Stocks would most likely be able to handle a modest rise in long-term bond yields to the 3% range. Specifically, if there remain plenty of blue-chip companies with competing dividends, income seeking investors would not be overly motivated to swap out of stocks. Further, we believe a 3% long-term bond yield is reasonable for the market to handle if stock market valuations do not get too ahead of themselves (i.e. the forward price-to-earnings ratio of the market remains near 20 or lower; $1 of earnings for $20 in stocks or a 5% earnings yield).

Speaking of stocks and inflation…what is the history of stock market performance and inflation? The common assumption is “it is bad.” However, we conclude “it is not clear.”

In the chart below, each dot represents a coordinate matching the stock market return to the corresponding level of inflation for each of the last 100 years. What you might observe is there are 17 years when inflation is above 5%; 8 of those years generated negative stock market returns while 9 years provided positive returns. As a result, the evidence is slightly more positive than negative though the sample size may be inadequate to draw any concrete conclusions.

On the other hand, when inflation is 5% or below, the stock market returns appear to be positive on average. Consequently, while we believe inflation will generally be 5% or below for the next few years, we do not believe inflation will be the top risk for the stock market.

Source: Robert Shiller, Standard & Poor’s.

As always, there are several risks to market returns. However, two of the major ones, the economy and the financial system, are low risks as they each appear to be on solid ground. On the other hand, certain valuation metrics are extended. The Shiller CAPE ratio, for example, is a price-to-earnings measure for the stock market with one adjustment – earnings are represented by the inflation-adjusted average of the prior 10-years of earnings. So while the price of the market is current, the earnings are an average of the past.

The Shiller CAPE ratio is showing us that today’s market is expensive relative to history. We believe this needs to be considered as an outlier but is indeed relevant. Our approach to minimizing the valuation risk is by adhering to our valuation centric approach to both growth and traditional value investing. Being willing to avoid buying (and consistently sell) investments that appear to be unreasonably expensive, we believe investors have and will continue to benefit around periods of market consolidation driven by valuation concerns.

Today, we remain strategically neutral to the stock and bond markets. In other words, as an investor, your long-term asset allocation plan remains important. As the stock market has run up, rebalancing may require some selling of stocks to get back in line with your strategic allocation. However, a modest overweight to stocks may make sense assuming your portfolio is not sacrificing excessive downside risk in favor of tax avoidance. Meaning, if you have holdings that are overvalued but also carrying high tax implications if you were to sell, accepting the trade-off that comes with trimming these positions makes sense in our opinion.

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Brian Cotroneo

The title of this article is bound to ruffle some feathers – in fact, I would expect that many real estate agents are bristling as they read this. However, I believe whole-heartedly that before you speak to anyone about purchasing a new home, you should speak to a financial advisor.

Of course, I am a financial advisor, so that is clearly a biased and self-serving statement. But that doesn’t mean it is wrong. Whether you are in the market for a new home or just reading this for informational purposes, you likely know that the residential real estate market has been explosive the last few months. In May of this year existing home prices hit a record, rising 24%, apparently on the back of COVID-19, increasing commodity costs, and historically low interest rates . Inventories of homes for sale are being described as at an all-time low, and whatever houses do hit the market are often sold within days to above ask, all cash, no contingency buyers. If you need or want to purchase a new home, it is easy to get caught up in the frenzy of the moment and find yourself rationalizing these actions. That’s where a financial advisor can add valuable perspective.

From a financial advisory standpoint, buying a new home involves investing, financial planning, risk mitigation, and cash flow management. It can affect practically every facet of your financial existence (cash flow, taxes, retirement, insurance, education funding, philanthropy) because a home is often a family’s greatest asset, their mortgage their greatest liability, and their monthly housing payment their greatest expense. It ticks many boxes that we are concerned with when developing a financial plan. So why don’t people rely on a financial advisor to help them through the process? Where could we logically fit in?

Let’s start at the beginning. If you decide you want to purchase a new home, you would likely ask yourself questions about location, size, and configuration. These are questions you ask yourself based on preference, family size, and a host of other issues. But I believe an equally important initial question to ask is “what can I afford?” It’s great that people ask that question, but unfortunately, they often ask the wrong person. Who should you ask? I would say your financial advisor. Who do most people ask in my experience? A mortgage broker.

Many mortgage brokers are great at what they do, but their job isn’t to understand your financial circumstances; it is to underwrite the loan for largest possible amount. This should be obvious – brokers are paid a percentage of the loan so are incentivized to write larger ones – but most people don’t realize that when they start the process. When you ask a mortgage broker what you can afford, they’re incentivized to look at a small portion of your financial picture – typically only what is on your credit report – and calculate a ratio of your monthly debts to monthly income. If your expenses are low relative to your paycheck, congratulations, you are approved. If they are too high, the broker will work with you and identify debts to pay down. Ultimately their goal is simple: get you just below the maximum threshold so they can get you as big of a loan possible.

Financial Advisors use these same ratios but with three major differences – scope, time horizon, and level. Scope refers to what is included when you start doing calculations, i.e., what kinds of expenses are included as “debt”. For Mortgage Brokers it is simple: anything on a credit report. Anything outside of that isn’t technically contractual, so it doesn’t have to be included. What does that leave off? Well, a lot, frankly. Food, utilities, gas, clothing, kid’s activities, daycare/school…the list goes on. While a credit report usually captures the largest and longest of a person’s liabilities, it is NOT comprehensive. A budget developed by a Financial Advisor, however, can include all these things and provide a more holistic debt-to-income picture.

The second issue is the time horizon. When underwriting a mortgage, lenders are concerned with your financial picture as a snapshot in time. They want to make sure that on the closing date everything is as it should be. But for those of you reading this that have a mortgage – has the bank ever followed up a few years later and asked if your DTI was still at a certain level? Of course not, and that is because what happens after the loan is approved doesn’t matter to the bank if you are making payments. I believe this is incredibly short-sighted. If you are purchasing a home with a mortgage, you are undertaking anywhere from a 15 to 30-year commitment. It is one of the greatest financial obligations an individual or couple can volunteer to accept. In many cases, it should be considered the cornerstone of your financial well-being with lasting consequences, not as a short-term transaction.

I believe the final issue, level, is most critical. A recent article in the Wall Street Journal revealed that “in the current lending environment, there are banks that will lend you in some cases up to 50% of your gross income ”, meaning your housing payment represents half of your pre-tax paycheck. To put this more simply, if your monthly paycheck is $10,000 before taxes, you could buy a house that requires a $5,000 per month payment. That is outrageous. The typical guideline for a monthly housing payment – or what is termed “House Ratio 1” – is no more than 28% of gross pay. In my view, that is the maximum a reasonable financial plan would budget strictly for principal, interest, taxes, insurance, and HOA fees for a home mortgage. So, in the current environment, some banks are willing to loan individuals almost TWICE as much as is financially responsible for the purchase of a home.

Does that mean that everyone who gets a mortgage at high DTI ratios is bound for bankruptcy? No, absolutely not. Banks are incredibly skilled risk managers and the 2007-2009 housing crisis taught them some very painful lessons. When a lender provides a loan, they should have confidence the individual will make the required payments. But that is all they appear to be concerned with – the required payments on the LOAN. As mentioned earlier, a new home can affect many aspects of your financial life; if you are spending half of your gross income on housing, will you be able to fund your retirement? What amount will you put aside for your children’s education, and will that be enough to pay for what you envision? Will you be able to afford a new car in a few years, or an annual vacation? How long could you afford to stay in the home if you lose your job or are injured?

I believe these are questions that can only be effectively answered by someone who has a holistic understanding of your financial situation. Every financial decision you make, especially large ones like purchasing a house, are intertwined. Nothing happens in a vacuum, and the extra $500 per month you might spend on a home could be the reason you retire years later than you want. Before you make a decision that will have lasting consequences for you and your family, make sure you are consulting with an advisor who has the whole picture – speak with your financial advisor.

[1] https://www.wsj.com/articles/u-s-existing-home-prices-hit-record-high-in-may-11624371222?mod=hp_lead_pos1

[2] https://www.wsj.com/articles/buying-a-home-dont-lose-your-head-in-a-crazy-market-11620984601

DISCLOSURES

While information presented above is believed to be factual and up-to-date, Aviance Capital Partners, LLC (“ACP”) does not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. Due to various factors, including changing market conditions, the above information may no longer be reflective of current positions or recommendations. All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change. Viewing this article does not serve as the receipt of, or a substitute for, personalized advice from ACP or its affiliated investment professionals. Readers should not use any of this content as the sole basis for any investment, financial planning, tax, legal or other decisions. Rather, a professional adviser should be consulted and/or independent due diligence should be conducted before implementing any of the options referenced above. Additional information about ACP, including its Form ADV Part 2A describing its services, fees, and applicable conflicts of interest is available upon request and at www.adviserinfo.sec.gov.

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It’s no secret that over the past few decades the average person has changed the way they shop for everything from cars to groceries. The internet and other developments have made the process of doing product research and price comparison a simple and easy task where previously it required significant time and energy. This is mostly a good thing – customers are better informed and have eliminated numerous inefficiencies. Companies likewise have experienced a renaissance in how they sell, evident in the ubiquity of “no haggle pricing” and free online price quotes. Consumers have been effectively conditioned – do your own research, know what you need, find the cheapest price, and make the purchase quickly.

This new paradigm works great for most products. It isn’t difficult for an average person to understand the difference between two different pieces of clothing or furniture as the discrepancies are tangible and evident. Where the new way of doing things starts to drop off, however, is with respect to service providers. The reason being that in the case of most service providers you aren’t buying an object in isolation but rather into a relationship. The more important the service being provided the more intense the relationship.

Unfortunately, that desire to build strong relationships has dissipated on both sides of many service relationships – customers want everything better/faster/cheaper while service providers need to do more business in the same amount of time to offset the decreasing cost of their services. The result is an alarming trend in some of the most important areas of an individual’s life – healthcare, childcare, financial management, etc. – that lead to customers being treated more like transactions and less like people.

A relatable analogy is a physician. The profession has a sacred trust in our society. Understandably so, as they are privy to personal and private information, trusted to make complex issues easier to understand so decisions can be made, and, on certain occasions, quite literally have your life in their hands. They are the ultimate service providers.

Now, let’s think about two different scenarios. The first is a doctor who takes your relationship seriously; reviewing your medical history before each appointment, striving to understand your current issues, and making informed recommendations and diagnoses. Conversely, the second doctor charges into the exam room 30 minutes after your appointment time, does not remember your last visit, did not look at your chart, and listens absent-mindedly to your issues while writing you a prescription on the way out the door. Maybe this doctor also reminds you to pay your co-pay on the way out.

Which doctor would you prefer? The first one who treated you like a person and valued your trust, or the second who treated you like a transaction? Who would you send your friends and family to? Who would you look forward to seeing again? While these are stereotypes and plenty of professionals inhabit the space between the extremes, the analogy is a poignant illustration created to make you think about how you want to be treated.

In the context of financial services such as financial planning and investment management, the feeling of being valued may also be a problem. The last thing you should feel interacting with an advisor is that you are being treated like a transaction – like the biggest priority is just getting the job done and moving on to the next thing. You should feel the person on the other side of the table is attempting to understand you helping you understand them and developing a mutual respect and interest.

Your financial advisory relationships share many of the same considerations as your healthcare relationships – advisors know your private financial details, help simplify difficult concepts, and make informed recommendations based on your best interest. Because of those considerations, financial advisors have a responsibility to develop real relationships with their clients. It is one thing to understand a client’s financial position; that is mostly a function of reading statements. It is another thing entirely to understand how a client got to where they are, where they want to go in the future, and the WHY behind their decisions.

As a healthcare patient, I would refuse to see a doctor who treated me like a transaction. My health and time are too important to be treated cavalierly by an individual whom I am trusting (and paying) to assist me in making challenging, potentially life altering decisions. As a financial advisor, I hold myself to that same standard – I assume my clients desire a meaningful and detailed relationship with someone genuinely interested in their well-being. I expect they treat their time and money with the same importance as they treat their health. If you have a financial advisor or are looking to use one for the first time, I encourage you to do the same. Make sure you are made to feel like more than an account balance and an annual performance report. Ask yourself who among your options is not only qualified but is someone you WANT to work with based on how you are treated. A mutual respect and trust are the keys to a long-term relationship – the kind you should want with your financial advisor.

DISCLOSURE

Past performance does not guarantee future results. All investment strategies have the potential for profit or loss, and different types of investments involve varying degrees of risk. There can be no assurance that the future performance of any specific investment or investment strategy, including those undertaken or recommended by Aviance Capital Partners LLC. (“ACP”), will be profitable or equal any historical performance level. Additional information about ACP, including its Form ADV Part 2A describing its services, fees, and applicable conflicts of interest is available upon request and at www.adviserinfo.sec.gov.

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With the economy back on track, we consider the prospects of inflation, market valuation, and the potentially increasing taxes.

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Jack Brown, CFA

Executive Summary

The U.S. economy is primed to rally. Coupled with other factors, upward pressure will likely be applied to the yield of the 10-year Treasury Bond, a barometer for long-term risk-free rates. We suspect the potential rise in rates could take a couple of years to play out though may be substantial, possibly exceeding 3%.

Coinciding with a rise in rates, we expect the price-to-earnings (P/E) ratio for the broad stock market (i.e., S&P 500) to fall modestly from its forward P/E of approximately 22x today to slightly lower, normalized levels over the same timeframe.

A burst in economic growth, the threat of rising long-term rates, and the implications for valuations frames the battlelines for the remainder of 2021 and beyond.

The Economy is Primed for Growth

The Purchasing Managers’ Index (PMI) offers a glimpse into the minds of corporate managers in both the service and manufacturing sectors. Basically, the survey highlights whether business is expanding, staying the same, or contracting. Despite an economy that has not fully reopened, these measures are at high levels and indicate the potential for strong economic growth.

Time to Get Back to Work

Companies are not only expecting activity to pick-up but are actively hiring in large amounts as indicated by open positions – specifically, we look at the job openings as a percent of all jobs (total employed plus job openings). Companies have typically been slow to hire coming out of a recession. However, in 2021, companies are eager to hire resulting in record levels on this measure.

Uncle Sam is on Board

From the start of the pandemic and ensuing recession, politicians have been clamoring to throw money at the problem. This has been enthusiastically embraced by economists, the media, and both sides of the political spectrum – until recently. The result has been breathtaking. The Cares Act alone has put upwards of $2 trillion in consumer’s pockets.

While actual economic growth tends to be an argument against excessive federal budgets, the prospects of growth does not seem to

be. The voices of restraint are seemingly muted as fiscal planning remains aggressive on items such as infrastructure spending. While paying for this will be a problem for another day, funds are being deployed to various segments of the economy. In aggregate, government spending is at near record levels on a historic and relative basis – adding fuel to the economic growth fire.

The Banking System is Flush

The combination of stimulus checks and a decline in household spending led to higher consumer savings in 2020. As such, we see a build-up in the supply of money (i.e., M2 – a measure of the money supply that includes cash, checking deposits, and easily convertible near money such as money market securities, mutual funds, etc.)

Additionally, the Federal Reserve began acquiring large stakes of the bond market by buying U.S. Treasury bonds, Agency Mortgage debt, and corporate debt which show up on their balance sheet. A large amount of buying in the bond market puts upwards pressure on bond prices and downward pressure on bond yields.

When taken together, the banking system is flush with cash and excessive reserves. The result is higher asset prices and the fuel needed for a pick-up in bank lending and consumer spending.

Below, we see the year-over-year percentage change of money supply and Federal Reserve assets. While the Federal Reserve has been actively trading since the Great Recession (red line), the acceleration of money supply growth is a 2020 phenomenon (blue line).

Given the likely pickup in economic activity in 2021 and beyond, we believe the growth in money supply will return to normal levels as more money finds itself spent and not sitting idle. A return to economic growth would also incentivize the Federal Reserve to ease up on the buy-trigger. The combination of these two means a reversal of what we saw over the past year – specifically, higher consumer spending and lower bond prices (i.e., higher rates).

Growth and Rates Set to Climb

As highlighted above, we currently see record (or near-record) levels of:

Expected activity (i.e., PMI)
Job openings
Federal fiscal spending (Congress & Administration)
Federal monetary spending (Federal Reserve)
Money supply

The above list of statistical outliers created in 2020 makes a strong enough case, in our opinion, to lean towards a pick-up in actual economic growth and a rise in long-term rates and bond yields.

We compare in the following graph the year-over-year percentage change in nominal Gross Domestic Product (GDP) versus 10-year Treasury Bond yields. It helps to envision an environment where nominal GDP, including inflation, returns to levels consistent with the last decade (i.e., 4-5%) and with long-term yields closer to 3% or more.

Imagine, for a moment, a landscape where long-term Treasury yields are higher. In this environment, yields for other bonds are higher as well. For investors who are income seekers, a higher percentage of your investment dollars may very well find its way to the bond market and less in the stock market.

This is a rather simplistic argument for a lower P/E ratio for the S&P 500. However, the incentive of higher bond yields leads investors to take less risk by owning bonds instead of stocks. Specifically, as low yields provide little income today, investors seek returns elsewhere such as in the stock market. Though as yields in the bond market rise, the risk-reward trade-off pulls investment dollars to bonds.

Ironically, this switch to bonds occurs many times during an environment where earnings are likely growing at a healthy pace. Investors will be torn between the incentives of higher yields in the bond market or the prospect of earnings growth in stock market.

Conclusion

With a pick-up in economic activity, we believe it is reasonable to expect a pick-up in yields closer to levels seen only a few years ago. This rise in yields may provide incentives for investors to consider a modestly, larger bond allocation and a lower allocation to equities. As a result, the tension between economic growth and rising rates will likely provide periods of market jubilation and concern over the next few years. We believe the markets will continue to provide plenty of interesting opportunities to help achieve a range of goals for investors with a strategic approach to risk management and asset allocation.

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Brian Cotroneo

One of the most fulfilling aspects of the Financial Planning profession is helping clients realize their financial goals. After all, providing peace of mind regarding retirement, education funding, or long-term care is an essential part of the job and our greatest value add.

That being said, the perception of how the process unfolds is vastly different than reality. It is a scenario that plays out in almost every television commercial for advisory services: an elderly couple or new parents enter an office and are asked a question: “what are your financial goals?” Their response is usually simple – to save adequately for retirement, save for their children’s college, or purchase a new home. After a short sit down with a professional, they’re provided a solution to their problem and leave overwhelmingly satisfied.

Sadly, this doesn’t reflect the real world; all it is does is give people unrealistic expectations and anxiety about their own financial preparedness. It’s not unusual for prospective clients to report feeling awkward or uncomfortable about the phrase “financial goals” – after all, they’ve been told they should have their goals identified and addressed in thirty minutes or less! If you can’t do that, surely you must have something to be embarrassed about, right?

The truth is ambiguity around your future finances is nothing to be ashamed of because goal discovery is a critical part of any new advisory relationship. Conversations about goal setting are rarely simple and almost never resolved in a quick office visit. Saving for retirement or education requires testing and adjusting dozens of variables before a client feels comfortable approving them. As Financial Planners we anticipate clients will need help identifying what they want to get from a plan – that’s why “Identifying and Selecting Goals” represents an entire step in the CFP Financial Planning Process and the Aviance WealthPlan. No one, least of all your financial advisor, should expect you to have everything neatly organized before you sit down for your first meeting.

Ultimately the important thing isn’t HOW you get to a conversation about your goals, it’s just that you DO. Without knowing the specifics of where you want to go, you can’t know if you’re on the right path to getting there.

Once you start the discussion, a Financial Planner can drive the process using several different paradigms. One particularly effective strategy we use at Aviance is the S.M.A.R.T. paradigm developed in the early 1980s. It addresses five key considerations of each goal to ensure it has been properly considered:

Specific: What are you trying to do and why? To what extent?
Measurable: How will you quantify success? By what metrics?
Attainable: Do you have the tools necessary to reach the goal? If not, what do you need?
Realistic: Can you meet the goal you are setting under normal circumstances?
Timely: When do you need to accomplish the goal by? Is that flexible? What are the intermediate steps and how long will they take?

Using a S.M.A.R.T. approach ensures that we can efficiently bring our experience and insights to your unique circumstances. We believe this maximizes the chances of meeting or even exceeding your expectations. Unlike what is often implied by television commercials, properly developed financial goals are seldom simple nor easy; they typically require significant time and effort to construct. As Planners we expect goal discovery to take multiple conversations and be frequently revisited as circumstances change.

If you’d like to start a conversation about your goals and see where they could lead, please contact us and we’d be happy to discuss them with you.

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