Archive for the ‘Wealth Management’ Category

by Jill Johnson, Vice President, The Corundum Group

As 2012 rolls on, we continue to watch the economy with rapt attention. This election and the handling of the pending “fiscal cliff” will both be very telling as to where markets and the global economy will head in coming years.

Congress is operating in an almost continual state of gridlock, and one of the most severe impacts of the stalemate will be felt when and if a series of planned tax increases and spending cuts go into effect the first day of 2013.

Few would argue that the shock of going off this fiscal cliff, as it is being called, would be easy for our economy to absorb.  Among the changes are the expiration of the Bush-era tax cuts, the Obama payroll-tax holiday, emergency unemployment benefits, and the reversion of exemption levels for gift and estate taxes.  The New Year will also see the introduction of new taxes to support the recently passed healthcare law.  When you look at all these factors you can’t help but hope for teamwork in Washington. Election outcomes will impact this whole scene as well as the following chart shows.


The uncertainty around the fiscal cliff causes us to remain wary and has likely contributed to the sluggish pace of recovery we experienced during the second quarter.  According to a survey of small business leaders conducted by the US Chamber of Commerce, 90% are concerned about the impact the fiscal cliff will have on their business growth. Nearly three-fourths of the respondents believe the recent healthcare law makes it harder to hire more employees. Global factors are also contributing to a fear of the unknown, fueled by economic challenges that continue to impair most of Europe and a slowdown in China.

Chart Source: RBC Global Asset Management, CBO, GS, RenMac, BoAML, DB, Eurasia Group, ISI. Note: Figures and scenarios are rough estimates. * Bush tax cuts for households with <$250K in income, Alternative Minimum Tax patch, tax extenders package. ** Original targeted debt ceiling cuts, old stimulus expiration, overseas military draw-down.


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Contributed by: Steve Schneider, President, CB Insurance

Because they are more likely to travel, own second homes, host fundraising and other events in their homes, and drive expensive vehicles; affluent families and individuals have greater exposure to loss. Personal insurance for the affluent, such as homeowner’s, personal auto, and coverage for valuables like jewelry, antiques, art, and gun collections, should be tailored to address these risks.

Specialized insurance programs tend to carry larger liability limits, higher deductibles, and broadened coverage than traditional insurance. Insurance companies specializing in the affluent market offer tailored coverage such as guaranteed home replacement cost coverage, ensuring that special features of the home are replaced with like kind and quality.

The review process itself should be approached like a business insurance review. The first review can feel a bit overwhelming, but it’s critical to understanding our clients’ exposures to loss in order to provide comprehensive solutions. I always emphasize the need for comprehensive solutions based on my experience seeing affluent families targeted for fraudulent claims and higher reward demands.

Claimants can now easily research you online and determine with some certainty that you have financial means. There aren’t many secrets these days. A few clicks of the mouse, and claimants (and their attorneys) can determine occupations, organizations to which you belongs, social engagements you attended and the like. Claim demands will be higher; making the need for high limits of insurance all the more important.

Tom Kammerer, Sales & Marketing Manager for Chubb Personal Insurance, stresses the importance of working with brokers and carries with this type of experience in affluent insurance coverage.

“Sometimes it takes a poorly-handled claim to make people see they need specialized help,” says Kammerer. “For our clients maintaining their lifestyle after a significant loss is important. Large, custom-built homes can take well over a year to replace. After large losses, we work with clients to help them find accommodations, replacement cars and other important personal affects they enjoyed prior to their loss.”

To protect from huge potential loss and headaches, the affluent should go through a review with their insurance broker and carrier once a year. High-end insurance carriers should delve deeply into client practices and ask questions about domestic staff (gardener, nanny, etc.), central alarm systems, valuable articles, and more.

So, yes, there is a difference when it comes to insurance for the wealthy! And I’d advise you not to wait and learn that lesson the hard way.

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Contributed by Steve Condon, President, CB&T Wealth Management

This Sunday we will witness the NFL Championship game as Aaron Rodgers and the Green Bay Packers take on Ben Roethlisberger and the Pittsburgh Steelers in Super Bowl XLV.

With the 4th quarter of 2010 now in the rear view mirror and four quarters of what looks to be some pretty super football on the horizon, I thought it appropriate to talk quarters.


  • Since 1990 the best performing quarter for the S&P 500 each year is the 4th quarter, which generated a positive average return of 4.9%.
  • Likewise, ratings for the Super Bowl increase each quarter with the highest number of viewers hitting in the 4th.
  • Earnings for S&P 500 companies were projected to be up 25% in the 4th quarter of 2010 vs. the 4th quarter of 2009.
  • The Dallas Cowboys, in Super Bowl XXVII, set a record for 4th quarter points with 21 to close out a crushing 52-17 win over Buffalo.

The 4th quarter can be critical.

The last Super Bowl appearance by the Steelers in 2009 required a 4th quarter miracle.  The Steelers were up 20-3 late in the 3rd quarter when the Cardinals staged a comeback and jumped ahead 23-20.  With 35 seconds left Roethlisberger threw a game-winning touchdown pass to give the Steelers the victory. After the game head coach Mike Tomlin stated it simply: “Steeler football is sixty minutes”.

Investing is the same way; the best results come when you are in it for the long-term. And with sound strategy you won’t have to rely on a last-minute Hail Mary play to pay for retirement. Focus on the good old-fashioned basics of offense and defense by creating a diversified asset allocation considerate of your time horizon and risk tolerance. Once you’ve got that squared away, you can enjoy the game and let Mr. Roethlisberger worry about 4th quarter miracles.

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