FAQ
What is a fiduciary?
A fiduciary is a person or organization that are held to a standard of conduct beyond that applicable to ordinary commercial dealings. As a fiduciary, an investment advisor owes clients a high duty of care and undivided loyalty. These obligations require the advisor to act prudently and solely in the best interests of advisory clients and make full, fair, and non-misleading disclosure’s.
What is the difference between non-qualified & qualified money?
Qualified money is pre-tax money from retirement savings accounts such as IRA’s, 401k’s and 403b’s. Non-Qualified money is after tax money and after tax savings accounts such as Roth IRA’s, mutual funds, and savings.
What is asset allocation?
Asset allocation is a method of allocating funds to pursue the highest potential return at a specific level of risk. Asset allocation normally uses sophisticated mathematical analysis of the historical performance of asset classes to attempt to project future risk and return. Asset allocation is an approach to help manage investment risk. It does not guarantee against investment loss.
What is Life Insurance?
A contract under which an insurance company promises, in exchange for premiums, to pay a set benefit when the policyholder dies. Several factors will affect the cost and availability of life insurance, including age, health and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder also may pay surrender charges and have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.
Why is life insurance important?
Life insurance is important because it can protect an individual, group or entity from substantial financial loss or responsibility caused by an unfortunate event.
What is an indexed annuity?
An indexed annuity is a special class of annuities that yields returns on contributions based on a specified equity-based index. (Investopedia.com)
What is an Exchange Traded Fund (ETF)?
A share of an investment company that owns a block of shares selected to pursue a specific investment objective. ETFs trade like stocks and are listed on stock exchanges and sold by broker-dealers. Exchange-traded funds are sold only by prospectus. Please consider the charges, risks, expenses, and investment objectives carefully before investing. A prospectus containing this and other information about the investment company can be obtained from your financial professional. Read it carefully before you invest or send money.
What is a revocable living trust?
A trust that can be altered or canceled by its grantor. During the life of the trust, any income earned is distributed to the grantor; upon the grantor’s death, the contents of the trust are transferred to its beneficiaries according to the terms of the trust.
What is an irrevocable living trust?
A trust that cannot be altered, stopped, or canceled after its creation without the permission of the beneficiary or trustee. Using a trust involves a complex set of tax rules and regulations. Before moving forward with a trust, consider working with a professional who is familiar with the rules and regulations.
What is term life insurance?
Term Life insurance provides coverage for a specific period. If the policyholder dies during that time, his or her beneficiaries receive the benefit from the policy. If the policyholder outlives the term of the policy, it is no longer in effect. Several factors will affect the cost and availability of life insurance, including age, health, and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder also may pay surrender charges and have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.
What is indexed universal life (IUL) insurance?
Indexed Universal life (IULs) are a type of universal life policy. The universal portion means that premiums are flexible and the components of the life insurance policy (death benefit, savings element and premium) can be altered throughout the contract. (Investopedia.com)
What is a portfolio?
The combined investments of an individual investor or mutual fund.
What is a Registered Investment Advisor (RIA)?
A Registered Investment Advisor (RIA) is an advisor or firm engaged in the investment advisory business and registered either with the Securities and Exchange Commission (SEC) or state securities authorities. (Investopedia.com)
What is an Individual Retirement Account (IRA)?
A qualified retirement account for individuals. Contributions to a Traditional IRA may be fully or partially deductible, depending on your individual circumstance. Distributions from Traditional IRA and most other employer-sponsored retirement plans are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty. Generally, once you reach age 70½, you must begin taking required minimum distributions.
What is a Qualified Retirement Plan?
A retirement plan that is established and operates within the rules laid down in Section 401(a) of the Internal Revenue Code, and thus receives favorable tax treatment
What is a Non-Qualified Retirement Plan?
A retirement or employee benefit plan that is not eligible for favorable tax treatment.
What is a Required Minimum Distribution (RMD)?
The amount which must be withdrawn annually from a qualified retirement plan beginning April 1 of the year following the year in which the account holder reaches age 70½.
What is a Bear Market and a Bull Market?
A Bear Market is a market experiencing an extended period of declining prices. A Bull Market is a market experiencing an extended period of rising prices. A Bull Market is the opposite of a Bear Market.