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An ETHICAL Investment Process must be void of all hidden agendas. We are an independent wealth management firm agnostic to product and married to no proprietary relationship. We invest your wealth in the appropriate places for you and your family.
We do this by discovering the expectations of a portfolio, the proper risk tolerance, the time horizon, the income tax implications, the constraints you might have in regards to unacceptable investments, the acceptable forms of communication and the liquidity needs. This is our ETHICAL process.
Investments can play a key role in any financial plan. For individuals, a mix of investment products, income and pension plans can help address short- and long-term goals.
For employers, we can offer assistance with savings and pension plans with fiduciary oversight.
Here is a list of some of the investments we offer:
- 401 (k) retirement plans and Individual Retirement Accounts
- 529 qualified tuition plans
- Options Strategies
- Structured Products
Everyone looks forward to retirement, but not everyone looks forward to planning for it. A strong financial plan is aimed to take the hassle out of this process and secure a balance of investment products to work towards your retirement goals.
While most working Americans will receive Social Security benefits, in most cases, they will not be sufficient to provide a comfortable retirement income. Depending on personal circumstances, either a 401(k) retirement plan or an Individual Retirement Plan can help in the pursuit of a more sizeable retirement account.
401(k) Retirement Plans
Employer-sponsored 401(k) retirement plans offer several benefits, including potential employer contributions. Enjoy tax savings by setting aside a portion of pre-tax salary in a tax-deferred investment account, which has the potential to generate compound interest. Depending on the type of plan selected, 401(k) plans can also offer yield potential from a variety of investment options.
Working together with a financial planner, decide the amount and frequency of 401(k) contributions while taking into consideration contribution limits and employer requirements. Some advantages include:
- Employer contributions in most cases
- Contributions taken from pre-tax salary allow for a reduced tax rate (Traditional 401K)
- Contributions taken from post-tax salary allow for tax free growth potential if taken in retirement (Roth 401K)
- Tax deferral of earnings with income and growth potential
- The opportunity to select from a variety of investment products
Individual Retirement Plans
Another option for retirement planning is to contribute to an Individual Retirement Plan (IRA). IRAs allow a variety of investment options, including variable annuities, stocks, and government securities. There are several types of IRAs, including the Traditional IRA, Non-Deductible IRA, or Roth IRA.
A traditional IRA is funded through after-tax dollars, and can be contributed to even if a client holds another retirement plan, such as a 401(k). A traditional IRA has several tax advantages: all income tax is deferred until money is withdrawn, and the growthpotential of contributions and earnings is generally tax-deferred. The non-deductible IRA is similar to the traditional IRA except that contributions are made with after-tax dollars, and there is no income tax deduction allowed. In contrast to those two options, contributions to a Roth IRA include income tax payments, but when money is withdrawn, it is distributed tax-free as long as it is considered qualified.
The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.
Other Retirement Planning Options
Depending on the nature of your employment, you may be eligible for other kinds of retirement planning options. For example, 457 plans are designed for independent contractors or employees of a state or local government or a tax-exempt organization. These plans allow participants to exclude certain specified types of salary from their gross income. Other options may include Deferred Compensation Plans and 403(b) plans, which are designed for employees of non-profit corporations.
A college education is expensive – and prices for tuition and living expenses are only getting higher. Families with children might consider planning how to finance an education as early as possible, so as to take advantage of tax and investment opportunities and contribute to pre-paid tuition rates.
Many states and educational institutions offer a 529 Qualified Tuition Plan (529) to help finance a college education. The specifics vary between states and institutions: some guarantee a minimum rate of return, while others offer tax incentives. Even if your state does not offer a 529 plan, many allow non-residents to contribute to their plans, and private plans are available.
There are two main types of 529 plan: a pre-paid tuition plan, and a college savings plan. Pre-paid tuition plans involve purchasing units or credits at participating educational institutions that can applied to tuition and, in some cases, living expenses. Most are sponsored by state governments and have residency requirements. College savings plans establish an account for a student that can be used to pay eligible college expenses, and allow contributors to choose among several investment options.
It is important to carefully consider how to invest in a 529 plan, since it can impact a student’s eligibility to participate in need-based financial aid programs. A financial planner can help balance assets held in college savings plans against financial aid requirements.
Some of the advantages of 529 Plans include:
- Depending on the state, the ability to deduct 529 contributions from state income tax returns
- Federal and state tax deferral of earnings with income and growth potential, if contributions are used for eligible college expenses
- Matching grants in many states
- Some pre-paid 529 qualified tuition plans sponsored by a state government are guaranteed
- College savings plans allow the option to invest in a variety of investment products
- When money is withdrawn from a 529 plan, the student typically pays little tax, due to a low income tax rate
Working together, we can examine college investment options to build a customized portfolio that takes into consideration your financial goals, tolerance to risk and timeline.
Prior to investing in a 529 Plan investors should consider whether the investor's or designated beneficiary's home state offers any state tax or other benefits that are only available for investments in such state's qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.
One of our real strengths is working with individuals with large concentrations of stock and developing a plan.
President and CEO, Greg Farrall, spent 13 years on the Chicago Board of Options Exchange as a market maker for his own company, Farrall Associates. Farrall’s career spanned the Homestake Mining, Merck, Yahoo and America Online floor trading pits. Farrall also traded over 600 issues within these respective pits, making markets for customers throughout the world, building multi-million dollar trading group called Rubicon Investments which he ran with two other managing partners and founders.
Our process includes discussion on all aspects of incentive stock options, recognizing more specific stock plans, explaining the types of insurance often associated with executive compensation plans and educating why non-qualified retirement plans are made available to highly compensated executives. Tax implications of these plans are also discussed.
Farrall Wealth also helps clients to minimize equity exposure. If qualified, our clients work with us on a one on one basis, discussing the emotional ties to certain stocks as well as potential tax implications. We are experienced in developing a strategy that is prudent for each high net worth or affluent family whether the client desires preservation or income or both.
Once upon a time, the retail investment world was a quiet, rather pleasant place where a small, distinguished cadre of trustees and asset managers devised prudent portfolios for their well-heeled clients within a narrowly defined range of high-quality debt and equity instruments. Financial innovation and the rise of the investor class changed all that.
One innovation that has gained traction as an addition to retail and institutional portfolios is the investment class broadly known as structured products. Structured products offer retail investors easy access to derivatives
We bring our years of experience in this space to your portfolio. The complexity of derivative securities has long kept them out of meaningful representation in traditional retail (and many institutional) investment portfolios. Structured products can bring many of the benefits of derivatives to investors who otherwise would not have access to them. As a complement to more traditional investment vehicles, we believe structured products have a useful role to play in modern portfolio management.
Structured products are complicated investments intended for a “buy and hold” strategy. Investing in structured products carry risks such as loss of principal and the possibility that you may own the referenced asset at a lower price, due to economic and market factors.