Northstar Financial Planners, Inc. offers an advisory relationship built on personal trust, creativity, and integrity. Thu, 14 Dec 2017 23:03:27 +0000 en-US hourly 1 Northstar’s Reading List Wed, 13 Dec 2017 22:13:25 +0000 By Mia Kitner

Reading a good book can lower your stress and improve your focus, and studies have shown that the habit can improve your short-term and long-term memory. While these benefits have probably been known for some time now, we still struggle to find the time to read more.


With the holidays fast approaching, many of us begin to think about our New Year’s resolutions. For me, it has steadily been to read more books. I have always enjoyed reading, and anyone in my family would tell you I always have a book with me everywhere I go. I just love books, from the old ones with their crinkled and yellow pages to the new ones with their crispiness and fresh smell. Books are, for me, an object of beauty, and in their pages are stories that remain to be discovered.

In the spirit of the season, we conducted a small survey in the office to get a little insight into what we all read at home. The genres varied, and below are our most memorable reads of 2017. All synopses are provided by the publishers.

Allen’s Pick: Losing Tim: How Our Health and Education Systems Failed My Son with Schizophrenia by Paul Gionfriddo

Why I chose this book: “Tremendous respect for the author, Paul Gionfriddo. This book provides great insight into the frustrations and trials families struck by mental health illness are going through.”

Synopsis: Paul Gionfriddo’s son Tim is one of the “6 percent”―an American with serious mental illness. He is also one of the half million homeless people with serious mental illnesses in desperate need of help yet underserved or ignored by our health and social-service systems.

In this moving, detailed, clear-eyed exposé, Gionfriddo describes how Tim and others like him come to live on the street. Gionfriddo takes stock of the numerous injustices that kept his son from realizing his potential from the time Tim first began to show symptoms of schizophrenia to the inadequate educational supports he received growing up.

Losing Tim shows that people with mental illness become homeless as a result not of bad choices but of bad policy. As a former state policymaker, Gionfriddo concludes with recommendations for reforming America’s ailing approach to mental health.

Steve’s Pick: Get Wise to Your Advisor: How to Reach Your Investment Goals Without Getting Ripped Off by Steven D. Lockshin

Why I chose this book: “Something about it resonated with me.”

Synopsis: The financial services world is changing. Technology is enabling an automated approach to investing that should bring down the cost of commodity services. No longer do you have to fund the lifestyle of a broker or advisor to have him tell you how to diversify or where to find the next investment that cannot be missed. This book will provide the tools for calculators that tell you most of what you need to know; from how much insurance you need to have to how you should diversify.

This book will provide a better understanding of your investment decisions. But, we all cannot be do-it-yourselfers. Advisors serve as an important resource for consumers when they are both capable and understand their duty to serve you, the customer, first. To complement their moral station, they must have the skills to deliver appropriate advice. The book, much like the company Mr. Lockshin founded, will simplify standards for consumers and audit advisors to those standards.

Gary Glanz’s Pick: Living Clean: The Journey Continues by Unknown Author

Why I chose this book: “For me personally, life is about living well and being at peace. Doing the right thing for the right reasons is a way of life, and this particular book showcases how to live a life of integrity and humility. Those values help lead my life.”

Synopsis: “Each time we surrender, we find once more that the desperation that drives us to our knees fuels the passion that carries us forward. When hope manifests into reality, our lives change. Our experience affirms what we believe, and belief grows into faith. When our faith grows into knowledge, the program that we once struggled to practice has become part of who we are. We find here what we were looking for all along, connection to others, connection to a Higher Power, connection to the world around us and, most surprising of all, connection to ourselves.” – Author

Gary Gonzalez’s Pick: All the Light We Cannot See: A Novel by Anthony Doerr

Why I chose this book: “It’s a compelling story about community bonds, self-sacrifice, and the strength of human compassion in the midst of unfathomable challenges for humanity.”

Synopsis: Marie-Laure lives in Paris near the Museum of Natural History, where her father works. When she is twelve, the Nazis occupy Paris and father and daughter flee to the walled citadel of Saint-Malo, where Marie-Laure’s reclusive great-uncle lives in a tall house by the sea. With them, they carry what might be the museum’s most valuable and dangerous jewel.

In a mining town in Germany, Werner Pfennig, an orphan, grows up with his younger sister, enchanted by a crude radio they find that brings them news and stories from places they have never seen or imagined. Werner becomes an expert at building and fixing these crucial new instruments and is enlisted to use his talent to track down the resistance. Deftly interweaving the lives of Marie-Laure and Werner, Doerr illuminates the ways, against all odds, people try to be good to one another.

Stacy’s Pick: The Man Who Invented Christmas (Movie Tie-In): Includes Charles Dickens’s Classic A Christmas Carol: How Charles Dickens’s A Christmas Carol Rescued His Career and Revived Our Holiday Spirits by Les Standiford

Why I chose this book: “The book provides insight into the author’s own struggles and all of the challenges he had to overcome to become one of the greatest authors of his time.”

Synopsis: As uplifting as the tale of Scrooge itself, this is the story of how Charles Dickens revived the signal holiday of the Western world. Soon to be a major motion picture.

Just before Christmas in 1843, a debt-ridden and dispirited Charles Dickens wrote a small book he hoped would keep his creditors at bay. His publisher turned it down, so Dickens used what little money he had to put out A Christmas Carol himself. He worried it might be the end of his career as a novelist.

The book immediately caused a sensation. And it breathed new life into a holiday that had fallen into disfavor, undermined by lingering Puritanism and the cold modernity of the Industrial Revolution. It was a harsh and dreary age, in desperate need of spiritual renewal, ready to embrace a book that ended with blessings for one and all.

My Pick: A Man Called Ove: A Novel by Fredrik Backman

Why I chose this book: “Being the perpetual reader and lover of books that I am, I am a member of a book club. This was the first book we read, but it was the most memorable one too. This is one of those books you read and remember forever. It will make you laugh and cry at the same time.”

Synopsis: Meet Ove. He’s a curmudgeon—the kind of man who points at people he dislikes as if they were burglars caught outside his bedroom window. He has staunch principles, strict routines, and a short fuse. People call him “the bitter neighbor from hell.” But must Ove be bitter just because he doesn’t walk around with a smile plastered on his face all the time?

Behind the cranky exterior, there is a story and a sadness. So, when one November morning a chatty young couple with two chatty young daughters move in next door and accidentally flatten Ove’s mailbox, it is the lead-in to a comical and heartwarming tale of unkempt cats, unexpected friendship, and the ancient art of backing up a U-Haul. All of which will change one cranky old man and a local residents’ association to their very foundations.

We hope you enjoyed learning a little bit more about us. If you are looking for a good book to read, please feel free to begin with our list, and if you are interested in keeping track of the books you’ve read and getting recommendations based on them, is a great (free) tool. I personally started using it, and it may well be the key to reaching my literary goal next year.

From all of us here at Northstar, we wish you happy reading and the warmest holiday wishes!

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Your Year-End Financial Checklist Wed, 06 Dec 2017 19:24:47 +0000 By Steve Tepper, CFP®, MBA

This month we once again give you our annual reprint of a handy financial checklist. So here are a few things to think about in between tree decorating, light untangling, and latke frying:

Employer-Sponsored Retirement Accounts: In order to take a deduction for contributions to an employer-sponsored plan such as a 401(k) or a Simple IRA, you must make your contribution through payroll deduction by the end of the year. Your primary goal should be to save at least enough to earn any company match offered. Contribution limits for 2017 if you are under 50 are $12,500 for a Simple IRA and $18,000 for a 401(k), 403(b), or 457(b) plan. If you are over 50, the limits are $15,500 for the Simple and $24,000 for the 401(k), 403(b), or 457(b).

Charitable Giving: Make your contributions (either of cash or donated goods) by the end of the year and get a receipt from the charity.

Gifting: You can contribute up to $14,000 per recipient per year ($28,000 if married and filing jointly). This includes contributing to your child’s 529 college savings plan. Note: Gifting is not tax deductible, but gifting in excess of limits could result in a very high gift tax.

Required Minimum Distribution: If you are older than 70 ½ years at the end of the year, you must take a distribution from your tax-deferred retirement savings. This is very important because the penalty for not taking your RMD is very high—as much as 50% of the amount you should have taken! RMD rules can also apply to inherited retirement assets even if you are younger than 70 ½. There is a small caveat to all of this, however. The year you turn 70 ½, you may be able to delay your distribution until the following year. But that would mean you would have to take two distributions that year (one for the prior year and one for the current year).

See the Doctor: Most medical and dental plans offer free annual or biannual wellness visits. Of course, nothing is free—you are paying for those appointments through those astronomical monthly insurance premiums. Or you may have already maxed out your out-of-pocket health care costs for the year. In either case, take advantage and go to see your doctor and dentist for a checkup.

Spend All Your FSA Dollars: Though they are not common these days, some people have flexible spending accounts to cover routine medical expenses such as prescriptions and doctor co-pays. Unlike health savings accounts, you must spend all the money you contribute to your FSA by the end of the year or you will forfeit the balance. So, if there’s still money in that account, get all your prescriptions refilled or get an extra pair of glasses. Maybe that’s why optometrists always walk around with a big smile in December.

Check Your Credit Report: You can get a free credit report from each of the major credit agencies once a year. You can do this any time of the year, but if you haven’t done so this year, now is a good time. is a good place to start.

Talk to Your Financial Advisor: If you haven’t talked to us in a year, let’s get together or just catch up on the phone. It is important that we touch base with you occasionally to check our strategy and plan, especially if you have had important life-changing events this past year or anticipate big changes in 2018.

I wish you and your family a great holiday season and new year.

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Wealth Management: So Much More Than Just Investment Consulting Wed, 22 Nov 2017 13:30:33 +0000

By Allen Giese, ChFC®, CLU®

So there’s a lot of advisors out there these days calling themselves “wealth managers.” What is a wealth manager, and how is it any different than a financial advisor or a broker? I think if you asked most people, even most financial advisors, they’d be hard-pressed to tell you what the real difference is.

Hi, I’m Allen Giese with Northstar Financial Planners in Plantation, Florida, and we really are wealth managers, so let me explain what that means.

I think of wealth management as a formula where:

Wealth Management = Investment Consulting + Advanced Planning + Relationship Management

Pretty simple formula when you look at it. I wish my math back in my schooldays was this easy. But let’s go a little deeper.

Investment consulting tends to be the No. 1 concern of affluent people, so that’s where we start, since most of the people who work with wealth managers are affluent, meaning they have $1 million or more available to invest toward their most important goals.

Investment consulting is about making smart decisions with your money, but here’s the thing: Every advisor out there offers investment consulting, and some are better than others. But there’s so much more to offering wealth management services than just investment consulting.

So in addition to investment consulting, we have to consider advanced planning. Now, when we’re talking about advanced planning, we find there are four components.

First is wealth enhancement, and this is the second biggest concern among affluent folks. One of the things that we all want is to pay no more than we have to in taxes, so we’re talking here about mitigating taxes, increasing cash flows, lowering debt costs—those kinds of things.

Next on the advanced-planning spectrum is wealth transfer, which is the third biggest concern. Here we’re talking about taking care of heirs.

Our fourth concern, and third element to advanced planning, is wealth protection. You’ve accumulated all this wealth and you want to protect it, so it’s like putting your arms around all your stuff and protecting it from being unjustly taken.

The final advanced-planning component is charitable giving—and that’s No. 5. Many affluent clients want to make charitable contributions, and you can use your contributions as an opportunity to further some of your goals in the other areas.

Now, relationship management consists of two parts—first, client relationship management, which is guiding you through the process and the experience that you, as a client, go through. But one of the things that we find often differentiate us is professional network relationship management, which is the process of working with your other advisors—CPAs, insurance professionals, and attorneys—making sure you have quality advisors in each of these areas who understand not just their area of expertise but can see the big picture as well.

So that’s what a wealth manager really does. It’s so much more than just investment consulting. If you’d like to know if working with a true wealth manager would make a positive difference in your life and help you achieve all that’s important to you, give us a call and we can talk about it.

Have a great rest of your day, and thanks for watching!

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Pet Projects Wed, 08 Nov 2017 13:30:38 +0000 By Steve Tepper, CFP®, MBA

If you are inclined to spend money like the rich, famous, and ultra-affluent, here are some ideas: Louis Vuitton offers a monogrammed carry sack for $2,550. From Versace, you can get a 22K gold-leafed bowl for $1,128. And Michels VIP Parfums carries a range of fragrances from $180 to $4,800. What’s that? Those don’t sound all that extravagant? Just a little extravagant? Well, in case the title and photograph accompanying this article didn’t give it away, those are things the ultra-rich buy for their dogs!

petOf course, highly affluent people lead the way in over-the-top purchases in just about every spending category, so there is ample opportunity to make fun of them, something I do every chance I get, and only maybe 80% out of jealousy.

And what better rich person to make fun of than Paris Hilton? The reality star heiress, one of the world’s most famous dog lovers (and occasional dog loser), built a two-story doggie mansion for her Pomeranians, Yorkies, and Chihuahuas. Price tag: $320,000.

But you don’t have to be a pseudo-celebrity to shower your canine in luxury. As reported in a recent article in Financial Advisor magazine, here are a few of the extravagances available for the pampered pooch:

  • If you are jet setting around the world, you won’t want to drop your four-legged friend off at a kennel. Make a reservation at D Pet Hotels, a nationwide chain that will pick up Fido in a Ferrari, Lamborghini, Bentley, Porsche, or Rolls. Amenities include an indoor gym with treadmills, personal trainers, chefs, and a private room with a bed and widescreen TV. At the spa, you can book aromatherapy, massages, pedicures, and facials.
  • If that isn’t enough to relieve your dog’s stress, a host of service providers will perform acupuncture, Reiki, hypnosis, and psychotherapy.
  • If you want Princess to feel like a real princess, treat her to a tiara designed by Thai jewelry designer Riwin Jirapolsek. In 2009, he fashioned a titanium crown with 250 carats of emeralds and diamonds for his 15-year-old Maltese. Value if you can snatch it from Fifi’s head: $4.2 million.
  • The pampered lifestyle doesn’t have to stop just because you’re gone. As hotelier Leona Helmsley famously did in 2007, you can bequeath millions to your fur baby. Thirty-eight states allow you to establish “pet trusts” to make sure your pet is cared for after you die. (A side note here, something I never knew until I researched this article: The $12 million Helmsley left to her Maltese—what is it with Maltese?—was reduced to $2 million when the dog’s caretaker said the amount would be enough to keep the dog in luxury for the rest of his life. Apparently, there may actually be a limit to how much you can spend on a dog.)
  • The pampering also doesn’t have to stop just because your pet is gone. If you want something more than a traditional cremation or casket from one of the more than 750 pet funeral homes and cemeteries across the country, have your dog mummified from $7,000 all the way up to $100,000 or more at the Summum temple in Salt Lake City. Another option is to render your pet’s remains into a synthetic diamond through a company called Life Gem: Prices range from $3,000 to $35,000.

For those of us not blessed with such affluence, I have only this advice: Buy a goldfish, or you might find yourself in the …

Source: When a Pet Owner is Rich, It’s No Dog’s Life by Ian Shearn,, June 19, 2017.

Cybersecurity, Identity Theft, and What We Should All Know Wed, 01 Nov 2017 16:33:48 +0000 By Mia Kitner

By now it’s not news that cybersecurity concerns have taken center stage in the country. Equifax, one of the three leading credit reporting agencies in the U.S., has admitted that they were hacked around May–July and that personal information of more than 145 million Americans had been compromised.

Sadly, as alarming as this may sound, it’s not the first of its kind. As you may remember, Target and Home Depot had breaches, as well as many others that did not make headlines. Even the Securities and Exchange Commission (SEC) was targeted. Their corporate filing system, EDGAR, was hacked, and nonpublic corporation filings of publicly traded companies were accessed, allowing for the potential for someone to benefit from private knowledge by violating insider trading laws and regulations.

It appears that no one is safe from cybercriminals, and as consumers, we must learn how to protect ourselves from identity theft.

The New Norm

In this age of digital domination, cybersecurity concerns are the new norm. The convenience of having many of our financial transactions online raises issues that need to be addressed.

For starters, our online presence has increased. We post about our personal lives, jobs, kids, and school, and all this information becomes public knowledge if we don’t set the necessary privacy settings. Our banking has also moved to the internet, and we can now deposit and transfer money or pay bills with a few clicks.

While it is convenient to have access to our information online 24/7, it also causes concern for many. Cybersecurity has been a threat and will continue to be one. Simply put, we must become proactive in protecting ourselves and our loved ones by taking the necessary precautions.

First Steps

Equifax’s data breach has had an impact on how we view cybersecurity concerns, and as a result of it, the agency has created a website where you can find out if you were affected. Their website will ask you for personal identifying information (PII), and in return, it will notify you if your data may have been compromised.

If you believe you have been a victim of identity theft, the first step would be to report it and file the necessary paperwork as soon as possible by visiting From there, you will be able to file your report and obtain a personal recovery plan.

We can also access our credit report free of charge once a year from each credit reporting agency at If you haven’t checked your credit report recently, now would be a good time to do so.

Review it carefully for accuracy, and report any discrepancies as soon as possible by contacting the respective credit bureau. Sometimes their reported information may differ, and it’s a good idea to check all three reports and compare them. If you don’t know what to look for, here is a quick guide from the Consumer Financial Protection Bureau that may help.

Another step to protect your credit file is to place a fraud alert or a credit freeze. A fraud alert stays on your file for 90 days, and you may renew it once it expires. To place one, contact one of the three credit reporting agencies, and they will notify the other two for you.

A credit freeze is slightly different because it prevents access to your credit report. If you need to apply for any new credit, you will need to remove the freeze beforehand. Unlike a fraud alert, a credit freeze must be placed with each credit reporting agency individually, and there may be fees associated with this service each time you freeze or unfreeze your credit.

Additional Steps

While identity theft can be a daunting topic, we must take precautionary steps to protect our identity and that of our loved ones. Below are a few additional things we should be doing to help keep our information secure.

  • Monitor your financial accounts. Pay attention to your credit card and financial statements. Many times, small amounts that may otherwise go unnoticed start to appear as recurring charges. If you notice suspicious activity, contact your bank or credit card companies. Many offer the option of setting alerts.
  • Review and shred all your bills. Know when they are due, and be sure to shred all documents containing personal and financial information. Your trash is an identity thief’s treasure.
  • Place a credit freeze on any minor’s credit. An alarming number of children’s identities has already been stolen. Children are easy targets for identity thieves because their credit reports are a clean slate and will often go undetected for a longer period. If you’re interested in learning more on how to place a credit freeze on a minor’s credit file, be sure to check out for details.
  • Stay on top of the latest scams; they tend to follow the headlines. We have all been targeted at one point or another with a scam via email, social media, or phone calls. Identity thieves are creative, and when they combine that creativity with sophisticated technology, it can be difficult to differentiate between a scammer and a legitimate organization. Be sure to do your due diligence and verify your sources.
  • Change your passwords frequently, and use secure ones whenever possible. Don’t use easy-to-guess words or names. Use at least a mixture of capital letters, lowercase letters, and numbers.

While cybersecurity is an ever-changing area of concern, by taking the time to familiarize ourselves with it, we are lowering our risk of becoming a victim. If you would like a printed guide to identity theft, please let us know, and we’ll be happy to send you a copy of the FTC’s Identity Theft: A Recovery Plan. Alternatively, you may also access the online version by visiting (Adobe Acrobat Reader is needed to view the document).

(800) 680-7289

(888) 397-3742

(800) 525-6285

What to Do in Case of a Breach

  1. Check your credit report by obtaining a free copy from all three credit reporting agencies.
  2. Place a fraud alert by contacting one of the three credit reporting agencies. Learn more here:
  3. Also consider placing a credit freeze. There may be a fee associated with this service, and you must contact all three credit bureaus independently.
  4. Considering identity theft protection services. Learn more by visiting this site:
  5. Change your passwords as a precaution. Be sure to use secure and different passwords for each account.
  6. Be aware of scammers that may call. Even if they can provide you with your name and Social Security number, don’t believe what they say.
  7. Try to file your taxes early. Identity thieves will often try to file your tax return in order to obtain your refund.
  8. If you suspect you may have been a victim of identity theft, please visit and learn more about what steps to take.


“Place a Fraud Alert.” Consumer Information, Federal Trade Commission, 13 Sept. 2017,

Extended Fraud Alerts and Credit Freezes.” Consumer Information, Federal Trade Commission, 26 Sept. 2017,

Identity Theft Recovery Steps |, Federal Trade Commission, 2017,

The Emerging Market Bounce Wed, 11 Oct 2017 14:00:23 +0000 By Steve Tepper, CFP®, MBA

You’d have to be a little crazy to invest in emerging markets right now. There are so many problems in the second and third world, they could hardly all be listed in this short article. But here are a few key drivers of expected weakness outside of the U.S. and developed international markets:

  • Cooling off of China. Annual GDP increases of 8% to 14% in China made emerging market funds winners in the mid to late 2000s, but the country’s recent numbers and forecast are not as rosy.
  • Fear of rising interest rates, which restricts the flow of money to non-developed markets.
  • Plummeting commodities prices—in particular, oil—have hurt third world countries whose natural resources are often their most valuable currency.
  • Anti-globalist sentiment across Europe, particularly in the U.K., have raised concerns about investing in developing markets.
  • And Putin. What’s up with Putin? The Russian president has single-handedly provoked political turmoil not only in emerging economies like Ukraine and Turkey but in Brazil, South Korea, and the U.S. as well.

Most of these factors have been simmering for months or years, with one more added to the mix last year: The U.S. presidential election campaign, in which the candidate who would eventually win marshaled the forces of anti-globalization from both the right and the left. Every sign pointed to one outcome: Emerging markets were going to get crushed.

You know where I’m going with this, don’t you? As I’m writing this in late June, the MSCI emerging markets index is up almost 19% year-to-date (after gaining more than 11% last year).

So it’s no wonder we’re a little crazy, because we are invested in emerging markets and have never gotten out. We didn’t get out in 2008 when the same MSCI index fell more than 50%, and good thing, because it ran up nearly 80% the next year.

As you can see from Table 1 below, we had a run of good years leading up to the 2008 crash, a big recovery in 2009, and then spotty performance. Even so, it has been a winning asset class, weathering economic and political storms, and providing an annualized return of 11.2% for the last 14-plus years. That’s good enough to turn a $1,000 initial investment into nearly $5,000.

Table 1
MSCI Emerging Markets
Annual Performance (%)

Year   % Gain/(Loss)
2017 YTD 18.7
2016 11.19
2015 -14.92
2014 -2.19
2013 -2.60
2012 18.22
2011 -18.42
2010 18.88
2009 78.51
2008 -53.33
2007 39.42
2006 32.14
2005 34.00
2004 25.55
2003 55.82

So why the unexpected results this year, after a tirade of bad news or ominous warnings? As bad as the financial media and economists seem to be at predicting the future, they seem to also struggle with playing “Monday Morning Quarterback,” offering up many, and sometimes conflicting, reasons for why things happened that shouldn’t happen. Here are a few of the postmortem excuses offered from the press:

  • The market decided Donald Trump was more talk than action on trade. For example, after the election, he backed off his campaign rhetoric that China was a currency manipulator.
  • After years of bad news and sluggish performance from 2011 through 2015, emerging market stocks were undervalued and therefore poised to rally.
  • Emerging markets are not as risky as they were just a few years ago. The most in-debt countries had deficits totaling around $300 billion in 2012. Today that number is below $100 billion.
  • Economists believe there is less risk that the dollar will rise. If it did, it would raise the debt service cost for debtor nations. Conversely, emerging market currencies have been strengthening, which has the opposite effect, making their debt service easier to handle.

All of these seemingly logical but ultimately incorrect predictions and rearview reassessments serve as reminders that even the so-called market experts can’t be relied upon to provide meaningful information to help us time the market or any segment of the market. And so we remain committed to broad investment across many asset classes, no matter what the prognosticators say.

Source: Bounce Back by Eric Rasmussen, Financial Advisor magazine, June 2017.

Past performance is no guarantee of future results. There is no guarantee an investment strategy will be successful. Diversification does not eliminate the risk of market loss. Investing risks include loss of principal and fluctuating value. International investing involves special risks such as currency fluctuation and political instability. Investing in emerging markets may accentuate these risks.

Is Your Advisor a Fiduciary? Wed, 04 Oct 2017 17:55:37 +0000

By Allen Giese, ChFC®, CLU®

Look, there are lots of advisors out there to pick from. And there are lots of differences between them. But if there is one thing that separates them more than anything else, one thing that tells you who may really have your best interest at heart, what would that be?

The answer, I believe, is whether or not your advisor is a fiduciary.

When we’re talking about a financial advisory relationship, a fiduciary standard requires your advisor to put your interests above his own. If your advisor is a fiduciary, it means he legally has to act in the best interest of you, the client.

It means that the advisor has to avoid conflicts of interests and disclose wherever there might be one, and that his or her analysis of your situation must be thorough and complete and as accurate as possible.

Sounds pretty good, right? Isn’t that what you’d want? For your advisor to have your best interests over his own? But the problem is, not all advisors have to follow a fiduciary standard.

Actually, the majority of financial advisors currently don’t have to follow a fiduciary standard. They follow something called the suitability rule.

Now, the suitability rule, in my opinion, is a big step down from a fiduciary standard because under the suitability rule an advisor has to only make recommendations that are consistent with the best interests of the customer. His recommendations need only be suitable for the client’s situation in terms of financial needs, objectives and unique circumstances.

There is also a key distinction in terms of loyalty that’s important, in that the broker’s duty is to his broker-dealer—the company he works for and who pays him—not necessarily the client he’s serving.

Here’s what that means: When it comes to things like transaction costs and fund fees, the suitability standard only says that the recommendation must not be excessive. Say there are two competing fund choices, where both funds invest in exactly the same thing—like, for example, an S&P 500 stock fund—but one fund pays a commission and is twice the expense of the other. The broker, under the suitability rule, can recommend the costlier fund—the one with the commission.

That’s a pretty big conflict of interest that the suitability rule causes. As long as the investment is suitable for the client, the broker can recommend it. This allows brokers to sell their own company’s products ahead of lower-cost competing products. And remember, the broker works for a broker-dealer, and ultimately that’s where his or her loyalty is.

At Northstar Financial Planners, we’ve been following a fiduciary standard for many years. We think it’s clearly the best thing for our clients. If you are interested in finding out more or seeing for yourself how recommendations might differ under an advisor who is following a fiduciary standard, or if you just want to know if you are making good decisions in today’s economy, consider Northstar Financial Planners for a second opinion. Give us a call, and we’ll talk about it. We think you’ll be glad you did.

Thanks for watching, and when it comes to your finances, don’t settle for something that’s just suitable.

The Retirement Savings Gap: Bleak and Getting Bleaker Tue, 26 Sep 2017 22:29:00 +0000 By Steve Tepper, CFP®, MBA

It should come as no surprise to readers of our newsletter that most people have not saved enough for retirement. We reported several years ago that about 57% of baby boomers would run out of money within 20 years of retirement according to the Employee Benefit Research Institute (EBRI). I haven’t seen an update for that report, but I’m going to go out on a limb and guess the figures haven’t changed much.

The World Economic Forum has put the long-term outlook into focus, and it’s very bleak. By 2050, the combination of longer life spans, inadequate savings, and poor investment strategies will result in a $400 trillion retirement savings gap.

$400 trillion! That’s a Dr. Evil number because literally, that much money doesn’t exist in the world—it is about five times the size of the global economy today.

The figure was derived by starting with an assumption that a retiree would need a beginning retirement income of 70% of annual earnings before leaving the workplace.

The death of defined benefit plans (traditional pensions) is a big culprit for the bleak assessment. Once upon a time, you worked for an employer for 30 or 40 years and built up a pension (a fixed amount of monthly income for the rest of your life), which, combined with Social Security, would provide the income you needed to cover living expenses. But very few employers offer traditional pensions anymore, shifting instead to defined contribution plans (such as 401(k) plans).

Defined contribution plans (including IRAs) make up more than 50% of retirement assets worldwide, and compared with pension-type plans, they are riskier for investors. They usually require employees to “buy in” or make contributions through payroll deduction. Participation is not mandatory, so an employee can opt to save nothing for retirement. Sadly, many do just that. For those who do participate, they may find limited investment options, or may not understand their options, and usually, don’t have the option of professional investment management.

None of that was a concern under a classic pension plan, where contributions were made for all eligible employees by the employer, and assets were pooled together, which helped spread out risk and allowed for low-cost management by a financial advisor required to act as a fiduciary to the plan.

The World Economic Forum reported that the savings gap is growing by about $3 trillion per year in the U.S. and could climb by as much as 7% in China and 10% in India, where populations are aging more rapidly and more people work in what they call “informal sectors.” I’m taking that to mean “off the books” jobs that don’t pay into retirement plans.

It is clear under the current system that individuals need to take responsibility for the success of their lifelong financial plans by investing as much as possible toward retirement during their working years and hiring the services of a professional financial advisor who will serve as a fiduciary and act in their best interest in managing their money.

Past performance is no guarantee of future results. There is no guarantee an investment strategy will be successful. Diversification does not eliminate the risk of market loss. Investing risks include loss of principal and fluctuating value. International investing involves special risks such as currency fluctuation and political instability. Investing in emerging markets may accentuate these risks.

Cybersecurity Best Practices Wed, 13 Sep 2017 14:34:39 +0000 The WannaCry ransomware attack last month affected individuals and businesses in more than 150 countries and infected more than 230,000 computers. It illustrated yet again the need for everyone using any device connected to the internet to employ best security practices at all times.

Ransomware occurs when malicious software is installed on a computer, encrypting your files and then flashing a message demanding payment so you can regain access to those files. Ransomware can be problematic for a number of reasons. First of all, in many instances, including the WannaCry attack, there is no guarantee that the hacker will un-encrypt your files even if you do pony up the ransom. Second, payment of ransom will encourage hackers to attempt more ransomware attacks.

SonicWall, an industry leader in cybersecurity hardware, reported there were 638 million attempted ransomware attacks in 2016, a 167-fold increase over 2015.

Here at Northstar, we strive to keep up with the latest information and releases to protect our clients’ information as well as proprietary business data, and we are committed to helping our clients do the same.

A recent article on highlighted best practices for the financial services industry, but many of them have universal application. Here are a few highlights:

Keep your updates up-to-date. Don’t you hate all those pop-ups and system messages on your computer telling you to run this and update that? Well, stop hating and start updating, especially anything marked “critical.” In March, two months before the WannaCry attack, Microsoft released a “critical” patch. Guess what all of the 230,000 infected computers had in common? None of them installed the patch.

Manage your device. All your devices need the latest antivirus protection. In addition, you should have the ability to erase or disable a phone or tablet if it is lost or stolen. Aside from the annoyance of giving someone access to your contact list and that secret selfie folder (hey, I’m not judging), you’ve probably got your bank account login cached in memory, so you definitely want to keep a thief from getting their hands on that.

A remote wipe can be done on an Apple device by making sure you have Find My iPhone installed on your phone (before you lose it, of course!). Then you can wipe or disable the phone (and maybe even find it) by using the same app on another iOS device or by visiting

For Android devices, the app is called Lost Android, and while there is a feature that would allow you to “push” the app onto your phone even after you lose it, that’s not a best practice. Install the app now, then accept administrator functions, which will allow you to go to the site to lock, wipe, or locate the phone if it is lost or stolen.

Encrypt your data. If you have received confidential information from us, you know what we do to protect that information. Rather than sending it as an attachment, we direct you to a secure site to download it ( It’s a bit of a hassle, but it is a critical component to our cybersecurity program. Additionally, if we want you to send something confidential back, we direct you on how to securely email us using Sendinc. That is a best practice for you to follow anytime you need to send confidential information electronically.

Use passwords, and make them long and complex. The most common passwords in 2016 were “123456,” “qwerty,” and “111111.” In fact, if you use any password with just letters or numbers, characters that are sequential on the keyboard, or are just six characters long, sophisticated hackers can get past your password security in just a few seconds.

Here are a few standards for password creation:

  • Use as many characters as allowed;
  • Use upper and lower case letters, numbers, and special characters if allowed; and,
  • Don’t use the same password for all of your logins. If a hacker figures out one of your passwords, he will probably try that same password and user ID combination on hundreds or thousands of other common websites, including every banking and brokerage site.

My rule of thumb for passwords is “If you can remember it, it’s not good enough.” Yes, that means you need a password file to write down all your passwords.

Don’t back down on backups. They can be a pain, but having a comprehensive recent backup can be a lifesaver if you fall victim to an encryption virus like ransomware.

By comprehensive, I mean more than just copying your “My Documents” folder to an external drive. You need a complete system image and your system registry so that you can completely restore all files, programs, and settings in the event you have to reset your device back to its original day-you-bought-it settings.

Be careful on social media. The information you put out on social media can be used by hackers to impersonate you to your friends and to figure out the answers to personal security questions. Did you ever post your wedding pictures? A page from your high school yearbook? A pic of your pooch doing something adorable? A shot of you and the family at the game, all dressed in matching team apparel? You’ve just answered some of the most common security questions: What is your best friend’s name (your best man or maid of honor), where did you go to school, what’s your favorite pet’s name, and what’s your favorite sports team?


Good cybersecurity practices can be a pain, but they are necessary components to safe computing in the 21st century. Get comfortable with them because they are with us to stay and will likely get even more complex and cumbersome as hackers become more and more sophisticated.

Source: 10 Cybersecurity Best Practices by Fred Kauber,, May 26, 2017

FRS Pension Option 1 with Life Insurance: Good Idea? Wed, 06 Sep 2017 20:03:49 +0000

By Allen Giese, ChFC®, CLU®

Here’s a concept that if you’re an FRS special risk employee approaching retirement, I’ll bet you’ve heard. The idea is, if you’re married, you choose Option 1 for your pension. That’s the option where if you die before your spouse, then your spouse gets no continuation of benefits—they get nothing. But Option 1 also has the highest monthly payout. So to make up for that, you also buy a large amount of life insurance that would be paid to your spouse, and then your spouse goes and buys an annuity or invests the money and draws an income to make up for the pension they lost.

Sounds like a great idea, right? Not so fast.

I’m Allen Giese, and our firm, Northstar Financial Planners in Plantation, helps special risk FRS employees make better decisions with their finances. With this pension maximization idea, the FRS retiree is obviously trying to increase his or her pension payout. The trick is to get the cost of the life insurance policy to be less than the difference between the payout of Option 1 and Option 3 or 4.

So let’s say a life insurance agent you are talking to shows you a plan where, indeed, the cost of the policy is less than the difference between the two pension payouts. Now you have to ask yourself: “Is it really enough life insurance to replace my pension?” I mean, how do you know how much you need? Have you factored in inflation and a reasonable return on the money and a conservative assumption for your spouse’s life expectancy?

The problem is, I often see plans like this where the retiree has far too little life insurance in place to accomplish the goal. That, of course, makes the premium lower, which makes the idea appear to work—until it doesn’t. But at that point it’s too late. And here’s typically the culprit, more often than not: You have to understand that the life insurance agent gets a commission for placing the policy, right? And that commission is no small amount. It can be as high as 100% (or even more) of the first year’s premium for the policy! So the agent has this big incentive to get the insurance in place. In fact, his or her number-one concern is to get a policy in place. The number-two concern is, is it enough?

We believe that you should always have somebody besides the life insurance agent (who stands to make a big commission and therefore has a conflict of interest) figure out how much insurance you really need in this situation.

Now I’m going to point out something that may not be obvious. Let me ask you, how does the state determine the difference between the Option 1 payout and the Option 3 payout, where Option 1 payments end at the retiree’s death and Option 3 payments end at the second of the two married persons’ deaths? They determine the difference using mortality tables. Well, guess what? They use the same mortality assumptions that life insurance companies use—except there is one big difference. Insurance companies are in business to make a profit, so they are going to mark up above the mortality to make that profit. The state doesn’t do that. The truth is, the average age a healthy 50-year-old lives to doesn’t change because he or she has a life insurance policy versus FRS pension Option 3.

So, in essence, Option 3 has already factored in the mortality at most likely a more favorable rate than the insurance company. So if the insurance is coming in at a better rate, then logic dictates that something is amiss. Again, it would probably make sense to have somebody, who doesn’t have a vested interest in you buying the life insurance policy, take a look at it and give you an unbiased opinion. Remember, once you make this decision and retire, there’s no going back and changing it.

Now one other problem I have with this pension maximization idea. This one is a little more philosophical than mathematical, but hear me out. Why do most people who pick the pension plan monthly benefit over the investment plan lump sum do so? Everybody I’ve asked says it’s because they feel safer and more secure not having to invest the money themselves and making perhaps a big investment mistake. They like the security of knowing that every month they are getting a check no matter what.

So let’s say an FRS retiree and his or her spouse do take Option 1 and buy a couple million dollars of life insurance. What happens when the retiree dies? Well, of course the monthly pension check stops coming, but what does the spouse get? A couple million dollars.

Now what are they supposed to do with it? Think about it: They are distraught. Is this a good time to be making major financial decisions? Is this a good time to be shopping for an advisor they can trust to do the right thing for them? Are they really going to take any investment risk with that money, even though you probably built the assumption they are when you determined the life insurance amount?

Aren’t they basically just a huge target for every unscrupulous commissioned salesperson with the “greatest investment you ever saw” in their briefcase? And isn’t having all this investment risk exactly what you were originally trying to avoid, which is why you took the pension in the first place? Logically, we think it’s just a bad idea.

All that security the FRS retiree had when they were getting a monthly check is gone and probably at one of the worst times possible as far as the surviving spouse is concerned. Believe me because I’ve been there: Surviving spouses aren’t looking for risk, and losing the security of their income that they live off of is a big deal.

I have a few other issues as well, but those are the biggest ones. My point is, there’s a lot to think about and a fair amount of homework that you have to make sure is right if you are considering taking Option 1 and buying life insurance to replace the lost income to your spouse. Every case is unique, and it would be a good idea to bounce the idea off someone who doesn’t have a vested interest in you buying the life insurance and has the ability to correctly analyze the situation.

If you find yourself in that or any other complex situation, or you just want to know if you are making good decisions in today’s economy, consider Northstar Financial Planners for a second opinion. We think you’ll be glad you did. Thanks for watching, and be sure to stay safe out there. Now, if you are an FRS employee and would like a free copy of Retired Battalion Chief Gary Gonzalez’s book explaining what you need to know about retiring from FRS, just give us a call or drop us a line.