Important Things Most Advisors Won't Tell You Transcript: Audio automatically transcribed by Sonix

Important Things Most Advisors Won't Tell You Transcript: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Producer:
Listen to the number one show on the weekends on AM 920. The Answer to Protect and Grow Your Hard Earned Money. The Act of Wealth Show with Ford Stokes your Chief Financial Advisor, Saturdays at 12 noon and Sundays at 11 a.m..

Producer Sam Davis:
Fixed annuities, including multiyear guaranteed rate annuities, are not designed for short term investments and may be subject to restrictions, fees and surrender charges as described in the annuity contract. Guarantees are backed by the financial strength and claims paying ability of the issuer. Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs, and may not be suitable for all investors. It is not intended to project the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.

Producer:
Welcome to the Active Wealth Show with your host. Ford Stokes Forde is a fiduciary and licensed financial advisor who places your needs first. You'll help you protect and grow your wealth. The Active Wealth Show has grown because activators like you want to activate their retirement planning with sound tax efficient investing. And now your host Ford Stokes.

Ford Stokes:
And welcome to Active Wealth Show Activators. I'm Ford Stokes, your chief financial advisor. I'm joined by Sam Davis, our executive producer. Sam, welcome the folks.

Producer Sam Davis:
Welcome to the Weekend Activators. It is a beautiful spring weekend here in Georgia. It is April. It is springtime. It's the most beautiful month of the year, possibly in the state of Georgia. And my azalea bushes are starting to bloom just a little bit, which means the Masters is right around the corner.

Ford Stokes:
Yeah, it's good stuff. I mean, the master stuff is amazing. We're going to be in Atlanta for spring break, but we get we're coming back that Friday. So we get to see Saturday, Sunday of the Masters. So that'll be pretty fun stuff. I'm pretty excited about the Masters every year. It is where the world just focuses its attention on our state and Augusta National and Augusta, Georgia. So that's great stuff. So we've got a really big show playing for you to get you guys and gals. Today we are going to be talking about the seven things that advisors likely won't tell you. And we're going to go through those seven. We're also going to have an inflation demonstration. We're going to talk about Roth Ladder Conversion and how to generate tax free income during retirement. We're going to try to be more tax efficient because that's one of those guarantees in life, if you can, you know, death and taxes. But also if we can get more tax efficient, that's a guarantee on not as much leaking out of your retirement nest egg or your retirement water bucket, if you will. And I think you're really going to like this show. I think you're going to like the seven things learning about the seven things that advisors likely won't tell you.

Ford Stokes:
And also, I'm just going to tell you off the front of this show, we're offering a free financial plan at no cost to you, a free consultation. It's a $100 value. We're going to give you a portfolio analysis where you can understand the risks you're taking, the fees you're paying currently. We're going to give you also a financial plan, your 95th birthday with your current plan that has nothing to do with us. We'll give you a financial plan to your 95th birthday with our recommended portfolios. We'll also give you a financial plan with our recommended portfolios. And a Roth Ladder Conversion. And we'll also give you a retirement income plan analysis. And that's not all. Folks, including the bamboo steamer and the Ginsu knives, will give you a a Social Security maximization report as well. We're going to do all of that at no cost to you. All you have to do is reach out to us at (770) 685-1777. Again, (770) 685-1777 or visit ActiveWealth.com and click that set an appointment button in the upper right corner. We're happy to help you there, but at first want to get started straight talking about our inflation demonstration example because I think you're going to find this one really interesting.

Producer:
It's time for an active wealth inflation demonstration.

Ford Stokes:
Meat and poultry prices are largely expected to climb in the US this year, but pricier cuts like steak should level out, according to a new analysis. Evercore ISI issued a protein inflation note this week, projecting the most protein prices are forecast to increase substantially due to higher feed costs, with chicken breasts reaching as high as 70% year over year in the first half of 2022. That means 70% growth in year over year from 2022 to 2021. The analysis said that pork and ground beef could climb as high as 20% year over year during the same period. However, inflation for pricier cuts like steak are expected to level off or even drop as consumers shift their buying patterns to more affordable products due to their budgets getting squeezed. Evercore analysis showed that the cost of a rib eye and chicken wings could each drop by around 15% in the first half of this year. Chicken and hamburger prices are expected to continue to rise, while steak prices will likely moderate, said David Palmer, who is a senior managing director of Evercore. And he leads the firm's restaurant and food producers team. The report pointed to the rising cost of grain that are used to feed livestock such as wheat, soybeans, corn and a significant factor contributing to increases in protein prices. Wheat, in particular skyrocketed following Russia's invasion of Ukraine. We also know that beef is the least exposed to grain volatility from the Russia-Ukraine war, as feed makes up roughly a quarter of production costs versus 50% of pork and 70 to 80% for chicken, Palmer told Fox Business. So that is your inflation demonstration for the week. Just be careful on the protein prices out there. And you know what? If chicken's going up, 70% say I might just eat a little bit more steak or a little bit more fish.

Producer Sam Davis:
Yeah, if that's what you've got to do, that's what you got to do. You know, I had some good steaks the other day that weren't too bad, so, you know, I. I think that that report is actually accurate to what I've been seeing in Georgia with just some of the chicken prices are through the roof. You can't really find sales on those. So maybe hold off on the chicken wings and like lean towards steak and pork for a while. But yeah, it looks like bringing home the bacon is going to be a lot more expensive.

Ford Stokes:
Yeah, and we've got our retirement cost cutter for the week now, too, so go ahead and roll that sounder for. For the good folks, Sam.

Producer:
Ready to save some money? Here's our retirement cost cutter of the week.

Ford Stokes:
So my retirement cost cutter is a new one. It's one that I've really never done before. What I would recommend folks do is frequent their local butcher. Yes, butchers are usually more expensive than Publix or Costco, and Costco is another great alternative but not doing a staycation. But I would do a stay in date date night and really enjoy hanging out with your spouse and cooking and and with this nice weather opening up the back door and letting the great weather come in. But over the weekend, I'm going to give a shout out. They have no idea this is coming. I'm going to shout out to Wilks Grow store and butcher shop over there in Cumming, Georgia, right off Matt Highway. They are fantastic. I'm a huge fan of Wilks and Diane. The girls are out of town, so I was able to get a $49 inch and a half steak cut rib eye. So it was a huge steak and that turned into two meals for me. So I got a steak sandwich out of the next day and I got the steak the night before and we had a salad and they have a Diana's even. My wife's name is Diana. She doesn't own this company. I wish she did.

Ford Stokes:
But there's a Diana's macaroni and cheese. I was able to get there. That is in in the freezer section. It was incredible. And it just did a hydroponic salad that was hydroponically grown local there in Forsyth County and had some great spinach and regular regular greens and and just for the salad and cheese and tomatoes and everything else. And it was just fantastic. It was a great meal. And I spent like, I don't know, maybe. 60, 70 bucks on it, but that's a lot cheaper than had I gone out to a restaurant. And and I also enjoyed a second meal. So I got basically two meals as if I was going out for the same for for about 30 to 45, 40 bucks per meal. And so I feel like that is a really great cost. Cutter Just go ahead and enjoy. Really make it a big deal. Make sure you get the steak and salmon if your wife wants the salmon and cook it on the big green egg. And and because I'm a big green egg fan or cook it on your gas grill or whatever. But I can tell you, Sam, I became a much better griller when I started grilling with a big green egg.

Producer Sam Davis:
Yeah, that sounds so good. That springtime weather, little salmon, little steak, little surf and turf. We like to do it with the roasted broccoli. And like the roasted mini potatoes, you get some rosemary going in there. Great springtime meal and it really is fun. You know, it is always fun going out and supporting local restaurants, of course, but doing a little stay in date as well as awesome, especially when the weather is so nice.

Ford Stokes:
Yeah. So that's my cost cutters to stay in date, but really make it a big deal, have fun, maybe get some cut flowers from it or something, but you'll end up spending less money than just going out. And I think you'll enjoy it more. You'll enjoy more time. You know, as we say in our family, we spend a lot of time and, you know, we spell time. You spend the time with your with your spouse or even your kids, and they come back from college or they're bringing the grandkids back after they've already started working and they're out of college. That's a great way to just have people stay in with you, have a stay end date and really just have a great time and save money versus taking everybody out. So that's my retirement cost. Cutter Oh, the week we come back from the break, we're going to we're going to dove into these seven things that advisors likely won't tell you. And I'm going to tell you I'm going to I'm going to lay them all the way out. I think you're really going to like these seven things, and it's going to help you better plan for your retirement and hopefully better protect and grow your wealth, because, again, you've generated an incredible amount of wealth. You've you've worked really hard, but it's probably even harder for you to have saved that money. And we're going do everything we can to help you protect and grow that money through a tax efficient, fee efficient and market efficient portfolio. You're listening. Active Wealth Show writer and I am 920 answer salmon are so glad you're here with us and we'll be talking about the seven things that advisors likely won't tell you. But we will probably come back to the break. You'll see the Active Wealth Show writer in am9 20. The answer. Late December.

Back in 63. Very special time for me, as I remember.

Producer Sam Davis:
Registered Investment Advisors and Investment Advisor representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interest of our clients and to make full disclosure of any conflicts of interest. If any exist, please refer to our firm brochure, the ADV to a page four for additional information.

Producer:
Are you concerned about US tax rates being raised by the Biden administration and how that will affect your retirement? Tune in to the Act of Wealth show with Ford Stokes, your chief financial advisor, to learn how you can reduce the taxes you pay before and during retirement. The Act of Wealth show Saturdays at noon and Sundays at 11 a.m..

Ford Stokes:
And welcome back, activators the Active Wealth Show. I'm Ford Stokes, your chief financial advisor, joined by Sam Davis, our executive producer. And we're talking about the seven things that advisors likely won't share with you. And the number one item that advisors likely won't tell you is your expense ratio. They're likely not doing a morningstar report on the current. Portfolio that you have with them, and they're not sharing the amount of money that is in fees that are being charged to 1281 fees, a share fees. C share fees. They're likely not telling you how much is being withdrawn from your portfolio that doesn't show up on your monthly statement. It does affect the overall value account value of your of your account, but it does not show up in your statement. And we're willing to give you a free portfolio analysis that will actually detail out your expense ratio. And all you have to do is visit Active Wealth and click that set an appointment button in the upper right corner again ActiveWealth.com and we're happy to help you. So that's number one. Number two is they won't remind you regarding their own portfolio and advisory fees. One other thing that I want to be clear about is. If you started working with an advisor ten years ago. I wanted to let you know that it's likely that portfolio and advisory fees have compressed since then.

Ford Stokes:
And our. The portfolio fees are likely lower than what you typically find from the portfolio in advisory fees. That are being offered by bank advisors or wirehouse or stockbrokers or other financial advisors. And that's a way to be more efficient. We can try to reduce your advisory and portfolio fees altogether. Example, in the expense ratio, our expense ratio basically averages between 0.15 and 0.17 on average with our portfolios, whereas the expense ratios that we see from four oh case that come in when people don't have an advisor can be between 0.6 all the way up to over 1% a year because those. Folks have mutual funds in their portfolio because that's really how a lot of foreign cars are structured. And they've got 12 one fees, which are just marketing fees that the mutual fund companies are allowed to charge. And they don't spend a lot of money advertising and they just take those 1281 fees that are allowed to help them market and advertise, and they simply just put that money in their pocket. And so it doesn't really provide any educational value for you and it provides value to the mutual fund company and especially if your portfolio is also been established, let's say, by a Series seven license advisor and they get an upfront commission between three and a half to five and a half percent on anything that you purchase through them.

Ford Stokes:
They get all that in day one. And also when they rebalance and they put you in other mutual funds, they put you in other commission products like. Like a variable annuity and other things. They're still getting their fees on the front end each time they rebalance. So you're effective. Portfolio and advisory fees could be much higher than your typical one. And a half to 2% in hours are lower than that. And all you got to do to figure out what our fees are, we'll tell you right off the front end. All you gotta do is just reach out to us at ActiveWealth.com and or just pick the phone up and give us a call at (770) 685-1777. My name is Ford Stokes. I'm your chief financial advisor. I'm also series 65 licensed and I'm a fiduciary. I got to put your needs ahead of my own. I'm also life and health license here in the state of Georgia and other states, and I'm here to help you any way that I can. And number one was expense ratio. They're likely advisors and likely not telling you about expense ratio. And number two is they won't remind you of what their portfolio and advisory fees are that are just coming out every single month. Number three is if they are series seven licensed securities.

Ford Stokes:
Licensed Stockbrokers is an example. They likely are shy about not letting you know that they're not acting in a fiduciary capacity and not held to a fiduciary standard when they're selling you a product that generates a commission for them. By definition, according to the SEC and FINRA, they are not held to a fiduciary standard when an advisor is selling you a commission product. So if I were you, I would start trying to work with a fiduciary, somebody that's got that must be held to a fiduciary standard that should be putting your needs ahead of their own when they're making decisions and when you're making decisions. That's why we do this free financial plan, including a free portfolio analysis and financial plan and retirement income plan. And so security maximization plan, we want to do all of that on the front end so you can make an informed financial decision about who you want to work with. I mean, it's a big deal and we're going to do everything we can to help, you know, like and trust us on the front end before you ever make a decision because. We only like working with people that like us and we like them and and where there's a high level of trust and we're all kind of rowing together and we're all developing, developing a plan together, we think that's a really good idea.

Ford Stokes:
Other advisors see things differently. We don't, and we're providing great value on the front end for a reason because we want to make sure that we're educating you. Because now with anything specifically, also with retirement knowledge is power. And as we say, at the end of every show, if you're going to be a bear or be a grizzly, you need to be aggressive about trying to get. Financial information and retirement information so you can have a successful retirement with peace of mind and without a lot of stress. You're not having to watch the stock ticker out there every day, things like that. But that's number three, because they're likely not telling you when they're not acting in a fiduciary capacity. And we will. But just, you know, I don't. Sell any commission products other than fixed annuities and insurance products. And when I do, I'm not acting in a fiduciary capacity, but I do try to put the best interests of my clients. Forward on that and every every decision that we make together. But when I'm doing assets under management. Were held to fiduciary standards, and it's just part of different investment sleeves and allocation sleeves. And we're going do everything we can to help you out. So just want to be transparent and clear about that. And then number four on our list of the seven things that advisors likely won't tell you is they won't share how to implement a Roth Ladder Conversion and divest the IRS out of your retirement account because.

Ford Stokes:
Think about it. They're incentivized to leave as much money in your portfolio as possible. And if you do a Roth Ladder Conversion, you've got to pay the taxes on that conversion each year. And so, therefore, they're going to be managing less money. We prefer implementing Roth Ladder Conversion for our clients because it's the right thing to do. And as a fiduciary, especially with their assets that are management accounts that we that we manage. I've got to do everything I can to reduce tax risk, fee risk and market risk for my clients. And kicking the IRS out of your retirement account over a 5 to 10 year period, doing just a little bit of a conversion each year is a really good idea. And so we recommend that for all of our clients as they're nearing or are in retirement, we try to get most of the Roth Ladder Conversion done by age of 72 before they have to start taking RMDs because RMDs and conversions are compounded. Your conversion does not count as a portion of the RMDs you must take. So you've got to take the RMDs. And also, if you're doing conversion, that can that can drive up the total ordinary income. Bucket for that entire year that that would be taxable for that year.

Ford Stokes:
So we want to try to reduce the taxes you've got and what you're dealing with. And so here's a couple of hints on Roth Ladder Conversion to. Things that I will tell you that other advisors may or may not share with you. So number one is what we try to do is we try to move money from your IRA to your Roth IRA. And we use a taxable account or a savings account or an investment account or a checking account. To pay the taxes on it because we want to move 100% of the money that moves from your IRA to your Roth IRA. So you move money from your tax deferred account into your tax free account. And we use taxable money from an investment account or savings or checking account. Do you pay the taxes on it? So therefore the money that you move from your IRA or Roth IRA moves dollar for dollar. So as your IRA depletes and goes down with their conversion, the Roth IRA goes up at the same level with the same amount. Another really great idea is if you've had some tax losses or have some market losses in the last three months, it'd be a really good idea to do a conversion now. But you move that move those assets in kind from your IRA to your Roth IRA.

Ford Stokes:
So we think that's a really good idea to do as well. We've got a lot. You know, 45 seconds left here in this segment. We've gotten through the first four. Of our seven things that advisors likely won't tell you, it's expense ratio was number one. Number two is they won't remind you of their own portfolio and advisory fees. Number three is that they will not tell you when they're acting in a fiduciary capacity, when they are not and they are not acting in a fiduciary capacity when they are selling commission products to you. And number four was they won't likely many times they won't share how to implement Roth Ladder Conversion and how to divest the IRS out of being your partner in retirement. When we come back from the break, we're going to talk about the last three. Of the seven things that advisers won't tell you that likely they won't share with you. And we'll have a bonus one as well. It was the Active Wealth Show writer and I am nine two. And the answer I think you're really going to like these next three items of the seven things that advisors likely won't share with you. We'll be right back. Right here on the Active Wealth Show on AM 920, the answer. If I had $1,000,000. If I had $1,000,000, well, I'd.

Producer:
Buy you a house. I would buy you a house. Are you concerned about US tax rates being raised by the Biden administration and how that will affect your retirement? Tune in to the Active Wealth show with Ford Stokes, your chief financial advisor, to learn how you can reduce the taxes you pay before and during retirement. The Act of Wealth show Saturdays at noon and Sundays at 11 a.m..

Ford Stokes:
All right. And welcome back, Activators, the Active Wealth Show here for segment three on Ford Stokes, your key financial advisor. I've got Sam Davis with me on the board, our executive producer. And we're talking about the seven things that advisors likely won't tell you. Number one is expense ratio. They won't share with you the fees that you're paying that don't show up in your monthly statements. Number two is they won't remind you of their portfolio and advisory fees. Number three is they won't tell you when and when they're not acting in a fiduciary capacity. Number four is they won't share how to implement a Roth Ladder Conversion and divest. The IRS sort of being your partner retirement that's these are all likely I'm not saying this is 100% but this is what we see in the marketplace when people come in to meet with us. And then number five is they likely won't share in retirement income plan because their their goal is for you just to leave all the money in your account, let it grow. So therefore their overall advisory fee grows and their flat advisory fee and so they keep making more money year over year off of you because your account grows, which is fine if the account grows. But at some point you need to have a retirement income plan. Like when are you going to withdraw? How can you withdraw from in a tax advantaged perspective? We've talked about this on the show many times.

Ford Stokes:
I want to do it again right now. There's only two types of tax free investments out there. Two, number one is life insurance. And if you're in your thirties, forties and fifties, we'd love to talk to you about investing in an index. Universal life policy can generate significant income during retirement. We we worked with one lady who recently got divorced. She's a marketing executive here in Atlanta, and she sold out of her house. Her expenses are like two grand a month, and she wants to grow all of our assets. Well. She also wants to get generate retirement income because she can't rely on anybody else. She's single now and she's 50 years old. She's put in $2,000 a month away for ten years until she's 60. And then when she's done working. She's going to generate $42,414 in the illustrated rate of return a year. Each year, she's going to get $42,414 a year from age 65, all the way up to age 90. Tax free because loans against her indexed universal life policy are 100% tax free. So we think that's a really big deal. She's diversified her tax buckets. She didn't have a lot of foreign K money, but she did have a lot of money from the proceeds of her home.

Ford Stokes:
And she had other investment money that she got in settlement from the divorce. And but she didn't have a large IRA or four one nest egg and she didn't have a large tax deferred nest egg. So she took some money and put it into that life insurance policy to generate. Tax advantaged income, which is really great. And the other. She took another 300 grand of it and put it into and put it into a fixed indexed annuity that's also going to generate income in a tax deferred way. So she's got two different buckets, tax free and tax deferred overnight when she had none of those before. And and she's very happy with the plan because also her annuity money is going to grow without market risk because her money is not invested in the market. Also, her IUL money, yes, there's money there for death benefit, protection for the life insurance portion. But the majority of the money is going into cash value of life insurance. It's just doing it at $2,000 a month for ten years. And that's it. She's she doesn't have to keep paying into that policy and she'll still have the the life death benefit protection. And then she'll also get tax free income. She's going to turn on when she's 65 years old, which is 15 years from now, it's right around the corner.

Ford Stokes:
So that's number five. Number six is strategies to they won't likely won't share with you strategies to downsize the family home and how to maximize wealth and income from that family home. And we specialize in that. We love doing that. We love helping folks maximize the value they get. We introduce them to real estate agents. We don't we don't market or sell real estate ourselves. But we will introduce you to licensed real estate agents who are reputable and or five out of five stars on Google and other things like that. And they're almost all the time. They are realtors. They're members of the Realtor Association as well, and some of our brokers, too. But we once we get that nest egg from the closing of that real estate and they're good and they've already identified the next home they're going to buy, we have strategies on how to invest that downsized money that's likely sitting in a taxable account that doesn't grow tax deferred and doesn't grow tax free. And we've got ways to do that. Whether it's with fixed indexed annuities or even structured notes gets you a higher rate of return than what the bond money could get from that. But that's not as tax efficient, but it does help you from a growth perspective. But the tax advantaged way to do it is invest in a fixed indexed annuity or life insurance or both.

Ford Stokes:
So we're happy to help you do just that. And then number seven was advisors likely won't share this on how to tax efficiently plan for legacy wealth transfer. You wouldn't believe how valuable it is. To. Give your children. An inherited Roth IRA versus an inherited IRA. Because an inherited Roth IRA involves no taxes. There's no RMD plan that they have to deal with. If they have an inherited IRA, they do. They have to deal with taxes. It gets compounded, gets added. The RMDs they take out have to add into their ordinary income. And you've got folks that are in their prime earning years or folks in their twenties and thirties and forties that deal with this stuff when they've inherited an IRA. So if you can transition your IRA money to a Roth IRA, you're going to leave one heck of a family legacy because they'll say, You know what? Mom and Dad were really smart. They they had the IRS out of this account. And we're able to take this money tax free over the next ten years because of the job they did. And we can help you plan for that. Sam, do you mind? We've got like four or 5 minutes left in the segment. Do you mind just sharing your personal story about your wife's inherited Ira?

Producer Sam Davis:
Yeah, absolutely. So when my wife was in high school around her junior senior year of high school, unfortunately, her father, her biological father passed away. But, you know, the the silver lining is that he did leave her with something. He left her with his IRA. But because it was an inherited IRA and not a Roth, even though we are now married and in our twenties, we take required minimum distributions because it's required by the IRS, we have to. And so that goes into what we make each year. It's tax season now. So this is already on the top of my mind and at the front of my mind. But yeah, that definitely affects our effective tax rate and what we owe come calculation time in April.

Ford Stokes:
Well, it's pretty amazing that you both, you and Bailey, are in your twenties and you're dealing with RMDs, which is about 50 years earlier than you're supposed to have to deal with it. Yeah.

Producer Sam Davis:
So and I expect we'll just have to continue to take them year after year until that inherited IRA is inherited by someone else or it's gone.

Ford Stokes:
Yeah, absolutely. So I just I just want to make sure everybody understands you really should have an effective. Plan for legacy wealth transfer. And we can help you do that easily and we encourage you to visit us at ActiveWealth.com schedule a free consult there or you can you can just give us a call at (770) 685-1777. Again, (770) 685-1777. And Deborah and her team are standing by here on this weekend to be able to take your calls. No problem. So just feel free to give us a call right now during the show whenever you want to do it. In segment four, we're going to talk about the structure note that's being offered by UBS through us. And it's a pretty remarkable structure note with an incredible interest rate. And so we're going to talk through that in at the beginning of segment four. I hope you've enjoyed the the learning about the seven things that advisors likely won't tell you. And I want to give you a quick, quick recap. Number one is expense ratio. That's the hidden fees that are generated by mutual funds that are within your portfolio with 1281 fees or marketing fees that mutual fund companies charge. And then as a share fees and see share fees.

Ford Stokes:
Number two is they won't remind you of their own portfolio and advisory fees except for once when they initially sign you up. Number three is that there are Series seven licensed securities, licensed stockbrokers. They're likely not going to let you know when they are and when they are not acting in a fiduciary capacity with you. When they sell a commission product, they cannot be be held to a fiduciary standard. I just want make sure that was clear. Number four is they won't share how to implement a Roth Ladder Conversion or how to divest the IRS out of being your partner in retirement. That's not all advisors, but it is likely that's the case. And then number five is they likely won't share a retirement income plan because it's all about just building a nest egg for them so they can make money off of your nest egg. We're here to make sure that you've got a retirement income plan and you can start generating income. And number six, it's also they don't really get into how to invest money that comes from downsizing the family home. We will absolutely give you a sound plan on how to do that. So all you need to do is reach out to us at Active Wealth and we'll give you that free down downsized plan and how to invest that money tax efficiently or at least tax deferred and in a tax advantaged manner.

Ford Stokes:
And then number seven is how to tax efficiently plan for legacy wealth transfer. They usually don't cover those things. And we're happy to help you do that. Whether it's through a trust or whether it's through a Roth IRA, the easy way to do is just have a will and and start building in a Roth Ladder Conversion plan. And you'll really like the results, I think, especially once you've kicked the IRS out of being your partner in retirement, that money keeps growing, taxed, tax free. And so it's a pretty good deal. When we come back from the break, we're going to share our structured note for April that's offered by UBS. And I think you're going to be. Quite shocked at the interest rate, the high interest rate compared to what's going on in the market the first quarter and. You're listening. Active Wealth Show right here on AM 920. The answer can't wait for you to come back to hear about our new structure note offered by UPS.

I don't care what you say anymore.

Ford Stokes:
This is my life.

Go ahead with your life. Leave me alone.

Producer Sam Davis:
Any examples used are for illustrative purposes only, and do not take into account your particular investment objectives, financial situation or needs, and may not be suitable for all investors. It is not intended to project the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.

Ford Stokes:
And welcome back, Activators, the Active Wealth Show and Ford Stokes, your chief financial adviser. And I'm joined by Sam Davis, our executive producer. So as promised, we've got a new structured note for April. This one's offered by UBS. We have a different large bank or wirehouse that offers these structured notes each month. And we offer structured notes that are offered by in an advisory capacity, which is just a different allocation sleeve within our portfolios and our portfolio structures. We do not charge an upfront brokerage commission as there are structured notes that are that involve brokerage and where brokers offer it in exchange for commission. We've stripped out the commissions and UBS stripped out the commissions and therefore they're able to provide a higher rate of return. On the interest rate side, these are securities. They do involve risk. They and but they do offer a 30% principal buffer protection. Let me explain what that is. So as long as the S&P 500, the Russell 2000 and NASDAQ 100 do not lose 30% of their value. From the time you purchase a structured note over a 12 month period, your principal is then 100% protected. If it does go below the 30% level where any of those three indices do lose 30% of their value, then your your principal would ride the market until maturity date and also UBS would not call it, and they're not allowed to call it in a negative position, but it would go all the way to the 12 month maturity date. These notes are also not available to be called for the first six months.

Ford Stokes:
They cannot be called in the first six months. So generally most of these notes are called on the first day of month seven. This one is offered by UBS and the minimum coupon rate for it is 12.75% annualized. The pricing date is Friday, April 8th. So you need to get money in to us so we can invest it prior to April 8th. The principal is protected up to the downside barrier or level to the underlying index. This is what's considered an American style or daily evaluated structured note. If a breach of the level of protection occurs, principal value will then be linked to the performance of the lesser performing index at maturity, and this note is callable at full principal value. After six months, what they would do is they would call it give you your principal back and you would have gotten interest over those first six months. Period is done at the issuer's discretion and if all three underlying indices or indexes are at or above their initial level. So in other words, they can't call it a negative position for you. It would have to go to maturity if that's the case. So 12.75% is a healthy interest rate. It is obviously way higher than different types of products like bank CDs that are offering 0.6% a year. Obviously, those are two different types of financial products because a structured note is at risk in the market, whereas a bank CD is not invested in the market and it's FDIC protected, but at the same time it is a much higher rate of return to consider.

Ford Stokes:
What we like to do is do structured note ladders where we take, you know, let's say you want 100,000 to invest in structured notes and you want to generate significant rate of return with these structure notes that are really attractive. From an interest rate perspective, we would invest $20,000 in five consecutive months and let that handle it. So we would that would diversify your risk. It would be five different starting points on the indexes, five different banks and five different interest rates. That would help diversify the risk all the way out in the the premise there is, hey, as long as you know, let's say we start at with these indices an arbitrary number of 100 and then let's say it goes down the next month to 90. Then we would start on those indices. The starting point would be at 90 arbitrarily, just for illustration purposes, the next month. And then it's likely that it's not going to go down 40% from that original 100 level that you invested in in the first month. So structuring these this investment over a five month ladder will diversify your risk further. So we like to do structured note ladders as well. But I did want to let you know that there is a structured note offer by UBS that is a security. It is at risk in the market. It does have a 30% principal buffer as long as the S&P 500, the Russell 2000 and the NASDAQ 100 don't lose.

Ford Stokes:
30% of their value. Then guess what's great news about that is, is that your principal is 100% protected and you get paid a little over 1% each month that goes back into your into your account. So we think that's incredibly attractive. We like to utilize structured notes as a bond replacement strategy for 10 to 20% of our client portfolios. And you know, again, typical 6040 portfolio, modern portfolio theory dictates 60% securities and 40% bonds. So consider 20% fixed indexed annuities and 20% structured notes and then 60% equities. Then we're in a really good spot. And and I think that's a better way to do it than take all the risk within bonds, because right now bonds are trading in a go forward PE ratio of 135 times earnings with US corporate bonds. And then the go for PE ratio for US equities is is between 22 and 23 times. And so there's significantly more risk dealing with corporate bonds right now in the market. And so we like replacing the bonds with other forms of income products like a fixed indexed annuity or structured notes. And it varies between at risk money with structured notes that's at risk in the market and invested in security or in investing into a fixed indexed annuity that is not invested in the market at all. So you can get market like gains without market risk. And we like kind of a balance between those two to get you a higher rate of return as well. So just something to consider there. It's the.

Producer:
So let's recap what you may have missed. It's the final countdown.

Ford Stokes:
We went over the seven things that advisors likely won't tell you. They won't share the expense ratio with the current portfolio that you hold with them. They likely won't remind you of the portfolio in advisory fees that they're charging. They also, as Series seven licensed stockbrokers, they may not let you know when they're acting as a fiduciary capacity and when they're not. They also number four is they won't share how they how you can implement a Roth Ladder Conversion and divest the IRS out of being your partner in retirement because they want to likely sometimes hold on to as much of the money as possible so they can make as much income as possible off of your nest egg. Number five is they likely will not share a retirement income plan with you. Sometimes they will. Sometimes they won't. But we do. And then number six is strategies to downsize the family home to maximize wealth and income from that money. We can help you do that. And then also, how to tax efficiently plan for legacy transfer. We will share that with you when you meet with us. Visit Active Wealth for more information. We're so glad you've been with us. Remember, with anything, knowledge is power. And if you're going to be a bear, be a grizzly about planning for your retirement. Seek as much information and knowledge as possible. And we hope everybody has a great week.

Producer:
Thanks for listening to the Active Wealth Show. You deserve to work with a private wealth management firm that will strategically work to protect your hard earned assets. To schedule your free consultation, call your Chief Financial Advisor Ford Stokes at (770) 685-1777 or visit Active Wealth Investment Advisory Services offered through Brookstone Capital Management LLC. Become a registered investment advisor. Bcm and Active Wealth Management are independent of each other. Insurance products and services are not offered through BC but are offered and sold through individually licensed and appointed agents. Investments involve risk and unless otherwise stated, are not guaranteed. Past performance cannot be used as an indicator to determine future results.

Producer Sam Davis:
A purchaser should evaluate and understand all of the risks and costs of an investment and structured notes sense prior to making any investment decision. A purchase of an RSN entails other risks not associated with an investment in conventional bank deposits. A purchaser may not have a right to withdraw his or her investment prior to maturity, or could incur substantial penalties for an early withdrawal if permitted. A purchaser should carefully read the disclosure statement and any other disclosure statements for SDN before investing. An investment, in essence is not FDIC insured and is subject to credit risk. The actual or perceived credit worthiness of the issuer may affect the market value of SSNs. Ssns will not be listed on any securities exchange. Even if there is a secondary market. It may not provide enough liquidity to allow purchasers to trade or sell SSNs. As a holder of SSNs, purchasers will not have voting rights or rights to receive cash, dividends or other distributions or other rights in the underlying assets or components of the underlying assets. Certain built in costs are likely to adversely affect the value of SSNs prior to maturity. The price, if any, at which the notes can be purchased in secondary market transactions, if at all, will likely be lower than the original issue. Price in any sale prior to the maturity date could result in a substantial loss. Ssns are not designed to be short term trading instruments. Purchasers should be willing to hold any notes to maturity. The tax consequences of SSNs may be uncertain. Purchasers should consult their tax advisor regarding the US federal income tax consequences of an investment. In essence, if a SN is callable at the option of the issuer in the SN is called, the holder will receive only the applicable redemption amount and will not receive any coupon payments that would have been payable for the remainder of the term of the SN sions are not FDIC insured, may lose principal value and are not bank guaranteed.

Producer Sam Davis:
This material is provided for informational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities. All data believed to be reliable but not guaranteed or responsible for reliance on this data. Past performance is not indicative of future results, which may vary. The value of investments and the income derived from investments can go down as well as up. Future returns are not guaranteed and a loss of principal may occur. Brookstone does not provide accounting, tax or legal advice. Investors should be aware that a determination of the tax consequences to them should take into account their specific circumstances and that the tax law is subject to change in the future or retroactively. And investors are strongly urged to consult with their own tax advisor regarding any potential strategy, investment or transaction. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client's investment portfolio. Historical performance results for market indices generally do not reflect the deduction of transaction and or custodial charges or the deduction of an investment management fee, the occurrence of which would have the effect of decreasing historical performance results. 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. The investment strategy and types of securities held by the comparison indices may be substantially different from the investment strategy and the types of securities held by the strategy. Not FDIC insured may lose principal value. No bank guarantee.

Producer:
Listen to the number one show on the weekends on AM 920. The Answer To Protect and Grow Your Hard Earned Money The Act of Wealth Show with Ford Stokes your Chief Financial Advisor Saturdays at 12 noon and Sundays at 11 a.m..

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