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Q4 2013 participant review
- 1. October 29, 2013 To the Participants of RSG 401(k) Update Deficit Issues, Government Shutdowns, Confusion on Healthcare and Taxes… So of course the market is up! Presentation by: Steve Scott Managing Partner Retirement Solution Group, LLC “Securities offered through Ausdal Financial Partners, Inc, 220 North Main Street, Davenport, IA, 52801, 563.326.2064, member FINRA, SIPC. Advisory services provided by Ausdal 1Financial Partners. Retirement Solutions Group and Ausdal Financial Partners, Inc | are separately owned and operated companies.”
- 2. From the history of the markets the S&P 500 posts a 12% return, over the last 20 years due to the multiple recessions that rate is down to 8.21%. What has been the return for the average US equity investor over the last 20 years? (source: Dalbar) 9.7 % 8.21 % 4.25 % 2|
- 3. Answer: C… 4.25% Think about that for a moment. s Most investors pay more for active management, with the expressed interest of beating the market. s The scary part is this is better than the average investor return over longer periods of time. s The fees, expenses and the markets matter, but participant behavior matters more… s So why are we all trying to get it right this time? 3| Retirement Solution Group
- 4. Agenda s Market s Q3 Focus Topic: Understanding Asset Allocation Funds s The 4| Update Challenges Today for “Looking Ahead”
- 6. Markets in 2013 STOCKS: YTD & 3 Year returns, Source – Morningstar.com (as of 10/23/13) Broad US Stocks 25.6 % & 16.8 % International Developed Countries, (EAFE) 20.63 % & 8.4 % International Emerging Markets, (EM) 0.63% & - 2.06 % & - 2.21 % BONDS: YTD Core Bond, -0.76 % & 3.22% TIPS, YTD -5.86% & 3.43% Economic Reality Unemployment as of Q1 2013% • • 7.3% August 2013 Slight drop since last meeting Q2 2013 GDP growth = +2.5 % 6|
- 7. Reminders for 2013 s Deferral Limits: $17,500 for 2013 $5,500 in catch-up contribution for participants 50 or older (Plan dependent) 2014 rates should be available by mid-November Best Practices: 1. Save more! The 1% per year 401(k) raise rule. Understand Roth vs. Pre-tax 1. Know where you are invested 2. Know why you own what you own 3. Does your risk level match your investments? 7 | Retirement Solution Group
- 8. Emotions Matter (Source: Investopedia/market timing) 8|
- 9. Focus Topic: Understanding Asset Allocation Funds 9|
- 10. The Basic Idea… s Reduce the emotions of investing by incorporating a more auto-pilot approach. The issue of participant engagement 1995 v. 2009 v. 2013 Risk or age based Static or tactical 10 |
- 11. Where are you on the risk/return discussion? 11 |
- 12. Risk Based Note all TDFs are the same… • Single fund family vs. multi-fund family • Active vs. Passive • The “Glidepath” Debate: to or through??? 12 |
- 13. Results & Takeaways s Know What You Own Risk or Age Based Active or Passive Static or Tactical Glidepath s When It Works & When It Doesn’t Are you a Deb? Are you a Mike? 13 | Retirement Solution Group
- 15. Looking Ahead There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don't know. But there are also unknown unknowns. There are things we don't know we don't know. Donald Rumsfeld 15 | Retirement Solution Group
- 16. Looking Ahead s Managing with high “Uncertainty” Known unknowns – U1 Unknown unknowns – U2 s Key Uncertainties (Source: Silicon Bank) 63% of workforce is supporting economy • Lowest level since 1978 10% Economic Sector “Rewrites” Dodd Frank 2010 • • • 40% not written 32% unproposed 39% of deadlines missed “Obamacare” 2013 How much can DC Bend? • • • Shutdowns Interest rates & Fed policy Fundamental budget & deficit decisions 16 | Retirement Solution Group
- 17. Summary s Market Update Strong Results, but Highly Concentrated s Understanding Asset Allocation Funds Not All the Same s Looking Ahead Managing with Uncertainty 17 |
- 18. So What? Where are you on Emotion Curve? Key Take-Aways: s 2013 limits are $17,500 ($23,000 with catch-up provision for those over 50) s 2014 limits coming soon s What do you own and what is the strategy? Next Steps: s Save more – 12% target (Source: DOL) s Be more engaged s But not too engaged… “Investments involve risks and potential loss of principal and are not FDIC insured investments. Investments and investments in 401k plans are not guaranteed by the federal government or the FDIC, they involve risk including but not limited to loss of principal. Opinions expressed are those of Steve Scott and do not represent the opinions of Ausdal Financial Partners, or Retirement Solution Group, LLC. They are opinion only and should be not considered as stand alone advice.” 18 | Retirement Solution Group
- 19. RSG Participant Support Team We are here to help, 866-352-7731 1. Elvia Sanchez, Senior Relationship Manager (Bi-Lingual) x410 2. Christie Cheng, Senior Relationship Manager x310 3. Megan Dunne, Relationship Manager x200 4. Mary Urlich, Participant Transactions x1 5. Steve Scott, Managing Partner x 210 “Can you help me with my forms?” “I have no idea on these funds, can you help me with that?” “How much should I be saving?” “Not really sure if I am aggressive investor or not, how do I figure that out?” “What is a stock/bond?” “Why do people keep talking about Spanish Bonds Yields?” 19 | Retirement Solution Group
Notas do Editor
- NOTE ABOUT SPEAKER NOTES: Content in the speaker notes section are not meant to be used as scripts and SHOULD NOT be distributed to clients. Instead, they’re supposed to provide general concepts expressed by the material, explanations of specific services and capabilities, and suggestions for expressing these ideas effectively. You may replace content in these speaker’s notes with your own language that reflects the concepts being expressed.
- The purpose of this section is to demonstrate our client-focused approach by showing that we’ve done our homework to identify what we know about their financial challenges and objectives and what we can do to address them.
- The purpose of this section is to demonstrate our client-focused approach by showing that we’ve done our homework to identify what we know about their financial challenges and objectives and what we can do to address them.
- Speaker’s Notes One of the first things we learn about investing is that risk and return are closely linked. Generally, the greater the potential return on an investment, the greater the potential risk, and vice versa. If it’s been a while since you assessed your risk tolerance, let’s go through a quick exercise. Please open your Risk assessment questionnaire. Carefully read the eight questions and circle the letter that best corresponds to your response. Turn to page 5 and add up your scores, using the point values provided. Once you have your scores, find the time horizon score on the horizontal axis and the risk aversion score on the vertical axis on page 6. The intersection of these two points is your suggested investor type. Knowing the type of investor you are will help you determine an asset allocation strategy. [Give people about five minutes to complete the worksheet. Walk through the room answering questions and providing input where appropriate.] The pie charts on page 7 of the Risk assessment questionnaire, and on this slide, illustrate different asset allocation strategies with varying degrees of potential risk and return. How many of you discovered that your risk tolerance aligns with your current asset allocation strategy? [Wait for a show of hands.] How many of you found that there’s more or less risk in your current strategy than you can tolerate? [Wait for a show of hands.] If you identified a large gap between your retirement spending wants and needs and your anticipated retirement income in the last exercise, you may want to consider a more aggressive investment strategy. Let’s see what that could look like.
- The purpose of this section is to demonstrate our client-focused approach by showing that we’ve done our homework to identify what we know about their financial challenges and objectives and what we can do to address them.