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December 2014 Volume 2 — Issue 3
1st Source Gazette ON REGULATIONS AND REASONS
THE fourth quarter
nursing home caring for a client’s loved one. This
process to collect and maintain the records, and the
time commitment of our staff to gather the forms,
adds additional costs to our operation and requires the
allocation of additional human resources to the effort.
A second change which is effective January 1, 2015 will
require us to separately record and report the nature
of the fees we charge to our clients for our services.
In the future, we will be required to report that
portion of our fees allocated to investment management
services as a separate item from the portion of our
fee used to provide administrative, accounting and
overhead costs. This is necessary because when
preparing a fiduciary trust income tax return,
the portion of the fee attributed to investment
management will be subject to the 2% of
Adjusted Gross Income limitation while there is no
limitation on the administrative portion of the fee.
This change will not affect your personal income tax
returns, since these investment and administrative
fees have always been subject to the 2% AGI
when reported on your Schedule A. We have
completed an analysis of our costs so we can make this
information available to clients beginning in 2015.
As we always have, we will continue to make full
disclosure of any and all fees we charge for our services.
Financial institutions, already subjected to very
100 North Michigan Street, South Bend, IN 46601 v 574-235-2790 v 800-882-6935 v www.1stSource.com
BY: STEVEN J. WESSELL, Executive Vice President
There has been much in the news in recent months about the
acceleration in the rate at which the federal government has
been imposing new regulations on businesses. There have
been two recent regulatory actions which impact 1st Source
Personal Asset Management Group and our clients.
The first regulatory change requires us to collect
information about individuals and/or companies to whom
we make payments for the benefit of our clients. In what
the government claims is an effort to increase scrutiny on
potential money laundering operations, we are now
required to obtain a form W-9 from any payee to whom we
issue a check, electronic payment or wire transfer. This form
requires the payee to provide us with name, address and
federal ID number or social security number. If the
payee refuses to provide the information, we will be
required to withhold a portion of the payment for
payment to the Internal Revenue Service as a tax
payment. While all of us would support the effort to
reduce money laundering, it seems unlikely, for
example, that we will be making a significant dent in the
volume of money laundering by requiring this form from
the handyman working for one of our clients or from the
significant regulatory burdens, have been hit hard
by many of the new regulations issued since the
turmoil of the 2009 financial meltdown. To be fair, the
federal government issued many of these regulations in
response to terrible abuses of consumers by large banks
and Wall Street firms. As it often is, the unethical
actions of some make it difficult for everyone in the
industry. Several years after the meltdown, we still see
Pe r sonal As set Manageme nt Group v December 2014 v Volume 2 I s sue 3
LIFE’S GOALS — INVESTING’S ROLEBY: PAUL GIFFORD, Jr., CFA, Chief Investment Officer
There seem to be many more commercials on television lately that talk about personal
investments. One commercial shows people walking around carrying a dollar value to
represent the amount they “need” in retirement, and another shows people running a
ribbon that represents their retirement savings to their anticipated life expectancy and
the ribbon runs short to the person’s dismay. Retirement is a main financial goal for
people, and while the lifestyle of retiring has definitely changed over the past couple
generations, the milestone remains and related goals need to be set. As the baby boomer
some of these big firms paying the price for their
accounting methods. We take great pride in the
recognition by Forbes of 1st Source Corporation
as one of the country’s 100 Most Trustworthy
Corporations as selected from among over 12,000 public
companies in America. We promise to always live up to
the principles established by those who came before us
during the first 150 years of 1st Source’s existence.
generation transitions into retirement and as life expectancies and quality of life continue to rise, the activities and needs
of today’s retirees demand more from investments and for a longer period of time.
In addition to retirement as a goal, supplemental goals such as maintaining financial security and a desired lifestyle,
traveling, bequeathing to the family and charity and assisting with grandchildren’s educational expenses play into the
quality of one’s retirement. Smart investments and comprehensive strategies help avoid income and estate taxes and help
create larger estates in order to help achieve these goals.
As we meet with clients to discuss their personal situation regarding lifestyle, changes in health, family, liquidity and
other matters, our commitment to remain highly knowledgeable ensures that each client’s portfolio is managed to meet
his or her specific needs. Equally important to a client’s current needs are the more complex questions that surround
asking of oneself personally and financially, “What sort of legacy do I hope to leave?”
The money you have accumulated or desire to accumulate works to meet your particular and unique set of life
goals. As we build a portfolio for each client, we focus on seven core areas as a basis for investing, and our team
asks the right investment questions and provide analysis that directs your investment policy to help you reach
your goals. The seven core areas include: Risk - the investor’s tolerance for price changes in their investments;
Return – the projected earnings needed to meet goals, and what we expect to be produced by various investments;
Time Horizon – the varying length of time for each goal; Liquidity – the anticipated need for cash, such as a monthly
distribution, or as an irregular distribution for items such as housing expense or purchase of a vehicle; Taxes – the tax
consequences of different investments, and understanding and applying strategies to maximize after-tax returns;
Legal – the documentation and compliance actions and
records that help you meet your goals; Unique
circumstances – the issues and situations that are unique
to you and your family and that influence investment decisions.
When we have this information, we compile it into your
investment policy statement to help us manage each
portfolio by constructing investments to meet each client’s
goals, whether short-term in nature such as lending money to
an adult child to buy a house, or long-term such as leaving
an inheritance to children.
As lives change and years pass, goals tend to change a bit
too. Since the investment policy statement and each client’s
portfolio are flexible, they can be adjusted to meet those
changing goals. Therefore regular communications with
clients is a keystone element of the relationship. Our
dedicated and experienced team is honored to guide you
and your investments toward your goals. While the goals
always remain yours, we are pleased you allow us the
responsibility and accountability to help you achieve them.
INVESTMENT MANAGEMENT
Our investment philosophy is focused on the needs and objectives of our clients, while placing a high value on long-term,
consistent investment returns.d
We believe in broad diversification as a way to mitigate risk and preserve assets within
each client’s investment portfolio.d
Economic and financial markets are cyclical; therefore, we believe value can be added through tactical adjustments to
a portfolio’s asset allocation.d
We track measures of investor sentiment to look for indicators that help us make prudent investment decisions on behalf of our clients.
Pe r sonal As set Manageme nt Group v December 2014 v Volume 2 I s sue 3
providing Estate Administration services to clients,
Judy has been involved with several community
efforts including serving on the Board of Directors
for the South Bend Education Foundation, as the
Vice-Chairman and Chairman of REAL Services Inc.
and with the Indiana University South Bend Paralegal
Advisory Committee.
To My Dear Clients,
With the reality of my retirement comes the realization I am leaving not only my dedicated and caring co-workers but all of you who have been a part of my life for the past 23 years. We have shared many memorable moments. I appreciate being allowed into your lives, both public and private, that enabled me to contribute to the management of your finances and sense of well-being. Your keen life interests and vitality have been an inspiration as I encounter the challenges and adventures ahead in this lifetime transition. My life has been forever changed and enriched for knowing you. I am truly grateful for that privilege. I wish you every blessing as you continue with our 1st Source family and their commitmentto you, your family and your financial success and security. Sincerely,
Judy Dominy
GRATITUDE & BEST WISHES After 23 years of service
with 1st Source, Judy
Dominy, Vice President and
Trust Officer, retired in
December 2014. In
addition to her expertise
THE STRENGTH OF PEOPLE
Pe r sonal As set Manageme nt Group v December 2014 v Volume 2 I s sue 3
Allyson (Ally) Powers joined our team in October as Vice President and Manager of
Personal Trust. In this position, Ally is responsible for the management of our personal
trust efforts, including administration and business development for our group. Ally has
a long history in the financial services industry with her most recent position at
JPMorgan Chase Bank in St. Louis. In her most recent role, she managed a team of
230 people across 23 offices in 12 states. At Citibank from 1995 through 2008, Ally
played an integral role in the development and execution of several new business ventures,
including the Smith Barney Home Lending Program at Citibank, where she last served
as Senior Vice President, National Sales Director.
The bulk of Ally’s experience has been in business development, client service and program
Not FDIC Insured Not Bank Guaranteed May Lose Value Not Insured by any Federal Government Agency Not a Bank Deposit
HERE TO SERVE CLIENTS. We greatly appreciate the opportunity to assist you in your
trust, investment and banking matters and encourage you to contact us if you have any questions or suggestions. If you have friends
or family members we might be able to assist, we would appreciate your recommendation. (574) 235-2790 / (800) 882-6935.
development in mortgage lending, private banking and related services. This is a unique opportunity for us to focus our efforts
further on our client needs and how to best serve our region with a proven national leader of client service and
initiatives. Ally, while having years of success with large national firms, is excited to join our very experienced team
that serves clients comprehensively with focus on deeper customer relationships and building local and community
connections. Ally earned her Bachelor of Arts degree from Truman State University and her MBA from Maryville
University. She and her family, including their two young children, Waylon and Ebbe, have recently relocated to South Bend.
Please join us in welcoming Ally to 1st Source.
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