Listen To Tana Gildea Share Her Journey Into The Financial World

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Tana Gildea CFP®, CPA, CCFS, a Principal at Homrich Berg, had a candid and inspiring conversation with Corey Rieck about her journey from Montana to Atlanta, her start in the financial world and how she eventually ended up at HB. Tana shares how she managed her many roles and the career steps she’s taken. She’s an accomplished business leader, author and blogger. Take a listen now to hear the full episode.

Homrich Berg Celebrates 30 Years!

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ATLANTA – October 10, 2019 – 30 years ago today, Homrich Berg was founded based on a belief in fiduciary, fee-only wealth management built on core values of objectivity, teamwork, excellence, innovation, diligence, and trust.  We still believe in those values today and are proud to celebrate this anniversary with our clients and employees!

Learn more about HB history and our mission we built on a foundation of core values.

Trekking Travel Tools – Documents

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By: Kevin Kraus

10/04/2019

Remember the good ole days when security at the airports was virtually non-existent and a passport was not even necessary to travel to some countries. Well, times have sure changed, and traveling outside the country has become more complicated and even more dangerous.

Countries around the world are changing their document requirements for entry because of heightened security issues and child trafficking concerns. If you don’t check for the latest regulations to the countries you plan on visiting, you could find your trip significantly delayed or cancelled. For example, we found out a parent taking a child into Canada without the other parent needs a letter from the non-traveling parent giving their consent and acknowledgement of the trip. Other countries, such as South Africa and Botswana, may ask for raised-seal birth certificates for minor children before entering their countries even though they may not be technically required to do so any longer.

Thus, it is no longer safe to assume that if a country does not require a visa then all you need is a passport. Actually, they may require birth certificates, immunization records or documentation of when you will be leaving the country, such as a return plane reservation. It is even recommended that you keep your prescription drugs segregated in each of their own bottles with the prescription information easily readable. Phillip Thompson, senior director at G3 Global Services, recommends parents traveling with children always have copies of birth certificates even if they are not required since passports of minors do not list the parents’ names.

Within the past couple of years the requirements have been constantly changing between countries as the U.S. has begun tightening their entry requirements. In a tit-for-tat, countries are tending to retaliate when it comes to entry requirements. When the U.S. tightened requirements on Chinese tourists, China retaliated by making it more difficult for U.S. residents to obtain a visa to travel to China. Additionally, in 2021 the European Union will begin requiring U.S. citizens to obtain “travel authorization” permits (a scaled down version of a visa) at least three days prior to a trip which will then be good for three years. As you plan your next trip abroad, the best place to start is the U.S. State department – but do not stop there as entry requirements can often be incomplete or not yet updated for recent changes made by a foreign country to their entry requirements.

Here are some additional tips for traveling internationally:

  • Make sure your passport is valid for at least six months from the end of your trip.
  • Carry extra passport photos and $50-$100 of cash in case a country requires a visa on the spot even if it is just considered an entry fee.
  • Consider registering with the State Department’s Smart Traveler Enrollment Program “STEP”. It is a free program providing safety updates and puts you in contact with local embassies and consulates in case of an emergency.
  • Have access to copies of passports, birth certificates, medical prescriptions, and credit cards in case you lose your originals. I always keep an on-line copy of these on my iPad and a copy back at work to facilitate replacement if these are lost or stolen.

It’s an unexplained phenomenon, but it often seems as we set out on vacation, we assume we are shielded from harm by an invisible bubble. That couldn’t be further from the truth as dangers lurk around every corner and nook in the world. Risks can range from stolen documents, medical emergencies, to kidnappings as recently experienced by a U.S. tourist in Uganda. While much can be done ahead of time to prepare and minimize for the risks you may encounter, it may also be worth considering travel insurance and not just the basic kind that will reimburse you for cancelled travel plans.

Most travelers don’t fully understand travel insurance, rescue and medical evacuation services, or how to best prepare themselves for a dire emergency away from home. Christophe Noel, an adventure travel expert, uncovered a number of reoccurring themes: “The majority of the travelers I interviewed not only didn’t know what type of emergency resources were available where they were traveling, they didn’t know if they were financially obligated to pay for those services if rendered. Even more unsettling was the number of people who had purchased some form of travel protection not realizing what it covered—and what it did not. The most common misconception was that active health, home, and auto insurance would fully cover a policyholder in the event of an emergency in another country. While some coverage may overlap, most of it will not. Lastly, an alarming number of travelers just assumed if tragedy intersected with their trip, emergency response resources would be available. That is never a given. In some cases, your rescue is fully in your hands. Are you prepared for that outcome?”

Our team at Homrich Berg has done some basic research on travel insurance and suggest clients wanting trip insurance should consider using Global Rescue or Ripcord Rescue. Global Rescue can also provide a detailed “Destination Report” on each country you are visiting describing the risks you may encounter during your visit. Both companies offer a menu of services to choose from and the pricing works on an a-la-carte basis.

Some examples of services include:

  • Real time information and alerts while traveling.
  • Field rescue services with transportation to the hospital of your choice with generous expense caps between $500k to $750k.
  • Extensive global network of medical and security advisory services.
  • Legal and document assistance.
  • Security evacuation for unexpected natural disasters, civil unrest, terrorism, geo-political events, war or other dangerous or chaotic events often staffed by former military expert veterans.
  • Translators and communication services to family members to keep them apprised of the situation.

In working with numerous services companies over the years, we have reached one inescapable conclusion: No plan is perfect. Some users of every program or service have been disappointed with a particular service or been faced with unexpected expenses while others have had experiences that far exceed their expectations and quite literally saved the day. This is not to say it’s a crapshoot, but like everything in life, there are no guarantees. However, one thing is certain, some protection is far better than none.

 

Andy Berg Named Barron’s 2019 Hall Of Fame Advisor And Top 100 Independent Wealth Advisor

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ATLANTA – September 26, 2019 – Homrich Berg is pleased to announce that CEO Andy Berg has earned a spot on the 2019 Hall of Fame Advisors list and Barron’s Top 100 Independent Wealth Advisors list. Barron’s Hall of Fame Advisors have been ranked for 10 or more years on the Top 100 list based on assets under management, revenue produced for the firm, years of experience and regulatory and compliance records.

Andy is co-founder and chief executive officer of Homrich Berg. He founded the firm with the belief that high-net-worth individuals needed access to conflict-free financial planning and investment advice. He developed HB’s model for serving clients’ wealth management needs on a fiduciary, fee-only basis.  Andy offers his diverse clientele hands-on counsel and oversees the management and operations of the firm. Andy’s expertise spans the wealth management profession and includes financial and estate planning, taxation, and investment strategy.

Investing In College Grads – Literally

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By: Tana Gildea

9/20/2019

Tired of the same old investment stock and bond options? How about investing in a future teacher, engineer, or doctor and getting a percentage of their future income as your return? That’s what some institutional investors are doing via Income Share Arrangements (ISAs). While it sounds like a new idea, Milton Friedman actually proposed such an arrangement back in the 1950’s with Yale University implementing it. They had the requirement that all funded graduates pay a percentage of their income until the entire pool was paid off. Sounds great if you are a low-salary earner who pays less over the term than the higher-earning counterparts! Of course, there were defaults and Yale ended up bailing out the program. Regardless, the interest has been building since 2009 when Lumni, one of the pioneering companies, entered the ISA space.

With the rising cost of college and student loan debt at over $1.5 trillion, schools as well as students are looking for better options. Purdue University has been a leader in developing and implementing ISA programs. “Purdue has arranged more than 700 contracts worth $9.5 million and closed two investment funds totaling $17 million.”1 They have had various iterations and modifications to their agreements including putting a cap of 2.5 times what the student borrowed to keep the most successful from over-paying on the defined “share of income” over the required term.

From the students’ standpoint, there are mixed reviews. Consider that English majors will pay 4.5% of their income for almost 10 years versus computer science majors who will pay 2.6% of their income for just over 7 years. That is an agreement to cover one year of college. If a student has multiple agreements or also took out student loans, the burden is still heavy. According to Julie Margetta Morgan, a fellow who studies higher education, “It’s pretty darn near impossible to say whether an ISA is better or worse for an individual.”1 That means that students have to read the fine print and do the math to compare options. Whether a student commits future income or repays debt, it is still a drain on resources post-graduation.

For investors, there are only a few schools using outside investment firms to provide capital for the ISA program. Some schools do solicit individual donors, usually wealthy alumni who are already generous in their support of the school. For those offering ISA investment funds, such as Purdue, those investments “may make the most sense for socially conscious investing.”1 The return history is just not sufficient to quote the type of returns that investors focused on maximizing return may be likely to see.

For now, it’s unlikely that we will offer you any opportunities to invest in engineers or scientists, but one never knows how this will play out in the future. You can certainly give this a try with your own budding professional!

Chuck Trafton of Flowpoint Capital Partners says he can “envision a whole new equity market for higher education in the next five years where today there is only debt.”1. May it be for the benefit of the students as well as the investors!

 1 “Investing in College Grads—Literally,” Clair Boston, Bloomberg Business, April 15, 2019

Tax And Legal Issues When Moving To A New State

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9/16/2019

When moving from one state to another, it is important to keep in mind a couple key concepts that can have significant tax and legal implications.

State of Domicile

A person’s domicile is generally defined as a person’s fixed, permanent and principal home that they reside in and that they intend to return to and/or remain in. Your state of domicile impacts everything from income taxes, to creditor protection (e.g. which state’s asset protection rules can be relied upon), to matters of family law (e.g. guardianship over children and the rights of a spouse in a divorce). A person can only have one state of domicile. Your state of domicile has the right to tax your worldwide income.

State of Residency

A person can be considered a resident for tax purposes in multiple states at once. Several states have statutes that spell out the facts and circumstances that would make someone a “statutory resident,” and some of the statutes are rather vague.

When moving from state to state, in order to avoid owing taxes in both states, you will want to establish strong ties to the new state, and sever as many ties to the old state as you can. Because the rules vary from state to state (and some are somewhat subjective) there is no definitive set of actions to take that will work every time. The best you can do is to demonstrate, with as many facts and circumstances as possible, both of the following:

  1. You intend to make the new state your primary home, and
  2. You are no longer a resident of your old home state.

To accomplish these goals, here are some action items to consider:

Action Items to Establish Ties With NEW Home State

  • Purchase a new home
  • Move your family and send children to new schools
  • Register to vote
  • Vote in the soonest possible election (in person, not absentee)
  • Obtain a new driver’s license
  • Register your automobiles
  • Change your car insurance to cover the car(s) registered in the new state
  • Open a bank account at a local bank
  • Get a safe deposit box at a local bank
  • Sign new wills and/or revocable trusts (and ancillary documents such as a power of attorney and health care directive)
  • Select a burial site in your new state
  • Update the situs on any trusts
  • Update any other legal and personal business documents to indicate your new home address
  • Change your mailing address on all insurance policies
  • Change your address with the Social Security Administration
  • File a “Declaration of Domicile” or similar document if the state has such a procedure
  • Become a patient of a local primary care doctor, and have records sent from your old doctor’s office
  • Become a patient of a local dentist
  • Purchase internet and cable for your new home
  • Claim residency status when filing your taxes
  • Join local organizations such as a gym, a local house of worship, or professional associations
  • Get a library card from the local library
  • Subscribe to local newspapers
  • Forward mail from other locations to your new home address
  • Gather for family holidays and other events
  • Seek some level of employment
  • Give to and get involved with local charitable organizations
  • Update any public profiles you have about yourself that mention where you are located (e.g. LinkedIn)

 Action Items to Sever Ties With OLD Home State

  • Sell all real estate
  • Spend as few days as possible in your old home state. This is particularly important if you maintain a home there. Some states have statutory rules that automatically make you a resident for tax purposes if you spend a certain number of days there.
  • Document the days you spend in each state. Consider an app for your phone such as Monaeo to help keep track of days spent in each state.
  • Cancel memberships (e.g. gym, house of worship, library)
  • Remove your name from voter registration rolls
  • Close bank accounts in local banks
  • Cancel any safe deposit boxes in local banks

Wise Moves: QCD’s

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By: John Bochniak

9/6/2019

As one reaches past age 70, a lifetime of wise moves has been lived. We write today to explain another wise move for our senior clients —that of addressing your annual giving intentions by donating from your Individual Retirement Account through what is known as a Qualified Charitable Distribution, or “QCD” for short.

Exercising a QCD not only allows you to address your giving desires but doing so can also create a very nice tax benefit. The tax benefit arises from the fact that the IRA distribution used to fund the QCD gift is totally excluded from your income. This income exclusion is a lot better than the tax treatment of a normal IRA distribution. A normal distribution is recognized as ordinary income and taxed federally at 10 – 37% depending on your income.

This tax benefit is especially nice now that we live in the age of the high standard deduction as many seniors find themselves no longer itemizing their charitable donations on schedule A. So, in essence, a QCD is a way to realize tax savings from a gift you can’t itemize on Schedule A – a wise move indeed!

It gets better as a QCD can count as part of your required minimum distribution (“RMD”) for the year. In fact, for many, the QCD can cover the full RMD keeping you in compliance with the annual distributive rules, yet completely avoiding the tax impact of the distribution requirement.

There are some important rules governing this strategy. Be aware of the following:

  • You must be age 70.5 or older at the time of the distribution.
  • The distribution must come from a traditional (or rollover) IRA. Distributions from SEP and SIMPLE IRA’s do not qualify.
  • You may only give up to $100,000 each year this way.
  • The gift must go straight from your IRA to the qualified charity
  • A qualified charity DOES NOT include private foundations nor donor advised funds.

Aside from the rules, it is key to understand how to report the QCD on your tax return. As is customary, the distribution from the IRA will be reported to you on a 1099-R from the custodian of the IRA. It then becomes your responsibility to properly disclose the QCD on the tax return to bring about the tax benefit (or, even simpler, just let your tax preparer know one was made during the year). As a helpful reporting hint, and as alluded to earlier, a QCD is not to be itemized as a charitable gift on Schedule A.

If you are age 70 or older, or approaching that age, and would like to understand the mechanics of this wise move and see if it plays well with your financial plan, please let us know. We look forward to discussing the strategy with you.

Private Security Scams

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By:  Jennifer Bachelor

8/22/2019

The sale of private securities has increased significantly over the last decade.  Legitimate private securities may provide increased portfolio diversification and returns. Unfortunately, this has also given rise to fraudulent security schemes.  Investors need to be aware, so they do not fall victim to such scams.

Private security offerings do not have to register with the Securities Exchange Commission if they meet minimum guidelines.  They are not held to the same scrutiny as public offerings.  Advisors and brokers can sell private, unregistered securities to clients with a net worth of at least $1 million or income of $200,000 annually, but agents on the outside of the financial industry are not as well supervised and held to the same standards.  It is difficult to identify private security scams because the agents that sell them (insurance agents or former stockbrokers, for example) are not under the supervision of the Financial Industry Regulatory Authority Inc.

Scams go unnoticed until an investor files a complaint with a regulator and an investigation commences.

Additionally, in the past, private securities were sold over the phone or via seminars primarily, but the internet and social media have given scam artists a platform to heavily advertise their investment scams and promises of exciting investment returns to anyone willing to click.  They prey upon senior citizens, inexperienced investors, and those without financial advisors.  Sadly, these are often people who cannot afford to lose their initial investment.

Unscrupulous registered brokers can also sell fraudulent private securities using a type of transaction called “selling away”.  This involves the representative requesting the client to move money from their brokerage account (TD Ameritrade, for example) to their bank account. Then the investment is made from the client’s bank account.  This makes it difficult for the broker-dealer firm to supervise.

Here at Homrich Berg, we may alert you to opportunities in private funds occasionally.  Those opportunities are reviewed rigorously by our investment department, and we do not receive any commissions on any sales.  The investment management fees are the same as if you were invested in a stock, bond, mutual fund, etc.  The investment purchase is made directly from your brokerage account.  You may hear about private security offerings from your friends.  Be sure to run them past your client manager for review before investing.

The sale of private securities will likely continue to grow.  Legitimate private securities provide wealthy investors with additional diversification and investment opportunity.  Just be aware that not all private security offerings are legitimate.

To find out more, go to https://www.sec.gov/oiea/investor-alerts-bulletins/ia_credentials.html

Homrich Berg Welcomes Evan Byers As Senior Associate

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ATLANTA – August 12, 2019- Homrich Berg is pleased to announce the appointment of Evan Byers, CFA, CFP®, CAIA as a new senior associate for the firm. “Evan has extensive wealth management expertise and will be an invaluable asset to HB,” said Andy Berg, co-founder and CEO of Homrich Berg. “ My partners and I are proud to welcome him to HB.”

Evan offers clients more than 8 years of comprehensive wealth management experience, serving as an advisor to high net worth individuals, including multi-generational family offices, corporate executives and entrepreneurs. Evan began his investment career at Fifth Third Bank in Cincinnati, where he managed portfolios for High Net Worth clients, Institutional clients and 401k plans. In addition, Evan maintained research and trading responsibilities for a U.S. Large Cap Equity strategy that was utilized by private wealth clients across the greater Fifth Third footprint. More recently, Evan was an Investment Strategist with SunTrust Private Wealth Management.

Evan holds a bachelor’s degree in Finance and Marketing from the University of Kentucky and a master’s degree from Xavier University. He is also a holder of the Chartered Financial Analyst designation, the Chartered Alternative Investment Analyst designation and has earned the Certified Financial Planner™ designation.

Evan maintains a volunteer position with InheritGA – The Georgia Trust for Historical Preservation and enjoys spending time participating in various financial literacy initiatives sponsored by the ASFIP Foundation. He lives with his wife Paige, and their two dogs in Buckhead.

Homrich Berg Welcomes Evan Byers As Senior Associate

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ATLANTA – August 12, 2019- Homrich Berg is pleased to announce the appointment of Evan Byers, CFA, CFP®, CAIA as a new senior associate for the firm. “Evan has extensive wealth management expertise and will be an invaluable asset to HB,” said Andy Berg, co-founder and CEO of Homrich Berg. “ My partners and I are proud to welcome him to HB.”

Evan offers clients more than 8 years of comprehensive wealth management experience, serving as an advisor to high net worth individuals, including multi-generational family offices, corporate executives and entrepreneurs. Evan began his investment career at Fifth Third Bank in Cincinnati, where he managed portfolios for High Net Worth clients, Institutional clients and 401k plans. In addition, Evan maintained research and trading responsibilities for a U.S. Large Cap Equity strategy that was utilized by private wealth clients across the greater Fifth Third footprint. More recently, Evan was an Investment Strategist with SunTrust Private Wealth Management.

Evan holds a bachelor’s degree in Finance and Marketing from the University of Kentucky and a master’s degree from Xavier University. He is also a holder of the Chartered Financial Analyst designation, the Chartered Alternative Investment Analyst designation and has earned the Certified Financial Planner™ designation.

Evan maintains a volunteer position with InheritGA – The Georgia Trust for Historical Preservation and enjoys spending time participating in various financial literacy initiatives sponsored by the ASFIP Foundation. He lives with his wife Paige, and their two dogs in Buckhead.