Authority Magazine interviews CIO Stephanie Lang as part of a series on strong female finance leaders. Read the full Q&A here!
ATLANTA – February 11, 2020 – Homrich Berg is pleased to announce that Kyle Glenn, CFA has joined the HB executive team as Chief Operating Officer. Kyle started his career at Homrich Berg as a financial advisor before completing his MBA and working with Bain & Company as a Manager in the Atlanta office.
“As we continue to grow in metro Atlanta and across the country, we were excited to have the opportunity to welcome Kyle back to HB and add his capabilities to our executive team,” said Andy Berg, CEO and co-founder of Homrich Berg. “I have known Kyle since the beginning of his career and am excited to have a Chief Operating Officer on our team who understands the keys to delivery of our high touch HB client service approach.”
As COO, Kyle will be focused on the core operations, technology, and management processes underlying the day-to-day success of HB. “I started my career at HB because of my belief in the firm and its focus on fiduciary, fee-only comprehensive wealth management services for their clients,” said Kyle. “As HB wraps up celebrating its 30th anniversary, I am excited about the opportunity to rejoin the Homrich Berg team and be part of the next 30 years of the HB success story.”
Kyle holds a BS degree in Management with Highest Honors from Georgia Tech, and an MBA with Honors from the University of Chicago Booth School of Business. He is a CFA Charterholder and has a wide range of expertise in M&A, growth strategy, organizational process design, and performance improvement.
About Homrich Berg
Founded in 1989, Atlanta-based Homrich Berg is a national independent wealth management firm that provides fiduciary, fee-only investment management and financial planning services, serving as the leader of the financial team for our clients including high-net-worth individuals, families, and not-for-profits. Homrich Berg manages over $7 billion for over 1800 family relationships nationwide. For more information, please visit www.HomrichBerg.com.
By: James White
When it comes to retirement planning most of us think firstly of our 401k, Pension, and maybe our Roth IRA. However, many never consider saving for one of retirement’s biggest costs with the most tax-advantaged vehicle under the IRS code. Saving for healthcare costs with a Health Savings Account (HSA) can potentially be your retirement plan’s fortifying feature. Homrich Berg believes that after contributing to your 401k, up to the company match, the next best place for retirement savings could be in a HSA up to its limits for those who are eligible (more on eligibility below)… The following are four reasons your HSA can be more advantageous than other savings vehicles:
- Increased Tax Benefits – HSA contributions are pre-tax, meaning they reduce your taxable income, they grow tax-free, and are distributed tax-free for eligible expenses. No other savings vehicle has as many tax advantages.
- Medicare and Private Insurance Eligibility – your HSA can distribute assets tax-free to pay for Medicare, private healthcare insurance, and long term care insurance premiums during retirement.
- Funding Unexpected Medical Bills – Under a 401k, for example, all distributions in retirement are taxed at Ordinary Income rates. The combined state and federal tax rate can be over 35% for some people. An unexpected $5,000 medical bill can require a withdrawal of $7,700 including taxes. If you have a funded HSA account, these withdrawals are tax-free, thereby reducing the gross amount of savings needed for unexpected distributions.
- Penalty-Free Distributions Before Age 59 ½ — There are no penalties for early withdrawals in a HSA. In fact, you can contribute, receive credit for the pre-tax income deduction, and immediately distribute the contribution for an eligible healthcare cost. If 401k savings money were needed before age 59 ½ there would be a 10% penalty plus taxes.
You must be enrolled in a Qualified High Deductible Healthcare Plan in order to be eligible to make HSA contributions. In 2020, contribution maximums are $3,550 for single filers and $7,100 for those married filing jointly. If over the age of 55, you are allotted a catch-up contribution of an additional $1,000. Consult with your tax advisor or CPA regarding eligibility and appropriateness of this strategy. Some risks may include the inability to maintain tax-advantages for non-spouse beneficiaries, a 20% penalty and loss of tax advantages for non-qualified distributions, as well as limitations on investing HSA savings. Some accounts offer significantly more investment options than others, so be sure to ask your financial advisor which account is best for you.
ATLANTA – January 24, 2020 – Homrich Berg is pleased to announce that CEO Andy Berg was named to Atlanta Magazine 500 Most Powerful Leaders in 2020.
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.
About Homrich Berg
Founded in 1989, Atlanta-based Homrich Berg is a national independent wealth management firm that provides fiduciary, fee-only investment management and financial planning services, serving as the leader of the financial team for our clients including high-net-worth individuals, families, and not-for-profits. Homrich Berg manages over $6 billion for over 1800 family relationships nationwide. For more information, please visit www.HomrichBerg.com.
By: Tana Gildea
Most of us look to the new year as an opportunity to “start again,” clean up our bad habits, make big changes, and reach for the stars! We’ll exercise! Lose weight! Save more! And then Monday comes. It’s another start to another week that feels exactly like those that have come before it. The thrill of the promise crumbles when faced with the reality of packing a lunch, forgoing a latte, or passing up those great sales in favor of a workout.
According to James Clear (Atomic Habits), BJ Fogg (Tiny Habits), and Charles Duhigg (The Power of Habit), creating a habit is the clear path to lasting success regardless of what we are trying to change or improve in our lives. So what financial habit is the keystone habit? Track your spending.
When we work with clients, we occasionally help them create a pie chart called Live, Give, Owe, Grow, and Can’t Say No. It takes spending over some time period and divides it into these categories. By making a pie chart, everyone can see how the pie divides which can lead to some great discussions around how the client feels about where the money is going. That can be a great “look back” exercise to help you identify things you want to change. The categories should be those that are important for you but keep it to a few so as not to get overwhelmed.
Analyzing what happened provides some insight, but tracking problem areas “in the moment” is what creates awareness and change.
Here are some things to try:
- Track a particular category of spending.
- Identify your problem area and track it. Eating out tends to be a trouble spot for a lot of people so, for example, every time you eat out, get in the habit of writing it down. This could be the notes section on your phone, a little notepad, or the back of an envelope in the sun visor of the car. Whatever works for you is the best tool. When you know that you are writing it down, you are being accountable to yourself and perhaps to your significant other.
- It may be helpful to jot down the circumstances like “left lunch in the fridge” or “traveling” or “overslept and went through the drive-through.” You might see patterns of when the spending is happening. This helps you develop strategies to counter these situations.
- Learn from the data that you are collecting.
- Have a spirit of curiosity and learning around what is happening instead of judgment and condemnation. We don’t thrive when we beat ourselves up mentally so seek understanding and solutions.
- Don’t expect perfection! Developing a habit and changing behavior is a process and will have ups and downs.
- Keep trying – knowing what doesn’t work helps us figure out what does work.
- Identify behavior triggers that lead to certain types of spending.
- Duhigg describes the “habit cycle,” and it’s clear that a trigger leads to a behavior. If we can identify the trigger and replace the undesirable behavior with a different behavior, we can change a bad habit into a good one or at least a neutral one. For example, if a frantic day at the office triggers the desire for a fast food fix on the way home, recognize that, and create a new “if I have a frantic day at the office” behavior: “then I’ll go to the gym” or “then I’ll call a friend on the way home.”
Whatever financial goal you have will benefit from having a clear picture of where the money is going. The backward look helps you see what happened and identify what you want to change. Tracking helps you be mindful and aware as it is happening or about to happen. Developing this one habit and looking at it with curiosity and interest can lead you toward a lot of ways to make small, consistent changes that will last long after the resolution has been forgotten.
By: Tom Houle
As a former business owner, I found myself on the receiving end of that phone call at least five times a week, so much so that I stopped answering any of the calls. But, what if there was an opportunity that would benefit my stakeholders, or would be advantageous for my family?
When determining whether to answer the call, I asked myself many of the questions that I am sure have crossed your mind. I hope my comments will help you with your answer.
How did they find me?
It is not hard to find a list of business owners, either by location, industry, or SIC code. Competitors and suppliers are also sources of information. If you are running a successful business, you are well known to those both in or outside of your industry. The caller will usually not possess any information that is not in the public domain. Yet there is a treasure trove of information available.
Does the caller REALLY have a buyer?
Most likely, the caller does not have a specific buyer in hand. However, many business brokers and financial intermediaries have relationships, whether formally or informally, with private equity firms, serial acquirers or actual companies that are looking for opportunities. The easiest way to determine the legitimacy of the call is to ask the caller the specific entity they are representing. If they are not straightforward in identifying their firm and their affiliations, it would be best to leave them with a dial tone.
With the large amount of capital committed to private equity firms, the limiting factor is the lack of target companies willing to sell, not buyers lacking cash. Legitimate firms are calling companies to gauge interest. Before giving any information, check out the caller with your financial advisor, banker, lawyer or accountant. Your professional team will be able to help in this area.
With these considerations in mind, most of your quality financial intermediaries will likely come from personal referrals, or industry relationships developed over a number of years. A friendly competitor might also inquire.
Other questions to consider.
Is the business capable of keeping up with the changes occurring in the industry? These could be innovation, technology or compliance demands, all of which require management and financial resources.
Am I losing business to more efficient providers, or are we losing to a profit destructor? Am I a mid-tier manufacturer taking price from larger more efficient organization, or am I a niche player who can set price?
If I expand, am I now competing with a different group of competitors?
Do I want to take on additional personal guarantees to expand facilities or add additional equipment?
Is our product or service part of a growing category, or are we competing in a flat or declining market?
Is there a family member or key employee that I am grooming to be part of the next generations of leadership?
Are my financial records accurate and up to date?
Am I ready to sell the business or am I having a bad day?
Do I have enough financial resources to retire, with or without the proceeds of the sale?
I have found that, as an owner, if you start listening some part of you wants to explore a sale. I would take a step back and give thought to your professional and personal reasons for exploring a sale. Your team should go through a thorough SWOT analysis, and answer these and other strategic questions.
The long term profitability of your business maybe out of your control, it might be the right time to maximize value.
So, do you answer that call from someone looking to buy your business? The answer, unfortunately, is maybe. But understanding what you want and why you want it are critical before answering the call.
It is my experience that business owners can get caught up in the process of the sale, and overlook many important factors that will determine long term positive outcomes for themselves and their family. Also, going through the process of a sale can result in a lack of focus on the business itself, causing irreparable harm. I would make a rational decision to engage after consulting with my full financial and legal team. After you have made the informed decision, it might be time to answer that call.
Tom is the director of business development for Homrich Berg, an independent Registered Investment advisor based in Atlanta, Georgia. He successfully purchased and sold two manufacturing businesses based in Jacksonville, Fl.
ATLANTA – 1/10/2020 – Homrich Berg (HB) is pleased to announce the appointment of Michael (Mike) D. Landsberg, CPA, CFP®, CPWA, PFS, as the newest Principal for the firm. “Mike has consistently exhibited dedication to HB and his clients,” said Andy Berg, co-founder and CEO of Homrich Berg. “My partners and I are proud to welcome him as the newest owner of HB.”
Mike has been with Homrich Berg for over seven years, and holds a B.A. in Accountancy from the University of Notre Dame and went on to earn a Masters of Taxation from Arizona State University. Mike serves as a member of both the American Institute of Certified Public Accountants – Personal Financial Planning Division (AICPA PFP) and the Georgia Society of CPAs. He sits on the board of Ur Worth It! as Finance Chair and was selected to the AICPA PFP Executive Leadership Committee. He also volunteers as a Financial Coach for the Catholic Charities of Atlanta.
ATLANTA – 01/08/2020 – Homrich Berg is pleased to announce that veteran wealth management leader Thomas Carroll has joined the HB executive team as President. Thomas joins HB after an extensive career at SunTrust Bank, where he held a wide range of leadership positions including leading Division Wealth Management and serving as CEO of GenSpring Family Offices, the multi-family office subsidiary of SunTrust Bank.
“As we continue to grow in metro Atlanta and across the country, we were excited to have the opportunity to add Thomas to our executive leadership team,” said Andy Berg, CEO and co-founder of Homrich Berg. “I have known Thomas for many years and know that he shares our unwavering belief in our core values of providing innovative high touch client service while using our scale and growth to attract talent and gain leverage for the benefit of our clients.”
As President, Thomas will join the HB management team and assist with the leadership of a wide range of growth and client service initiatives. “Andy and his partners have built a great firm, and I have always admired Homrich Berg and their focus on fiduciary, fee-only comprehensive wealth management services for their clients,” said Thomas. “As HB wraps up celebrating their 30th anniversary, I am excited about the opportunity to join the Homrich Berg team and be part of the next 30 years of the HB success story.”
Prior to joining HB, Thomas was most recently the head of Division Wealth Management for SunTrust Bank. In that role he managed all of the core private wealth management sales and client service activities on a national basis across 9 SunTrust divisions. Prior to that role, Thomas was the Chief Executive Officer of GenSpring Family Offices, SunTrust’s multi-family office subsidiary, which provides independent advice to ultra-high net worth families. Before joining GenSpring, Thomas served as the Head of the Sports & Entertainment Specialty Group for SunTrust. In that capacity, Thomas managed a group of advisors who provided private wealth management services to sports and entertainment professionals. Thomas began his leadership career as the wealth services manager for the Atlanta region. Thomas has spent his entire career in the wealth management industry beginning as an advisor serving high net worth clients before transitioning into his leadership roles.
A native of Atlanta, Thomas holds a Bachelor of Science degree in Business from Wake Forest University, and is a Certified Financial Planner™ professional. He is active in the community, having served on the Leadership Council of Zoo Atlanta and on the Board of Trustees for the Atlanta Sports Council, the Metro Atlanta Chamber of Commerce, the Atlanta Botanical Gardens, the Atlanta Children’s Shelter, the Atlanta Police Foundation and Young Harris College.
About Homrich Berg
Founded in 1989, Atlanta-based Homrich Berg is a national independent wealth management firm that provides fiduciary, fee-only investment management and financial planning services, serving as the leader of the financial team for our clients including high-net-worth individuals, families, and not-for-profits. Homrich Berg manages over $6 billion for over 1800 family relationships nationwide
By Jaime Ruff and Todd Hall
December 23, 2019
Packaged with the recent spending bill was some of the most significant retirement plan legislation to come along in years. The Setting Every Community Up for Retirement Enhancement (SECURE) Act was signed into law in Friday December 20th, and will impact businesses and consumers in a number of ways. Here are five key takeaways
- The End of the “Stretch IRA”… say hello to the new 10-Year Rule
Perhaps the most prominent change under the SECURE Act is that it creates a new 10-Year Rule for non-spouse beneficiaries of inherited IRAs. Most non-spouse beneficiaries who inherit a retirement account after 2019 will need to withdraw the entire account and pay any associated income taxes within 10 years, rather than over their life expectancy. This effectively ends what has colloquially become known as the “Stretch IRA”, since spreading the distributions from an inherited IRA over the life expectancy of the beneficiary potentially can defer those taxes for decades.
The 10-Year rule does not apply in the following situations:
- If the beneficiary is the spouse of the original IRA owner
- If the original IRA owner dies before January 1, 2020, in which case the beneficiaries are grandfathered under the old rules and can “stretch” the IRA over their life expectancy
- If the beneficiary qualifies for “eligible designated beneficiary” status under the SECURE Act, including heirs that are less than 10 years younger than the decedent, chronically ill individuals, disabled individuals, and minor children. Minor children will age out of the exclusion once they hit the age of majority in their state, typically 18 to 21. At that time, the 10-year required minimum distribution period would become applicable to any remaining balance in the inherited defined contribution plan or IRA. As such, minors will still be able to stretch out distributions slightly longer than other individuals.
Joe was 65 when he died in 2020. He had an IRA worth $500,000 and his designated beneficiary was his daughter Megan, age 40.
Under prior rules, Megan would have only have been required to take out a percentage of the IRA each year based on her life expectancy. The required minimum distribution or “RMD” would start around $15,000 in the first year and the percentage to withdraw would gradually rise until Megan turned 85 when the account would have to be empty. She thus could have “stretched” those distributions over 35 years and deferred the associated income taxes.
Now, if she wants, Megan won’t have to deal with an RMD at all during those first nine years. Instead she must empty the entire IRA balance within 10 years, which could bump her into a higher tax bracket pretty quickly. Notably, she has flexibility as to when within those 10 years to take her distributions, so perhaps she can time her distributions to coincide with years when her income will otherwise be lower.
In light of these changes many existing estate plans should be revisited.
The loss of potential decades of tax deferral further tips the scale in favor of considering charities rather than individuals as retirement account beneficiaries.
Things like Roth IRA conversions and multi-generational trusts are tools that will be useful in managing many wealthier families’ income tax brackets.
Use of a conduit trust as an IRA beneficiary may be a problem now. Under the previous Stretch IRA rules, trust distributions could be spread over the life expectancy of the beneficiary. Now with the IRA emptied within 10 years the funds will effectively be distributed outright to the trust beneficiary, thus negating the elements of the trust that were sought after.
- Later Required Beginning Date for Retirement Distributions
On a positive note, if you were born on or after July 1, 1949 then you are not required to begin taking Required Minimum Distributions (RMDs) from your IRA until age 72, rather than 70½. If you’re already 70½ in 2019, the new rules won’t apply to you as you’ll have an RMD for 2019 that must be withdrawn by April 1, 2020. But if you were born after July 1, 1949 your required beginning date is postponed.
Those with birthdays in the first half of 2020 will benefit slightly more from this provision. For example, someone who turns 70 next spring (and 70½ next fall) won’t have to take distributions until 2022 when they turn 72 —two extra years than if the bill didn’t pass. But if someone is turning 70 next fall (and 70½ in the spring of 2021), they don’t have to take distributions until 2022 when they turn 72. That person gets just an extra year.
- Contributions to Traditional IRAs Allowed After age 70
Another positive aspect of the legislation is in recognition of the fact that many more people are now working after age 70. Under the SECURE Act workers over age 70 can start making IRA contributions up to $7,000 per year (including the $1,000 catch-up contribution for workers over age 50). A nonworking spouse whose spouse earns income also can contribute.
- Qualified Charitable Distributions Still Allowed Beginning at Age 70½
People who are 70½ or older still can make a Qualified Charitable Distribution (“QCD”) from their IRA to one or more charities, up to $100,000 in a given year. The SECURE Act does not change that popular tax break. The legislation does, however, introduce an anti-abuse provision to reduce the allowable QCD amount by any traditional IRA deduction received for that year.
- Initiatives to Increase Employer Adoption of Retirement Plans
The new law increases the tax credit for small businesses to set up new retirement plans, from $500 to $5,000. It also creates a new tax credit of up to $500 per year to defray startup costs for new 401(k) plans and SIMPLE IRA plans that include automatic enrollment. Unaffiliated small employers are now able to band together to offer a 401(k) type of plan and shift some of the administrative burden to a retirement plan administrator. And starting in 2024, 401(k) plans will be required to allow employees who work more than 500 hours for three years to contribute.
December 17, 2019
Year-end is a busy time as clients want to meet to wrap up the year. While many are interested in discussing how their portfolio has performed, most are eager to set their “Financial New Year’s Resolutions”. Oftentimes good investment performance can lead to resolutions of splurging, whether that be throwing a large family party or a big vacation to commemorate a milestone birthday or anniversary. Sometimes our clients’ resolutions are simply to straighten up their financial homes. For example, my client recently forewarned me that she’s serious (this time) about getting a better handle on her monthly spending. We discussed utilizing one of the many systems available: computer programs such as Quicken or Mint.com, building a spreadsheet, or using an old fashioned notebook to track every single expense. I often recommend purchasing the system in November or December to ensure that it is in place for January 1. After all, most people don’t wait to purchase their annual planner during the second week of January because they don’t want to miss sending cards for the early January birthdays, etc.
Resolutions for the new year often include the dreaded task of reviewing (and possibly updating) estate documents. Clients will insist that nothing has really changed or that they are still healthy. Ironically, when we dust off their existing estate documents, clients are often shocked to see a now deceased relative named as their executor…or worse yet an estranged friend named as the guardian for their children. For many of my suddenly single clients, we immediately review the beneficiary designations to ensure that an ex-spouse is no longer the primary beneficiary of a retirement account or life insurance policy (unless required under the divorce agreement). In conjunction with these decisions, we will review those named in financial powers of attorney and medical directives. Following a divorce, clients typically prefer to name someone other than their ex-spouse as the person making medical decisions on their behalf.
With the new year right around the corner, now is a great time to make the list of your priorities and develop a meaningful financial resolution.