Homrich Berg Named to Barron’s 2020 Top 100 RIA Firms

Homrich Berg is proud to announce being named to the Barron’s Magazine 2020 list of America’s Top 100 RIA Firms. HB is #42 on this list of the top independent firms in the country based on their proprietary ranking criteria, which include some new criteria: technology spending, staff diversity, and succession planning. Here is a link to the full article.

Adam Fuller Offers Thoughts on Charitable Giving

HB Principal Adam Fuller, CFA, CFP® offers thoughts on charitable giving in recent Atlanta Business Chronicle article.

Intra-Family Loans

By: Todd Hall


In a low-interest rate environment, loans to children or grandchildren (intra-family loans) can be an effective way of assisting family members while keeping wealth within the family. Such loans can be for many purposes, such as assisting with the purchase of a home or car, paying off higher interest debt, or starting a business. There are several uses of intra-family loans in more complex wealth transfer plans as well. A properly structured intra-family loan has many benefits, including:

  • lower interest rates for the borrower compared to commercial loans
  • greater flexibility than commercial loans (e.g. any number of years)
  • loans can be made with no credit checks or reporting if desired
  • origination and other transaction fees can be avoided

Interest Rates Used

There is a minimum interest rate that must be charged on intra-family loans in order to avoid adverse tax consequences. The rate that must be charged is called the Applicable Federal Rate (AFR) and is published monthly by the IRS. The rate is based on the term of the loan as follows:

  • Short-term — Three years or less
  • Mid-term — More than three years and up to nine years
  • Long-term — More than nine years

As of August 2020 the AFRs are: 0.17% for short term, 0.41% for mid-term, and 1.12% for long term loans. This means a parent can create a 30-year loan to a child for 1.12%, while commercially available mortgages are around 3%.

Properly Implementing Intra-Family Loans

The IRS presumes a transfer of money to a family member is a gift unless it is properly structured as a bona fide loan. Before implementing an intra-family loan, consult with qualified tax and legal advisors to confirm it is set up properly and will be honored by the IRS. Best practices include:

  • Sign a promissory note
  • Establish a fixed repayment schedule and ensure payments are made
  • Set a rate at or above the AFR in effect when the loan originates
  • Secure or collateralize the debt
  • Maintain records that reflect a true loan transaction
  • Avoid having a prearranged schedule to forgive the loan
  • Lender should report interest income, and if applicable the borrower may deduct interest payments (e.g. for a properly secured mortgage up to a loan size of $750,000)

If properly structured and maintained, intra-family loans are a technique that can have significant benefits for both the borrower and the lender.

HB Named One of the Top 50 RIAs in the USA by FA Magazine

Homrich Berg is pleased to announce it has been named one of the Top 50 RIAs in the USA by Financial Advisor. To see the full list click here.


Neither rankings and/or recognition’s by unaffiliated rating services, publications, media, or other organizations, nor the achievement of any designation, certification, or license should be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if Homrich Berg is engaged, or continues to be engaged, to provide investment advisory services. Rankings published by magazines, and others, generally base their selections exclusively on information prepared and/or submitted by the recognized adviser. Rankings are generally limited to participating advisers (see link as to participation data/criteria, to the extent applicable). Unless expressly indicated to the contrary, Homrich Berg did not pay a fee to be included on any such ranking. No ranking or recognition should be construed as a current or past endorsement of Homrich Berg by any of its clients. Homrich Berg’s Chief Compliance Officer (email at casdia@homrichberg.com) remains available to address any questions regarding rankings and/or recognition’s, including the criteria used for any reflected ranking.

Andy Berg Quoted on Industry Trends in FA Magazine

HB CEO Andy Berg quoted on industry trends in Financial Advisor article featuring interviews with industry leaders. To read the full article click here.

Homrich Berg Named to 2020 Financial Times 300 Top Registered Investment Advisers

ATLANTA – July 30, 2020 – Homrich Berg is pleased to announce it has been named to the 2020 edition of the Financial Times 300 Top Registered Investment Advisers. The list recognizes top independent RIA firms from across the U.S. 

This is the seventh annual FT 300 list, produced independently by Ignites Research, a division of Money-Media, Inc., on behalf of the Financial Times. Ignites Research provides business intelligence on investment management.

RIA firms applied for consideration, having met a minimum set of criteria. Applicants were then graded on six factors: assets under management (AUM); AUM growth rate; years in existence; advanced industry credentials of the firm’s advisers; online accessibility; and compliance records. There are no fees or other considerations required of RIAs that apply for the FT 300.

The final FT 300 represents an impressive cohort of elite RIA firms, as the median AUM of this year’s group is $1.9 billion. The FT 300 Top RIAs represent 39 different states and Washington, D.C.

The Financial Times 300 Top Registered Investment Advisers is an independent listing produced annually by Ignites Research, a division of Money-Media, Inc., on behalf of the Financial Times (July 2020). The FT 300 is based on data gathered from RIA firms, regulatory disclosures, and the FT’s research. The listing reflected each practice’s performance in six primary areas: assets under management, asset growth, compliance record, years in existence, credentials and online accessibility. Over 750 qualified firms applied for the award, 300 of which were selected (40%). This award does not evaluate the quality of services provided to clients and is not indicative of the practice’s future performance. Neither the RIA firms nor their employees pay a fee to The Financial Times in exchange for
inclusion in the FT 300.


Advisors Turn to Alts In Rocky 2020

Stephanie Lang, CFA spoke with Citywire RIA Magazine about how alternatives have been a reliable source of yield throughout the recent market turbulence and what this looks like for companies. Read full article here.

Balancing Debt Repayment and Savings Amid COVID-19 Economic Uncertainty

How can you decide between saving for important goals and paying down debt balances? HB Principal Michael Landsberg, CPA, CFP®, CPWA, PFS lists out a few common rules of thumb to follow. Read full article here.



A Fireside Chat with Rupal J. Bhansali & Stephanie Lang, CFA

HB’s CIO Stephanie Lang , on behalf of CFA Society Atlanta, spoke with Rupal J. Bhansali of Ariel Investments about stocks and investing today. To watch the full interview click here.


HB Perspective: Stimulus Helping To Fuel Lofty Stock Valuations

By Ross Bramwell


The Fed’s actions are a combination of lessons learned from the 2008 financial crisis and new measures created for today’s unique situation in their attempt to prevent the health and economic crisis from becoming a financial system crisis. Combined stimulus from the Fed, Congress, and the U.S. Treasury currently equals more than 25% of real U.S. GDP this year. It’s becoming easier to understand the concern about the current disconnect between the economic pain on Main Street and the resilience of Wall Street as the economic news continues to be rather devastating for Main Street, including U.S. deaths crossing over one hundred thousand and 40 million Americans filing for unemployment benefits.

Unprecedented Stimulus Has Helped Fuel Stock Rally

One reason for that resilience is that the growth rate in money supply that has gone parabolic (the blue line below) as the government has pumped liquidity into financial markets to keep the economy afloat. However, the velocity of money continues to decline (the yellow line below), which is why inflation in the “real economy” has not been an issue. “Money printing” by the Fed only becomes inflationary if the liquidity pumped into the financial system comes out via the lending channels and flows through the economy. Without increasing velocity, inflation may be absent in the real economy, but can become quite evident in financial assets, such as stocks, where prices can become inflated as a result.

M2 Money Supply Has Gone Parabolic As Velocity As Declined

Source: Charles Schwab, Bloomberg, Federal Reserve as of 4/30/20

The government-mandated shutdown and resulting recession have broadly devastated earnings across companies and industries. FactSet recently reported that Q2 earnings estimates have come down 35% since March 31. To put in context for the full year, the current year 2020 earnings per share estimate for the S&P 500 has declined by 28% to $128 from $178. At the same time, stocks have broadly risen off the March lows based on the hope that the economy’s reopening will be successful, and also on expectation that we’ll develop therapeutics and eventually a vaccine for the virus itself. As an example, since mid-April, the four best-performing days for the Dow Jones Industrial Average, came on days there was a significant medical announcement:

  • April 17: Gilead’s drug Remdesivir showed effectiveness in treating COVID-19 (+705 points)
  • April 29: Positive data about Remdesivir’s trials (+532 points)
  • May 18: Moderna announces early-stage human trials for its COVID-19 vaccine (+912 points)
  • May 26: Novavax announces phase one clinical trial for vaccine; Merck announces plan to work on vaccine alongside IAVI (+530 points)

Stock Rally Has Left Us With Elevated Stock Valuations

With the recent stock market rally and declining corporate earnings continuing to filter through, stock valuations have increased significantly in just a matter of weeks. This has led us to become cautious on U.S. stocks and their return potential over the short term until we see improving economic data. It’s certainly true, fiscal and monetary support has been unprecedented and could ultimately overcome the damage to the economy, but getting 40 million Americans back to work and understanding what the recovery of several large industries, including travel & leisure, retail, and entertainment will look like are still largely unknown.

The below chart shows the S&P 500 Price to Earnings Ratios based on the Last Twelve Months (red line) and also Next Twelve Months (brown line). There is still much uncertainty to future earnings as many companies have pulled their guidance, but both show the rapid rise in valuations. Valuations have rebounded much faster than the economy. In focusing on the Next Twelve Months P/E ratio, it appears that investors are pricing in a ‘V’-shape recovery not only for the economy but also for earnings. However, we believe earnings estimates will continue to come down through the second quarter. We believe much of this rally has been fueled by the unprecedented stimulus provided by the Fed and Congress, which gives us reason for our short-term cautionary view on stocks until the economic data catches up.

S&P 500 P/E Ratios Have Significantly Risen In Recent Weeks

Source: Bloomberg, as of June 3, 2020 for trailing 3 years

Our strategy to navigate these uncertain times continues to be based on principles such as diversification across, and within, asset classes, and rebalancing that trims exposure into strength and adds exposure into weakness. We believe successful investing does not rely on the precise timing of market tops and bottoms, but is about a consistent process over time that reduces risks and keeps investors on track within their financial plans. Please contact a member of your client service team if you have any questions.


Disclosures: This is a general discussion of current investment themes, asset classes, and specific investment segments. The discussion includes our opinions and forward looking thoughts and analysis as of June 7, 2020 and is not a guarantee of future investment results. Actual client portfolios are often customized and do not necessarily represent an exact replication of, if any, allocation discussed. This commentary focuses on a wide range of economics and finance issues in order to educate you on the linkages between these topics and their impact on the overall economy and investment markets. The content of this presentation represents the opinions of Homrich Berg regarding these educational topics and should not be interpreted as direct investment advice or marketing of HB services. Information included is from sources believed to be reliable, but which have not been independently verified. Investing involves risks including loss of principal. This document does not constitute legal, tax accounting or investment advice.