Famous Last Words on Interest Rates

I do not know about you, but this fear of inflation is beginning to get out of hand. Ever since President Carter's unfortunate tenure as our President, we have had this huge fear of another bout of similar inflation. Personally and professionally speaking, I believe it is all a bunch of hooey. This could be my famous last words on the subject, but I am willing to stick my neck out.

What went wrong back then?

• Back when President Carter was in office, we had a horrible position of energy dependence. We needed a lot more oil than we had and we were subject to the whims of other countries.
• Insurance companies were allowed to purchase high yield bonds for their normally staid investment portfolios.
• Banks were just abject fools back then offering double digit CD's.
• Insurance companies were offering fixed annuities to compete with those bank double digit CD's by offering double digit fixed annuities.
• Bank regulators could not keep up with the fast moving changes.
• Insurance regulators were woefully inept.
  
• The biggest factor was that the Federal Reserve Bank thought that the best way to solve the runaway inflation problem was to raise interest rates.

What did we learn from all this?

• Never again be dependent on other countries for our oil supply.
• Limit the amount of high yield bonds that insurance companies can purchase.
• When you are a bank, you offer paltry CD rates and people will still buy them.
• When you are an insurance company, you offer paltry fixed annuity rates and people will still buy them.
• Bank regulation is much improved, especially since the 2008 fiasco.
  
• Insurance regulation is better, but there are still problems with product approvals. They are too complicated for the average consumer to understand, in my opinion.
  
• The Federal Reserve Bank is still a problem. Raising interest rates like they did fueled the problem.
  

We fixed most of those problems, but the Federal Reserve Board of Governors still believe that President Carter days are just around the corner, if we do not watch out. Never mind the fact that according to the Federal Reserve's own numbers, they have over seven trillion on their balance sheet at Federal Reserve banks across the United States. This is not a paltry sum by any means.

https://www.federalreserve.gov/releases/h41/current/h41.htm 

I for one do not believe that we will have to worry about inflation on the par of President Carter's tenure in office. The main reason for this is, if the Federal Reserve raises rates like they did back then, it would doom our economy and nation. It would cause the amount of U.S. Debt to increase exponentially with a rise in interest rates that would cause an enormous hit to our balance sheet, not to mention the government debt. In effect, they would be cutting their own throat. It is much easier for the Federal Reserve to keep buying fixed income investments (bonds and mortgages,) put them on their balance sheet, then let them mature, or pick and choose profitable times to sell. These actions will guarantee rates will be low for the foreseeable future. Inflation is not a problem and I do not believe that we should ever worry about it. So, when you see the pundits on television talking about inflation getting out of hand, know that they are full of bull. It is not going to get out of hand. I'll stick my neck out and say we will never see another round of inflation like we saw when President Carter was in office.

Review Your Parent's Beneficiaries

The best advice that I can ever give adult children of older parents is to review their financial, annuity and insurance policies to see if their beneficiary designations are according to their wishes. A lot of times, one parent passes away and nobody bothers to check the beneficiary designations. Sometimes the deceased spouse is still listed as a beneficiary. This can create a major headache, especially if not corrected. 

I recently ran into another situation where an adult son's ex-girlfriend was named as a beneficiary. The parent thought that his adult son would eventually marry this girl and never got around to changing the beneficiary.

On another case, a lady with dementia in a nursing home was named as a beneficiary. This really complicates things especially when the parent has already passed away. The lady in the nursing home is due the proceeds for their share even if she passes away before paying it. You have to go find out who is handling her affairs, where to send the check, how to apply for the beneficiary share when the person (the lady in the nursing home) cannot legally sign for herself. It just becomes an administrative nightmare.

Of course, sometimes there is no beneficiary at all named like with individual accounts. Individual accounts without a beneficiary designation are guaranteed to have to go through probate if the person has an estate size of more than $75,000 in most states. You can avoid this with a Revocable Living Trust or by adding a transfer on death clause to the individual account.

Personally, I have been in business for over 30 years and I have yet to see the "perfect" estate of a parent who had all their i's dotted and t's crossed. They may be out there somewhere, but I have not seen anyone's estate like this in my thirty plus years. It pays to follow up on these beneficiary designations to make sure that there are no hidden surprises.  

We offer a beneficiary review service for an hourly fee of $100 per hour with a $400 maximum. This is a small price to pay to get things right, in my opinion.

See our Form ADV 2A disclosures on our web site at https://marianfs.com.

10 Critical Mistakes in Estate Planning

Over my thirty-two plus year career, I continued to see mistakes in legal documents prepared by attorneys along with the failure to review and update these legal documents by their clients. No offense to the many "flawless" attorneys out there. These are the biggest mistakes that I often see:

1. Failure by the attorney to make certain that individual and joint assets are re-titled into the new Revocable Living Trust by the client.
2. Failure in drafting a Revocable Living Trust (mostly on purpose) that names a bank or corporate trustee.
3. Failure by the client to update their legal documents periodically.
4. Failure by the attorney, again on purpose, to force the creation of one or more Testamentary Trusts at the death of the grantors.
5. Failure to have clear language regarding beneficiaries ability to accept their share outright, or as a lump sum.
6. Failure in drafting a Revocable Living Trust that restricts all beneficiaries as if they were all addicted to drugs, having maritial problems, or are a spendthrift.
7. Failure to record a deed for real estate into the name of the Revocable Living Trust.
8. Failure by the attorney to make clear their fee and timetable to perform trust updates.
9. Failure by the attorney to obtain client signatures in all the proper places.
10. Failure by the attorney in not drafting a "see-through trust" when recommending the beneficiary of qualified plans and IRA's be the new Revocable Living Trust.

Let's take these one by one. 

Number one is very typical. The attorney drafts the document, then tells the client to re-title everything, yet nobody follows up to see that it is completed.

Number two in most cases is totally unnecessary for middle class families. Someone with a small estate has no need for a bank trustee. This should be a no-brainer by the attorney, but I have seen it often.

Number three is very common. Sometimes the grantor's beneficiary dies before they do and the Revocable Living Trust is never updated. Further still, the grantor may have wanted to change their beneficiaries, but did not get around to it.

Number four is a pure money grab by the attorney, in my opinion. The grantor paid the attorney for the Revocable Living Trust, then the attorney never explained and the client never read it to see that each beneficiary cannot have access to their share of the estate. Only the income from the principal and for their health and welfare. By adding Testamentary Trusts which are created upon the death of the last grantor, then this is what you end up with. This makes each beneficiary have to hire an attorney. You see, even though your parents left you a share, since you are three siblings for example, then all three have to hire their own attorney to draft their own Testamentary Trust. One attorney cannot represent three siblings. They are barred from doing so since each sibling has competing interests and different beneficiaries.

Number five is related to number four. There is no provision for an outright distribution or lump-sum distribution for beneficiaries when Testamentary Trusts are created. You do not need Testamentary Trusts if you pay beneficiaries outright.

Number six is where the attorney drafts the Revocable Living Trust so that all beneficiaries are considered spendthrifts or have marriage or addiction problems. Each family is different, but attorneys tend to treat all the beneficiaries the same when they draft legal documents, even if only one beneficiary has issues.

Number seven is related to number one. I see this a lot. The attorney tells the client to do a quit claim deed, but there is a breakdown in communication somewhere along the line and the quit claim deed does not get filed with the county where the real estate is located.

Number eight is where the attorneys gladly take the client's money to do the initial drafting of the Revocable Living Trust, but do not have a clear explanation about their fee to update the trust as the client's lives change, or tax laws change. Clients are left to wonder how much it costs for an update and typically blow it off and file it away in the "I'll do it later" category. For example, in Florida, the Revocable Living Trust, the Pour-Over Will and the Financial Powers of Attorney should all be witnessed by two people with their full addresses. Everyone, the grantor and the two witnesses signatures should also be notarized. You may have a problem in Florida if the trust does not have two witnesses and a notarization of everyone's signature. You do not want to find out when someone passes away about this issue. Do an Estate Planning Review!

Number nine is another no-brainer. Believe it or not, most attorneys leave the notarization up to someone who works for them in their office. This is ripe for mistakes. I have seen it numerous times where a signature is left blank, or not dated properly and where the grantor's date and the notary's date do not match. Plus, scribbling through something and initialing it, is a mistake. Never ever scribble through anything on a legal document. RE-DO IT!! The attorney that allows this on a newly created trust is not professional, but rather lazy, in my opinion.

Number ten can be costly. I had a client whose attorney let her husband name his Revocable Living Trust as the beneficiary of his IRA. His wife was a beneficiary, but there was also a corporate beneficiary. This failed to meet the definition of a "see-through trust" as far as the IRS is concerned, because a corporation is not a person. Therefore, you cannot "see-through it" to any person. As a result, the wife could not treat the IRA as her own and she had to take it all out in five years.

There you have my 10 Critical Mistakes in Estate Planning. Trust me, it is worthwhile to have someone like me take a look at your legal documents. Although, I am not an attorney, I am qualified by training and experience as a Certified Financial Planner® to review estate planning documents. By this I mean that I can read!

https://marianfs.com

Dealing with Grief

On September 4th, it was my son Reese's 31st birthday. Reese lived for 92 days and died of Sudden Infant Death Syndrome. I was blessed to be his father. Losing a son is no easy thing. You hear people say that "no parent should ever have to bury their child." I agree. Especially when it is your first child and they are only three months old. At age 33, I asked myself at the time, "How I am supposed to deal with this?" Truth be told, I didn't know.

Now that it has been almost 31 years, I can look back at it and evaluate how I have dealt with it over the years. When it happened, I suddenly had to wear a theoretical 50 pound vest around me. I am speaking metaphorically of course. In addition, to that, I had to try and be there for my wife. The first thing we noticed was that we each grieved differently. We both realized very quickly that we had to be supportive of each other when it counted. Too many grieving couples develop silos of grief and fail to communicate with each other. This causes one spouse to think the other does not care. Of course, this is patently untrue. It is simple a break down in communication. However, a breakdown in communication during a period of grief will lead to divorce in a lot of cases. Luckily, that did not happen in our marriage.

For several years, we volunteered at a Compassionate Friends group which became a Bereaved Parents group later on. One of the things that immediately slapped me in the face was that there were always people worse off than you. One lady had lost three of her children in a fire. Another son who filled in one night for his friend at a convenience store was murdered on that freak one night. He was working on his master's degree and was going places in life. There were so many heartbreaking stories among these people, but it was comforting to meet other people who have also lost a child. It was a safe place for a time. However, it is not a place to stay for years upon years. You will know when it is time to move on. Your instincts will tell you.

My wife and I discussed what to do next. We still wanted to have a family. Our plan was to have two or three children about two years apart. When we were ready, we got back up on that horse that had knocked us down and had our second son Marshall. Once he was born, it was not easy. We were on pins and needles that we might lose another child to SIDS. He was hooked up to a breathing monitor and I'll be darn if he didn't set that thing off 28 times in the first 30 days. You talk about a guy running a hundred yard dash to his bedroom. I did that a lot. 

Of course, the risk for SIDS is really about the first six months. We did not know anything about SIDS back then, nor did we even know anyone who had a child who died of SIDS. For myself, I went to the local medical school library and read everything that I could find on it. There are influencing factors that I discovered. Premature birth, male, born in winter months, having a cold prior to death and sleeping on their stomach. Reese was born about 4 - 5 weeks early. He was not really what you would call a premature baby, but when he was born, he was held in the neo-natal unit the whole time at the hospital. When the doctor finally showed up 4 or 5 days later, he said "take him home and treat him like a normal baby." I was like, wait a freaking minute. He was in neo-natal ICU for 4 or 5 days and now, everything is fine? The doctor said "Yes. Treat him like a normal baby." Notice how I remember that 31 years later? Of course, I do not have a very high opinion of that doctor. I know. I know. It wasn't his fault that my son died, but damn it! Get your head out of your rear end. You are a "baby doctor" who is supposed to be knowledgeable about things like, oh I don't know, perhaps Sudden Infant Death Syndrome. Reese had all those signs that I discovered in the medical school library mentioned above.

Sorry, I digressed.

My first real experience with grief was when I was a senior in high school and I learned that my father had died. I never knew my father. Although, he had plans to have a relationship with me, because he had moved back to Arkansas from California to become the Chief of Police in Camden. My sister Tami had told me that they moved to Arkansas so he could have a relationship with me when I turned eighteen. Unfortunately, it was not meant to be.

Dealing with the grief of losing my father has been a lifelong struggle. My mother has been absolutely no help. No parent should ever disparage the other parent to their child, especially when they are deceased. After all, they are not a threat any more if they are dead. 

My wife and I had three miscarriages in a row after Marshall was born. These were no fun. We decided to keep trying. We saw that movie "Rudy" and decided that our baby would be named Rudy if it was a boy and Rudi if it was a girl. We were blessed with a girl and both our son Marshall and daughter Rudi are doing well. 

I've lost two brothers and a sister, too. My brother David was killed in a automobile accident at age 32. My sister Tami died at age 53 of health complications from Lupus and doctor approved morphine. More recently, my brother Jon died last year of a heart attack. I begged him to quit smoking, especially since our father died at age 39 of a heart attack and he was a heavy smoker. After Jon had his second heart attack, he had bypass surgery and quit smoking for a short time, but resumed his smoking unfortunately. There was no good outcome to be had.

When I turned age 39, I was wondering if I would make it pass that grim milestone. I had an eerie feeling that year and for good reason. One of my best friends in the world would be murdered and two days later, my step father would die of cancer. My best friend's mother would go on to lose three of her 4 children. One more to ALS and another to murder. Two murdered children in one family. As I mentioned above, there is always someone who has had it worse than you. Remember that.

Looking back, as I am nearing my 64th birthday, I am amazed that I am not in the crazy house. Getting back to the title of this blog, I have dealt with each of these incidents of grief in different ways. For my son Reese, I look at his picture each night that I go to sleep and pat myself on my chest where I used to hold him. On his birthday, we light a candle for Labor Day, since he was born on Labor Day.

For my father, I have researched his life and built a shadow box in his honor. He was a "Rakkasan" or Korea War paratrooper from the 187th which merged into the 101st Airborne. He spent over 10 years in both the Army and the Air Force, then joined the ranks of law enforcement where he served until his death. He was an American hero. I have his pictures on my phone and on my mantle. Further, I have done genealogy on the Allison family and this has been very rewarding to me personally.

For my best friend Mike, I have a beer holder in a drawer in my bath room that holds my hair brush. Every time I brush my hair, I see that beer holder. We were roommates and fraternity brothers and went to the Sigma Alpha Epsilon Leadership School together.

I have pictures of my brothers, David and Jon on my mantle too, along with one with my sister Tami. Whenever the clock strikes 12:12, I think of my brother David. We saw David on 12/12/1993 for the last time at my nephew's first birthday party. On his way home, he was killed in the automobile accident. I do not go by that exit on I-40 often, but when I do, I certainly do not like it. I have a golf tournament award that my brother Jon won along with a picture of him with Eddie Van Halen. I miss my brothers a lot. Both of them were great brothers.

The picture that I have of Tami is one with all of the Allison family except our father. She was always sweet to me and helped me fill in some gaps in regard to my father. It was like that show "Long Lost Family" when I met her in Las Vegas. We instantly connected.

One thing that I noticed about grief is that your friends change. People that you thought were your friends feel too inept to communicate with you, so they slowly slink away. While other people you do not expect have a newfound appreciation of what you have gone through. There is no one answer to dealing with grief. Of course, I could not do it without my faith in Jesus. I am comforted to know that he said "Let the little children come to me." That tells me all I need to know about how Jesus feels about Reese.

Right now, my wife's father is experiencing his last days in a nursing home. More grief to come for my wife and I. My wife lost her brother Jerome at age 57 which was the same age that my step father Hillman died. Unfortunately, grief never goes away, so you have to learn to live with it, like it or not. There is no reason to ruin your life and sink into a depressive state, or get addicted to drugs or alcohol to deal with it, because none of those things will help you. It is more important to recognize grief for what it is, accept it, then keep moving forward living your life. You will never get over the loss of people that you love, but you can choose to live your life and find your own happiness. Little by little, the weight of the 50 lb weight vest will start to dissipate. It will rreturn periodically, but you will get better at removing the weight of it. Stay focused on the future, respect the memories of the past, appreciate the gifts that you received of God putting those people in your life and then live your life in pursuit of your own happiness. Happiness is better than depression any day of the week.

There is Hope in #Fintwit

I am a student of prior wars. One of the craziest wars was World War I, sometimes called the Great War. Parts of this war took place in Northern France, Belgium and Southern Germany via trenches. The Germans advanced and dug large trenches over a vast stretch of land and then defended it. The Europeans also dug trenches very close to where the Germans dug their trenches. The Generals on both sides periodically ordered their men over the side of the trenches to advance to the other trenches. If you failed to get out of your trench when ordered, then you were likely to be shot dead right there by your own side. If you got out of your trench, then you were likely to be shot by the enemy. This insanity repeated itself for several years with neither side advancing. All that happened is thousands upon thousands of people were needlessly killed by incompetent military leaders.

Today's political climate reminds me of this trench warfare. Instead of playing out on a battlefield somewhere, it is playing out on Twitter®. This is just pure stupidity in more ways than one. First of all, nobody should believe that their opinion on Twitter matters in the grand scheme of things. Secondarily, if you are espousing your political beliefs on Twitter, then you will most certainly get attacked and perhaps even some will try and cause you to lose your job. This is all totally ridiculous. It really should stop. I have started to see it rear its ugly head in #fintwit. This is disturbing to me, because our industry already has to fight off all these stinking Ponzi schemers. We do not need to be sullying our reputations as a group over mindless political opinions.

Twitter is today's trench warfare. A bunch of people with way too much time on their hands send out tweets and foolishly believe that their words carry a lot of weight. The truth is Democrats do not care about a Republican's opinion and vice-versa. So, I am going to double cancel culture the both of you Democrats and Republicans. Cut it out. You are giving our profession a black eye.

I notice some things about our industry having been a part of it since 1988. For most of my career, other financial advisors have mostly looked at each other as competition. I recently had a financial advisor with an office in my building tell me that we were competitors. I told him that we were not. He disagreed. I tried to reason with him that the people that he knows in his circle are in a different circle than the people in my circle. He was unconvinced. Although, I could have offered a ton of help to this younger advisor, he was totally opposed to the idea of even having a further conversation, much less help from a competitor. I thought how sad. He was trying to branch out on his own, but months later, I noticed that he took a salaried job at Citibank. No surprise.

I met another financial advisor who once told me that he knew how much assets under management that I had. I replied, "You're kidding?" He said, "No. In fact, I have a list of every financial advisor in town and how much they have in AUM on an Excel spreadsheet." I was stunned. Why is this guy wasting his time worrying about what other advisors in town are doing? Seems pretty dumb to me. Must be a male ego thing, I guess.

There are some young people coming up today who are making changes in that attitude. Specifically, Jason Wenk, Tyrone V. Ross, Jr. Dasarte Yarnway, Brittany Castro, Emlen Miles-Mattingly, Douglas Boneparth, Ryan Hughes, Alex Rosenberg, Taylor Shulte, Justin Castelli, Breanna Reish , Alex C. (the Armenian) and Kyle Van Pelt. Forgive me, if I left you out. Those are the names that came to my immediate mind. These folks are all about helping each other. They do online seminars, video blogs and reach out to each other by social media. Others have businesses that help young advisors. These people are doing great things for our industry. I can tell you confidently that the future of the financial profession is in good hands with these young professionals. They get it and frankly, I do not care what their political beliefs are since they have no effect on what they are trying to accomplish and I strongly believe will accomplish. 

Let me know if I can be a resource.

https://riarules.com

https://marianfs.com

Who is investing with these fools?

Are people really this stupid? Sadly, apparently so. Some promoter of investments in Texas promised investors a return of 20% per year over two years. In addition, this Texas promoter promised that each investor would potentially receive another $15,000 to $18,000 over five years, plus even more crazy incentives.

I am not sure how many stupid fools invested with this guy, but the Texas State Securities Board's Enforcement Division stepped in and put a stop to it. Or, at least they thought so. The brazen nature of this promoter is unbelievable. While the promoter met with the Enforcement Division, after promising to stop his sham, he was still promoting it to investors on that very same day!

My book, Meet Wall Street. The Reason You're Stupid, 2nd Edition is on sale right now for $0.99 as an eBook at https://books.apple.com/us/book/meet-wally-street-the-reason-youre-stupid/id816020421?mt=11&app=itunes. The subtitle is very apropos for anyone fool enough to invest with this promoter. Hopefully the Texas State Securities Board stopped him before he stole too much money from investors. You can read the press release from the Texas State Securities Board here: https://www.ssb.texas.gov/news-publications/commissioner-enters-order-against-georgetown-promoter-fraudulent-medical.

If you had read my book, then you would not have fallen for an investment promoter like this guy. Let's have a little class on this, shall we? Your first clue to this being a sham was the 20% per year return promised over two years. He was only asking for $50,000 from each investor. That was your second clue. Your third clue was the additional return promised of another $15,000 to $18,000 over five years. Add these clues up and you have a sham investment of a 76% return on your money in five years. How can these guys even say this crap with a straight face? I would report a guy like this so fast they would not know what hit them. I majored in Criminal Justice and I believe in law and order. Besides, I am out here doing the right thing by people and these investment promoter types are ruining it for honest advisers like me.

Readers of my eBook will know that this type of investment violated my rules of investing. One of my rules is to "Keep it Public." By keeping it public, I mean that you should only invest in publicly traded investments listed on a stock exchange.  My other rule is to "Keep it Liquid." This investment was certainly not liquid. Once you gave this promoter your money, then that would likely be the last time you saw it. How are you going to comply with my two rules? This sham investment was not publicly traded and it was not liquid where you can get your money in as little as two business days. Therefore, as readers of my eBook know, this was a big, red flag and they would have never fallen for this investment promoter.

Oh by the way, did these investors check this guy's background? That's what I thought. Another egregious failure. Did they check to see if this was a securities offering registered in the State of Texas or granted an exemption from registration from the State of Texas? Of course, they did not. They just blindly hand their money over to investment promoters like this all the time. You can check an advisor's background at https://www.investor.gov/crs.

Ninety-nine cents will provide you the information to protect you from investment promoters like this guy. Now do you see why the subtitle of my book is "The Reason You're Stupid"? Unfortunately, you are very, very stupid if you invest with someone like this.

You need me in your corner. I am telling you.

https://www.marianfs.com

Direct Indexing

There is a new change coming in the area of investing called Direct Indexing. What is Direct Indexing? This is where you invest in a pool of stocks that follows a particular index such as the S&P 500® or the Dow Jones Industrial Average for example. Right now, financial advisors use ETF's that invest in a multitude of different indexes. Generally, most index fund charge fees for managing the funds. Recent competitive pressures have forced a lot of these management fees to come down significantly. These management fees can range from 0.50% down to as low as 0.03%. There are some funds with management fees higher than 0.50%, but for the most part, most of the well known fund sponsors with index funds charge less than 0.50%. If you are investing in one of these ETF's, then this is the fee that you pay the fund sponsor to manage the pool of money.

Direct Indexing is going to change the investing world significantly.  Suppose your financial advisor has you invested in a portfolio of ETF's. The total management fee is based on your financial advisor's fund selections. Let's assume that your total management fee is 0.50% per year. With Direct Indexing and free trading commissions your financial advisor will be able eliminate this 0.50% fee altogether. Now, this is not something that is going to happen immediately, but it will happen. The key to this is two fold. One is zero trading costs and the other big one is the ability to buy fractional shares.

You long had the ability to buy Mutual Funds in fractional shares, but you could not buy fractional shares of ETF's. ETF's trade like a stock. You cannot buy 0.3478 shares of a stock...unless you have a brokerage firm that has the software capability to allow it. The major players like Schwab, Fidelity, TD Ameritrade, E*TRADE and others will soon be allowing you to buy fractional shares in your account, if they are not already. This fractional share issue is the key to Direct Indexing. You may have seen an ad on television for Schwab Stock Slices. This is a form of Direct Indexing, but not the full freedom that financial advisors like me prefer. We want complete freedom to choose as many stocks as we want in each client account. This is when Direct Indexing will really take off.

For taxable accounts, Individual, Joint or Trust accounts, there is a tax advantage utilizing Direct Indexing. Stocks by themselves are tax deferred. After you buy a stock and hold it, you only pay taxes if you sell it. Of course, the amount of taxes that you pay depends on the time period that you held the stock (i.e., short-term capital gain or long-term capital gain) and whether you have a profit or a loss. You can still do Direct Indexing in your IRA and Roth type accounts. There just will not be any tax advantage in doing it. However, you will save in management fees from a formerly all ETF portfolio.

In the very near future, probably in 2021, your financial advisor may come to you to discuss Direct Indexing with you. Direct Indexing will allow you to hold a portfolio of, for example, 500 stocks in fractional shares in your Individual account without having to pay an ETF management fee. This will save you somewhere between 0.03% and 0.50% or higher in fees each and every year. Your financial advisor will be fairly compensated by their normal assets-under-management fee or annual flat fee that they charge. The reason this is true is because, they have to research the 500 fractional share stocks to put into your account! This takes a lot of time and their time is valuable.

I am working on a new relationship with a firm that will be able to offer this sometime late this year or perhaps early next year. It is something that I am personally really excited about. More to come.

Let me know you I can help you today. Visit https://www.marianfs.com give me a call and/or request a Zoom Meeting via email.

2018 Census Data vs Local Police Forces

Wikipedia defines critical thinking in this manner.  

"Critical thinking is the analysis of facts to form a judgment. The subject is complex, and several different definitions exist, which generally include the rational, skeptical, unbiased analysis, or evaluation of factual evidence. Critical thinking is self-directed, self-disciplined, self-monitored, and self-corrective thinking."

Count me in the group who are normally skeptical, require unbiased analysis and factual evidence. This is especially true in matters of media reports and political statements.

Keep in mind that this is just a blog post and not a peer reviewed data study. However, I will provide sources. In order to keep things simple, my sources are: 

https://data.census.gov/cedsci/all?q=Race%20and%20Ethnicity&tid=ACSDP1Y2018.DP05&vintage=2018&hidePreview=false 

https://www.bjs.gov/index.cfm?ty=tp&tid=71 (Local Police Departments, 2016: Personnel, Full Report)

I will start this blog with the question..."How many White people, Black people, Hispanic people, Asian people, Native American people, mixed race people and Native Hawaiians should we have in our local police forces?"

According to the latest Census, specifically 2018, we should have the following percentages:

• Black or African American - 12.3%
• White - 60.2%
• American Indian or Alaskan - 0.7%
• Asian - 5.6%
• Native Hawaii or Other Pacific - 0.2%
• Hispanic - 18.3%
• Two or more races/other 2.7%

Then, I wanted to compare what the 2016 Bureau of Justice Statistics says about local police forces. Here is what I found.

• Black or African American - 11.4%
• White 71.5%
• Hispanic - 12.5%
• Other/Unknown 4.7%

This local police study did not exactly correlate with the Census numbers, but I was amazed at how closely the local police forces tracks our overall Census population. Remember, we are taking a macro or helicopter view meaning we are just looking at the entire population of the United States versus the entire population of local police forces.

Where is the problem? If anything, I would say that Hispanics and Asians are underrepresented. Blacks or African Americans are pretty representative with a 12.3% versus 11.4%. 

My critical thinking conclusions would be that we need more Hispanics and Asians in the local police forces across America. Further, I feel that the distrust of local police forces in Black and Hispanic communities probably contributes to them being under represented. More so for Hispanics, than Blacks. Asians, at the risk of sounding racist here, teach their children that their education is the most important thing in life. Asian parents expect exceptional educational performance from their children. It stands to reason that local police force education requirements and the compensation that goes with it conflicts greatly with what Asian families teach their children.

I do not really think we have a problem as far as race and ethnicity is concerned with local police forces. Now, if you disagree with that, then you must answer this question:  

"What is the correct percentage for each race that should be employed by local police forces?" 

You cannot answer that question. All you can do is make an assumption that there is a problem that requires "fixing." If you do make an assumption, then I would conclude your critical thinking skills to be lacking. Show me your data to back up your assumption. When you do that, then you have begun to think critically.

I majored in Criminal Justice, in case you were wondering why I have a blog post like this one, plus my father was a former Chief of Police in California and Arkansas.
 

The Difference Between Me and You

My paternal family came to this country before America became the United States of America. Our family was known as "MacAllister" or "MacAllistar" depending on the spelling. James Cuthbert MacAllistar moved to Northern Ireland after having changed his last name to Allison. He was the first Allison in our paternal family tree. His middle name is the name of a Catholic Saint, St. Cuthbert of Northumbrian. It was thought that James Cuthbert Allison left Scotland to move to Northern Ireland to become a farmer. Some Scottish MacAllistar's were under attack at the time in land disputes. James Cuthbert Allison just left the area and started over in Northern Ireland.

James Cuthbert Allison had a son named John Allison I who was born in Avondale, Lanarkshire, Scotland. His son, John Allison II had a son, John Allison III who came to Colonial America settling in Lancaster, Pennsylvania. John Allison III was politically involved and was a signer of the Lancaster Petition along with his son, William Allison. You can read about the Lancaster Petition here: 

http://www.phmc.state.pa.us/portal/communities/documents/1681-1776/lancaster-petition.html

William Allison had a son, Colonel John Robert Allison who moved to Orange County, North Carolina from Pennsylvania. He fought in the Revolutionary War for North Carolina. Colonel John Allison had a son, Lieutenant Joseph H. Allison who also fought in the Revolutionary War. Lieutenant Allison's son was a General in the North Carolina Militia. His name was General Joseph S. Allison and he helped keep the peace in North Carolina after the Revolutionary War.

General Joseph S. Allison had a son who moved from North Carolina to Texas and became a Medical Doctor who rode on horseback to treat patients. His name was John James Allison whom they called Dr. J.J. Allison. One of Dr. Allison's children was named William L. Allison and is sometimes referred to as William L. S. Allison. William moved to a small town in Arkansas called Hattieville to become a farmer. Hattieville is an unincorporated community made up mostly of farmland about 10 miles north of Morrilton, Arkansas off of Interstate 40. One day, William went to the General Store by wagon and never returned. The story goes that Indians from Texas followed him to Arkansas, sought him out and killed him. Supposedly, he left Texas to escape the Indians. William had only one child named John Washington Allison. The Allison family tree came perilously close to ending right there, but luckily, John Washington Allison was born. Here is a picture of John Washington Allison standing in front of his Hattieville, Arkansas home. Just a pillar of wealth, don't you agree?

John Washington Allison had two children by his first wife, Cassie Simons. One of those was my grandfather, Terry Francis "Fred" Allison and the other was his little brother, Perry Roosevelt Allison. Here is a picture of these two young guys standing in front of the pure wealth of the Allison family. My grandfather is on the right. Notice the wealthy background that I came from. I just love this picture.

John Washington Allison remarried and went on to have another six children. His second wife was named Elizabeth "Eliza" Menees. He was a baseball player and notice that he is the one in the black uniform holding a baseball. I assume he is the pitcher. Hattieville, Arkansas is a very rural area in Arkansas and I cannot even imagine that they could field a baseball team, but they did. Here is the proof from a 1913 newspaper article.

There are two Simons in the picture and they must be the brothers of John Washington Allison's first wife Cassie Simons. I am a baseball player and fan myself and this is obviously where my love of baseball comes from. I inherited it.

My grandfather Terry Francis "Fred" Allison was probably wondering why the hell his parents gave him a middle name of Francis while naming his little brother after Teddy Roosevelt. After all, his first name Terry can be a girl's name, too and he didn't want to go by Terry or Francis. You cannot really blame him for going by Fred.

Fred Allison had four children, three girls and a boy and that boy was my father, Billy Joe Allison. That is an Arkansas name if I ever heard one. Of course, he didn't much like to be called Billy Joe, so he went by Bill. Bill Allison, my father, married my mother Donna Jean Bridges who was born in West Covina, California. They were married in Little Rock, Arkansas in 1955. I was their only child, Richard Mark Allison.

My mother still has a picture in this wedding dress hanging on the wall in her house. Unfortunately, Bill and Donna did not stay married long. Less than two years in fact. However, both remarried and had three more children each and lots of grandchildren that followed.

Bill Allison joined the Army when he was 15 years old. By the time that he was 21, he had already served in Korea as a member of the 187th Airborne which merged into the 101st Airborne Division. His 187th unit was known as "Rakkasans" and they earned the Presidential Unit Citation. Here is a picture of him and one of his Army buddies with their Presidential Unit Citation and other badges. The Presidential Unit Citation is for extraordinary heroism in action against an armed enemy. Their unit accomplished their mission under extremely difficult and hazardous conditions so as to set it apart from other units participating in the same campaign. Bill Allison is on the right.

 

Bill had two combat jumps into North Korea. He had married my mother upon winding up his Army service in 1955. Shortly thereafter, they had me as a baby. Consequentially, he joined the Air Force in order to take care of me and my mother. However, my mother's father was not a man who wanted his daughter to be moving all over the place with a young child and he kind of put pressure on my mother to stay home in Arkansas where her family could help out. My mother's story was disparagingly different, but this is what I believe to be true. My mother changed my name later on to Richard Allison Johnson. It always felt wrong to me that my name was changed and I did not like it. In 2019, I finally changed it back to Richard Mark Allison and I have never been happier about my decision. With this paternal family tree, who wouldn't want to be an Allison? Before that however, I was known as Richard Allison Johnson and had my children with that last name.

I had my first son, Reese Cannon Johnson on September 4, 1989, but he only lived about three months as he was a SIDS baby. In November of 1990, we had another son, Marshall Reid Johnson. He is the greatest son that a father could ever ask for. I could not be prouder of him. He is amazingly smart and knowledgeable about cars, movies and just about anything under the sun. There is nothing that he cannot achieve.

After three miscarriages in a row, we were blessed with our daughter Rudi Michelle Johnson. She too is a gift from God, especially after three miscarriages in a row. I could not be prouder to be her father. She is going places in life as she is currently pursuing the academics to be a dentist. Don't ask me why, but she decided this all on her own.

My father went on to be in law enforcement and became the Chief of Police in Grover City, (now Grover Beach) California. He spent most of his married life there in Arroyo Grande, California where he was a police officer. The Arroyo Grande Police Station is named after my uncle, Former Police Chief James C. Clark who married my father's sister, Betty. 

Bill eventually moved back to Arkansas to take on the Chief of Police job at Camden, Arkansas. Sadly, he passed away at age 39 when I was a 17 year old senior in high school. He was planning on having a relationship with me once I turned 18 years old, but it was not to be.

My mother had three children with Hillman Johnson who was my father growing up. One of those, my brother David passed away in a truck accident when he was only 32 years old. We lived on the same street in Little Rock at the time. It was very hard losing David in this way. I still have a sister and another brother back in Arkansas, Sharri and Gary who are doing well.

On my father's side (Allison) of the family, it has been rough. My sister Tami passed away at age 53 from Lupus and other complications. My brother Jon Terry Allison, named after our grandfather passed away last year, 2019, at age 54 from heart complications. Very tough to lose Jonny. Such a great guy with a lot of love for his friends and family. He left behind a wife, Dena and son Riley Jon Allison who was named after his father and my brother Jon.

Consequentially, I see the world different from most people. All of this makes me look at the current looting and rioting going on in American cities right now in a very different light. 

Look at my life and tell me how tough yours has been compared to mine. I think what you will find is that it does not matter whether you are white or black. It only matters how you choose to live your life. As I watch young people rush into loot a liquor store, I cannot help but wonder how is that going to improve their life? Where is their faith? They do not care about God, or other people based on their actions. They are narcissistic and selfish. The fact that many of them are black makes no difference. Society does not owe them anything. Certainly not a stolen case of Bud Light.

You only get once chance at life. If you choose to be a criminal, rioter or looter, then you have devalued your own life. If you choose to fight the police when they go to arrest you, then you are risking your life even more. If you believe that cops go around killing people because of the color of their skin, then you are ignorant of reality. Therein lies the problem. This false narrative is simply not true. Visit the Bureau of Justice Statistics and see for yourself. https://www.bjs.gov. I majored in Criminal Justice and you can find the truth at this web site.

Racism is itself a form of dividing people. By you claiming to be black or me claiming to be white, we are immediately putting up a brick wall between us. If you want to get rid of racism, then you have to stop labeling people by the color of their skin.

In reality, if you are black, then you are no different than me. You have children and families and dreams for those children and families just like I do. If you are black, white or any other label, then you have choices to make. Do you choose a life of crime or refuse to be a criminal? Do you continue to be dependent on the government for the very little benefits that you may receive, or do you educate yourself and try and achieve a better life for you and your family? It has nothing to do with racism. Sure, I know there is poverty and poor areas of our country, but I also know that if you drop out of school, then you are killing your chances at a better life. Education is your way out. Blaming others and being a victim instead of looking in the mirror means accepting failure. Why do you want to be a failure when countless black Americans have enjoyed and continue to enjoy the American dream? Most of these black Americans chose to educate themselves and focus on a goal that was important to them and then they set about achieving that goal.

It really isn't about being black or white. It is about what you want out of life regardless of the color of your skin. Look at my life story. What advantages did I get by being white? I would gladly have traded my white skin for being black if I didn't have to lose my father, my son, my brothers and my sister.

I play baseball and have done so for a long time. Look at how many black guys are on my team from last year. If I was a racist, do you think that I would play with black players? The opposite is true also. These black teammates of mine have no qualms about playing with a bunch of white guys. Do you know why? We work together for a common goal, that trophy down in front and we are not stupid enough to put a wall up between us called racism. Racism is for losers and people who want to be victims of oppression. I'm not blind to oppression. The fact is that it does not matter what challenges in life are placed in front of you. What matters is how you overcome them. I could have given up when my father died, but I didn't. I could have given up when my son died, but I didn't. I could have given up when my brothers and sisters died, but I didn't. Instead, I chose to keep moving forward. Don't give up no matter what your circumstances.

Hard times and Bad Actors

Well, hard times have a way of exposing bad actors. The SEC has stepped in and frozen a firm based in Aventura, Florida, named TCA Fund Management Group which is sadly a Registered Investment Adviser (RIA) firm. I say sadly because my firm is a Registered Investment Adviser firm, but nothing like this one. It ticks me off when I see RIA firms give honest RIA's a bad name. I do not like it one little bit, so take this blog post with a grain of salt if you want.

You can read about the SEC's actions in this press release link: https://www.sec.gov/news/press-release/2020-110

Everyone has opinions, but I have to fault the SEC for approving this firm as a Registered Investment Adviser in the first place on August 13, 2014. Everything about this firm is murky and they use a bunch of investment jargon which is often necessary to con people out of their money. Of course, the firm is innocent until proven guilty. However, I present some evidence to bolster my opinion which again is just an opinion.

They became registered with the SEC on August 13, 2014. However, they were touting their performance before then in a very peculiar fashion. For their TCA Global Credit Master Fund LP, they show a performance table in this document that shows their monthly returns since inception of April 2010. (I am sure they hate the fact that this document is on the Internet now, but your experienced Chief Compliance Officer sleuth has found it.) As you examine this table, specifically the "Onshore Monthly Performance (%) Net of Fees" table, please notice the fact that they never lost any money in any particular month for the period shown. www.portfoliomi.com/pdf/AMI-TCA-FACTSHEET-JAN-2015.pdf. Correct me if I am wrong, but don't you find that just a wee bit unusual?

The second thing that jumps out at me is the location of this "fund." Cayman Islands. Now, come on SEC, why on earth would you approve a firm that is a Registered Investment Adviser when they have an "investment" (and I am using that term very loosely) based in the Cayman Islands? Seriously, you guys need me approving firms as Registered Investment Advisers. I would never approve a firm like this one as an RIA

The other thing that bothers me is that they charge a 2% management fee, plus a 20% of profits Performance Fee. Ah ha! This is a hedge fund! Well, of course only sophisticated investors with the requisite net worth can invest in hedge funds as you know. Their minimum investment is $500,000. Of course, just because you have $500,000 or more to invest does not mean that you are smart. In my opinion, you should read the 2nd Edition of my book, Meet Wally Street. The Reason You're Stupid. There is a link in the right hand column of this blog.

There are many points that I can make here, but look at these items if you will.

1. They were touting performance before being registered with the SEC as an RIA.
2. They mention that their performance was calculated by a "third party administrator," but did not name this firm in this document. How convenient!
3. Their performance never had a losing month! This comes in very handy as it relates to number 5. below.
4. They are based in the Cayman Islands. Most people do not even know where the Cayman Islands are located, their tax laws, their asset protection laws, their treaties or lack thereof with the United States and on and on.
5. They charge a performance fee of 20% based on positive returns which is really nice when you consider number 3. above.

Most people do not realize this, but you can see who created this document, if you have Adobe Acrobat by going to "File" and then "Properties". According to this, a fellow named Mike Vernon created it. I tried a search for Michael Vernon or Mike Vernon on the SEC's website: https://adviserinfo.sec.gov but sadly to no avail. So, let me get this straight. This guy has never been registered with FINRA or the SEC, yet he is allowed to create this document? How would he know all the regulations pertaining to performance without being registered? I'm just curious.

Did I mention that TCA Fund Management Group was also registered in the United Kingdom and other countries? Supposedly, they are registered in the Cayman Islands, the United Kingdom, the Netherlands, Belgium and finally, the United States. Who knows if any of this is true? I am sure all of their investors know and did their due diligence before investing. I know. I know. I am being sarcastic.

I don't know how long this You Tube video is going to survive before the attorneys catch it, but if the link still works, I want you to watch this and tell me what in the hell TCA Fund Management Group does. I have a hope and a prayer that this young lady is one of the whistleblowers helping the SEC. https://www.youtube.com/watch?v=QCbWFC9rGu4

Don't forget that I am a compliance sleuth. I found this when I DuckDuckGo'd her name after watching the You Tube Video above. If you will notice that first thing in this DuckDuckGo search lists her, Tara Antal, as Chief Compliance Officer and Chief Administrative Officer. https://duckduckgo.com/?q=tara+antal+tca+fund+management+group&t=ffnt&ia=web Who knows what in the hell a Chief Administrative Officer does, but I do know what a Chief Compliance Officer does. Funny thing is that I could not find her at the Adviser Check web site either. Rather curious, don't you agree?

When you click on that link to her LinkedIn account, it does not exist any more. So, this is the scary part and why I hope and pray that she is one of the whistleblowers. I am in no way being prejudicial against young women, but I have a hard time believing that this young lady has the requisite skill set, experience and knowledge to be a Chief Compliance Officer for a hedge fund. Watch the video again and you will see that she struggled to explain what the firm does. At the time of this video she was a Senior Financial Analyst, but somehow she made the jump from that position in 2014 to a Chief Compliance Officer of a firm with supposedly $489,835,822 in regulatory assets under management as of January 31, 2019. She was CCO of almost a half a billion dollar RIA firm? Hopefully, she has "lawyer-ed up", because she is in a heap of trouble as the Chief Compliance Officer for this firm, unless she is one of the whistleblowers, then the SEC might work a deal with her. Let's pray for her.

This is a big lesson for young people. Do not accept a fancy title like Chief Compliance Officer unless you have a ton of experience, lots of control and know everything about a firm and its investment offerings. Otherwise, you could end up like this young lady in a big legal mess. Maybe she already quit this firm and called the SEC before they dropped the hammer. Let's hope so.

Another interesting fact about this firm is their Form ADV 2A given to clients. They do not have one posted for 2020 as they are required to do.  However, never fear, you compliance sleuth is on the case. I found one for 2019. https://adviserinfo.sec.gov/firm/summary/169163

Funny thing is that there are a bunch of glaring problems with this document. One obvious one is where is the money held? Their answer is "banks or other qualified custodians to hold all assets of these Clients." WTF? Are you freaking kidding me? They do not even tell people where their money is? I'll say it again. WTF?

This is proof positive that the SEC did not look at this document when it was filed. If they did, they would have instituted an immediate examination. The SEC's answer will be that they are understaffed and need more funding. There is this thing called reading Form ADV 2A filings. After all, once you submit this Form ADV 2A, then someone at the SEC is notified electronically. I would venture to say nobody read it when it was filed. Just a guess on my part. Don't get me wrong. We need the SEC, but they need someone like me helping them as an outside consultant on RIA exams and inspections.

Let me give you another glaring mistake. This firm was subject to independent auditors. In this 2019 Form ADV 2A, they said that they "expect to distribute audited financial statements to all investors ...within 120 days of the end of the fiscal year." Expect to? Expect to? WTF?

Another thing is the way they described the guy who owns the firm in this 2019 Form ADV 2A. "The Firm is controlled and majority owned by Robert Press via one or more affiliated entities." Huh? One or more affiliated entities? WTF? What affiliated entities? What are the names of these "affiliated entities" and are any of these "affiliated entities" regulated in any way? Have they been subject to any lawsuits? Sadly, the way this is worded, an investor has no freaking idea. Apparently, they do not have a problem writing a check for $500,000 though.

I wonder. Perhaps this may offer some insight into why there is no 2020 Form ADV 2A and further answer the question as to why they are currently under investigation by the SEC. Their independent financial auditor maybe did not sign off on it.

Oh well. Another cautionary tale for a lot of people.

Question the Data

This Wuhan Coronavirus or Covid-19 has numbers that reminds me of the video of the BP oil leaking into the ocean that was on television everyday. As people kept seeing the BP oil leak into the ocean, people got more and more fearful of what was going to happen to the Gulf Coast. There was legislation passed to compensate businesses for their losses due to the BP oil leak and the damage from it. What ended up happening? It became a money grab by a bunch of crooks claiming that they lost their businesses due to the BP oil spill and come to find out, a lot of these people were just out and out stealing money. Do you even remember the effect of the BP oil spill? The truth is that it did not have the effect that the television news and the doomsayers said it would. A lesson for today no less.

So, here we are with this Coronavirus. The massive legislation has already passed and supposedly will be passed out to worthy businesses and people. However, I am sure that there will be all kinds of abuse by unscrupulous bad actors. There always is in situations like this. I suspect that the truth will turn out the same as the BP oil spill. It will not be as bad as the modelers, the health experts and the doomsayers on television tells us everyday.

Let me point out something to think critically about. According to Wikipedia, the U.S. death rate in 2018 was 8.7%. Also, according to the Johns Hopkins Coronavirus map (equivalent of yesterday's BP oil spill video) that changes by the minute, the U.S. has a death rate of 2.55% as of this minute. (4/3/20: 1:26 pm) However, when you look at the death rate for Italy, Spain and other countries hard hit by this Coronavirus, you will see a death rate around 10 - 11%. We keep hearing from the medical experts that most of the people dying in all countries have "underlying health conditions." So, this begs the question..."What percentage of the people dying are 100% related to Coronavirus and only Coronavirus?" These medical experts keep repeating the phrase "underlying health conditions." Therefore, an easy conclusion would be that of the 2.55% U.S. death rate, then a large portion of those are related to "underlying health conditions." Further critical thinking would say that a much smaller percentage is actually 100% related to Coronavirus, probably 10% - 20% of the 2.55% figure. An inescapable conclusion then is that the death rate in the U.S. to Coronavirus is primarily related to those people with underlying health conditions (80% - 90%). If we were to see the age breakdown instead of just one number (all deaths), we would see more deaths at older ages. Some of these numbers have leaked out of Italy, but for some reason are not being shared here in the U.S.

This all brings me back to that 8.7% U.S. death rate. If underlying health conditions are a major contributor to that 2.55% death rate, then this means that it is probably safe to say that our U.S. death rate will climb to around that same Italy and other countries. The death rate in the U.S. would be 2.55% plus 8.7% on the low side, or 11.22%. Assuming the modelers worst case scenario on the high side would be adding the 8.7% and the 10 - 11% (Italy figure) for a total of 18.7 - 19.7% U.S. death rate. However, would this really be accurate? I for one do not think so. Let me explain why.

You have to assume that these people with underlying health conditions are actually part of that normal 8.7% death rate, but things got sped up a little due to the Coronavirus. These modelers (garbage in and garbage out) are predicting doom and gloom to cover their rear ends. They will always err on the side of worst case scenario, then when it doesn't materialize, they will all breathe a sigh of relief. My financial plans are worthless if the data going into them is wrong. The same is true for these modelers and their protections. It is garbage in, garbage out.

This all begs a host of questions.

• Why are we shutting down our economy based on these health experts, if the reality is that the majority of the deaths are people with underlying health conditions? 
• Further, if people with underlying health conditions are most of the 2.55% figure, then even if we assume a worst case scenario figure of 10 - 11% (Italy like) of people who get the disease, then how much higher will this really be above our normal 8.7% U.S. death rate? I believe these figures bleed over each other and will never get to 18.7 - 19.7% death rate of people who contract the Coronavirus. That's not going to happen, because of the efforts we have already taken.
• Why are we relying on these behind-the-scenes "modelers" in the first place? We need to question everything and be skeptical of data models.
• If the actual death rate of Coronavirus is a small percentage of 2.55%, then this is easily measurable. The risk for healthy people is a range of 0.255 - .051% (10 - 20% of the 2.55% figure). This is the quantifiable risk - 0.255% - 0.51% to healthy people. It is more dangerous to drive your car than this figure.
• Even assuming the worst case scenario, if the U.S. death rate jumped to 10% (Italy figure), then that would still mean that the majority of deaths would still be attributed to those "underlying health conditions." Therefore,  assuming 10 - 20% of that 10% death rate would mean that the effect of Coronavirus killing people would be 1 - 2%. Eureka! We are killing the economy for a 1 - 2% risk to healthy people. Seriously? This is stupid.

Here is the real problem. The hospitals are woefully unprepared. We are buying time during the month of April to ramp up the health care system. I think the President is going to side with the American people and get us back to work in May. Let's pray for a good outcome better than the one we have right now. The actual death rate numbers do not and will not justify killing the economy for a 1 - 2% risk of healthy people. As Americans, we take risks all the time. We can afford this risk. Let people with underlying health conditions adjust their lives to the risk, but put the rest of the healthy people back to work. Sooner, rather than later.

It Is Only Temporary - If You Cooperate

Personally, I do not like to hear people talk about depression and suicide in tough times. Although it may seem overwhelming to some people right now, it is only temporary. This is no time to jump off a cliff, reach for a bottle or grab a handful of pills. This is only temporary...if you cooperate.

People are dying everyday, but people are dying everyday anyway from other things like cancer, flu, car wrecks, and job site accidents. Yes, this invisible enemy can be scary, but not if you are smart and make good decisions. Nobody likes to self-quarantine, but right now and for the next month, this is the best thing we can do. After all, it does not take a smart person to figure out, if you stay away from other people, then you will not get infected and more importantly you will not infect other people. This means that the virus has no place to go and when warmer temperatures arrive, then the virus will go away for most locations in America. Pray for global warming and 100 degree temperatures!

The problem is going to be people moving around from hot spot areas. People from cold climates traveling to the United States will be an issue. Let's trust our health officials to recommend that this kind of travel be stopped. They are working overtime and deserve a lot of respect for the sacrifices that they are making.


Of course, some states like Florida are instituting tough measures for travelers from hot spots like New York. I don't mean to pick on New York, but to explain my point, I think it is important.  What good does it do for Florida to have tough measures in place when people from hot spots are traveling to Florida instead of self-quarantining? All these "travelers" are doing is delaying the end of this. Think about it. If all New Yorker's stayed home and didn't get in their cars and drive to Florida or other states, then there would be a flattened curve in a shorter amount of time. However, if they travel to other states and infect others, then this drags it all out for a longer period. You do not have to be a PhD to figure this out.

Self-quarantine and quit traveling around. This is where being smart comes in. Are you going to be smart about this? Or, are you going to be a narcissistic and travel around the country, because you feel like it?

Regulations, Regulations, Regulations!

Why is it that people in government think the way to solve a problem committed by a small subset of people is to make new rules that apply to everybody?

A case in point: Regulation Best Interest and Form ADV 3 - CRS. (See June 5, 2019 Final Rules)
https://www.sec.gov/rules/final/finalarchive/finalarchive2019.shtml

This proposed rule by the SEC applies to all broker-dealers and investment advisers. The problem is that this rule favors broker-dealers over investment advisers. There are a couple of lawsuits filed against this proposed rule and we will see how this all pans out. However, herein lies the problem. Broker-dealer representatives can sell Variable Annuities that pay 6% (or more) commissions to their clients and still comply with RegBI. Well, you might say... "What is the big deal as long as it is disclosed to clients in writing?" More disclosures? We really need more disclosures? Let me get this straight. As long as your broker puts it in writing that he is charging you 6% commissions and you do not even have to sign Form CRS, then this makes it okay? Give me a break.

Here is another problem. Think about this from the best interest of the client for a minute. This broker sells you a 6% commission Variable Annuity with a 10 year surrender charge and has given you the proper Form CRS disclosure. What this broker did not tell you was that you can get a multitude of Variable Annuities without any commissions and no surrender charges. Guess what? He didn't put that in his RegBI disclosure either.

Do you see the problem here? How can you ever sell a client a Variable Annuity that pays 6% commission with a 10 year surrender charge knowing full well and trust me, the broker knows full well, that there are Variable Annuities without commissions and no surrender charges? How can this ever be in a client's best interest? It cannot. Pure and simple.

In my opinion, the issue is and always has been to protect broker-dealers over investment advisers like my firm. https://www.marianfs.com.

How do I plan to solve this issue at my firm? Give the Form CRS, plus a side-by-side comparison of the fees currently being paid by a client against the fees if they move to my firm. All you people who still do business with broker-dealers, really need to come see me, or reach out to me. Seriously. This one form will open your eyes to how your broker is not doing things in your best interests and quite frankly, never will. This form is copyrighted by the way, so don't get any ideas you brokers.