A guest Post from Tim Aldiss -
Financial regulations are always put in place with the intention of lending further transparency to decision making processes. However, the eventual results do not always mirror the initial vision. Although providing a new breed of qualified investment advice may help investors avoid financial pitfalls, many individuals are now distancing themselves from this prepaid and often times still confusing arena. The end result has been that markedly fewer people are seeking the services of a financial adviser; indeed, less than one-third of all adults will consult these professionals.

Although some analysts will state that a reduction in the number of professional advisers is one of the goals of many regulatory authorities, others will feel that the do-it-yourself tendency being witnessed may usher in dire consequences for those inexperienced in the financial industry. Is this a future financial debacle waiting to unfold?

Another effect that this shift has had is in the way financial companies now communicate with potential clients. Unsurprisingly, many professionals are now learning to embrace the internet as a means to drive business forward and to disseminate their services. It seems that online execution-only platforms may be the way forward. In fact, the investment giant Hargreaves Lansdown now boasts a website that attracts more visitors in the United Kingdom than The Times or the Post Office. They have also adopted an iPad version of their newsletter and cater to thousands of Twitter followers each month.

Additionally, it should come as no surprise that garnering investment advice from social media sites has also increased in popularity in recent times. Many of those who follow the do-it-yourself mentality will utilize the knowledge base of the larger, interactive populace to help shape their financial decisions. Although this methodology is still in its infancy, some feel that the purchase of equities and deciding upon the correct investment fund may be the next logical step forward in the social media arena.

It is obvious that financial companies and fund managers need to quickly adapt to a generation increasingly focused on mobile devices, business apps and real-time flexibility. No longer does this approach represent but a small portion of investors; rather this will be considered the norm in the relatively near future.

So, while the landscape of financial advice may be changing dramatically, the ability to acquire sound and secure advice is more important than ever before. While companies continue to modify their practices to accommodate this growing trend, individuals need to avoid the pitfalls often times associated with such a malleable environment.
Tim Aldiss writes on behalf of Broadgate Mainland, the financial services PR experts.

written by Joe \\ tags: Finance

Let’s start this week with My Retirement Blog’s U.S Retirement System a Success. To be fair, Andy doesn’t quite agree with the title, but was referencing a paper put out by the Investment Company Institute (ICI). I’ll be reading the paper and writing my own take on it later this week.

Now that she’s finished her Walk For Hunger (congrats for passing $2000 raised, and your team for $5,000+!!) Stephanie is asking herself, “Was my Traditional to Roth IRA conversion a mistake?” You see, she did fine projecting her tax bracket, but the extra income negated her ability to deduct her student loan interest. If it’s any consolation, Steph, the market is up nearly 17% year to date, so you may have already broken even or are ahead of the game despite that small faux pas. If it still bothers you, you have until October 15th to recharacterize that conversion and amend your return, but hopefully you caught much of the market increase this year and are happy with the decision to stay in the Roth. Check out her site Graduated Learning: Life after College.

At Five Cent Nickel, I found out that Overdraft fees soared to $32 billion in 2012. WTF? (This is a family friendly site, WTF = “what the factorial?”) You can do the math here, this is $100 for every last person in the US. And probably $300+ given that at least half of us must be more responsible than that. The take-away here? Balance your checkbook. Now.

At Lazy Man and Money, a guest post by Kosmo – Saving Money At The Store. One day you will make enough that you might be able to waste money without a second thought. Few people are there right now, so these ‘frugal’ articles are always welcome reading to me. From this article, one gem of a line – “If you’re paying $3.60 per gallon for gas and get 18 mpg, you’re burning 20 cents worth of gas each mile you drive.” Which is why planning your grocery store trips is a great first step in your path to saving.

At Monevator, The Investor tells us why he’s “Thinking of Hetty Green as I dial back on shares.” I have to admit, I’ve been thinking about this as well. As we went through the 2008-09 crash, we hung in and bought into the market. It’s pretty cool to see a net worth 2-1/2 times as great as it was in 2009 just over 4 years ago. But it would also be ok to take a bit off the table so if and when the market starts to get frothy, I’m not the last one hanging in there.

Let’s close this week with the question If you had be selfish and spend $5,000 by the end of today, what would you buy? This was asked at Punch Debt in The Face, and it got 60 answers pretty fast. I haven’t responded yet, gotta think on this one.

written by Joe \\ tags: Debt, Finance, Frugal, Retirement

Just as one issue starts to be put behind us, it seems another comes to take its place. Unfortunate events, indeed.

written by Joe \\ tags: bengazi, irs, obama

In Week 37, I shared how I planned to dump my Verizon land line and move to Comcast’s Voice service. So far, that’s not happened. So this week, it’s a Dear Comcast Letter -

Dear Comcast,
At first it seemed simple. I called and your sales guy told me $14 would get me Comcast Voice. I agreed, and a few days after, a technician came.
Nice guy, set up the VOIP modem, dial tone, but my phone number wasn’t ported from Verizon. I could dial out, but calls wouldn’t come in. He moved the wire back to the Verizon copper, spent some time with your customer service, and told me the issue was with my Verizon account.
It seems that a few weeks prior, I made a change to my account on line, and while Verizon ignored it, it put my account into a limbo status. So I spent the next hour with Verizon and they told me they would release the number within a few days.
I called Comcast back and awaited the next tech’s visit. The number still wasn’t released, and it was round two with both Verizon, and then Comcast. You told me to give it a week and then call your porting department to be sure the number was released and to set up another tech visit.
This is when the fun started. The porting department saw nothing, no order at all. Said I needed to talk to sales to set up the order. Sales is when it all went downhill. I told the gal I was looking to get the triple play (I already had Comcast TV and Internet) and that the first guy promised me it was $14 more than I paid now. Sales gal insisted I listed to a pitch for a security system, and told me to calm down. Rule number one for customer service – never say “calm down.” Never. She then told me phone would cost me $50 more than I paid now. As I started to tell her that I’m 2 visits and a half dozen calls into this, she abruptly tells me she’s transferring me to customer retention. Funny, I never said I was planning to leave, I was trying to get more service, and pay the price I was promised.
Another person answers and after letting me explain my situation, apologizes. He is a technician, and will transfer me. The final representative said the first salesman made a mistake, and instead of just adding phone also bumped up my TV selection. Somehow it took 15 minutes to figure this out. The actual triple play along with the adder for two cable cards for my TiVos will cost a total $12 more than I pay now. A bit less than I was expecting, but with far more aggravation than I’d ever imagine. The install was promised for this coming week. I figure it’s 50/50 whether this will be the end of it.

To be fair, when it’s going well, cable doesn’t bother me. There was a vocal minority that objected to data caps, a 250GB monthly limit. I think the most I ever hit in a month was 100GB. What’s remarkable is the confusion that occurs for what should be a simple issue. The good news is they are now going to waive the service call fee. The bad news is I was never expecting to pay a fee in the first place.

Have you ever had an ongoing issue with your phone or cable company? How did it end?

Edit – What are the odds? I wrote this article last night and today I get an online article from Advisor One – Top 10 Most Disliked U.S. Companies: 2013. Sure enough, Comcast was on the list. Funny though, so was American Airlines. They were my airline of choice and I a million miler with American. I’d say that in 30 years of flying, I had two issues that really caused me grief. Two issues in 30 years isn’t bad.

written by Joe \\ tags: cable, concast, phone, verizon

If you read enough different Personal Finance blogs, you find that there are a number of popular recurring themes. Ways to save on various purchases, how to plan for retirement, etc. The one that’s been haunting me lately is, as the title today says, saving vs paying off debt. There are some obvious choices to be made, such as paying down an 18% credit card or putting that money in the bank to earn .01% interest. (Uh, if it wasn’t obvious, pay the damned card!)

But, then there’s the grey area where the debate really has no conclusion, no right or wrong, just what’s right for you. First, a disclaimer. In the PF blogging community, it’s ok to disagree. Disagreeing isn’t a personal attack in this case, it’s just a different take on an issue. That said, It was two months ago that I read Are 401(k) and 529 Plans a Good Idea When You’re In Debt? I was part of the 78 comments that quickly went up after Joan Otto (Man Vs. Debt community manager) wrote this article in which she described how she’d prefer to go at her debt 100%, even to the point of sharing that she was sorry she or hubby even had their 401(k)s to begin with. She explained that they had a combined $44,000 in their retirement accounts averaging 8% return, but $59,000 in debt costing 14%. Ouch. I understand that’s an issue. The real issue that Joan shared was that their 401(k)s had no match. Game over. Really. Joan’s plan to pay off her debt with a vengeance was exactly the right thing to do.

What drew me in to the discussion was where Joan remarked that even if there were a match, she’d pass on it, and take The David‘s advice. If your employer is going to match the first few percent of your income dollar for dollar, my opinion is to take this free money. The match is usually up to the first 4-6% of income, which should leave enough funds so the debt repayment plan doesn’t suffer too much. Joan mentioned paying $2500 per month (wow!) toward the principal on her debt. That’s $30,000 per year. I don’t know their income, but even if we are looking at $100,000, I’d suggest steering the $6000 toward the match if there were one to be had. But that’s all hypothetical.  Let’s move on to a real situation.

My ‘friend’ (ok, it’s a close relative. Let’s stick with friend for this delightful anecdote) mentioned that she’d qualify for a refinance of her mortgage once her credit cards were paid off. $10,000 at 18%, so the $400/month she was paying toward the cards would take nearly 32 months to pay off. She told me that she stopped depositing to her 401(k) and I thought about Joan’s story. My friend’s company  had a match, 4%. This was $3000 left on the table. I looked at the numbers, and made an offer. I wrote her a check to pay off the cards, and she’d putting in $250/mo to the 401(k). Since it comes off the top, it’s $188 less in her take home pay. This leaves $212 to pay toward the $10,000. At the end of 32 months, she’ll still owe me $3,680, but her 401(k) will have $16,000 that wasn’t there before. Yes, the $16,000 is pretax, but she’s over 55, so if she changed jobs she can take it out with no penalty, just tax. At 25%, she’d still clear $12,000. I’m not forecasting any gain, in fact, she’s probably wise to keep this money in the short term bond fund for now, to know that it’s safe. And the refinance – once the cards show as paid on her credit report, the refi should save her another $200 per month.

There’s something admirable about killing the debt, I get that. I get that debt feels like a weight you just want to get rid of. But after nearly 30 years of matched 401(k) deposits, I see the power of compound growth on top of matching deposits. I see that I could have taken $200K over the years and paid off my mortgage by now, or I can have that $200K in debt and far more than twice that sitting in a retirement account. It’s tough to stay the course, especially when you look at how the S&P has crashed twice in the last 15 years. For most 401(k) accounts, I’d say to deposit to the match and that’s it, but walking away from that free money is a mistake, in my opinion. Keep in mind, most 401(k)s offer a low risk investment choice. Even though I might not choose it myself, it’s a good alternative to using the excuse of a ‘risky market’ to avoid saving altogether.

How have you handled the debt decision? Are you passing up a match in your retirement account?

written by Joe \\ tags: 401(k), Debt