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2013
Quarter 1 Newsletter

Your Financial Guide is Checking In...

What a great year we had in 2012 and well into 2013.  Investment portfolios have been on a significant rise, many are taking care of debts, many are seeing resources multiply and are on their journey to reaching financial desires. You contribute to that upswing in the economy; it thrills us to see the individual successes we've seen and applaud you in working toward your goals.

Though difficult times happened in previous years, those times give us a chance to scrutinize how we are doing, follow plans with new determination, and be grateful when the sun begins to light our path and see there is success ahead.

But before we sit down and unload our backpacks for a rest, now may be the time to be more diligent before another storm comes, and now may be the time for a quick review to make your journey rich:

  • Do you remember your vision for why you began the journey? The vision is key to you and your family's success.
  • Have you met with your guide (Chad) to re-evaluate your resources and assets, and the purposes for those assets?
  • Are your resources and assets aligned with the goals you have set?  Are they working for you?

If you have answered "no" to any of the questions above, make a point to make an appointment with us.  We want to make sure you have clear vision and are here to help. 

In this newsletter you will find:

Answers for You:  How to Choose Trustees for Your Trust. As clients have begun to put trusts in place, they have wondered who to choose to name as their trustees.  This article reviews the trends and gives good advice to consider before naming someone for your trust.

 

Education/Advice:  "Where are We Going, Daddy?" gives humorous, everyday examples of why employees or family have a difficult time engaging in work or in goals.  This article gives solid advice on how to remedy those issues.

Resources:  A section will also be provided in which we will list resources to assist you in your journey of life's success. This section will include, but is not limited to online articles, magazine articles, financial updates, books, etc.

Communication:  And finally, we are connecting with you through Facebook.  Connect with Parker Advisory and you will be able to receive regular updates on thoughts from us and connect with others you know.  You will be able to share links of articles and access advice from others.

As your guide, we care about you and your journey.  Communicate with us and connect with us to make life's journey rich .  Oh, and, enjoy the new read. 

Answers for You

Many high-net-worth people rely on trusts to minimize taxes and keep wealth in the family. But who should serve as trustee? A survey by Spectrem Group shows many wealthy investors who create trusts designate themselves or a family member as the trustee. But are family members the best choice? Here are some ideas you may wish to take into consideration when you are making the decision.

Trustee Responsibilities

Trustees have many complex responsibilities. The primary obligation is to distribute assets and trust income according to the wishes of the grantor - the person who establishes the trust. But the job also involves keeping records, investing assets, filing tax returns, and resolving conflicts.

Family Members as Trustee

Many investors appoint family members because they believe they will serve the interests of the beneficiaries. Also, family members often are paid little or nothing for their service.

However, trust experts say family members often have problems trying to administer a trust. They may not understand legal and regulatory issues and sometimes may grant distribution requests too freely, draining the assets.

Among affluent investors, Spectrem reports, 41% serve as their own trustee, 40% name their spouse, 21% name another family member, and 18% name their child. Just 25% name a financial institution, while 24% name their attorney and 13% appoint their accountant. (The numbers add up to more than 100% because some grantors name more than one trustee, known as co-trustees.)

  A Professional as Trustee

An outside professional can provide the expertise needed, along with an objective viewpoint. Sometimes the best solution is to appoint a family member along with a trust expert as co-trustees. The professional ensures the trust is properly handled, while the family member may be in a better position to deal with family issues.

Here are some reasons to consider appointing a trust professional as trustee or co-trustee:

  • A corporate trustee will continue as administrator for the term of the trust—even if that covers multiple generations. Any family member appointed as trustee eventually will die or become unable to continue. Grantors usually appoint a back-up, but that person, too, won’t be able to serve indefinitely. 
  • A corporate trustee is held to an even higher standard under state and federal regulations than regular trustees. All trustees must interpret all trust documents to serve the best interests of the beneficiaries. The trustee works for the grantor, not the beneficiaries, and is guided by the trust documents.
  • Trust specialists have the knowledge and experience required to comply with all legal and regulatory requirements.

A corporate trustee brings objectivity and ensures that any conflicts or questions are resolved in a legally appropriate manner.

As you can see, there are numerous options at your disposal; obtaining expert advice will help you determine which option will be best suited for your situation.

Chad W. Parker is the founder of Parker Advisory Group, Inc., and has over 17 years experience in financial planning and helping people to make their life's journey rich. He is a Certified Financial Planner (CFP®) a Chartered Financial Consultant (ChFC)and a Chartered Life Underwriter (CLU). If you would like to know more information about how your journey can be rich, contact us at 435-628-8773, or visit our website at www.parkeradvisor.com. We look forward to hearing from you. Content provided by Advisor Products, Inc.

Education/Advice

"Where are we going, Daddy?" Purposeful Engagement in a Vision

Scenario One: Not in the Plan

It was an early day in May: beautiful weather and a light touch of summer in the air.  My husband and I were excited as we got the bags packed and the kids ready.  We knew this was going to be the most exciting adventure for our little ones—we were taking them to the Disney Land Theme park and it was going to be a surprise.  As we were packing the bags, my youngest asked, “Where are we going, Daddy?”

“It’s a surprise,” was the short answer. 

And we continued with our business.  Within three minutes, our daughter asked again.  “Where are we going, Mommy?”

Again, our answer was, “It’s a surprise; now finish getting dressed.”

After two minutes, she asked again, and she received the same response; but this time we added, “And if you don’t get ready, you won’t get to see the surprise.”

So she hurried off again.  But it didn’t stop her from asking at least ten more times as we were making the six hour drive there, and instead of staying excited, she and her sister began fighting and becoming irritable.  Along the way they decided they wanted to go swimming.  And the longer our drive was, the more determined our children were to go swimming—but wasn’t in our plans.  Our statements of, “You’ll like our surprise for you.  If you be good, you’ll get to see the surprise,” didn’t suffice any longer.  By the time we arrived, we were so frustrated with our kids we were ready to turn around and go home.  None of us wanted the surprise any longer.

We had the vision and we knew they would love the surprise and we couldn’t figure out why they were being so difficult: and to top it off, they had decided where they wanted to go and became obstinate when we told them it wasn't in the plan!

Scenario Two: No End in Sight

When I was sixteen I worked in a sewing factory.  My work was to sew biking short crotches.  My first day I was taken to the sewing machine where my director had a lady demonstrate what I would be doing.  She did it so fast, I was barely able to see.  But I was told, “The faster you knock these out, the more money you make.  You are being paid on piece rate.”  I had a certain margin of error, and was told so.  I didn’t know what the finished shorts looked like, nor did I know who was selling them and who the customer was.  Also, little did I know that when I trimmed off a little too much from the top to the bottom that it would cause a very uncomfortable pull—quite like a “wedge-y” feeling for those wearing the shorts—even if they passed inspection.

Needless to say, not knowing the end from the beginning and holding no loyalties to my employer or the consumer, my heart wasn’t in the quality of the make. I thought nothing of what went on before me, how parts of the shorts got put together, and then what happened after me.  I was there to collect as large a paycheck as I could get and my loyalties were only to me.  On breaks the other employees only spoke of how they hated their jobs and they couldn’t wait to get out.  By the end of the first day, I had created my own vision.  I decided this job would provide me two things: a paycheck and experience to put on a resume to obtain other employment.  I worked there for three long months before I found other employment. 

People need a vision and if someone doesn’t show them the vision, how they have part in it, and the end rewards, they find their own vision.

Scenario Three: Lack of Motivation

In my years of consulting one company asked me to help with their employee motivation.  “We can’t seem to get their engagement,” the owners told me.  They were perplexed and didn’t understand why the employees didn’t love the company as much as they did.

Upon investigation, though the company had a vision, the employees were not certain of the end vision and what it looked like.  They didn’t know the context of their jobs and how they could contribute an important part to the end objective. 

People want to contribute to a cause and be valued for what they are good at.

Scenario Four: Financial Goals, or Not

I know of a person who doesn't have a clue what is in the shared bank account with her husband, doesn't have a budget set, and has the tendency to spend too much.  When her husband raises his eyebrows at her in dismay, and at times even raises his voice, she feels terrible, but justifies her actions with, "How can I know how much to spend when I don't know how much is there and I don't have a budget?"

When he counters with, "I told you to be careful. We are trying to save money," she shrugs her shoulders and replies with,  "How can I save money if I don't know exactly what I'm saving for, or how much?"

"Just be careful," he says.

Scenario Commonalities

Do any of these scenarios hit a chord with you?  Professionally or personally?

Each of these examples demonstrated how lack of vision and context were the culprits for lack of engagement and motivation.  Engagement in a cause for business or family seems to be a challenge world-wide.  But generally people are people and respond positively when given the opportunity and the right environment.  What can you do to turn employees on to your company?  What will make them loyal?  What can you do to motivate your family in a family goal, either financially or otherwise?

  1. Communicate: Show them the end goal. 
    1. In business: What is the business deliverable?  How do they serve the clients?  What does a happy client look like and what do they need to have in their possession? 
    2. In family: What is the goal?  What does it look like and what is the reward? 
    3. Provide Context and Outcomes.
      1. In business: What is the outcome of their work and how does it apply to the larger vision?  What is the context of their work within the company?  How do their contributions matter?
      2. In family: What is each person's responsibility and how does it contribute to the family goal?
      3. Evaluate and Empower.
        1. In business: Are you passing up opportunity by not knowing your employee’s talents? What items do they see that can be improved?  What initiatives could possibly be started by employees in your company to solve existing troubles or contribute to the larger vision?  Do they have the freedom to follow through on these initiatives?
        2. In family: Moms and Dads, you know your children's strengths and each other's strengths.  Give them opportunity to shine.  Allow your family members to come up with creative ideas to save money or to make money.  Let the little creative geniuses work.  Your appreciation for them will increase.
        3. Provide ongoing feedback.
          1. In business: Nothing is worse than a manager or employer who is too busy or apathetic to communicate with the employee who gets off on the wrong track and doesn’t get needed feedback.  Or worse, when they are doing such a great job and do not receive the well-deserved and needed praise.  During these meetings, evaluate actions—both successful and unsuccessful.  Then give praise where deserved and determine steps to improve in needed areas.
          2. In family: How many times have we heard, "Look at me!", and they won't stop until you look and you say something?  By human nature, we want attention and we want to know someone can appreciate what we can do.  We say it forthright as little children and in other ways as we grow older.  Give praise where it is due, and where improvements need to be made, ask them how they think they can do things differently.  We can't improve if we don't know we aren't on the mark.

Whether a large business, small business, or family, the principles are the same.  Generally, following these simple steps will show the person that you care about him or her as an individual and their success and contributions.  More than likely you will engage the people you are with when they feel part of something important and they know what to do. 

As far as family vacations are concerned, we take a different tactic now.  That Disney Land trip may not have turned out how we had hoped it would, but it definitely taught us a valuable lesson.  From the very beginning, we talk about a vision of what we would like to do.  We also ask the children what they would like to do.  We come up with a common vision, and then map out how each can contribute to make the journey successful.  Sound contrived?  Sound too much like superimposing business on family?  Perhaps so, but it works.  Generally, human behavior is the same in business or in family.

With over 20 years experience in the field, Heather G. Christensen has been an international trainer and business consultant; having worked with people from over 20 countries . She recently returned from Saudi Arabia where she served on a project to co-lead the design and development of Upstream technical training for Saudi National young professionals and led the Communications Team for Saudi Aramco's Upstream training organization. She currently resides in Southern Utah, with her two teenage daughters, and husband, Todd, who is also an international trainer and consultant.

 

Resources

Books 

Starved Stuff by Matt Townsend

Mr. Townsend has dedicated his career to understanding people and relationships. He has counseled with thousands of couples and individuals and has come to find that all people want healthy, strong, and growing relationships in their life. How to accomplish this is quite another story. Mr. Townsend focuses on three primary areas in his book: “The Goal-Creating healthy and enduring relationships. The Challenges-Starved Stuff: Feeding the 7 basic needs of healthy and enduring relationships. The Solutions-The four courses that feed the starved relationship.” I loved this book and how it helped me to see people and relationships in a very different and positive way. I have personally attended a couple of Mr. Townsends relationship classes and have always come away a better person with greater insight and direction for my relationships.


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