We are now uniquely able to help our clients plan to qualify for this benefit. Those who qualify receive between $12,000 to $19,000 tax free every year.

Created by an act of Congress in 1951, the benefit was originally designed for disabled veterans or those who had reached the age of 65. With the progress that medicine was making, it soon became apparent that many veterans and most retirees were just getting started at that age, and so the requirements have changed over the years. The most recent modifications, one in 2001 and one in 2006, have made assisted living expenses and even independent living expenses eligible for consideration as medical care. When a certain threshold is reached in the ratio of medical to non-medical expenses, the benefit can kick in and really add a great deal of security to life of someone in their golden years.

A typical recipient is a widow of a veteran who served during a war, but not necessarily in the war theatre. Any enlisted person or officer who served at all, even one day during the standardized time periods, is eligible.

While not a strict rule for Porter Kickham clients, we would like to see the veteran family member in one of the "Veteran First Communities" established in the local area. These communities specifically cooperate with our efforts to educate residents and families about the benefit and they are committed to moving the volumes of paperwork required in a fast and efficient manner.

For more information on this benefit and how to get it, feel free to drop into one of the many briefings that we do around the St. Louis, St. Charles and Jefferson County areas.

Looking for objective, unbiased advice? Thanks to the Uniform Prudent Investor's Act, opinions and special interests count for little;  sound process rules. Five new principles define Prudence in regard to investing practices.

Your Advisor Must Diversify Your Assets

Sound diversification is fundamental to risk protection. If your portfolio is not well diversified (in a very technical sense) you had better have a very good reason for it. Without diversification, investment portfolios tend towards greater volatility than necessary while having similar long-term expected returns.

Risk and Return Must be Measured

Risk and return are so directly related that trustees have a duty to mathematically analyze and make conscious decisions concerning the levels of risk appropriate to the purposes, distribution requirements, and other circumstances of the trusts they administer. Prudence requires avoiding uncompensated or unsystematic risk whenever possible. An expert trustee will deliberately take on risk only when it is judged likely to contribute to desirable investment performance for the portfolio as a whole.

Fees Must Pay for a Beneficial Service

Trustees have a duty to avoid fees, transaction costs and other expenses that are not justified by needs and realistic objectives of the trust's investment program. Many amateurs, misled by journalists, get in trouble on this issue.

The public is often advised to pare costs to the absolute minimum. But no one gives guidance about what fees should be paid and to whom (See number 5, below). Experts minimize fees whenever possible in reasonable and appropriate ways. The investment strategy should guide this decision and fees should correspond to the quality of services required consistent with the investment strategy being implemented.

Risk and Return Must be Balanced.

The fiduciary duty of impartiality requires a balancing of the elements of return between production of income and the protection of purchasing power. Again, journalists often mislead the public on this issue. In the last five years, a number of investment instruments like variable annuities have been trashed by the press. While TV pundits may make valid points, a Prudent investor will evaluate each on a case by case basis.

Expertise Must be Delegated

Trustees have the authority as well as the duty to delegate. In the past, delegation of fiduciary responsibility was impossible. Now the law allows for and insists upon delegation of tasks which the investor, trustee or advisor is not qualified to perform or perform well enough to serve the purposes of the trust.

Although most retirees don’t hold their assets in a trust, so the language of the UPIA might confuse. Successful retirees consider their wealth a trust for themselves, spouse and family. When the law references a trustee, they read "advisor" and whenever the law refers to beneficiaries they think of their family.

Advisors Must Put Your Interests First

A stockbroker often has a fiduciary duty to his employer, not to you, when selling investments. On the other hand, the law requires registered investment advisors to put your interests first.  A trusted advisor's His loyalty must lie with the purposes of your trust (retirement funds) rather than with his own purposes.

In St. Louis, you may hear a popular radio advertisement informing you that you are a high net worth investor if you have $500,000 in retirement savings. At a private bank, you may need to have at least one million dollars to become a client.

Online brokerages frequently require only $2,500 to open a margin account, and as little as $500 to open a stock trading account. Some mutual fund companies have a minimum of $100 and will accept $25 per month deposits in order to provide you with a disciplined way to save.

We're Committed to Investors Who Want to Succeed

Our commitment is that those who wish to invest prudently for retirement succeed in their endeavors. Not everyone who has this goal has enough money saved in order to take advantage of the products or services we offer. However, they can still avail themselves of our expertise. In other words, we don’t have a minimum account size that you must have in order to consult with us. We do a fair amount of pro bono work.

The Only Requirement is Your Commitment to Prudent Investing

Regardless of account size, we do have a minimum success probability percentage. In order to invest with us, you must be committed to doing what is necessary to assure that your particular plan has at least an 85% chance of success when it’s initiated, and that you will take the steps we recommend to bring that percentage to 90% or above. We obtain these success probabilities by using a Monte Carlo Planning Simulator in order to account for volatility, inflation and other risks when we do client planning. Our white paper, Better than Averages, provides a more detailed description of the process we use to construct your portfolio and assign a success probability

Increasing the security of your retirement may mean spending a little less than you might have hoped for. There is no way to sustain a retirement account if you are intent on withdrawing 10% per year. There is no way to sustain spending power if you insist on putting all of your money in a money market fund.

Failure is always possible. Success has parameters. We are committed to your success and our only minimum is the requirement that you are committed to your own success as much as we are.

The popular press touts Fee-Only planning as the best arrangement for obtaining financial planning. This arrangement supposedly insures objectivity and unbiased advice for the lowest possible price. In some instances, this is the best arrangement to make. If price is the only concern, then fee-only arrangements make sense for those with at least $750,000 in retirement funds.

Preparing a Financial Plan:

This is the least expensive fee-based service we offer. We meet once to determine your goals and objectives. If you have exposure to various betas (market forces) that are unusual, we can accommodate those in a customized plan. Then, Porter Kickham designs several different portfolios for your approval. We meet again to present different alternatives to you. The final work product is a portfolio of ETF’s (exchange traded funds) or actively managed mutual funds which achieve a Prudent diversification arrangement consistent with your goals and risks. You would decide whether or not you had the expertise to implement the plan by yourself and waive rights to recourse for improper implementation. Plans start at $2,500.

Hourly Fee Schedule

Certified Financial Planning services for individuals are available from Mike on an hourly basis, which would include pre and post prep time and production of the reports required for the plan. Issues he has dealt with in the past include complex estate plans for family wealth preservation, issues related to vesting options in employer sponsored plans and diversification of large single stock positions in order to minimize taxes and increase safety.

Institutional Advisory Services

Guy provides advice and consultations to institutions and hedge funds through the consulting firm of Gerson Lehrman. Issues that Guy has consulted on in the past include volatility arbitrage trading, neural net construction for high speed trading strategies, volatility dispersion trading, active alpha strategies and management of accredited trading strategies. Fees for these services may be hourly or by the project.

Asset- Based Fees Arrangements:

We design and manage a portfolio of actively managed mutual funds, with particular attention to manager skill and sub-asset diversification construction. We use a variety of funds from different investment companies which represent their best offerings in terms of performance against appropriate benchmarks. We determine the best ways to re-balance funds while minimizing transaction costs. AUM fees range from 75 bips to 225 bips depending on the complexity, the amount of assets to manage and the goals involved.

Notice: Some Commission-based Products Cost Less than Fee Based Advice

In almost every case, your goals and needs in retirement will dictate a variety of possible solutions. If you're a prudent investor, you won't ignore any of them. The tenets of the Prudent Investor Act won't let your advisor ignore them either.

You should keep in ming that commission based products may offer you many of the same advantages for less money. You'll need to decide when you see the figures, but don't be fooled by a blanket quote for advisory fees. Many investment advisor accounts come with transaction fees of $25 or more per trade. Many have fees for custodial services. When you compare alternatives, be sure to look at all the costs as closely as you can.

Fee Only Planners Have a Duty to Examine Commission Products

The Uniform Prudent Investor Act won't allow your advisor to exclude the use of commission based products from consideration. Since some products cost less than advisory services and the associated costs, ignoring such products is in itself a conflict of interest and represents its own bias.

Most people prefer products or services with lower costs, other issues being equal. In most cases, we agree that low costs are best. In all cases, you have the final say.

The Uniform Prudent Investor Act (UPIA) defines a process for Prudent investing.  Expert fiduciaries who follow the process correctly make the portfolio management prudent, without regard to subsequent results.

Good Results Do Not Substitute for Good Process

We'd all agree that buying lottery tickets with your 401K money would be imprudent, even if you won. The good results do not justify the incredibly stupid risk that action represents, even if you turned $100,000 into $120 million overnight.

However, investing too much money in bonds will also violate the Prudent investment law, thus it is on par with buying lottery tickets. If you are heavily invested in bonds during a bear market, your portfolio may appear to “beat the market” and “be safer” because of it’s performance. That’s just luck, however. Your bonds won’t outperform a bull market in stocks and over time inflation can work against you over the duration of your retirement. Both of these decisions demonstrate equal imprudence, even though things will work out better with the bond strategy than with the lottery strategy. In short, the law defines prudence and makes everything else imprudent.

No Proper Investments are Inherently Prudent or Imprudent.

Experts have wrestled for centuries over how to invest important money (usually, other people’s money). The “Prudent Man Rule” resulted from a case in 1830 when Harvard University tried to sue a trustee based on the performance of investments chosen for the University’s endowment. The judge ruled that trustees may make investment decisions applying the same standards - reasonable income and preservation of capital - that a prudent man would use.

That standard guided trustees for over a century. Some states created more formal rules, limiting fiduciaries and bank trust departments to a so-called Legal List of approved investments. The Legal List made for easy investing, but the conservative investments often had beneficiaries running out of money before they ran out of the need for money.

Diversification Allows for Volatile Investments in a Prudent Portfolio

Academic research over the last 70 years shows that when managers use statistical principles to choose portfolio components, a blend of volatile assets can make the portfolio safer. The purpose of proper diversification is to lower volatility and achieve market returns after all expenses.

This means that your retirement funds need to be positioned in accordance with the needs of you and your family, not in accordance with a five minute risk tolerance questionnaire.

Risk and Return Analysis: Numbers, not Emotions

Risk and return are so directly related that trustees have a duty to mathematically analyze and make conscious decisions concerning the levels of risk appropriate to the purposes, distribution requirements, and other circumstances of the trusts they administer.

This means that your retirement funds need to be positioned in accordance with the needs of you and your family, not in accordance with a five minute risk tolerance questionnaire. Long term investors distinguish between risk and volatility. Volatility is unavoidable for those who want to live on investment income. On the other hand, your risk tolerance for failure in retirement is exactly zero. You don’t want to do anything that increases your risk of failure. Prudent planning may not succeed in the face of abject disaster, but it represents the best planning available to St. Louis retirees.