Our In-Person Reopening Plan

Our In-Person Reopening Plan

As the country begins to reopen gradually, here in Dane County it appears that the “safer at home” restrictions will lift after Memorial Day. We have used some guidance from the Wisconsin Economic Development Corporation (WEDC) to assist us in preparing for our return to the office, and are also working on developing written policies to comply with the Forward Dane reopening plan.   

Clients will be allowed to again schedule in-person meetings with us at their convenience. We have moved the seating areas apart to socially distance. We will do our best to refrain from sharing items, such as passing iPads to each other or office supplies, like pens. We also will not be offering water or coffee in our meetings, so we kindly ask that you bring in your own beverages. 

We will not be shaking hands or hugging clients (as much as it pains us!). Clients will not be required to wear masks, but they may wear them if they choose. We will disinfect chairs and wipe down surfaces after each meeting, and our staff will communicate with each other to avoid back-to-back meetings in conference rooms. Additionally, we will attempt to keep clients from having contact with other clients in waiting areas by utilizing both office spaces inside our building.

Our staff will be responsible for disinfecting their workstations as well as washing their hands after any meeting and throughout the day. We will also be encouraging our staff to work remotely from home offices on days where we don’t have in-person meetings scheduled. We will attempt to keep a six foot distance between workstations, as well.

If you are concerned at all about coming in for an in-person meeting, we recommend that you schedule a video conference (“Zoom meeting”) instead. As COVID-19 made us “safer at home”, we all have lots of practice on video conferencing! We believe that with screen sharing and video, we can help give you a virtual experience that is similar to an in-person one, without the drive time or worry. It is our intention to continue to offer 1-2 dedicated days of video conference meetings per week.

As we all continue to navigate through this pandemic, we assure you that we will continue to try to keep you as safe as possible when meeting at our office. For those of you who choose to use a virtual meeting structure, we pledge to you to make your experience as equal to an in-person one as possible. In the end, it’s about giving you choices and meeting your needs. We welcome your feedback and wish you all good health.

 

The Walkner Condon Team

The SAVERS Act – A Unique Retirement Savings Opportunity?

The SAVERS Act – A Unique Retirement Savings Opportunity?

Will I be able to put more money into my 401(k)? If a recent bill called the Securing Additional Value for Every Retirement Saver Act (SAVERS Act) passes through Congress, the answer could be yes. The bill was introduced in the House of Representatives in late April and would still need to pass through the House, the Senate, and be signed by the President before becoming law. The SAVERS Act could (temporarily) open significant doors for enhancing tax-advantaged saving and investing for retirement. 

Supercharged Contributions…

The act proposes to triple – yes – triple! the amount that one would be able to contribute to their 401(k), 457, or IRA. The current (2020) maximum amount that one is able to contribute towards their 401(k) and 457 is $19,500, while the IRA is capped at $6,000. These caps exclude any “catch-up” contributions (e.g. those aged 50 years and older can contribute an additional $6,500 to their 401(k), for a total of $26,000 in 2020). 

For the clients of ours that are already maxing out their 401(k), their 457, and IRA simultaneously that are looking for additional tax-advantaged vehicles to save for retirement: this bill will be important to follow because if it becomes law your contribution strategy in 2020 could very likely change (but don’t forget to talk about your strategy with us first!). 

But Only Temporarily…

“This sounds too good to be true; there must be some sort of limit.” Yes, there is a limit. Remember when I mentioned “temporarily” earlier? The IRS wouldn’t let too many people defer such a large chunk of their tax bill indefinitely! The SAVERS Act proposes these changes for the tax year 2020.

Typically the amount that the IRS allows you to put into these tax-advantaged vehicles is increased by $500 or $1,000 every few years. If the SAVERS Act were to become law it could potentially present a once-in-a-lifetime opportunity for high-income earners that have the wherewithal to save. Representative Patrick McHenry of North Carolina (who introduced the bill) said, “Every American is feeling the economic impact of COVID-19. We need to give savers the opportunity to shore up the savings they have worked so hard to grow.”. We will continue to monitor the progress of the SAVERS Act and be ready to advise our clients on their retirement contribution strategy if and when it is signed into law. 

Mitch DeWitt

Should I Hire an Online Financial Advisor?

Should I Hire an Online Financial Advisor?

COVID-19 has changed our lives and the effects will be felt for years to come, and in some cases, forever. As we migrate to more of a virtual office, one should question whether they are better served by other professionals more equipped to handle this medium. Is it time now to hire a virtual financial advisor?

When we say “virtual”, basically it means that your relationship is handled completely online rather than at an in-person location. With technology tools, we can use screen sharing and video conferencing to enhance the client experience far beyond a phone call. 

How Does This Differ From an In-Person Experience?

One benefit is that you don’t have to leave work or your home and fight traffic to get to an office. You (probably) won’t be shaking hands anyways, so the contact attribute will likely be removed from the picture. You won’t get to immerse yourself in some of the office amenities such as great coffee at the Madison Chocolate Company, our rustically comfortable decor, and of course, our friendly staff that will greet you and make you feel at home. Aside from these niceties, you will still get the same experienced advisors, software tools, and our “comfortably unique” experience. Additionally, due to fewer logistical barriers, we can offer an expanded calendar for appointments.

For busy professionals and those where travel presents a major headache, this is becoming an essential way to meet with the professionals in their lives. Also to consider, does one of the main factors in finding an advisor – proximity – is that really that important an attribute to you? There may be more important items to consider in experience, personality, and expertise. 

Is My Current Financial Advisor Equipped to Offer a Virtual Experience?

For many advisors, the answer to this simply is “no”. Some firms are still resistant to offering virtual meetings due to (in our opinion) overly onerous and conservative compliance restrictions. Others are using dated technology that may not show well in a screen sharing environment. Demographically, financial advisors are quite an older group. According to a J.D. Power article, “the average age of financial advisors is about 55, and approximately one-fifth of advisors are 65 or older.” As this technology may present challenges for older advisors not accustomed to using screen sharing and other financial software tools, we expect clients to be seeking advisors that are better equipped to offer these services.

The other challenge for clients that are explicitly seeking a virtual advisor is that the financial advisors that may be most comfortable using this technology may also be the least experienced. It is certainly not unreasonable to desire a wealth manager that isn’t “practicing” on your accounts to gain experience. 

The Walkner Condon Virtual Experience

We are ready to assist clients virtually in both of our divisions: our domestic wealth management, as well as our U.S. expat financial advisory services. Our staff is very familiar with “Zoom meetings” as well as screen sharing, financial planning, and investment management software. We offer our clients our proprietary GAPP process as well as the comfort in knowing that in comparison to our peers, we are young and experienced. Additionally, we also have a variety of trusted business professionals in our network that are also able to assist our clients virtually where appropriate.

As we all migrate to the “new normal” of a virtual office setting, we are committed to making the experience as close to our in-person meetings as possible. Perhaps we will institute online greetings by our administrative staff, or find a way to enjoy a cup of coffee together regardless of where you live? The possibilities remain endless and we look forward to serving our clients in their preferred medium. If you’re ready to explore our virtual services, you may schedule a no cost, no obligation appointment here.

Clint Walkner

 

COVID-19 and the Real Estate Market

COVID-19 and the Real Estate Market

The Coronavirus is affecting our lives in many different ways. Eating in with carryout and delivery instead of reservations at restaurants and bars, Zoom meetings and teleconferences instead of office meetings, waves instead of handshakes and hugs; the world is a different place than it was two months ago.

More of the Same….and Then It Wasn’t

The beginning of 2020 looked quite similar to the start of the last few years in the housing market. Then, as we know, everything changed in March with COVID-19. We are now left with many more questions than answers. Mortgage rates have fallen to even lower levels as the Fed is desperately trying to help the economy. This, in turn, created a glut of refinancing applications for mortgage lenders. However, the negative economic impact of COVID-19 is far reaching, creating tremendous liquidity problems within the banking system. It is difficult to close on a mortgage refinance when the money to pay off the existing mortgage is in limbo, or lock a rate on a mortgage application when the lender has no idea how long it will take to get to a closing table. Delinquencies on existing mortgages will certainly increase as homeowners deal with an uncertain job market, leading one of the country’s largest mortgage lenders, JPMorgan Chase, to change their lending guidelines in recent weeks.

Uncertainty Abounds 

The economy is in a very different place as well. Strong earnings reports and record low employment numbers have been replaced with the utmost of uncertainty. Almost every aspect of the economy is dealing with some level of ambiguity, with the housing market taking center stage. The housing market over the past decade has been, for the most part, quite strong. This has been fostered by low interest rates, ample cash liquidity, and friendly lending guidelines. This, however, has led to the issue of low inventory and excess demand for the last few years. While this has been positive for house prices and mortgage applications, it has created an imbalance. Builders are trying to take up the slack by fast-tracking new home construction, and anyone remotely interested in selling a home has been enticed with the idea of completing offers to purchase within days, instead weeks or months.

Housing Recession Imminent?

With all of this said, it would be easy to assume that the housing market is headed for a recession of its own, but I wouldn’t be so quick to come to that conclusion. This is one of the more resilient components of the overall economy. People need to buy and sell houses every day, regardless of what is happening in the rest of the economy. We will likely have a low interest rate environment for the foreseeable future, which should keep the market somewhat stimulated. 

What To Do?

What should you do if you are in the process of a refinance or house sale/purchase? First things first…don’t panic! Nothing good will come with trying to force the process to go faster or demanding that things happen. The task at hand will require more patience and understanding than in previous years. The refinancing timeline has shifted to a couple of months versus a couple of weeks. Locking rates will almost certainly become more difficult than it was before, and underwriting guidelines are changing. My recommendation would be to work with a mortgage lender who is in touch with the current protocol and can guide you through the process. You need to be working with a lender who provides specific advice and has a strategy for operating in this environment. This, in my opinion, isn’t the time for the internet lender who is offering a teaser rate of slightly below the market rate. This is a time for trusted advisors. If you need a recommendation, please let us know and we would be happy to provide you with the contact information of different lenders.

Nate Condon 

Investment Committee Meeting Recap: Responding to Market Conditions

Investment Committee Meeting Recap: Responding to Market Conditions

With work from home, school from home, and everything else from home, routines have been disrupted for many of our clients. Fortunately for us at Walkner Condon, our preparations for the need to work offsite (detailed in Clint’s post from March) have meant that our processes have largely remained unchanged. Last week, we held an investment committee meeting (via Zoom of course, with the proper password protections!), which is a key part of our ongoing investment management process. As part of our commitment to transparency, we wanted to share some of the thoughts we discussed during the meeting.

Portfolio Structure

In general, we have maintained our overall portfolio structures as they accord with our client’s risk profiles– that is to say, we have not made overall shifts from the percentage of assets allocated to bonds or stocks. However, in our discussion we also acknowledged that maintaining our long-term strategic outlook of correlating overall allocation to a clients’ financial plan is a tactical decision, especially in light of the market volatility.   

Bonds for Balance

That said, we have not left our clients portfolios untouched, and we discussed the various markets where we see opportunities and how to position our bond and stock portfolios. For instance, our overall strategy views our bond allocation as a defensive position in our clients portfolio. Consequently, our most recent rebalances look to make our bond positions more defensive in light of the ongoing uncertainty in the market. Moreover, we discussed how one of the advantages of smart-beta and active management in the bond portfolio is that it can lead to less risk exposure in negative environments like the present. Such a defensive position may help clients in the short term and also allow us to rebalance effectively into stock positions. 

Stocks for Growth

Regarding those stock positions, we discussed where we see longer term opportunities in the markets given the longer-term fallouts from the coronavirus. While we aren’t making any predictions about the shape of or the timeline of the U.S. recovery, we do continue to think that rebalancing towards a core of U.S. equities will be a solid investment for the long-term. In that context, we’ve also noted that in the previous ten years we have experienced marked outperformance from U.S. equities. The continuing strength of the U.S. dollar (which will lower the cost of their exports), coupled with a strong response to the global pandemic could mean that Asian stocks are also particularly well-positioned for long-term growth.

As we continue to discuss the strategies surrounding our clients and our portfolios, the key refrain of this discussion and others is that we need to continue to align our portfolios with our clients long-term needs and let the portfolio construction continue to be governed by our clients’ financial plans and goals.

The Walkner Condon Team

Authored by Keith Poniewaz