Tag Archives: BMO Private Bank


BMO Private Bank hires regional director of investments

Jason Lattin Reg Dir of Invstments Western USBMO Private Bank announces the hiring of Jason Lattin as Regional Director of Investments, Western U.S.

Lattin brings 18 years of industry experience and will oversee the development and delivery of investment management and advisory services to high net worth individuals, families and organizations, including endowments and foundations, throughout the Western U.S.

In addition to his financial services experience, he worked as a software consultant training bank treasury departments in the U.S. and Latin America on how to use an interest rate risk management program.

Lattin earned a BS in Finance from Arizona State University and a MIM in Finance from Thunderbird School of Global Management and he holds the Chartered Financial Analyst® designation.


How will Obama plan impact financial planners, consumers?

President Obama recently announced a “new” ruling requiring financial advisors to put their clients’ interests above their own. Sounds like a good thing, right?

Not so fast.

“We have ongoing concerns that the Department of Labor and the White House have completely ignored the existence of the robust regulatory regime under the SEC and (Financial Industry Regulatory Authority),” said Kenneth Bentsen, president and CEO of the Securities Industry and Financial Markets Association. “This re-proposal could make it harder to save for retirement by cutting access to affordable advice and limiting options for savers.”

Obama’s “new” initiative is actually not so new. It’s a rewrite of a 2010 rewrite of the 40-year-old fiduciary rule that was eventually withdrawn in 2011 amidst industry furor. Despite the retread, something needed to be done to address the “backdoor payments” and “hidden fees” that cost Americans up to $17 billion a year in lost retirement savings, according to The Effects of Conflicted Investment Advice on Retirement Savings.

The new Department of Labor rules would require brokers to be held to a fiduciary standard, meaning that they must put their clients’ interests first. For example, given the choice between two similar funds, the broker would have to recommend the one with the lowest fees and commissions.

“Many consumers are not aware that the advisors they have hired to manage their investments are not required to act as a fiduciary,” said Mark Feldman, CEO and managing partner of Miller Russell Associates. “In other words, the advisor may not be required by law to recommend products or solutions that are in the best interest of the consumer. Many of these professionals receive commissions or fees for recommending certain products over others. The standard differs between different types of advisors (registered investment advisors vs. non-registered advisors or brokers). A suitability standard is not the same as a fiduciary standard.”

Feldman said SEC or state-registered investment advisors will see little impact even if Obama’s initiative is implements.

“These advisors have always been held to the fiduciary standard,” he said. “However, advisors of retirement accounts only, not currently registered with the SEC or state as an investment advisor, will be significantly impacted. It is not yet clear how that will look from a regulatory and accountability standpoint. We will likely see significant changes with FINRA, state departments of insurance and other organizations that provide oversight of advisors who are not currently required to act in a fiduciary capacity.”

Phil Kim, divisional vice president of AXA Advisors Southwest, said by raising the fiduciary standards by which advisors must be held accountable, Obama’s initiative will improve the profession and weed out the individuals that lack the knowledge and skills and do not place the consumers’ best interests first.

“With the implementation of this new initiative, I hope that a more open dialogue between consumers and financial advisors will be fostered,” Kim said. “Over time, I think people will start to regard professionals in our industry with the same respect as they do with their personal physicians.”

Until then, Sean McCarthy, regional chief investment officer for Wells Fargo Private Bank, said advisors should be prepared for the possibility of more stringent oversight with increased need for disclosure and heightened regulatory requirements.

“Beyond that, advisors should anticipate greater demand from clients that they clearly articulate their value,” McCarthy said. “Clients will want to understand what it is they are paying for and what they should expect from the relationship with their professional.”

While the potential impact on financial planners and financial advisors remains uncertain, the potential impact of the initiative is clear for consumers.

“Consumers should expect to see more benefits — free advice if the rule change is implemented, as well as potentially lower investment fees inside retirement accounts,” said Paul Rutkowski, managing partner, investment strategy for Nelson Financial Services.

While the impact on consumers is positive, McCarthy  said the industry must be prepared for the potential effect on profitability. He said Obama’s initiative could negatively impact income statements in two ways:

• Slower revenue growth is possible if fee transparency creates fee compression

• Expenses — in time and dollars — would be greater to comply with increased regulation

“Depending upon the severity of these implications, some participants may need to exit the industry, leaving consumers with an unfortunate and unintended consequence of less selection,” McCarthy said.

Despite the possible impact on the bottom line, most financial experts see the initiative’s silver lining.

“A uniform fiduciary standard for advisors who manage retirement accounts clearly favors the consumer,” Feldman said. “This is good.”


Here is what Valley financial experts advise consumers to think about before hiring a financial planner:

Mark Feldman, CEO and managing partner, Miller Russell Associates: “Consumers should understand the fee structure, and be aware of ‘hidden” fees.’ Ask the advisor if he/she receives fees in addition to any management fee paid by the consumer. Professionals who also receive commissions or other fees for recommending certain products have an inherent conflict of interest and the White House report released in February states that conflicted advice leads to lower investment returns.”

Phil Kim, divisional vice president, AXA Advisors Southwest: “This business is about building trustworthy relationships. Consumers can begin their due diligence by looking for a clean (Financial Industry Regulatory Authority) record, as well as the backing of a financially healthy firm. Referrals and recommendations from other trusted advisors, along with attainment of industry designations and appropriate licenses and registrations are other items to look for in a financial professional.”

Jason R. Miller, CFP, market manager, regional director, financial planning, BMO Private Bank: “While formal training is certainly not the only factor in choosing a financial provider, it is a very important one. Look for professionals who have demonstrated the appropriate level of formal training as well as a commitment to continuing education. Research and understand the requirements for the different designations and/or certifications these professionals may have. Financial matters are often complex and it is invaluable to have a knowledgeable partner on your side.”

Paul Rutkowski, managing partner, investment strategy, Nelson Financial Services: “Ask your CPA, attorney, neighbor or family member who they work with and what level of satisfaction they have with that person. Don’t be afraid to ask the tough questions about costs, the amount of risk for each strategy recommended and how advisor gets paid. Advisors should provide 100 percent full disclosure on how much they get compensated for their service.”


Portfolio risk vs. achievement of goals

Risk tolerance is often the first subject wealth advisors assess when trying to help investors create the ideal asset allocation mix. As a result, determining individual risk thresholds becomes the foundation for portfolio planning. But can this focus on risk actually interfere with the attainment of personal financial objectives?

In determining the appropriate asset allocation for their investment portfolios, many investors (and their well-intentioned advisors) too often put the proverbial “cart before the horse,” focusing too much on minimizing short-term portfolio volatility. While short-term risk tolerance is a key consideration, basing an asset allocation on this alone risks designing a portfolio that may not be aligned with the investor’s long-term lifestyle goals. The answer may be to work “backwards” by first establishing goals and then “backing into” the asset allocation strategy that maximizes – or at least meets the client’s minimum level of comfort for – the probability of achieving these goals.

To help determine the asset allocation that will best help meet long-term lifestyle goals, consider the following questions:

What are my lifestyle goals?

Before entering into any investment plan, first establish specific goals. For many investors, these goals may include: maintaining a comfortable retirement; providing a college education for a family member; not becoming a burden on loved-ones; or perhaps leaving a family or charitable legacy. Whatever the goals, they first need to be clearly defined before an appropriate portfolio can be designed.

What is the current probability of success for achieving these goals?

After establishing goals, attempting to quantify whether or not they are realistic and achievable based upon different portfolio allocations represents the next step.  By analyzing the impact different portfolios may have on reaching your goals, you can determine what asset allocation gives the highest estimated probability of success. It is wise to work with appropriately trained and credentialed financial professionals during this process – they often have the experience and tools to conduct this type of analysis.

What is the potential volatility of the portfolio as it works to meet these goals and can I live with that volatility?

Even after determining the optimal portfolio in this manner, the work is not complete. The optimal portfolio for maximizing the probability of reaching your life goals may be too volatile for you to maintain the strategy for the long-term. Consistency is key to any long-term investment strategy, and you must be able to tolerate the short-term swings that will occur in order to reap the benefits over the long term. If you find that portfolio fluctuations cause you undue stress, you may need to modify your financial goals to fit a more tolerable portfolio.

So what is your real risk? Is it portfolio standard deviation or the risk of not meeting your lifestyle goals? For most investors, it is likely the latter.  For instance, it doesn’t make sense to “protect” your money in an overly conservative account if that allocation virtually guarantees you will run out of money during retirement. You would “protect” your money until it was all gone!  While not always the case, sometimes intelligently increasing portfolio risk will actually increase the likelihood of goal achievement.

To be clear, this is not a suggestion that investors take on more risk than is necessary to meet their financial goals. Rather, investors should determine their asset allocation based less on one-year downside risk tolerance and more on minimizing the risk of not accomplishing their stated goals. By determining asset allocation in this manner, you will become more aware of the effect of the portfolio decision on your life goals. You can then make an informed asset allocation decision, balancing any tradeoffs between short-term portfolio volatility with the achievement of longer-term goals.

Jason Miller is director of financial planning for BMO Private Bank, which offers a comprehensive range of wealth management services that include investment advisory, trust, banking and financial planning to meet the financial needs of high-net-worth clients. 

Key Elements to Retirement Planning

What retirement looks like for Arizona’s affluent

BMO Private Bank today released a study examining what retirement looks like or will look like for high-net worth Arizonans (defined as those with investable assets of $1 million or more). The study is part of BMO Private Bank’s Changing Face of Wealth series examining trends among affluent Americans.  

According to the study, a significant number of Arizona’s affluent plan to:

• Retire young: Almost one third (29 percent) plan to retire before the age of 60; the average age of retirement for Arizona’s wealthy is 62.

• Live in the United States: The vast majority (98 percent) want to stay in the U.S. during retirement, with 90 percent planning to use their time traveling, 73 percent spending time with family, 49 percent on hobbies and 49 percent volunteering.

• Continue working: Twenty-two percent plan to earn an income during retirement by working part time and 12 percent would like to start a new career.

“Your ability to live out your ideal retirement lifestyle will largely be determined by how well you’ve prepared for this period. To create the lifestyle you want, you need a comprehensive financial plan touching on investing, estate planning and philanthropy,” said Ashley Ober, Managing Director, BMO Private Bank, Arizona. ”Discuss your goals with a financial professional and your family early on so that the end goal is always in mind as you navigate day-to-day finances and plan for major purchases.”

Investing Profile of High-Net Worth Arizonans

The study also examined how affluent Arizonans manage their finances.  One hundred percent of respondents said they have an investment portfolio or share one with their spouse or partner. The average amount in their investment portfolios is $2.6 million, with 51 percent of the state’s wealthy holding more than $2 million. 

Further, the study found:

• Ninety-five percent of wealthy Arizonans plan to use money in their portfolio to fund their retirement, with 41 percent planning to use it as an inheritance for the next generation.

• Sixty-one percent consider themselves to be balanced investors, 27 percent are conservative and 12 percent are aggressive.

“A balanced approach to investing is the safest way to ensure a valuable portfolio come retirement. Having lived and worked through the recession, we’re seeing tomorrow’s retirees step back and re-evaluate the need for risk,” noted Jack Ablin, Chief Investment Officer, BMO Private Bank. “Affluent Americans want to retire younger and do more, so they aren’t willing to compromise their retirement income on risky investments.”

Key National Findings

On a national level, the study found:

• High-net worth Americans hold an average of $3.2 million in their portfolio and feel they need $2.3 million to live out their ideal retirement lifestyle.*

• One-in-five wealthy Americans plans to retire before the age of 40 and the average retirement age is 56.

• Ninety-six percent of affluent Americans plan to live in the U.S. during retirement, with 81 percent planning to spend their time traveling.

• Many want to continue to earn money through working part time (21 percent), starting a new career (21 percent) or starting a business (11 percent).


Wealth management advice from BMO’s Ashley Ober

Ashley Ober Managing director, Greater Phoenix and Scottsdale BMO Private Bank bmoprivatebank.com

Ashley Ober
Managing director, Greater Phoenix and Scottsdale
BMO Private Bank

Ashley Ober, managing director, Greater Phoenix and Scottsdale, BMO Private Bank

Ober oversees a team of professionals dedicated to providing high net worth individuals, families and organizations, with a full range of wealth services as part of an overall personal wealth management strategy. He joined BMO in 2010 and has 29 years of experience in financial services, 24 of those in the Phoenix and Scottsdale markets.

2015 trend to watch:

“The most significant impact on wealth management in 2015 will be the increased importance and need for holistic financial planning. Far too often we see people who do not have a long-term game plan or road map for their financial lives. To a large degree, in today’s information age, investment management and banking have been commoditized. Financial planning is very personal and
customized to each person’s or families’ needs and priorities. As our population ages and the next generation inherits a tremendous amount of wealth, financial planning will have a significant impact on wealth management in the future.”

Advice for 2015:

“Make sure you have a financial plan and roadmap for your future financial life. Once you have a longterm plan in place that is customized to you and your family, you have a foundation in place to build upon. The plan should include an investment strategy that is consistent with your long-term goals and objectives. A holistic, disciplined approach is the key to future financial success.”

Best Arizona investment:

“Although it is not publicly traded at this time, I would invest my own money in
Infusionsoft, which provides the only all-in-one sales and marketing software built just for small businesses. The company has a strong business model with a recurring revenue stream. The company is well capitalized and they provide a service and product that small business cannot afford to replicate.”

charitable trust

Report: Affluent Arizonans donate an average of $6,259

BMO Private Bank released the results of a study on holiday giving and gifting trends among high-net-worth Arizonans (those with investible assets of $1 million or more). The study is part of an ongoing series examining financial trends among the state’s affluent.

According to the study:
• High-net-worth Arizonans plan to donate an average of $6,259 to charitable causes this year, 28 percent of which will occur during the holiday. Nationally, affluent Americans plan to donate $12,394 this year and 29 percent during the holidays.
• The majority of affluent Arizonans plan to donate the same amount as last year, while 12 percent plan to donate more.
• Among high-net-worth Arizonans donating to charity, most plan to give clothing (73 percent), cash (66 percent) and food (61 percent) this holiday season, followed by household goods (44 percent), securities (7 percent) and credit card points (2 percent).
• Thirty-two percent plan to volunteer and 22 percent plan to attend an event where proceeds are donated to a charitable cause.

Holiday Spending to Surpass $4,000 Among Affluent Arizonians

The study also found that high-net-worth individuals in Arizona are planning to spend, on average, $4,254 this holiday season on the following:

• Trips/Travel $2,599
• Gifts $1,196
• Entertainment $329

Twenty-two percent of high-net-worth Arizonans plan to spend more during the holidays than they did prior to the 2008 recession, while 68 percent plan to spend the same. Additionally, more than half (56 percent) are expecting to buy gifts for five or more people, with an average of $233 spent on each gift.

“It’s encouraging to see Arizonans spending more during the holiday season,” said Ashely Ober, Managing Director, BMO Private Bank, Western U.S. “It’s yet another sign that the economy is improving and consumers are funneling more money into key industries, such as retail, hospitality and tourism.”

Key National Results:

• High-net-worth Americans will give an average of $12,394 to charities this year. Of this amount, an average of $3,631 will be given over the holiday season, with 28 percent donating more than in 2013, five percent giving less and the rest donating about the same amount.
• Affluent Americans plan to spend an average of $10,525 on gifts, travel and entertainment during the holidays; $4,459 will go towards gifts and $3,385 will be spent on travel.
• Forty-three percent indicated they intend to spend more than they did in the years prior to the 2008 recession, and just 9 percent indicate they plan to spend less.
• High-net-worth Americans plan to buy gifts for an average of 16 people, with 42 percent reporting plans to buy gifts for ten or more people and plan to spend at least $100 per gift.


Arizona Women Confident They Can Manage Finances

A new study released today by BMO Private Bank has found that 88 percent of women in Arizona are confident in their ability to manage their finances if something were to happen to their spouse.

The study found that, in the event of divorce or the death or the incapacitation of their spouse:

Seventy-seven percent believed they would be able to maintain their current lifestyle.
Fifty-eight percent stated they “would be fine” being single in retirement. However, 22 percent are concerned that they may end up homeless or broke in retirement.

“We’re pleased to see that so many women in Arizona feel confident that they could continue to manage their household and finances if they were to suddenly be alone as a result of the death of a spouse, divorce or a medical emergency,” said Ashley Ober, Managing Director, Private Banking, BMO Private Bank. “Women across the country are becoming more empowered and are controlling a growing percentage of the nation’s wealth; this is being reflected in their levels of confidence.”

According to the study, an overwhelming 85 percent of women in Arizona and nationally currently manage their household finances or share responsibility equally with their spouse.

Majority of Women Lack Key Estate Planning Documents

Despite the financial confidence of women in the state, the study found that most Arizona women do not have key estate planning documents in place, potentially putting their families at risk:

• Sixty-seven percent do not have a Will.
• Seventy-five percent do not have a Living Will.
• Seventy-four percent do not have a Power of Attorney.

“Estate planning is an important component of your overall financial plan, regardless of your gender,” stated Mary Jo Herseth, National Head of Banking, BMO Private Bank. “Having a Power of Attorney and Will in place can save family and loved ones a significant amount of stress and complication.”

Regardless of marital or parental status or level of wealth, having a Will is an essential part of estate planning that allows people to design how their assets should be distributed. A Will also allows parents of minors to choose a guardian who will care for their young children.

Further, a Power of Attorney is important because it provides for the proper management of people’s property, financial affairs and healthcare during their lifetime should they become mentally or physically incapable, or have to be absent for an extended period of time. Not planning for this contingency can potentially have disastrous financial and personal implications, not only for individuals, but also for their family and loved ones.

Key National Findings

On a national level, the study found:
The vast majority (88 percent) of American women reported that they would be able to manage their household finances effectively in the event of divorce or the death or the incapacitation of their spouse.
·        Seventy percent of women are confident they could maintain their current lifestyle should they get divorced or have their spouse pass away or become incapacitated. However, 28 percent are concerned about their financial future in retirement.
·        Eighty-five percent of women currently manage their household finances or share responsibility equally with their spouse.
·        Many women in the U.S. do not have key estate planning documents in place: 58 percent do not have a Will; 62 percent do not have a Living Will; and 68 percent do not have a Power of Attorney.

A Guide to Applying for a Bank Loan

BMO Private Bank Boosts AZ Senior Staff

BMO Private Bank announced new senior staff additions and promotions at the wealth management firm’s Arizona offices, which serve high-net-worth individuals, family-owned businesses, endowments and foundations throughout the Western United States.

• Ashley Ober is now serving as managing director of the greater Phoenix market, overseeing strategic development and delivery of wealth management services provided by a team of financial professionals. He was previously the firm’s regional director of private banking.
• Paul Tees was hired as the Tucson managing director. He will be responsible for the overall growth and management of the Private Bank for all of Southern Arizona, with a team of bankers reporting to him.
• Jason Miller, CFP®, was promoted to market manager for Greater Phoenix. In addition to his responsibilities as Director, Financial Planning – Western U.S., he will now have management responsibilities for the Arizona team of financial planners.
• Lindsey Jackson, an estate planning attorney, joined the firm as senior trust administrator. She will oversee trust administration for high-net-worth clientele.
• Tony Tanner was hired as a senior client advisor. This newly created position is designed to assist clients who have more complex financial planning and advising needs.
• Craig Shelley has been hired as a wealth advisor. He will serve as an advisor to high-net-worth individuals, families and organizations, including closely-held and family-owned business, endowments and foundations. He will assemble the appropriate team of professionals to provide a full range of wealth services as part of an overall personal wealth management strategy.

“The caliber of our team is second to none,” said BMO Private Bank Western U.S. President Matt Miller. “As we continue to expand our presence in the U.S., we are adding top-notch professionals who are truly committed to our clients and possess the skills necessary to help high-net-worth individuals and families navigate complex financial decisions to achieve their goals.”

New business in the Western U.S. region has increased significantly over the past year. To further support the influx, Miller says BMO Private Bank is increasing staffing to focus on positions that enhance the client experience.

For more information about services and operations, visit www.bmoprivatebank.com.


Most High-Net Worth Arizonans Enjoy Hobby Investing

BMO Private Bank today released the results of a study on high-net worth Arizonans (those with at least $1 million in investable assets) and hobby (or passion) investing. The study, the fifth and last in a series by BMO Private Bank examining trends among the affluent, found that half of the state’s wealthy engage in some form of hobby investing. This compares to the national average of 68 percent.

Hobby investing is defined as adding collectible assets to one’s portfolio as a means of diversification and, just as important, as a way to have and to hold the things investors love the most.

“While diversification is critical when structuring a portfolio, hobby investments should be limited to a relatively small portion of an investor’s overall portfolio because of the unique risk and liquidity characteristics associated with most collectible assets,” said Mike Sullivan, Director of Investments – Western U.S, BMO Private Bank.

The study found that the items in which the Grand Canyon State’s affluent are most passionate about investing include:

* Art (25 percent)
* Jewelry and coins (23 percent each)
* Stamps (18 percent)
* Antiques and sports memorabilia (13 percent each)
* Classic cars and wine (10 percent each)

“People who choose to invest in their hobbies often do so because it allows them to feel a sense of engagement without having to spend a lot of time on them. Many hobby investors are keen to create a legacy to pass on to their heirs – one that is unique to them and reflects their interests,” said Jack Ablin, Chief Investment Officer, BMO Private Bank.

Why do People Engage in Hobby Investing?

According to the study, one of the main reasons why Arizona’s affluent engage in hobby investing is simply because it is “fun” (65 percent). Other reasons identified include:

* Combines interests with investing (50 percent)
* Allows for showing off investments to others (20 percent)
* Provides something unique to pass down to heirs (15 percent)
* Provides sound investments that will grow in value (15 percent)

Regardless of what influences people to combine their hobbies with investing, Mr. Ablin noted that, as with any form of investing, there are a few cautionary factors Arizonans of all income levels need to consider. For example:

Antiques: can be very illiquid and therefore not suitable for those who may need to convert them to cash in a short period of time.
Wine and art collecting: are long-term propositions, so not appropriate for those with a short-term investing horizon.
Stamps and coins: there is a robust counterfeit market in both these items, so investors need to be careful about their authenticity and well-educated about the risks.
Comic book collecting: may be trendy today, but the market may not be so strong in the long or even the medium term.

Key National Findings:

On a national level, the study found:
* Two-thirds (68 percent) of high net-worth Americans have a hobby investment.
T* he most common hobby investments are coins (38 percent), art (36 percent), and jewelry (31 percent).
* High net-worth Americans are most likely to engage in hobby investments because they find it “fun” (62 percent), because it is a way to combine an interest of theirs with investing (54 percent) and because it enables them to pass something special down to their loved ones (40 percent).
* Four-in-ten (40 percent) say they invest in their hobbies because it is a sound investment which will appreciate in value, with this being a larger motivator for men than women (41 percent vs. 36 percent).

The online survey was conducted by Pollara between March 28th and April 11th, 2013 with a sample of 482 American adults who have $1M+ in investable assets. The margin of error for a probability sample of this size is ± 4.5%, 19 times out of 20.


BMO Names Miller as President, Western U.S.

BMO Private Bank announced today that Matt Miller has been promoted to President, Western U.S. In this role, he will be responsible for the strategic development and delivery of wealth management services for high-net-worth individuals, family-owned businesses, endowments and foundations throughout the Western U.S.

Miller has nearly 30 years of experience in the financial services industry. He joined the organization in 2009 as Managing Director. During this time, he was responsible for organizing the western regional hub office and recruiting many of its senior managers and advisors.

“Matt is an ideal fit for this position. He is passionate about guiding his clients and helping them achieve their financial goals,” said Terry Jenkins, President and CEO, BMO Private Bank, U.S. “He leads by example, is focused on excellence and motivates his teams to success. We are confident the Western region will achieve even greater success in the years to come.”

Miller is headquartered at BMO Private Bank’s Scottsdale location, which also serves as the hub of Western regional operations. He will oversee a team of 75 financial professionals located in Arizona, Utah and Washington.

A fourth-generation Arizonan, Miller is an active leader in local business and civic communities. He currently serves on the board of directors for Teach for America Arizona, Valley of the Sun United Way Financial Stability Council and volunteers regularly at JAG (Jobs for Arizona Graduates). He previously served on the board of the University Medical Center in Tucson for 12 years. Miller earned a Bachelor of Science in Finance and Accounting from the University of Arizona.

“This is an exciting time to lead an organization that is poised for significant growth,” said Miller. “The caliber of our team is second to none, and our clients benefit from industry-leading planning tools that enable us to provide the best in financial planning and analysis.”

BMO Private Bank has Arizona locations in Scottsdale, Phoenix and Tucson. For more information about services and operations, visit www.bmoprivatebank.com.


Important Changes for Year-End Tax Planning

With less than a month left in 2013, BMO Private Bank encourages Americans to turn their attention to tax planning. This is especially important given an increasingly complex tax code and recent changes such as the addition of the new Net Investment Income Tax (NIIT).

“It’s important for taxpayers to educate themselves about changes in the tax code, and with the addition of the Net Investment Income Tax this year, there’s an even greater need for advanced planning,” said Jason Miller, Director, Financial Planning, BMO Private Bank. “That’s why it’s always helpful to consult with a financial and tax professional before the end of the year.  Waiting until the New Year to start thinking about taxes is often too late.”

The NIIT adds a 3.8% tax on investment income if one’s Adjusted Gross Income (AGI) exceeds $200,000 for a single taxpayer or $250,000 for a couple filing jointly. One way to determine if you might be subject to this tax is to look at last year’s income tax return and have a general idea if this year’s income would be significantly different.  The tax is on net investment income.

The income subject to this tax would include interest and dividends, distributions from non-qualified annuities, income from rental real estate, S-Corporations or partnerships, and net capital gains from the sale of investments.

Deductions that could reduce or help eliminate NIIT include investment interest, state income taxes on investment income, and investment management fees.

Miller noted that one misconception regarding the NIIT is that all home sales would be subject to this new tax. For a primary residence, a taxpayer can exclude $250,000 of gain from the sale of a home ($500,000 on a joint return) if the home was used as a primary residence for two of the last five years. Only the gain in excess of this exclusion would be subject to the new 3.8% tax.

For more information on tax issues or to find out more about how to work with wealth and tax professionals, click here.


High-Net-Worth Arizonans Upbeat about Economy

A study released today by BMO Private Bank has revealed that affluent Arizonans are optimistic about what the future holds for the U.S. economy.  The study is the second in a series by BMO Private Bank examining trends among high-net worth individuals (those with investible assets of $1 million or more) in Arizona and across the country.

According to the study, 65 percent of Arizona’s affluent expect the U.S. economy to improve over the next year. Additionally, almost half (48 percent) say they are financially better off now than they were before the 2008 recession.

Other key highlights of the study include:

* Affluent Arizonans consider stocks (65 percent) and real estate (58 percent) as the investments most likely to deliver solid returns in the next five years.
* They see the health sector (83 percent) as the most promising in which to invest, followed by the energy and technology sectors (73 percent each). They are least optimistic about the mining (40 percent) and agricultural (28 percent) sectors.
* Arizona’s affluent are spending more or the same since before the recession on entertainment/leisure activities (88 percent) and vacations (85 percent).

“Confidence in the economy has given Arizona’s wealthy greater peace of mind,” said Mike Sullivan, CFA, Regional Director – Investments, Western US, BMO Private Bank. “They are relaxing more, spending more, and making more thoughtful decisions about their investment strategies – all of which will continue to help stimulate economic growth within the state.”

On a national level, the study found:

* Almost two-thirds (61 percent) of high-net worth Americans say they are better off today than they were before the recession.
* Sixty percent of the nation’s affluent are optimistic about what the future holds for the U.S. economy.
* They are most bullish about the technology (80 percent), health (78 percent) and energy (77 percent) sectors and least optimistic about the prospects for the manufacturing (50 percent), agricultural (46 percent) and mining (43 percent) sectors.
* They are spending more money or the same amount as before September 2008 in a number of areas, including:

* Entertainment and leisure activities (86 percent)
* Travel and vacations (83 percent)
* Club memberships (81 percent)
* Collections and hobbies (80 percent)
* Clothing and accessories (77 percent)

Ray Headshot

Artigue Agency Expands Growing Sports Practice

Local marketing communications firm, The Artigue Agency has announced the addition of several new clients to its growing sports practice.  Led by sports marketing veteran Ray Artigue, the firm’s new clients include Junior Golf Association of Arizona (JGAA), Naismith Basketball Hall of Fame, former Phoenix Suns star and NBA veteran Eddie Johnson, Patriot All-America at Wigwam Arizona and QR Gameplan.

“The growth of the agency represents the need for additional staff and expanded offices and I’m flattered by the market’s demand for our professional services,” said agency principal Ray Artigue.  “As we evolve and expand our sports offering, our greatest marketplace differentiator remains our people.  Our team comes from a variety of backgrounds, bringing diverse skills and extraordinary expertise in their respective specialty areas, ensuring that we’ll continue to deliver successful PR and marketing programs.”

The Artigue Agency recently moved to a larger office in Biltmore-area of Phoenix to be closer to new and existing clients and to accommodate its growing team.  The firm has also added two new two senior account executives, Casaundra Donahoe and Ian La Cava.

Donahoe brings nine years of experience in brand strategy, creative development, media relations and communications planning. Prior to joining The Artigue Agency, Donahoe worked for Park & Co. where she served as strategic counsel for brands like Goodwill, Girl Scouts, Expect More Arizona, METRO Light Rail, Coca-Cola and many others.

La Cava has five years of experience developing and executing public outreach campaigns and strategic initiatives on behalf of several clients in the sports industry. Prior to joining The Artigue Agency, La Cava worked for Niner Sports Marketing where he managed talent procurement, endorsement deals and social media for marquee athletes.

The Artigue Agency works with emerging and established companies in several markets with extensive experience in the sports, entertainment and lifestyle, healthcare, financial, legal and environmental industries.  Current clients include Arizona Broadcasters Association, Arizona Public Service (APS), Arizona Biltmore Golf Club, Abrazo Health Care, Cardon Global, Gallagher & Kennedy, BMO Private Bank, JDM Partners, Scottsdale Tourism Development Council, Wigwam Golf Club and Waste Management, among others.

Phoenix Symphony Contest

Phoenix Symphony Names 2 to Board

The Phoenix Symphony Association named Jaime Daddona Brennan and Tim K. Schultz to its Board of Directors.

“Jaime and Tim bring invaluable experience to our Board of Directors,” said C.A. Howlett, Chairman of the Board for The Phoenix Symphony. “We are truly fortunate to welcome such high-caliber individuals to our team” he added.

Jaime Daddona Brennan is a Senior Associate with Squire Sanders (US) LLP in Phoenix. She practices in the corporate, securities, and financial services practice groups with an emphasis on merger and acquisition transactions, public and private offerings of debt and equity, and corporate governance matters. Ms. Brennan attended Arizona State University where she graduated as valedictorian, summa cum laude, with her master’s degree in public affairs, and graduated magna cum laude, Order of the Coif, from the ASU College of Law. In addition to her law practice, Jaime serves as the Secretary of the Phoenix Symphony Young Professionals Board, is a Squire Sanders (US) LLP Global Associate Liaison, and has served on the U.S. Marine Corps Scholarship Ball Committee, the International Foundation for Anti-Cancer Drug Discovery Advisory Board, and the Fax Net 1 Board of Directors.  A lover of classical music in particular, Jaime plays the piano and recently took up violin.

Tim K. Schultz is Senior Vice President/Regional Director of Administration and Operations for BMO Private Bank, a part of BMO Financial Group, in Scottsdale. Prior to this position, Mr. Schultz held several Vice President/Regional Director positions with financial corporations throughout the country, most recently M&I Wealth Management. Tim has a long-time passion for music and the arts, having earned his Bachelor of Music from Augsburg College. He currently serves as an Advisory Board Member for the ASU Lodestar Center for Philanthropy and Nonprofit Innovation; Board Member of One-n-ten; Member of Planned Giving Roundtable of Arizona, Central Arizona Estate Planners, BMO National and Regional Diversity Councils and the BMO Community Reinvestment Committee.

For more information about The Phoenix Symphony visit phoenixsymphony.org.