WEALTH MANAGEMENT - WHAT DOES IT MEAN?
Wealth Management is a term used to describe an integrated approach to understand, plan, and implement a strategy for your financial life. Wealth Management encompasses the various pieces of financial planning (cash flow, debt management, savings, retirement planning, taxation, insurance, estate planning, education savings, and more) and investment management is the tool used to achieve your financial goals. Through collaboration with service professionals (attorneys or accountants), the optimal strategy is developed to benefit your individual needs.
The Trust Company is well known for our expertise in trust administration and estate planning however, much of our work is in the area of Wealth Management. Because we provide all of these services, we can fully understand your goals and help you throughout your lifetime to plan and manage your financial life and to transfer wealth to family, friends, or charities you care about at the end of your life.
Are you utilizing all these services? If not, please visit with your advisor to inquire about how we may be able to better serve you and provide you with peace of mind.
1st QUARTER MARKET UPDATE: CHALLENGES, CHALLENGES, CHALLENGES...AND OPPORTUNTIES?
By Mark Knackendoffel, President & CEO & Michael Carlisle, Vice President & Investment Committee Chair
The current economic and investment environment is perhaps the most challenging we have faced in our careers of 40+ years. Several of the most significant of these challenges include:
* Rising Interest Rates
* Russia’s Attack on Ukraine
* Supply Chain Bottlenecks
* Covid-19 Pandemic
* High Equity Valuations
* U.S. Budget Deficits & Debt
* Cybersecurity Threats
* Divisive Political Climate
The rise in interest rates this year shouldn’t have been a surprise to anyone after coming off historic low levels in 2020 and 2021. The biggest surprise may be how quickly those rates have risen, particularly short-term rates. The 10-year U.S. Treasury has risen from 1.6% to 2.8%, but the 2-Yr rate has risen from 0.7% to 2.7%. These rates influence many consumer rates such as mortgage and consumer loans. For example, 15 & 30-Yr Mortgage rates have risen in 2022 from 2.25% & 3.5% to 5.25% & 6.0% respectively.
Rising interest rates also suppress stock prices, particularly for growth companies, which suffer from markets discounting the value of their future earnings. As a result, companies like the tech sector have seen their stock prices plummet recently.
But the other surprise has been how slowly the Federal Reserve has responded in increasing the Fed Funds Rate – from 0.08% to 0.33%, a measly 0.25%. In the low-rate environment of 2020-21, we got more defensive, using more short-term bond funds. Unfortunately, we didn’t get defensive enough.
Regarding inflation, interest rates are only part of the story. We’re also suffering from some structural challenges in our economy – supply chain issues, labor shortages, and huge U.S. Govt funding. But these challenges are solvable. It’ll take several years, but it doesn’t mean those challenges are permanent.
We still believe that Equity ownership, although volatile, is the best broad asset class to meet the challenges of inflation over the long-term. While equity markets have dropped this year, remember the pandemic equity market rebound was extraordinary, which led to some over-valuation. However, if we can address some subset of these challenges, long-term equity investors should be rewarded.
WEALTH MANAGEMENT SPOTLIGHT: FINANCIAL PLANNING
Financial Planning is at the heart of wealth management. To develop a good financial plan, you must know what your short- and long-term goals are and assess where you are currently. Financial advisors don’t have a crystal ball or a magic wand, but they can guide you through the planning process to develop a plan for successfully reaching your goals. Financial Planning is an included service for all wealth management clients at The Trust Company.
Cash Flow Analysis & Goal Setting
Understanding how much money you have (assets) and how much money you owe (liabilities) is crucial to developing a plan because it helps your advisor understand your starting point. Once you know where you’re starting from, you can determine how to achieve your goals - how you apply your money to pay debt, to save for emergencies, and to invest for your future.
Wealth Accumulation & Preservation
You are working hard to save and plan for the day you can retire, but are you saving enough to do that at the age you desire, and will you have enough money to live the lifestyle you desire and to last for your lifetime? Having a good financial plan that you review annually with your financial advisor is important to ensure you are on target to reach those long-term goals. Playing catch-up is stressful and it’s much more difficult to do than having a good plan that you update and verify over the course of several decades. Plus, it is a lot of fun to celebrate those milestone achievements along the way!
Wealth Protection & Estate Planning
Having measures in place to protect your savings is important, because one accident or mistake could cost you everything. Your financial advisor can help you understand what type of coverage you need to protect your wealth from lawsuits, disability, and death and ensure you and your loved ones don’t have a financial disruption that could be catastrophic. We can help you navigate the various types of insurance and estate planning documents that can ensure you remain in control of your financial plans and that you obtain your goals and dreams, regardless of the curve balls life might throw your way.
MEET OUR NEW STAFF MEMBERS
Estate Settlement Officer, Manhattan
Jenny became The Trust Company’s first Estate Settlement Officer in late 2021. Her role involves partnering with Trust Officers and Account Administrators to ensure the estate settlement process runs as smoothly as possible and that families are guided in a supportive way through difficult times.
Jenny has a degree in marketing from Fort Hays State University. An internship with the United States Olympic Committee led to her being hired full-time by U.S. Speed Skating and attending the 2014 Winter Olympics in Sochi, Russia. Just prior to joining The Trust Company, Jenny served as a Development Officer for the College of Arts and Sciences at Kansas State University.
Account Administrator, Manhattan
Anne joined the Schotte Team in early 2022. She previously spent seven years at Kansas State University—first in Financial Aid, then in the Registrar’s office, as NCAA Athletic Certification Specialist.
Anne has a Bachelor of Arts degree in Political Science with a concentration in Public Administration, from the University of Tennessee. Many years in customer service have sharpened her listening skills and awareness of clients’ needs. In her free time, Anne enjoys traveling and spending time with her grown daughter who lives in Fort Collins, Colorado.
JACQUELINE “JAKY” KRELL
Operations Administrator, Manhattan
A 2022 addition to our team, Jacqueline (“Jaky”) provides back-end client support such as bill payment processing, new account setup, and other administrative responsibilities.
Jaky was born and raised in California and her family moved to Topeka while she was in high school. After earning a Bachelor of Science in Finance from Fort Hays State University, she worked in a Topeka law firm for several years. Prior to joining The Trust Company, she was a personal banker for five years at two different banks in Manhattan. Jaky now lives in Manhattan with her husband, Ryan, who currently works for Armed Forces Bank. They have three dogs—Bacon, Brownie, and Boujee—and a pet pig named Peppa, of course.
Our advisors are passionate about helping people achieve financial peace of mind. Contact us today to get the conversation started.
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