VisionQuest Wealth Management was created from the following question:  How can I effectively coordinate advice from multiple advisors to ensure their strategies are aligned with my family’s goals?

When working with several advisors who specialize in different aspects of your financial picture, you may tend to view your wealth in separate compartments or silos.  You rely on your CPA to provide tax compliance, consulting, tax execution and financial reporting.  You rely on your estate planning attorney to work on your family structure; your insurance agent to perform an annual check-up; and your portfolio manager to assist the family in determining your asset allocation and investment strategy.  This silo approach may work when you dedicate the required time as the family’s financial quarterback, but if you aspire to goals of efficiency, effective communication and excellent results, you might undertake a different approach – a more integrated one.

Employing an integrated approach in serving affluent families is becoming a trend in the wealth management industry.  While you strive to work with best-of-class providers for every aspect of your wealth management strategy, you should not underestimate the importance of making sure these advisors understand how the other interdependent parts operate.  This comprehensive approach should create a like-minded strategic vision across multiple generations for the family and foster coordinated advice based on knowledge of the entire situation.

Financial integration mandates that your trusted wealth management advisors work seamlessly as a unified team to collaborate and render advice with one voice.  In this model, it is paramount that the family’s goals and objectives come first.

Over the past several years, VisionQuest Wealth Management has recognized that the challenging economy has dramatically changed the role and expectations of a trusted advisor.  More than ever, clients are seeking advice from individuals and companies that do not sell their own financial products and can therefore provide an objective viewpoint.

VisionQuest Wealth Management is a registered investment advisor.  This material does not constitute investment or tax advice.  Please consult an investment or tax professional about your specific situation. 

How do I determine if my liquidity level is appropriate?

At VisionQuest Wealth Management, we often say that if you do not know where  your living expenses are coming from, then your liquidity level is  insufficient.  The first part of our assessment process starts with a client’s cash flow and then we work backwards when setting up the asset  allocation.  You protect cash flow by investing in safe, low-volatility investments that provide stability and security.

I think we’ve all learned from the fall of 2008 that all asset classes have two correlations: one for normal times and another reserved for panics.  As  a result of unusual sales pressure, the nominal value of almost all asset  classes, other than Treasuries, traded off sharply in the fall of 2008.  In spite of this, we saw many income-producing investments continue to work as  intended during this timeframe.

With the current economic policy, VisionQuest Wealth Management has been very  cautious relative to debt.  We believe maturities that are intelligently  laddered can pave a runway of cash-flow protection and we’ve found that  investors can intelligently stomach short-term volatility when they have  certainty of their cash-flow position.

Private-debt has been a successful strategy for producing consistent  cash-flow for investors.  In previous years, we’ve seen the private debt offerings have yield returns between 8 to 12 percent.  Investing is not without risk and the continued tightening of high-yield spreads is evidence of  investors’ hunger for yield driven by today’s ultra-low interest rates.   Many other firms agree that an allocation to high-yield bonds will improve your  portfolio due to its low correlation to other asset classes.  In today’s hot bond market, that means covenant-light bonds with fewer protections for  bond-holders.  With that being the case, I think you will see more firms  choose smaller, niche managers who source all of their own deals (typically  private debt investments) and therefore dictate terms to those companies.

VisionQuest Wealth Management is a registered investment advisor.   This material does not constitute investment or tax advice.  Please consult  an investment or tax professional about your specific situation.  Past  performance is no guarantee of future results.  Investments are: Not FDIC  Insured, NO Bank Guarantee; May Lose Value.

When you start a business, your initial focus is on getting customers. Once you get the customers, a second focus surfaces – keeping and fulfilling the promises you made; and lastly, a third area of focus demands attention – tracking the promises and organizing the activities of the company into a viable, sustainable, and profitable business.

Our experience at VisionQuest Capital shows that business owners and CEOs are the most valuable to their companies when they focus on making and keeping promises. The company loses value when the owners and CEO try to devote some or all of their focus to tracking the promises and managing the cash flow, profitability, and other accounting, finance, and administrative functions crucial to building their business.

The ideal solution would be to hire a seasoned and successful executive, also referred to as a Chief Financial Officer (CFO), to lead this area of the business. However, most businesses cannot afford to add the overhead cost of this position to payroll. VisionQuest Capital solves this dilemma for many businesses by delivering high-impact solutions and results at an affordable cost through their Business Advisory Services Division.

Imagine a group of naturally talented individuals who have had a remarkable track record of success in their past. Like a SWAT team of business execs if you will, swooping down on companies and spotting, quickly and efficiently, every play where the company can strengthen and improve is exactly what VisionQuest Capital has built through their Business Advisory Division. 

VisionQuest Capital provides a customized, outsourced CFO Services to firms under $50 million in annual sales.  By specializing in small to mid-size businesses; they focus on the growth, opportunities and challenges that every business encounters and whether the business is attempting to grow organically, through acquisitions, or you are evaluating an exit by selling your company, VisionQuest professionals can lead you through the process.

This is exactly why Joe Slayton former President of Operations at Alltel in Little Rock, Arkansas and now the owner of Slayton Wireless hired VisionQuest Capital.  Wendy Miller, Director of Business Advisory Services and Tax, says “we are showing Slayton Wireless how to capture a lot more profit without expending more man-hours and capital; And we have developed a very specific plan and forecast for Slayton Wireless so that we can budget and plan for the present and the future. 

Joe Slayton, owner of Slayton Wireless, says “they (VisionQuest) are an invaluable asset to me as a business owner to have the experience, insight, guidance, professionalism, and genuine concern for my success…and this is specifically why I have recommended VisionQuest to other business owners.”

The boutique nature of VisionQuest makes the firm well positioned to serve firms under $50 million in annual revenue and their depth of experience and ability to help clients across a range of industries makes it unique relative to the competition attempting to serve this marketplace.

About VisionQuest Capital’s Business Advisory Practice
VisionQuest’s business advisory professionals provide industry-focused tax and advisory services to their clients and stakeholders. Whether clients are proactively implementing change or reacting to an unplanned event, VisionQuest Capital leverages the firm’s resources, deep industry experience, and business acumen across the areas of operations, finance, organizational strategy and structure, process improvement and human resources effectiveness to help organizations effect sustainable change.

According to the Society of Human Resource Management’s 2010 Employee Benefits Survey released in June of 2011, 72 percent of HR professionals said “the benefits at their companies had been affected ‘in some way’ due to the economic downturn that began in 2008.” And while 79 percent said “they were reviewing their benefits offerings annually,” 10 percent reported that they were reviewing them more than once a year.

One notable SHRM statistic stated that 10 percent of respondents said “they plan to reduce or eliminate employer match for 401(k)s in the coming year.”

Employee benefits are a very important component of an individual’s financial plan and they should be coordinated and managed towards achieving financial wellness. That’s why VisionQuest Wealth Management helps its clients review all available benefit choices to determine how such choices fit into your overall financial strategy.

Here are some of the items that we review:

Retirement Plans: Most companies will alert you if they are changing investment options and/or matching contributions.  On a quarterly basis VisionQuest reviews each client’s 401(k) investment options and recommends appropriate changes with the asset allocation.  If you receive notice of changes occurring within your plan, VisionQuest needs to be notified in order to stay up-to-date on each client’s plan offerings to ensure we maximize success within the plan for you.

Health Care Plans: As you’re reviewing health plan choices, think of all the health issues you’ve experienced throughout the year. It could be a diagnosis of a chronic disease, the birth of a child, or the need to place a new spouse/partner on your coverage. A new spouse or child can usually be added with proper notice throughout the year, but open enrollment is a good time to review all current and future situations. If you’re healthy, you might want to opt for a lower-premium plan that requires higher co-pays or deductibles and try to put more into your retirement savings. Just try not to choose any plan that limits lifetime benefits to $1 million or less — you’d be surprised how little time it takes to get there for an accident or serious illness.

Prescription Plan: You should look at your prescription needs and find the best insurance choice to cover them. While you may have a co-pay of $5 to $10 for generic drugs, will your plan pay for a brand-name drug that you really need, or will you get stuck with a co-pay of $50 or more? Make sure you understand the tier system within your pharmaceutical plan and pick the right one for you based on your current or expected needs.

FSA/HSA Options: A flexible spending account (FSA) is an account some employers offer so workers can deposit funds on a pre-tax basis to pay their out-of-pocket health and dependent care costs. However, workers need to make a good estimate on the funds they’ll use by year-end because excess funds can’t be carried over. Health Savings Accounts (HSAs) allow workers to save pre-tax dollars for health care costs without the “use it or lose it” restrictions in FSAs, though they require the enrollment in a qualified high-deductible health plan, which more companies are moving toward. These dollars often can be directed into different investment accounts and used on a tax-favored basis in retirement. In 2010, individuals can deposit up to $3,050 in their HSA, and those with family coverage can deposit up to $6,150. Individuals above age 55 can add another $1,000 in contribution on both individual and family coverage.

At the onset of each client relationship, VisionQuest takes the time to review the benefit options available and helps each client get enrolled in the right choices.  If things are changing in your life or your benefits, we need to sit down and go through the same process during your next open enrollment period.  To get the ball rolling, simply send us the information your Human Resources team sends to you and we’ll make sure you’re set-up for success in the coming year.

President Obama delivered his long-awaited economic address Thursday night and Friday’s reaction in equities was a major Bronx cheer. Obviously the news from Greece, with that country teetering on the edge of a default, was also a big negative.

With all of that being said and this is not a political commentary, we believe the lion’s share of the problem is, once again, a president is proposing policies that are both primarily oriented toward the short-run and unlikely to succeed at lifting the pace of economic growth.

Back in 2008, under President Bush, we got a relatively small short-term “stimulus” bill. Then, in early 2009, President Obama got exactly the “stimulus” bill he wanted, in both grand size and scope. Then, late last year, the president and the outgoing Congress agreed to yet another stimulus bill.  Each of these policies has mostly failed, yet the president is pushing for another set of proposals cuts, with temporary payroll tax breaks, a temporary extension of full tax-expensing for plant and equipment, and more (politically-driven) infrastructure spending.  The Administration is also asking for an extension of the 99-week program of unemployment benefits, so it can cover workers who lost their jobs back in late 2009 thru 2010.

Without any sense of irony, the program wants to cover workers who lost their jobs during periods that his past stimulus efforts failed to stimulate.

What we need is for our lawmakers to get off the treadmill of short-termism and start focusing on where we want our country’s policies to be for the next generation.

The biggest opportunity is on the tax treatment of business purchases of plant and equipment, where the president is asking for just one more year of 100% full expensing. We think, given the priority he’s putting on this bill, that lawmakers who know better should demand to make this policy permanent.

In closing, you can never determine how someone takes your words – so let’s be very, very clear, we do not believe the US is doomed to become another (larger) version of Greece. What we simply believe is that with each proposal that has put a priority on the short run, we have taken a step in that direction to become a larger version of Greece. It is NOW time for policymakers to show they have learned something over the past few years.

With the IRS cracking down on the high-income loop-holes and individual audits on the rise, tax-payers have been put on notice.  The average tax-payer is usually more concerned with the gray areas of tax shelter tactics, but here are four (4) particular situations in which the IRS might take notice that they haven’t in previous years.

1.  Family Partnerships.  If a family limited partnership does not truly function as a business, it certainly will not seem like one to the IRS. If, for example a father places his home in a partnership in order to transfer it to his heirs and avoid part of the estate tax, he cannot retain any interest in the property meaning he cannot live there.

2.  Multiple Partnerships.  The presence of numerous limited partnerships sends up a red flag to the IRS signaling potential improprieties.  Investors often enter into these complicated deals by pouring large sums into money hungry companies, frequently operating in real estate or exploration.   Be aware that although this activity alone is not an issue, it certainly draws scrutiny.

3.  Earnings from Abroad.   In the age of globalization, many investors have diversified and will continue to diversify their holdings worldwide.  However, money earned overseas by American citizens remains subject to U.S. taxes, although you should receive a U.S. tax credit if you are taxed on it abroad.  Investors should also be careful when sinking cash into complicated deals located in known tax havens, such as the Cayman Islands for this too will draw scrutiny.

4.  Executive loans.  With companies like Tyco and WorldCom who forgave millions in loans, executives and owners should be prepared to prove that corporate loans are actually loans.  The IRS wants to verify that a loan to leadership is not a cleverly disguised bonus which would be taxed at a higher rate.  To reassure the IRS, make sure your company acts like a bank, documenting everything and charging interest.  Know that if the company forgives the loan, the IRS will sometimes try to argue that it wasn’t really a loan in the first place and they may try to convert the entire loan into income for the year the loan was made by the company.  This obviously could result in penalties for the company, the owner(s), partner(s), or executive(s).

As we have all seen and heard, the United States bonds are no longer officially rated Triple-A, at least in the eyes of Standard & Poor’s.

And while Moody’s and Fitch, the other leading rating agencies, have affirmed the top rating, they too have worried about the long-term outlook for the United States.

None of this necessarily means disaster for your money. The United States has not been downgraded to “junk” status, like say, Greece. The rating is still very high — just not tops.

Your stocks: Bad news for the economy generally means tough times for stocks. But history shows that when a country loses its AAA credit rating, it’s not necessarily terrible news for that nation’s stock market.

When Canada lost its AAA rating in April 1993, the country’s stocks gained more than 15% in the subsequent year. The Tokyo stock market climbed more than 25% in the 12 months after Moody’s downgraded Japan in November 1998.

At the very least, a downgrade could add more fear and uncertainty to an already sluggish economic recovery. To counter this, VisionQuest has been diversifying our portfolios to include an even greater global reach as well as the addition of specific commodities including oil, natural gas and agricultural products.

Your bonds: In the year following Canada’s downgrade in 1993, yields on 10-year Canadian bonds jumped from 7.6% to 8.1%. So there could be an uptick in U.S. bond yields, but experts didn’t think it would be big.  That’s because Treasuries, unlike Canadian securities, are considered a default investment for global investors seeking safety.

The “downgrade” will likely force investors to look at bond issuers with balance sheets that, unlike the U.S.’s, are improving.  And with regards to emerging market countries, their ratio of debt-to-GDP is falling as the same ratio rises in the U.S. and Europe.

As a bonus, Americans who buy emerging market debt could see their investments rise simply because emerging market currencies are strengthening against the U.S. dollar.

Your cash: The safety of the different vehicles in which you might stash your cash — FDIC-insured accounts, money market funds or short-term Treasuries, for example — wouldn’t be so affected by a downgrade that you’d need to shift your money around.

Skittish investors who wouldn’t want to park their cash in downgraded Treasuries might feel more secure by putting that money into an FDIC-backed bank account instead, since it would be protected by deposit insurance.  But the increased sense of security would be little more than psychological, because after all, like Treasuries, FDIC-insured accounts are ultimately backed by the same entity: the U.S. government.

As for money market mutual funds, which are not insured, the effect of a downgrade is not expected to be dramatic since those funds generally invest in short-term debt and discussion of a downgrade has so far been limited to long-term U.S. bonds.

Despite a downgrade, U.S. debt would still be considered a safe haven. Double A will become the new triple A because there simply isn’t a viable competitor to Treasuries.

Your borrowing: Because yields — and corresponding interest rates — move inversely to price, rates that track shorter-term Treasuries are more likely to see a bump.

Rates on car loans, which follow shorter-term rates like the two-year Treasury or LIBOR could go up, but not enough to really hit consumers.

Most mortgage rates, however, track the 10-year Treasury yield, which continues to fall. Adjustable rate mortgage holders could be slightly more vulnerable because ARMs are typically tied to shorter-term interest rate movements.

For students and parents who rely on private student loans, any jump in borrowing costs for lenders would be passed on to borrowers.  Luckily, Federal student loan rates would remain fixed.

Credit card rates are pegged to the prime rate, which moves with the federal funds rate. If the prime rate goes up, consumers could be hit with credit card rate hikes. Even if the rate doesn’t go up, card issuers spooked by a credit downgrade could raise your interest rates anywhere from 1% to 5%, but only if you’ve had your card for more than a year.

The credit downgrade has implications for the general economy, but none of them are as dire as they were portrayed from other sources. VisionQuest and its teams of experts will continue to deliver consistent, appropriate advice to help you reach your financial goals.