Advisory Agreement Assignment Letter Q&A:
Question: Why did I receive this letter?
Answer: Because you have an advisory (fee-based) account at KMS Financial Services.
Question: Did everyone who has an advisory account at KMS Financial Services receive this letter?
Question: What’s the purpose of the letter?
Answer: To gain your approval to continue to work with your KMS representative under an advisory agreement.
Question: Why do I need to give my approval?
Answer: KMS Financial Services is a subsidiary of Ladenberg Thalmann and Ladenberg Thalmann is undergoing a corporate restructuring as part of their merger with Advisor Group. Because of this merger, KMS is required to obtain your consent on your existing advisory agreements.
Question: Who is Advisor Group?
Answer: Advisor Group has one of the largest networks of independent wealth management firms in the United States. There are currently four individual firms that comprise Advisor Group — FSC Securities Corporation, Royal Alliance Associates, SagePoint Financial, and Woodbury Financial Services – soon to be five with the addition of Ladenberg Thalmann growing the Advisor Group network to over 11,000 independent financial advisors.
Question: Is anything changing between my account and Klevens Capital?
Answer: No, your relationship with me is not changing in any way.
Question: Is my fee changing?
Answer: No, your fee is not changing.
Question: Do I need to sign anything?
Answer: We’d appreciate it if you’d sign the consent letter and return it in the envelope provided.
Question: What will happen if I don’t sign the consent letter?
Answer: That’s fine, you can disregard the consent letter. In roughly 3 weeks you’ll receive another letter from KMS informing you that unless they hear from you they’ll presume you want things to remain the same as they currently are.
Question: Do I have to sign the second letter?
Question: So, if I do nothing, if I ignore both the first letter and the second letter everything will remain the same as it has been?
Question: So, what’s the purpose of sending me letters that I ignore for everything just to stay the same?
Answer: Attorneys need to eat too.
Recommended for Ages 4 to 99- “Lego, the world’s largest and most profitable toymaker, is zeroing in on a growing demographic: stressed-out adults,” said Abha Bhattarai in The Washington Post. Facing stagnant sales growth and “smartphones and apps that are devouring a bigger portion of children’s allowances,” the 87-year-old Danish company is tapping into Gen X nostalgia and finding that parents are more likely to “drop $800 on a 7,541-piece Star Wars Millennium Falcon set” for themselves. The company’s newest kits include “the Central Perk café from the sitcom Friends,” while a DeLorean time machine from the film Back to the Future is said to be in the works. More adults are also using Lego in their “search for modern-day tranquility.” The toy giant has been “revamping instruction manuals to make kits foolproof for frazzled adults,” and has “introduced a line of koi and shark models with soothing movements.”
Five Years Strong- Warren Buffett was America’s biggest philanthropist in the five years between 2014 and 2018, giving away $14.7 billion, or 16.3 percent of his net worth, mostly to causes selected by his friends Bill and Melinda Gates, who gave $9.9 billion of their own.
Surprise!- A British TV reporter was pranked by an Australian camera crew into thinking that a koala bear was, in fact, a mythical man-eating marsupial called a “drop bear.” Correspondent Debi Edward donned body armor and goggles during an on-air report as a park attendant handed her a koala and explained that it was a “really vicious” animal that drops from the trees to attack people with venomous fangs. A terrified Edward held the bear and gamely delivered her report before realizing she’d been scammed.
Weekly Focus – Think About It
“Believe you can and you’re already halfway there”
Markets hunkered down last week.
News of the coronavirus outbreak in Wuhan, China unsettled investors around the world. The respiratory infection is related to severe acute respiratory syndrome (SARS) and Middle East respiratory syndrome (MERS), reported WebMD.
Previous virus outbreaks have affected global economic growth. Research into pandemic preparedness suggests extreme events can reduce global annual income by 0.6 percent per year (including mortality and income loss). Lower income often is equated with slower economic growth.
Viruses can also affect companies and share values. However, not every investment will move in the same direction at the same time, and not every country or industry will be affected in the same way. Barron’s reported:
“SARS infected more than 8,000 people in 2003, killing more than 770. The outbreak occurred between November 2002 and July 2003. Stocks of U.S. airlines – a proxy for travel-related shares – dropped more than 30 percent from pre-SARS highs during that outbreak, about twice the decline of the broader S&P 500 index. All stocks, it appears, were impacted by the outbreak. It took about three months for shares to bottom and another three months to achieve previous highs.”
China responded to the outbreak by imposing a transportation lockdown, and that could affect China’s economic growth. S&P Global explained:
“The coronavirus is hitting China during Lunar New Year, a period when households tend to spend more on travel, entertainment, and gifts. Even if the virus is contained fairly quickly, the initial stages of high uncertainty are likely to affect spending.”
In addition, the city of Wuhan, where the outbreak began, is a major transportation hub and a center for auto production. It is China’s sixth largest city, home to 11 million people, and responsible for 1.6 percent of the country’s economic growth.
Major stock indices in the United States moved lower last week.
A DECADE OF WORDS. Time Magazine puts a ‘Person of the Year’ on its cover. ESPN awards ESPYs to athletes annually. Nobel and Ig Nobel committees recognize the worthy and the unsuspecting. Merriam Webster selects a ‘Word of the Year.’ It is the word dictionary users searched for more than they had in previous years. Here are the words of the year from the last decade:
2010: Austerity, noun, “The quality or state of being austere, a stern and serious quality, a plain and simple quality.”
2011: Pragmatic, adjective, “Relating to matters of fact or practical affairs often to the exclusion of intellectual or artistic matters: practical as opposed to idealistic.”
2012: Socialism, noun, “Any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods,” tied with Capitalism.
Capitalism, noun, “An economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.”
2013: Science, noun, “The state of knowing: knowledge as distinguished from ignorance or misunderstanding.”
2014: Culture, noun, “The customary beliefs, social forms, and material traits of a racial, religious, or social group, also the characteristic features of everyday existence (such as diversions or a way of life) shared by people in a place or time.”
2015: -ism, noun suffix, “Manner of action or behavior characteristic of a (specified) person or thing, or prejudice or discrimination on the basis of a (specified) attribute.” (The most looked up words were socialism, fascism, racism, feminism, communism, capitalism, and terrorism.)
2016: Surreal, adjective, “Marked by the intense irrational reality of a dream.”
2017: Feminism, noun, “The theory of the political, economic, and social equality of the sexes; organized activity on behalf of women’s rights and interests.”
2018: Justice, noun, “The maintenance or administration of what is just especially by the impartial adjustment of conflicting claims or the assignment of merited rewards or punishments.”
2019: They, pronoun, “Those ones: those people, animals, or things.” The definition was expanded to, “Used to refer to a single person whose gender identity is nonbinary.”
The short-list of words for 2019 included: quid pro quo, impeach, crawdad, egregious, clemency, the, snitty, tergiversation (“evasion of straightforward action or clear-cut statement”), camp, and exculpate.
John Klevens, CFP ®
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This material is intended to provide general financial education and is not written or intended as tax or legal advice and may not be relied upon for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. This material is for informational purposes only and is not an offer to sell or a solicitation to buy any securities.
Securities and Advisory Services offered by John Klevens through KMS Financial Services, Inc. Member FINRA/SIPC and an SEC Registered Investment Adviser. Klevens Capital Management and KMS are separate and unaffiliated.
Portions of this newsletter have been prepared by Peak Advisor
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* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
https://www.barrons.com/articles/stocks-catch-a-cold-after-fed-stops-expanding-its-balance-sheet-51579916069?mod=hp_DAY_1 (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/01-27-20_Barrons-Stocks_Catch_a_Cold_After_Fed_Stops_Expanding_its_Balance_Sheet-Footnote_1.pdf)
https://www.barrons.com/articles/travel-stocks-coronavirus-china-airlines-health-care-51579714639 (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/01-27-20_Barrons-Coronavirus_has_Hit_the_Stock_Market-Heres_What_History_Says_Comes_Next-Footnote_5.pdf)