Quarter-End Snapshot: Q3 2018
from J. Carter Tolleson
Over the years, we have intentionally added services to meet our clients’ needs. In the past decade alone, we have grown significantly in areas like family education, philanthropy and client bookkeeping services. With our capability to serve in so many areas, we often find it hard to tell people what we do in a single sentence.
We recently met with our friend Stan Richards, founder of award-winning advertising agency The Richards Group, who we’ve known for many years. He is familiar with us since he helped with the original Tolleson Wealth Management branding in the early 2000s. When we met, Stan asked me to give him the firm’s “elevator pitch,” but stopped me shortly as I started to get into the all the details and services we provide.
“It’s too long… you lost me. The elevator stopped, and I got off,” he said. “It’s clear you do everything financial for your clients. You allow them to enjoy their wealth.”
He was right. It was simple and true. The goal of every service we provide, every advisor, every report we create, every hire we make allows our clients to enjoy their wealth. Everything is tightly interwoven and culminates into that one overarching objective.
We want our clients to enjoy their wealth.
There are so many variables to accomplishing this goal, but one we often see is through philanthropy. Whether it is managing a private foundation, a donor-advised fund or simply facilitating a charitable gift, our firm can help clients and their families achieve their philanthropic goals – or even shape those goals. Philanthropy has also become a key component of family meetings. It can be hard to get your family together to discuss family values, financial management, being a good steward of money, etc., etc., (I can see my kids rolling their eyes already), but to bring the family together to discuss individual passions, however different they may be, and how to make a difference, all while staying rooted in family – that’s powerful!
Therefore, you can understand my excitement to announce that Susan Wells Jenevein will join us as our Philanthropy Director to build upon the great work the team is already doing and lead us into the future. She joins us from Cristo Rey Dallas and has more than 20 years of experience in philanthropy development. We are excited to welcome her to the team.
As always, it is a sincere honor to serve you so that you can enjoy your wealth.
2008 - 2018: Investing Then & Now
from Eric Bennett, CFA, CHIEF INVESTMENT OFFICER
A decade has come and gone since 2008, a period in the markets now known as the Great Financial Crisis. Lehman Brothers' collapse in September 2008 marked the beginning of a downward spiral for risk assets, as the S&P 500 fell 46% in just six months. However, the almost 10 years since the crisis have been nothing short of spectacular for those who remained invested in U.S. equities throughout this period. Most market strategists we talk to today continue to be optimistic about both U.S. and global economies, but what seems to be lingering in everyone's mind is the question of when will the music stop? How much longer can this current market cycle last?
One of the biggest themes that we've noticed recently is the continued positive sentiment surrounding the U.S. economy and markets. As a result, growth stocks that led the stock market last year are keeping up their momentum and, more recently, both short- and long-term interest rates are rising, a sign of a healthy economy. As interest rates move higher, we expect this to not only weigh on fixed income or bond markets, but also on equity valuations, as the cost of capital increases.
For example, emerging markets have recently performed poorly relative to other markets. They are now feeling the pain of higher U.S. interest rates, weaker local currencies and investors taking their capital elsewhere after reevaluating the risk/reward profile. While others may shy away, we see a good opportunity to further diversify both our fixed income and equity exposures across the globe, as the economic and earnings outlook are still encouraging.
As we witness these changing market conditions, we've positioned client portfolios into fixed income assets such as floating rate (as opposed to fixed rate) bonds that should perform well in a rising interest rate environment. On the equity side, we remain invested in high-quality companies that tend to trade at lower valuations than the broad market.
Ten years ago, the common question people asked was whether stocks will ever again provide a positive return. Hindsight has proven that patient, long-term focused investors who remained committed to diversified, balanced portfolios were rewarded with a decade of growth and the full recovery of temporary losses.
Then, as now, our goal here at Tolleson Wealth Management is to focus less on how much longer this cycle can last and more on portfolios that can prosper for the foreseeable future.
Client Advisory Team
from Royce Ramey, Managing Director
The past 10 years have been a journey of service and growth for Tolleson Wealth Management. We have built a team of dedicated individuals with the singular focus to help you and your family with all things financial. We are honored to serve you and will continue to help you enjoy your wealth.
As we look forward to the next 10 years, we want to share some of the exciting ways we are continuing to shape and develop our advisory team.
Hiring Talent: We have enhanced recruiting efforts for entry-level positions and increased exposure across many universities. Our intentional commitment as a learning organization helps our advisory team remain competitive and attractive to new candidates who may have considered larger Wall Street or Big Four accounting firms. We select advisors and service associates not only for technical aptitude, but also their intellectual curiosity, passion to serve and ability to work in a collaborative environment to provide service for our client families.
Technical Training: We approach training with a proactive strategy to retain top talent. Having the right technical skills helps our advisors work effectively and collaboratively to serve client needs. We coordinate investment management, tax planning, estate planning, cash flow planning, wealth-transfer opportunities and philanthropic strategies alongside many other family office services. Our technical training also extends to specialty areas like financial literacy and family education. We even have the capability to connect you with career coaching for your family’s young adults as part of our commitment to family education and governance. We continue to develop our curriculum to stay ahead of the curve.
Leadership Training: Speaking of growth, as our advisors progress in their career, we begin to work with them on leadership skills, emotional intelligence and techniques in coaching others. This is not only important to the succession of the firm but helps us succeed in advising your family across generations.
from Richard Joyner, President
Below are several planning items that you should consider as we approach year end.
• Payment of property taxes: The property tax income tax deduction is now limited to $10,000 and so the tax impact of payment is less than it historically has been; thus, it may be beneficial to assess when payment is most advantageous from a cash-flow perspective.
• Timing of charitable gifts: Beginning in 2018, individuals are now able to claim a charitable deduction for cash gifts up to 60% of their adjusted gross income.
• Defer income and accelerate expenses: This advice is still very much true under the new tax system. Depending on each client’s specific situation, some taxpayers have benefited from the 2018 tax changes resulting in lower tax rates while other clients will see an increase in taxes due to the loss of certain historical tax deductions. Management of income recognition can benefit all taxpayers.
• Recognizing any existing capital losses to offset current year taxable gains: After a year of significant growth in equities, most taxpayers will pay taxes on capital gains in 2018. Recognizing any losses on existing positions prior to year-end will help lower next April’s tax bill. With proper planning, a client market position can be maintained, and wash sale limitations avoided during the loss harvesting process.
• Annual exclusion gifts: An individual can now give up to $15,000 to another without reporting or gift tax implications. As always, payments made directly to schools for tuition or medical providers of health care services are “free” gifts and can be made for any amount. This is a great time to execute planning with your advisor to help maximize your tax-efficiency.
Tolleson Wealth Management is not a CPA Firm.