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How to pay for your children’s college free of stress and debt

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College tuition is rising steadily. The price of a four-year public university has risen 2.3 percent (1.6 percent for private college), and that is on top of inflation, according to the College Board. Those increases reflect the average of the last 20 years and include tuition, fees, room and board.

Sound intimidating? Good news, these numbers don’t have to be daunting for parents. Having a plan to properly fund these goals is half the battle, and definitely decreases anxiety. Here are some tips as you begin savings for your child’s higher education:

  1. Know the numbers – If only we had a crystal ball to predict exactly what tuition will cost when your child gets to college. We do, however, have tools that can forecast costs and assist in planning. Talk with your financial advisor—he or she will be able to help you estimate and plan for these expenses.
  1. Determine how much to fund – Once you have an expected figure, talk about how much you want to fund. There are differing viewpoints on what percentage parents and children should each contribute to education through scholarships, loans and tuition payments, so discuss this with your family and then set goals based on what everyone feels is appropriate.
  1. Establish investing timetable – The next step is to put your financial goal in writing and begin weighing options on how to achieve the desired savings. Designating monthly or annual contributions to your preferred education savings vehicles is a great way to start. However, you should feel comfortable adjusting these over time on an as-needed basis. Don’t become discouraged if projected savings do not align exactly with the end goal. The most important thing is to consistently save something to ensure the funds continue to grow.
  1. Evaluate options – There are a variety of college savings vehicles available, including 529 Plans and Coverdell Education Savings Accounts. Your financial advisor can make recommendations that are in line with your strategic plan.
  1. Communicate the strategy – When the time is right, start the conversation with your children about their educational paths. Talk about the financial support you plan to provide, and where you expect them to share responsibility. This will help your children begin establishing their own goals and promote accountability for educational expenses as well.

Saving for your children’s college expenses can seem like an overwhelming task, but it is much easier to manage with the right planning and support. Consider these tips and talk with your advisor—those college enrollment packages will arrive before you know it!

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When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.

 


Ms. Stokes is a senior vice president and director of Private Banking at UMB. She is responsible for driving sales and relationship management activities. She works closely with the Wealth Management leadership team and regional presidents to grow business and helps to develop roles in wealth management, relationship management and presentation skills. She joined UMB in 2009 and has more than 30 years of experience in the financial services industry. She earned a bachelor’s degree in business administration from the University of Missouri- Kansas City and a Bachelor of Arts from the graduate school of retail banking.



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Pairing your passion with your giving

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Did you know you can use a wealth advisor for more than simply financial and estate planning? Whether it’s your business or your family’s philanthropy, a wealth advisor can match you with the organizations you want to work with and even set up meetings with the board of directors for you if desired.

The “why” behind giving is the most vital. When we match an organization’s mission with a person’s passion, there’s power in that.

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Ms. Barnas joined UMB in 2007. As Senior Vice President Regional Manager, she is responsible for the growth and support of new customer relationships as well as supervision of regional sales associates. She is also responsible for oversight and delivery of the financial planning discipline within the region. Ms. Barnas has 28 years of experience in the financial industry. Prior to joining UMB, she served in retail and collections management at Bank of America and Banc of America Investment Services, Inc. and premier client manager within the Global Wealth and Investment Management division. Ms. Barnas studied business and communications at Missouri State University in Springfield, Mo. She serves on the Child Advocacy Center Board and the Director’s Council for the Foundation for Springfield Public Schools, and she was the Charter President of the Summit Optimist Club in Springfield, Missouri.



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How saving money differs in your 40s, 50s and 60s

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We already told you how your financial goals and habits vary from decade to decade in your 20s and 30s. The same is true as you move into your 40s and up until retirement. Here are some pro tips on how to take full advantage of each unique decade.

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Things to DO in your 40s

Do meet with a financial planner to make sure you’re on the right track to retire when you want and with the right amount to continue living the lifestyle you want. Retirement may seem very far away, but you don’t want to let yourself be caught in your early 60s playing catch-up on your 401(k).

Do decide how saving for major purchases balances with your retirement saving. If you have children, are you going to pay for all or some of their college tuition? What about your children’s weddings? These are examples of things that can cause parents to be caught off guard and can put a pause on your important retirement saving. For more information on these decisions, take a look at our recent post on Kids’ college vs. retirement: where to save?

And one thing to AVOID in your 40s

Don’t miss out on the maximum match from your employer on your retirement plan. As we’ve recommended from your first job in your 20s, be sure to take full advantage of the match from your employer. Of course, going above that amount is also a great idea; just be sure you’re reaching that minimum amount to get your full match.

 

Things to DO in your 50s 

Do think of this decade as your time to save the most (less expenses with children out of the home and typically higher income than you earned earlier in your career). Consider paying off high-cost debt, such as your mortgage, if you haven’t already and then save aggressively.

Do add catch-up contributions to your retirement savings. Even if you’re tracking well toward your retirement goals, you’re allowed to save more now, so do it!

And one thing to AVOID in your 50s

Don’t wait until your 60s to purchase long-term care insurance. The average age to buy this type of insurance is 57. If you wait until a few years later, it will be much more expensive.


Things to DO in your 60s
 

Do prepare aggressively for retirement…even before your planned last day of work. It’s difficult to predict when health, layoffs or extra time needed to care for your aging parents will cause you to retire earlier. This is the case with more than 40 percent of workers.

Do think about downsizing. This isn’t something that needs to wait until you’re already retired. If you’re single or if it’s just you and your spouse in your home, consider where you want to live for the next few decades and if moving makes sense.

And one thing to AVOID in your 60s

Don’t keep the same insurance policies you had in your 30s. You might not need life insurance anymore. Check your long-term care insurance policy to see what benefits it includes.

Remember, whether you’re 21 or 68, it’s never too late to improve your financial plan.

 

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References: *2012 National Association of REALTORS® Profile of Home Buyers and Sellers

Inspired by a Daily Finance article

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


Ms. Ponce is a Financial Center Manager for UMB Bank. She is responsible for managing the Collinsville micro-market. She joined UMB in 1991 and has 23 years of experience in the financial services industry.



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Kids’ college vs. retirement: where to save?

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In a perfect world, you could save for your retirement AND your children’s higher education. But what if it comes down to a choice between the two…which one should be the priority? Loving parents may not love our answer.

Of course, launching your college-graduated children into the world debt-free is an admirable goal and the topic of an upcoming blog post. However, doing so at the expense of your own retirement goals is not advisable.

Parents are starting to move their focus more toward retirement savings and less toward their children’s education costs, according to a report from Fidelity Investments. The survey reported among long-term savers, 55 percent are saving for retirement while 33 percent are saving for their children’s college tuition. That split was closer to equal last year, but many parents are realizing that their children have several options to help pay for college—loans, scholarships and grants—options that simply don’t exist when saving for retirement.
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How to save for retirement

You may not realize that savings anxiety exists at several different income levels. The lack of retirement preparation in the $20,000 to $30,000 income range (with nearly nine out of 10 individuals reporting they were not prepared) was surprisingly close to those making $100,000 to $150,000 (with nearly eight out of 10 giving similar answers).*

So how do you take charge of your financial future? If you’re in your 20s or 30s, you have more time to ensure a comfortable retirement. Just make sure you start right away. If you’re older than 40, we have a blog post next month that will offer specific advice for saving in your 40s, 50s and 60s. Regardless of your income, the best way to start is by taking the simple advice: determine what you can put away starting right now and do it. The sacrifice now will be worth it later.

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*Source: American Consumer Credit Counseling survey

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


Mr. Bryan Joiner is a Financial Center Manager for UMB Bank, N.A in St. Charles, Missouri. He is responsible for managing a team that advises consumer and small business clients on financial decisions, such as how to lower debt and save more. He joined UMB in 2011 and has three years of experience in the financial services industry.



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Talk is not cheap when it comes to family money

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The most important concept to understand when transferring wealth is the communication plan. It may be difficult, but here’s why you need to focus on it.

Click “continue reading” for more a more in-depth look at this topic.

 

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How to broach the subject of transferring wealth to your children and grandchildren

Money used to be a taboo topic—one your great-grandparents and grandparents would never consider discussing with the next generation. However, times have changed—and so has the thought on these conversations. People want to talk about it while they’re still able to, and there are many benefits to that.

Why the big shift? New wealth, complicated investing vehicles and legacy desires are a few reasons. Many people have seen the challenges that come with unexplained inheritance parameters and instructions. However, discussing your strategies with beneficiaries ahead of time can eliminate confusion, frustration and hurt feelings.

With money comes responsibility and expectations

Educating your beneficiaries on the responsibilities that come with inheriting wealth is important, particularly if you would like your wealth to live beyond the next generation. As you formulate strategies to leave your hard-earned assets to loved ones, you may wish to structure a plan that provides financial security for not only your immediate heirs, but theirs as well.

Start the conversation early

Your children need to be old enough to understand the information, but you can begin talking with them about areas like philanthropy as early as grade school. For example, if your family makes an annual donation, you can involve your children in choosing recipients. Discuss causes that are important to them. Maybe they love pets or want to help give other kids presents for the holidays. Talk about it and let them help pick who you support.

As your children enter the high school years, you can work with your financial advisor to help introduce fundamentals like budgeting and personal cash flow management. Then during their early to mid-20s, you can begin conversations about your estate plan.

Share the strategy

Wealth advisors, or financial planners, generally start the conversation with the older generation about how to share their estate planning details. This is one of the most significant services these advisors provide, because they assist in explaining the estate plan structure, and many times will facilitate the conversation about the strategy.

Inheritors have a lot of questions when discussing their trusts and the strategy behind them, sometimes misunderstanding the intent.  Wealth advisors are neutral parties who explain that securing assets until a certain age is a strategic step. Whether it’s done to ensure measured wealth disbursement or to enable the inheritor to mature before accessing funds, these decisions are made from a comprehensive planning standpoint.

Intergenerational wealth transfer is an extremely complicated process—it can be complicated to execute and emotions are always a factor. Talk with your wealth advisor—they can proactively counsel and assist in both building your strategy and communicating amongst generations. Having these conversations can be the difference in you leaving a gift and establishing a legacy.


Mr. Clyne is a Vice President, Wealth Advisor for UMB Private Wealth Management. He is responsible for delivering customized financial planning with an emphasis on the areas of risk management, investment and wealth transfer. He joined UMB in 2011 and has 11 years of experience in the financial services industry. He serves on St. Louis University Finance Department Advisory Board and Volunteer Lawyers and Accountants for the Arts.



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UMB Insights: Funding a Trust

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We’ve already walked you through the process of estate planning. Today, we’ll explain how to fund that trust and give you an important reminder to update it as your life changes.

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Ms. Gattis joined UMB in 2009. As a Senior Financial Planner, she is responsible for working with clients to insure that they are finding a solution to reaching their unique financial goals. Ms. Gattis has 20 years of experience in the financial industry. Prior to joining UMB, she served as a Private Client Manager for US Trust. Ms. Gattis earned Bachelors in Human Resource Management and Masters in Business Administration degrees from Wichita State University.



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4 important steps after cashing out: Things you need to know about Liquidity Events

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Several things may spark a personal liquidity event, or a large inflow of money, during your career. Selling a business, earning a large commission or accepting an executive buyout, are a few examples. And with that influx of cash comes many investment questions and options—particularly if your current employment is affected.

Understanding and evaluating the different personal and professional areas that may be impacted is important, as you will have many financial decisions to make once the event occurs. Career desires, market conditions, day-to-day finances and employer-provided benefits are a few of the items you will need to consider. Watch more on this topic in the below video. Also check out Part 1 of the Colorado Business Magazine video series where Marti discusses spring cleaning for your finances.

Below are the four important steps:

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1) Determine Your Next Career Step

First, determine your personal short- and long-term employment goals. Are you going to take some time off? Do you want to start a new business? Do you want to venture into an entirely new profession?  Understanding where you are now and where you want to land 12 months (or more) from now will help provide a framework for strategic planning and decisions.

2) Evaluate the Market Environment

The market has changed dramatically over the past few years, and these shifts could carry on for the foreseeable future. The current interest rate environment continues to provide challenges that didn’t exist for investors five years ago. It’s critical for you to have an understanding of current market conditions and how they will likely affect your investments.

3) Establish Your Cash Flow Plan

Now it’s time to look at your cash flow needs. Are you spending more than you’re earning? If the answer is yes, your asset allocation inside your current portfolios becomes extremely important, as there will be a need to fill the deficit without eroding your portfolio’s principal. For example, if you are making an annual salary of $100,000, one of your goals may be to replace that money with the interest earned from your portfolio as opposed to taking direct withdrawals. Advisors can provide you with recommendations and options on how to achieve these goals, while continuing to position your portfolio for your long-term needs.

4) Evaluate Your Ancillary Benefits

Health care, life insurance, savings vehicles, disability and similar benefits are often tied to employment and may end or need to transition when your current job service ends. Advisors can help you identify areas to review and provide recommendations on the best ways for you to move forward based on your strategic plan.

Liquidity events can provide you with many exciting opportunities, but they come with challenges as well. Taking the time to evaluate and plan how to proceed, both personally and professionally, is extremely important. A trusted advisor can work with you to navigate these different areas and make sure you are well positioned for the future.

 

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


Marti Brust joined UMB Private Wealth Management in 2006. As senior vice president and wealth advisor for the Colorado Investment and Wealth Management department, she works with high net worth individuals and not-for-profit organizations in the areas of investment, retirement, education and estate planning. Ms. Brust earned a Bachelor of Arts in Journalism with an emphasis in Public Relations from the University of Central Oklahoma. She has obtained the Certified Wealth Strategist designation and holds a state insurance and FINRA Series 7 and 66 licenses.



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Do you need a wealth advisor?

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Do you need a wealth advisor (also known as financial planner)? You might think that only the very wealthy need this type of expert advice. If you’re interested in investing, whether it’s for retirement, education or to leave a legacy, it is recommended that you work with a financial planning professional.

Whether it’s your first time talking to a financial planning professional or your 10th, you want to ensure your advisor is taking the time to ask the sometimes difficult questions to plan the best future for you.

Basic financial planning questions

Most customers focus on questions like:

  • Will I have enough to retire?
  • Will my children’s education be taken care of?
  • What if I get sick?

These are important topics to cover, but an in-depth financial/estate planning will include more than these basic questions.

Do I need a trust?

One question you should ask is, “Do I need a trust?” A trust is a legal agreement that allows you to transfer assets to a trustee. A trust can be used for various reasons including to:

  • manage assets
  • protect assets
  • facilitate charitable gifts
  • transfer of monetary assets or property

If the answer is yes, your advisor should assist you with making sure your assets are titled appropriately, or given the correct ownership recognition. You wouldn’t want to spend several thousand dollars for an attorney to prepare a trust document, only to find out that the assets aren’t titled appropriately. If so, the trust doesn’t get funded and your estate plan isn’t carried out to your intentions.

What about insurance?

Your advisor should also discuss the topic of insurance with you. Customers and advisors sometimes avoid this question, as it can be an uncomfortable conversation. Most insurance is used in the case of a disaster, accident, illness or death, and these are not pleasant subjects to discuss. You want an advisor who will understand the sensitivities of these topics, but will not avoid the subject. Insurance is an important part of a financial plan and it can be helpful to your family’s future.

Building relationships

You should look for an advisor who will build a relationship with you. If they work to create more than a business partnership, it’s likely there will be more open dialogue between you both. Advisors who are thorough in their work and ask the hard questions will be able to build a solid financial/estate plan for you, your family and their future generations.

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When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.

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UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



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The Plan in Planned Giving

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Planned giving can be an important tool when planning for the future of your estate. Some may have a desire to give to non-profit organizations, including their alma mater, a medical research project or a favorite youth organization. Whatever your desire, make sure you work with an experienced financial partner that can help guide you through the process to ensure your goals can be met.

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First, what constitutes a meaningful gift?

Quite simply, any gift is a meaningful gift. Many people are under the impression that only the very wealthy can be philanthropic. However, this is not the case. Gifts of any size are greatly appreciated by non-profit organizations, especially now as economic challenges have affected many individuals’ ability to donate while the needs continue to grow.

Motivations for gifting

The reasons for gifting vary greatly depending on the individual. Compassion for those in need, an extension of a religious or spiritual commitment, desire to share good fortune with others and memorializing the lives of others are some of the most prevalent reasons for planned gifts. You should personally evaluate your motivation and goals, and keep them in mind when determining how and when you want to support a cause.

Selecting the “right” organization

There are many worthy organizations, and choosing the non-profit that best fits your giving intentions is extremely important. Once your inspiration for giving has been clearly identified, make a short-list of potential groups. Organizations should be carefully researched and vetted to ensure you are comfortable with the final decision. It’s important to learn about a specific topic or organization, so your philanthropy can be used in a meaningful way. Once one or more organizations have been selected, a financial partner can help you define your vision, determine how the gift will be distributed and then evaluate, when possible, how the gift has been used.

Gift Options

Another item to consider is the type of gift you may want to give. Many organizations have gift acceptance policies, which may exclude certain types of donations. Things like stocks, real estate, art or other items may be quite valuable, but you should have a conversation with the organization first to ensure they are able to accept these types of gifts.  

Planned giving is an extremely meaningful and personal investment. Taking the time to evaluate these types of questions can really help individuals and organizations make the most of charitable gifts.


Jan Leonard is senior vice president and managing director for charitable trusts, private foundations and fine art services. She joined UMB in 2003 and has more than 25 years of experience in the management of private and public organizations. Leonard earned a bachelor’s degree from Arkansas Tech University and a master’s degree in business administration from Ottawa University in Ottawa, Kan. She is also a graduate of the Cannon School of Foundation Management.



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Celebrating 20 years with the Scout International Fund

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At Scout Investments, we’ve had a lot to celebrate lately. The Scout International Fund, celebrated two major milestones over the last few months: the fund’s 20th anniversary in September and more recently reaching $10 billion in assets under management.

You’re probably wondering why the 20th anniversary of an international mutual fund is such a big milestone. Well, according to Morningstar data as of Dec. 1, 2013, the Scout International Fund is one of only 70 “Foreign Large Funds” that have passed the 20-year mark of the 380 funds in existence in that category today. It’s one of the oldest international large-cap funds available to investors. 

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The Scout International Fund is led by Jim Moffett, who has managed the fund since it launched in 1993, along with co-portfolio managers Michael Stack and Michael Fogarty. The team also includes seven experienced sector analysts.

For an international fund to be around for 20 years with the same manager at the helm the entire time is certainly unique. In Jim’s two decades as lead manager on the fund, he has seen a world of change in international investing and investors’ views. When the fund first launched, investors were very cautious of international investments, especially as compared to today’s global marketplace with many investment options in developed and emerging markets around the world.

Recently, Jim traveled to New York City and spent time discussing the fund and his investment strategy with several media outlets. He had the opportunity to discuss current events affecting international markets and where the team is finding opportunities, as well as sharing his thoughts on specific holdings in the fund.

One of the media interviews he conducted was with CNBC Television during their morning program Squawk Box. Watch Jim’s interview here.

Preparing to go live on CNBC.

Jim was also a guest on Bloomberg Television during In The Loop with Betty Liu. Watch Jim’s appearance here.

We congratulate the Scout International Fund team on these recent milestones. We also thank our investors for their continued support and confidence in the fund to help them meet their long-term investment goals.


 

When you click links marked with the “‡” symbol, you will leave UMB’s website. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.

All opinions represent Scout’s judgments as of the date of the interview and are subject to change at any time without notice. You should not use these interviews as a substitute for your own judgment, and you should consult professional advisors before making any tax, legal, financial planning or investment decisions. These interviews contain no investment recommendations and you should not interpret the statements in these interviews as investment, tax, legal, or financial planning advice. Information used in these interviews was obtained from third-party sources it believes to be reliable, but this information is not necessarily comprehensive and Scout Investments does not guarantee that it is accurate.

The Fund’s Prospectus or Summary Prospectus, available by calling 800.996.2862 or visiting scoutfunds.com, include investment objectives, risks, fees, expenses, and other important information. Please read and consider carefully before investing.

Risk Considerations: Foreign investments present additional risks due to currency fluctuations, economic and political factors, government regulations, differences in accounting standards and other factors. Investments in emerging markets involve even greater risks.

The Scout Funds are distributed by UMB Distribution Services, LLC, an affiliate of UMB Financial Corporation, and managed by Scout Investments, Inc., a subsidiary of UMB Financial Corporation.


Scout Investments Chief Executive Officer Andrew Iseman provides strategic direction and day-to-day management of the firm and leads the firm’s executive committee. He has developed Scout Investments’ multi-year growth strategy, which includes delivering competitive investment performance to clients, bringing Scout’s award-winning equity investment strategies to the institutional channel and broadening distribution for Reams Asset Management Co., Scout’s fixed income division. Mr. Iseman joined Scout in August 2010, bringing with him a lengthy career spent in the financial services industry, including more than 26 years of experience at the most senior levels of asset management. Mr. Iseman received a master’s degree and bachelor’s degree in business administration from Rockhurst University. He serves on the board of directors of Starlight Theatre.



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