Blog   Tagged ‘investment’

The Credit Conversation: Now is the time to talk with your private banker

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Personal lending was a completely different world just a few short years ago. With shifts in the financial landscape, economic uncertainty and low interest rates, this is a good time for you to talk with a private banker and create a financial plan for the future—and the conversation should start with the topic of credit.

What was best for a person five years ago may not be the right choice now. Markets shift, and it’s important to occasionally survey the financial landscape with your private banker and possibly prepare for new opportunities.

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  • Work with advisors, not transaction managers.
    Sound financial planning is built on strong relationships, not individual transactions. Those relationships are built on knowledge and trust. A private banker should be acting as your advisor so they can help you make decisions that fit both your short- and long-term goals. Advisors will focus on tomorrow’s financial decisions, not today’s transaction.
  • Don’t make credit decisions with blinders on.
    No financial decision should be made without knowing the overall financial picture. In a trustworthy banking relationship, your private banker works alongside an entire team of experts to determine the best lending solutions for areas such as investment, tax and retirement purposes while also taking into consideration the overall wealth and estate plan.
  • Create a customized credit plan.
    It’s important to understand all the options. The truth: most people don’t proactively manage the borrowing side of their personal balance sheets when they plan to purchase a luxury vehicle, a business or a second home. That may stem from not knowing all of the varied credit options available.

    A private banker can help you explore and customize lending solutions to match risk and best leverage your assets. This provides you with options that may extend beyond the ones commonly offered in the marketplace.
  • Prepare for the unexpected with a line of credit.
    As the old saying goes, the time to borrow money is when you don’t need it. For example, a line of credit can be an invaluable tool to help you prepare for the unexpected and manage your overall financial picture. 

    Lines of credit can be used for a wide variety of purposes, including major ticket purchases, home improvements, education and medical bills. Additionally, lines of credit can provide you with peace of mind if and when unexpected expenses occur.

As you plan for your future, it’s important to talk with a professional who can ensure you are taking full advantage of the many credit solutions available to you while also providing you with advice related to your overall wealth plan.

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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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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Is Amazon the new Christie’s?

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Would you like to add a Norman Rockwell original to your shopping basket? Well, now you can.

Amazon recently launched a new platform where you can purchase fine art just like you would buy toys, books or laundry detergent on their site. On Amazon Art, you can choose from a wide array of options in price, artists and quality.

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Buying art online

 

 

Research on internet art purchasing shows that online sales tend to be in the $5,000 and under price range and are usually the works of living artists with or without a significant resume. Online buyers also tend to view their pieces as more decorative versus a long-term investment.

 

 

 

There are both benefits and drawbacks to buying fine art online. If you’re thinking about purchasing a piece of art from an online source, consider these benefits:

  • Easy access to more artists: The online option increased the market for sellers by providing an inexpensive, easily-accessible platform and fronting with a brand name.
  • Pick your price point: Sites now offer options that range from $20 to $4 million, so there is something for everyone. With a broader selection of pieces, you will be able to stick to a price point that fits your budget.
  • Customized shopping: Some sites are very user-friendly and give you the option to shop by color, price, size, etc. These sites will only continue to evolve, which will force all players to keep improving their online customer experience to be competitive.

On the flip side, there could be some risk to buying art online:

  • Value risk: Basically, are you getting what you paid for? This is something to think about because there may not be an opportunity to verify authenticity or provenance (or origin) before buying a piece.
  • Transactional risk: Depending on the online seller or site, there may not be a guarantee to return a piece you purchase if you learn it’s not authentic, is misrepresented, etc.
  • Lack of References: Check references before buying a significant piece. Call the gallery directly or arrange to view the piece on site.  While we encourage this practice, you may or may not have this option depending on the online seller.
  • Hidden Costs: You may also encounter added expenses, such as shipping, handling, administrative fees or insurance.

When you look for your next piece of art, keep your options open and these tips in mind. If you are thinking about buying a significant piece, you may find traditional shopping methods are best.  But if you’re interested in looking online, there are many options to choose from ­– just remember to proceed with caution.

 

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.


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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Making the most of your HSA

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As health savings accounts (HSAs) become more popular with employers and employees, you should be well-informed about the benefits and rules around this option. For example, did you know you can use an HSA as a savings/investment tool? Most HSAs are tax-advantaged, offer investment options and you can use them in retirement planning.

So, what else do you need to know? To get the most out of an HSA, you need to understand some of the long-term benefits of this health care savings strategy and what options are available when you sign up for an HSA.

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  • Move past the “use it or lose it” mentality

    HSAs are different than flexible spending arrangements (FSAs), because your unused HSA balance rolls over from year to year so you will not give up the money and your account may grow over time. FSA funds that aren’t used by the customer within a certain time period are lost.Here is an example of how an HSA can be used to save for future expenses.You’re a generally healthy, 20-something male who doesn’t have many major health care expenses. You would like to save for future health care expenses for when you start a family or possibly for when you are closer to retirement age and are more likely to have substantial health care costs. You should consider an HSA.

  • Take a long-term view

    Eligible HSA deposits are tax-deductable, earnings grow tax-free‡(1), and withdrawals for qualified medical expenses are tax-free1. These features may make the HSA a more appealing choice than other tax-advantaged financial instruments such as an IRA. With an IRA, you will pay income tax on your withdrawals used to pay for medical expenses and you may have to pay a penalty for withdrawing money too early. If you withdraw from an HSA for a non-qualified medical expense, you will have penalties and tax implications similar to an IRA.Many HSAs offer investment options. You can invest part or all of your HSA into money market accounts‡(2),or self-directed brokerage accounts (3) for mutual funds or individual stocks. Like all investments, other factors will determine the actual returns on those made within an HSA, but the reality is that these options are underutilized by most HSA accountholders.

  • Learn more and determine next steps

    If your company offers a high-deductible health insurance plan with an HSA, talk to your benefits department about what is included with the HSA. Determine if an HSA is right for you at the time. Many benefit partners will offer “people like me scenarios” to give you a better idea of how you can benefit from an HSA.Here is another example of how an HSA can be used to save for future expenses within a shorter timeframe.

    You’re a woman in your 50s and you are preparing for your retirement in the next 10 to 15 years. You have noticed that your health issues are more frequent and more expensive. You realize that the HSA makes the most sense for you to start investing in now, while you’re still eligible. You also learn that you can make a catch-up contribution to your HSA since you are over age 55. It’s not too late for you to consider an HSA.

To learn more, click here.

UMB CFO Mike Hagedorn discusses the innovation of HSAs and how they have become an important part of the payments industry. He explains the distinction between product and innovation and how a company can poise itself to be a leader in innovation.

 

1All mention of taxes is made in reference to federal tax law. States can choose to follow the federal tax-treatment guidelines for HSAs or establish their own; some states tax HSA contributions.  Please check with your state’s tax laws to determine the tax treatment of HSA contributions, or consult your tax adviser. Neither UMB Bank n.a., its parent, subsidiaries nor affiliates are engaged in rendering tax advice.

2 Contributions up to the $1,000 peg balance are FDIC insured.  Any funds over the peg balance that are swept into a money market mutual fund are not insured or guaranteed by the FDIC or any other governmental agency.  Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in a money market mutual fund.

3 Investments made through your HSA Self-Directed brokerage account are not FDIC insured.  Investments offered through UMB Financial Services, Inc., member FINRA, SIPC.  UMB Financial Services, Inc. is a subsidiary of UMB Bank n.a.  UMB Bank n.a. is a wholly-owned subsidiary of UMB Financial Corporation.  UMB Financial Services, Inc. is not a bank and is separate from UMB Bank n.a. and other banks.

Investments in securities, whether through the money market sweep account or through other investment options available in the self-directed brokerage account are:

Not FDIC-Insured · May Lose Value · No Bank Guarantee

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.


Dennis Triplett is chief executive officer of UMB Healthcare Services. He is responsible for the strategic direction in healthcare banking and manages the sales and marketing activities, plus product development and relationship management. Dennis has more than 29 years of experience in the banking industry. He currently serves as board chairman for the Employers Council on Flexible Compensation, chairman of America’s Health Insurance Plans’ HSA Leadership Council and a charter member of the American Bankers Association’s HSA Council.

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