Category Archives: James Shagawat

Baron Financial Group, a Women-Friendly Firm

Liz Skinner of InvestmentNews interviews Laura Mattia of Baron Financial Group, in the July 26, 2013 article “Women-friendly, with the seal to prove it”.  Laura discusses why Baron was chosen to receive the Women’s Choice Award for Financial Advisors, and how the firm helps educate women. The award is based on rigorous research and evaluation applying 17 objective criteria, and at the time of publication, only seven firms and advisers (only 11% of those evaluated) had qualified to receive this premier recognition.

” ‘The stamp says these people do the right thing for women,’ said Laura Mattia, a principal with Baron Financial Group LLC, which has been given the award. ”It helps them know we’ll answer every little question they ask.”

Ms. Mattia said her firm didn’t plan to make women the focus of their practice, but it found that women responded well to its focus on educating clients and hand-holding through the financial planning process.  Today, Baron Financial helps many single women, divorcees and widows – many of whom have never handled their own finances.  It also produces a monthly podcast, “Financially Empowering Women,” which attracts between 800 and 1,000 listeners.”

Click here to read the complete article

The Benefits of Using Individual Bonds

Jim Shagawat discusses the strategy of laddering high quality individual bonds to limit bond interest rate risk, in the Reuters’ article written by Suzanne Barlyn on May 30, 2013.

STRATEGIC APPROACHES

Advisers at Baron Financial Group have trying to reduce those risks by exerting more control over clients’ fixed income assets, said James Shagawat, a principal at the Fair Lawn, New Jersey-based wealth management firm.

Shagawat invests clients’ fixed-income assets in high quality individual bonds, such as AAA-rated corporate and municipal bonds, instead of mutual funds that can include hundreds of bonds with varying maturity dates.

Shagawat typically “ladders” bonds for clients – a strategy in which clients buy bonds with different, but evenly spaced maturity dates to help offset risks of rising interest rates.

Click here to read the complete article

Baron Financial Hosts 6th Town Hall Meeting

vic and tony

Anthony Benante (left) and Victor Cannillo of Baron Financial Group, speaking at the April 3, 2013 Town Hall Meeting

Baron Financial Group hosted their 6th annual Town Hall Meeting at the Fair Lawn Community Center in Fair Lawn.  Attendees listened to the Baron Principals speak about the efficiency of markets and the updates to taxes in 2013.  Ed Coyne, of Royce Funds, spoke about small-cap equities and how they can provide both diversification and return for clients’ portfolios.

Baron’s clients, friends, and guests enjoyed the event, as well as the famous Baron desserts.

Baron Financial Group, in honor of its clients and friends, donated to the Fair Lawn Food Pantry.

 THM SLIDE

 

Can You Roll Over a 403(b) Into a Roth IRA?

Jim Shagawat interviewed by CNN Money’s Austin Kilham on August 21, 2012.

My daughter has about $25,000 in her 403(b) account. She quit her job and has no income. Can she convert her 403(b) money into a Roth IRA this year? — Name withheld

Anyone can roll a 403(b) into a traditional IRA or convert it to a Roth IRA when they leave an employer, regardless of age. A Roth conversion may be a great choice, says James Shagawat of Baron Financial Group, an advisory firm in Fair Lawn, N.J. Without a job, her income tax bracket may be lower than if she had kept working, which means she may pay less in taxes if she converts her 403(b) to a Roth IRA. And by paying taxes on a conversion now, she won’t owe taxes when she starts making withdrawals.

That said, whether it’s a good idea for your daughter to roll those assets into a Roth IRA will depend on whether she has the extra cash to cover the income taxes triggered by the conversion. Shagawat warns that paying the tax with 403(b) funds will reduce the account’s value, and could end up triggering an additional 10% penalty for making a withdrawal before age 59 1/2. “If she can’t pay the taxes, she shouldn’t do it,” says Shagawat.

Another option: She can roll over her 403(b) into a traditional IRA. She won’t owe any tax on the rollover, but she’ll eventually see a tax bill when she begins making withdrawals.

— Austin Kilham

Should I keep my universal life insurance or invest instead?

Jim Shagawat answers a reader’s question in the Money Watch column by Christine Dugas, USA TODAY reporter.

 Q: I may get rid of my costly variable universal life insurance and invest the money through a broker or financial advisor. But I don’t want to get taken to the cleaner again on fees. What issues should I consider?

 A: Universal life is just a life insurance policy attached to an investment plan. Many consumers purchase variable universal life insurance from an agent who is paid a commission. Once you deduct the fees for the insurance premium, the commission and possibly other fees, the investment portion ends up to be a fraction of the original payment. Universal life is not an optimal plan to build or protect wealth in most cases.

 You may get hit with a penalty if you cancel the policy within the first 7 to 10 years. Make sure to ask the insurance company what you will have to pay in surrender fees if you exit the policy now.

 There is only one valid financial reason for keeping a universal life policy: You still need life insurance but your health has deteriorated and you are no longer insurable. Universal life can also be a great tool to help pay estate taxes. It has an option in which the death benefit increases through the life of the policy, unlike term life insurance.

 If you are healthy but still need life insurance, you can consider replacing your variable universal life insurance with a simple term life insurance policy, which for the same price will almost double the coverage.

 If you decide to hire a broker or financial adviser to invest your money, you should do your due diligence. Here’s how:

When looking to find an adviser — particularly a fee-only investment adviser, one who is compensated on their advice alone and not for the sale of any products — go to the NAPFA (National Association for Personal Financial Advisors) website at www.napfa.org. At NAPFA, you can search for an adviser in your area.

  • The same is true for the ChFC® (Chartered Financial Consultant), which is a financial adviser certification that requires extensive training. You can find a ChFC in your area by going to its website, www.designationcheck.com.
  • RIAs (Registered Investment Advisers) are different from broker-dealers and they are held to different standards. It is important to know the difference. Check Securities and Exchange Commission website to find information. Go to www.sec.gov, click on the office of Investor Education and Advocacy and there will be a link to “Check Out Brokers and Advisers.” Another good source for RIAs is www.WiserAdvisor.com, where you can search for an adviser for your specific goals.

 Among the questions to ask a potential broker or advisor:

 • How are you compensated? Are you a fee-only management firm, and don’t get commission from the sale of any products? This helps you know if they have a conflict of interest.

 • Can you provide references?

 • What are your qualifications and experience?

 • Will my money be kept at a trusted third-party custodian, like Charles Schwab?

 Avoid any advisor who says they can predict the financial markets. The stock and bond markets hold many uncertainties. There is simply no way to know what will happen year by year, much less day to day, and if anyone tells you differently, walk if not run in the other direction.

 The best way to prepare for long-term investing is to select a diversified mix of stocks, bonds, and cash that fits your goals, time horizon and risk tolerance.

 

Jim Shagawat earns the Chartered Financial Consultant® (ChFC®) designation

We are proud to announce that Jim Shagawat of Baron Financial Group has earned the Chartered Financial Consultant® (ChFC®) designation from The American College, Bryn Mawr, PA.

Candidates for the ChFC® designation must complete a minimum of eight courses and 16 hours of supervised examinations.  They must also fulfill stringent experience and ethics requirements.

Individuals who earn a ChFC® can provide expert advice on a broad range of financial topics including financial planning, wealth accumulation and estate planning, income taxation, life and health insurance, business taxation and planning, investments and retirement planning.

Advisors with the ChFC® designation are required to serve with the highest level of professionalism.

Baron Financial Group partners selected as 2012 Five Star Wealth Managers by New Jersey Monthly magazine

Baron Financial Group is proud to announce that New Jersey Monthly has chosen all 4 of our partners as Five Star Wealth Managers for 2012.  This is the second consecutive year that the Baron partners were selected for this prestigious award. 

Wealth Managers selected for the Five Star award scored highest in the client based research conducted by a third party independent research firm.  The evaluation process identifies professionals who provide quality service to clients, and a maximum of just 7% of Wealth Managers in the State of New Jersey were named to the list.  The Five Star Wealth Managers do not pay a fee to be included in the research or the final list and the award is not based on sales revenue or assets under management.  Asset Managers are chosen, based on 10 objective eligibility and evaluation criteria, such as, client retention rates, client assets administered, firm review and a favorable regulatory and complaint history.  Baron Financial Group is proud to be included in the list of the top Wealth Mangers in the State of New Jersey.

5 Questions to ask your Financial Advisor

1.      How are you and your firm compensated?

  • Fee-Only? Fee only advisors put their clients interests first and therefore hold a fiduciary standard
  • Fee-Based? Fee-based advisors are compensated both by an hourly fee and commissions on some insurance products.
  • Commissions? Commissioned advisor’s compensations are directly tied to the type of product that they sell to you.

2.      Does anyone in your firm receive compensation from investments that you may recommend?

Receiving compensation from a recommended investment vehicle leaves the possibility for a conflict of interest.  That certain investment or insurance product may not fit your needs, but it probably will provide the sales person with a nice sized commission check.

3.      Do you receive referral fees from attorneys, accountants, insurance professionals, and mortgage brokers?

It is important when working with a financial advisor that they refer you to professionals that they trust and are competent.  If someone gets a free for referring, that may not be the best professional available to you.

4.      Are you transparent with your fees and compensation?

Many people believe that their brokers are doing their investments for free.  Of course, this is not the case, their fees are just so hidden that it may feel like they are doing it for nothing.  It is important to fully understand how your advisor is compensated, and how much they are charging you.

5.      Are you a fiduciary?

This is the most important question of all.  A fiduciary is legally required to work in your best interests and to disclose any and all conflicts.  If your advisor is not a fiduciary, you may need to ask who your advisor is really working for…

To see how Baron Financial Group answers these questions, call us at (1-866-333-6659)