Silber Bennett Financial
Rebecca Dawson is an experienced, independent financial advisor offering personalized wealth and investment management guidance to a select group of individuals, families, and businesses in Southern California and around the country. Her mission is to be a trusted advisor to her clients by partnering with them to identify what is most important in their financial lives while providing tailored solutions to help achieve their goals.
For over 20 years, Rebecca has served as a financial advisor. She has developed highly refined methods for evaluating client's needs and formulating successful investment strategies. She and her staff provide an exceptional level of service to her clients, who are typically worth well in excess of $1 million and include some of the most prominent people in the United States.
Before joining Silber Bennett, Rebecca managed her own independent brokerage office since 1999. Prior to that she held similar positions with PaineWebber, Merrill Lynch, and Alex.Brown & Sons.
Her clientele have included corporate presidents, and officers, charitable foundations, pension funds, business owners, and wealthy retirees. Her affiliation with Silber Bennett Financial provides her clients with full service wealth strategies.
BA, Liberal Arts, University of Texas at Austin
SECURITIES AND ADVISORY SERVICES OFFERED THROUGH SILBER BENNETT FINANCIAL, INC.
DOI: CA 0H72697 | MEMBER: FINRA / SIPC
Why Choose Rebecca Dawson
Rebecca Dawson on To The Point
From your question, I am not sure how long you have held your mutual funds nor what upfront fees were paid. Mutual funds can be expensive so if an upfront commission was paid it may take a while to get your investment whole again depending on the performance of the fund.
Your next step is to track the performance of your mutual fund. If it is not outperforming the corresponding index then it may be time to shift assets. If you paid an upfront fee or if there is a back end fee then most mutual funds will allow their shareholders to transfer to another mutual fund under the same family of funds within the same mutual fund company. If you are not subject to these fees then there are other alternatives to mutual funds that do not have the same commission structure and would still give you diversification.
Among alternatives to mutual funds that are structured differently and will also give you diversification: Unit investment trusts (UITs) are a fixed portfolio of securities usually with a 12 to 24 month term, therefore, no annual expenses only an upfront commission. Additionally, exchange-traded funds (ETFs) offer diversification and liquidity with lesser fees relative to mutual funds.
The bottom line is that mutual funds are not always the safe haven that they have been touted. The companies that manage mutual funds face a fundamental conflict between producing profits for their owners and generating superior returns for their investors. The best way to evaluate a fund is by digging a bit deeper into the fees and also looking at the turnover ratio prior to investing. It is important to understand the good and bad points. The probability of a successful portfolio increases dramatically when you do your homework.
To understand the reasons hedge funds are not always accessible to the general public, you need to understand that hedge funds are privately held and often structured as limited partnerships.
- Regulation D enforces that non accredited Investors have only a limited number of investors in the fund. There are three parts of Regulation D: Rule 504, Rule 505, and Rule 506. These three rules each have different benefits and drawbacks but the common denominator is that they allow a company or hedge fund to raise money from investors without filing a lot of paperwork. Most hedge funds require their investors to be classified as accredited versus non accredited.
- Regulation D made prohibit a hedge fund to advertise. Regulation D generally banned advertising, making it nearly impossibly for you to learn about hedge fund opportunities unless you have an existing relationship.
- The general partners of a hedge fund can accept who ever they want into the fund.This can benefit the hedge fund in a lot of ways and can make sure only like minded investors with the same capital allocation policy are admitted.Some very successful hedge funds were only started with friends and families assets.
- Hedge funds can set the minimum investment at higher amounts that most investors would not feel comfortable investing, since there is a limit to the total number of investors that can be admitted under a Regulation D offering. Some hedge funds require a minimum investment of anywhere between $100,000 to $25,000,000.
Most employers offer four basic choices to departing or retiring employees:
- Leave the money where it is.
- Withdraw the money in a lump sum. A lump-sum distribution can trigger adverse federal and state income tax consequences and the distribution will be taxed to the employee as current income and the 10 percent early withdrawal penalty may apply.
- Roll the funds over into an IRA.
- Transfer the money to another employer’s retirement plan. If you are still working and want to delay taking required distributions, you can do so beyond age 70½, provided you continue to work for the employer maintaining the plan.
Keep in mind that these options are not mutually exclusive as you may make one choice for part of your plan assets and another choice for the remainder.
It is more common for you to move your retirement plan to either another retirement plan or an IRA. Some of the reasons individuals move their workplace plan assets would include (although if your vested account is less than $5000, the plan may cash out the ex employee's account):
- To consolidate retirement plan assets in an IRA.
- If you want to work with your personal financial professional.
- In order to have a broader choice of investment alternatives.
The most common type of rollover involves transferring funds from a qualified retirement plan to an IRA and typically occurs when an employee leaves a job or retires. When funds are rolled over, the account continues accumulating on a tax-deferred basis because the funds are simply moved from one retirement account to another. If done properly, no taxes or penalties apply. And, there is no dollar limit on the amount that may be rolled over.
The similarity of mutual funds and hedge funds is that both invest in variety of securities (stocks, bonds, commodities, etc.). Either fund, whether a mutual or hedge fund, may be more risky than others. Before investing in either mutual funds or hedge funds, be sure you understand each of their investment goals/objectives and the potential downsides.
Mutual funds are registered with the U.S. Securities and Exchange Commission (SEC) and must make periodic reports of their activities. They are subject to reporting rules and government oversight. Mutual funds trade at the close of the market day at their closing net asset value (NAV) and are manged daily making buy and sell transactions with no market leverage. They invest in all types of investments, such stocks, bonds, commodities, REITs, etc.
Whereas hedge funds may appear to be similar to mutual funds but can be very different:
- The term hedge may be a misnomer. The term hedge fund commonly refers to a private investment fund that may invest its capital in a variety of markets using a wide range of investment strategies. Some hedge fund managers will hedge out certain market exposure in their portfolio while some managers will chose not to.
- Hedge funds may or may not be aggressive and risky strategies. There are thousands of hedge funds in the world that use dozens of strategies. The expected volatility of a hedge fund manager’s return is a function of their chosen strategy/investment objectives and their skill or track record/experience. Investing in private equity, small capitalization companies, emerging market stocks and/or using leverage are some hedge fund's strategies that may have more exposure to risk.
- Another difference between hedge funds and mutual funds are the terms of when investors can and cannot redeem their units. Mutual fund investors can instruct a redemption on any given business day and receive the NAV (net asset value). Whereas some hedge funds offer weekly liquidity, some offer monthly, while others only allow redemptions quarterly or annually. Many hedge funds impose a lock-up period (a portion of time you must leave your money in the fund without the ability to redeem). During periods of market volatility such as the most recent financial crisis, several hedge funds actually suspended redemptions entirely in order to protect the remaining investors from a potential fire sale of the fund’s portfolio. It is important to carefully read the hedge fund’s offering memorandum to fully understand your redemption rights.
Inheritied IRAs can be very confusing and complicated. If your late husband indicated you as the sole primary beneficiary on the IRA then the spouse who is named sole beneficiary has certain privileges that are not available to other beneficiaries after an IRA owner's death. A spouse can choose to treat the inherited IRA as his or her own and roll it over to his or her own IRA. Only a spouse beneficiary can do a rollover, which gives the spouse full control of the inherited assets and permits him or her to delay taking distributions until reaching age 70.5 thereby no Required Minimum Distribution would get passed down. Keep in mind that a surviving spouse must be the sole primary designated beneficiary. If a spouse is named as a co-beneficiary with children or others, the spouse will be treated as a nonspouse beneficiary for distribution purposes. In such case, the spouse cannot treat the IRA as his or her own IRA.
If in fact, your late husband left his IRA beneficiary as a trust then the trust must be considered a "look-through trust". As a general rule, for purposes of the distribution at death requirements, a trust cannot be considered a designated beneficiary. However, the law does allow for an exception known as the “look-through” rule. If the trust meets certain requirements, the tax law will “look through” the trust to the trust beneficiary. That beneficiary, assuming he or she is a natural person, will be treated as the designated beneficiary for the distribution of the IRA assets. Thus, an IRA owner may, under the look-through rule, name a trust as beneficiary and still take advantage of a longer distribution period for the beneficiary.
To qualify as a look-through trust, a trust must meet all of the following requirements:
- The trust must be valid under state law.
- The trust must be irrevocable or become irrevocable upon the death of the owner.
- All of the beneficiaries of the trust must be natural persons. If one of the trust beneficiaries is not an individual (such as a charity), there will be no designated beneficiary for IRA distribution purposes.
- The IRA custodian must be given a copy of the trust document listing all of the beneficiaries of the trust by October 31 of the year after the IRA owner's death along with a detailed description of each beneficiary's share.
If a trust meets these requirements, the beneficiary of the trust can be treated as a designated beneficiary for purposes of computing required distributions. If a trust does not meet these requirements, the trust's beneficiary loses the ability to use his or her own life expectancy for computing post-death required distributions. Instead, the IRA will be paid out within five years after the IRA owner's death or over the deceased IRA owner's remaining life expectancy (if the owner died on or after his or her required beginning date).