Journal July 2023 - The value of intangibles
Intangibles can be things we don’t normally consider in evaluating financial services. I found this article to be interesting regarding the obvious appeal of cash yields at current levels. https://www.forbes.com/sites/michaelcannivet/2023/05/31/money-market-yields-are-attractive-and-investors-are-taking-notice/?sh=7c84548361 We think everyone should review what your financial institutions pay you on sweep money markets. At Baird, we provide not only good yields but also protection beyond the FDIC insurance limits. https://www.bairdwealth.com/how-we-can-help/liquidity-solutions/
At Baird we continue to offer very competitive yields on our cash and great FDIC insurance – another intangible item we try to provide. https://www.rwbaird.com/cashsweeps/
We work in an industry that is all about tangible measurable outcomes. This works wonderfully when the measurement of value is easy to calculate. This strategy made money, earned a yield, or protected your balance. What is more difficult for most is to understand the intangibles. For example – in any given day we may add value by providing many intangible benefits. Measuring these will never be on a performance report. Some real-life examples that come to mind:
- Advising you on what not to do in your investing. I.e., do not invest in an overpriced stock, real estate, or collectible. How do you measure this inaction?
- Advising you on how to gift “tax smart” with your financial assets. From using QCDs out of IRAs to low-cost basis appreciated stock or setting up a Donor Advised Fund.
- Providing insight on managing various stages in your money life from budgeting, banking, financing purchases wisely.
- Reviewing intent based on advice with deep conflict of interest from salespeople who get paid to sell you things based on commission (Real Estate, Mortgage, Insurance) and confirming the wisdom of the size and nature of these purchases.
- Assisting with managing your estate plan needs and prioritizing actions to help you and your family get the basics covered and avoid much stress.
- Review the cash reserves and advise on approaches to fit your financial needs and tax bracket.
- Helping to identify appropriate strategies with social security benefits, Medicare, long term care, pre-tax and post-tax savings for better outcomes.
- Directing you on how to manage identity fraud risk, or monitoring to prevent it.
In the end, so much of what we do is not measured by the over and under or a market index that has no transaction costs nor tax implications – but we believe that every day our value in these intangibles have direct impact to your financial well-being even if it is not an easy measurement on a report.
Jean, Kurt, Anders and Molly
JG2023-0719