Brokerage Investment Solutions*
College Savings Plan
Paying for college is harder than ever. Everyone wants to help their children or grandchildren realize their dreams - whether it's to become an astronaut, engineer, teacher or technician. It's no secret that the cost of funding a college education is rising rapidly, outpacing inflation. The cost of a public four-year college education now can average over $6,000 per year, with private universities averaging over $15,000. Add room and board, books and supplies, transportation and miscellaneous expenses, and you've got a hefty bill. Your strategy could include scholarships, student loans, grants, work-study, and financial aid. But these may not be feasible or cover all of your costs. Through our broker/dealer you have access to many different investment options to fund college expenses:
- Money Market Funds
- Certificates of Deposit
- Common Stocks
- Mutual Funds
- Zero Coupon Bonds
- Coverdale Education Savings Accounts
- 529 College Savings Accounts
Our Investment Executives can help develop a customized college savings plan that might include Education IRA's, 529 plans or other traditional ways of saving.
Fixed Annuities
A fixed annuity is a vehicle that can provide tax deferral, withdrawal benefits, guaranteed income streams for life and safety of principal. These unique benefits can assist you in accumulating and distributing your assets to meet your needs. A fixed annuity can be an immediate annuity, providing for your current income needs, or it can be a deferred annuity, providing for your accumulation as well as future income needs. Your value in an annuity contract is the premium or premiums you've paid, less any applicable charges and fees plus interest credited. The insurance company credits interest, and you defer taxes on the earnings until you make a withdrawal or begin receiving an annuity income. The rate of interest for fixed rate annuities is guaranteed for a specified time. Fixed rate annuities are attractive because they often credit a higher interest rate than most fixed income alternatives. They are well suited for conservative investors who don't need current income and who want to save for the long term. Earnings accumulate tax-deferred, giving fixed rate annuities an advantage over other taxable savings plans. Some fixed annuities will offer a first-year bonus. These may also be referred to as "Rate for Term Annuities."
Note: As indicated in footnotes, a surrender charge is generally imposed during the first three to 10 years that you own a policy. Withdrawals prior to age 59 1/2 may result in a 10% penalty, in addition to any ordinary income tax. The guarantee of the annuity is based on the financial strength and claims-paying ability of the underlying insurance carrier. Annuities should not be purchased as a short-term investment. To learn more about fixed annuities, contact your Investment Executive.
Variable Annuities
Variable Annuities are contracts between you, the investor, and an insurance company, and are one of the few remaining investment vehicles left that combine tax-deferral and opportunities for growth. Variable annuities combine tax advantages with the benefits of investment funds and insurance. Elements of both are present and are "married" into one product.
The investor chooses from a selection of managed investment portfolios consisting of stocks, bonds, global investments, and guaranteed fixed rate accounts.
Variable annuities are easily purchased through the brokerage services available at Farmers National Bank. For a complete discussion of all fees, charges, and penalties associated with this product, it is important that investors ask for a prospectus and read it carefully before investing or sending money. Please contact an Investment Executive to explore the opportunities of variable annuities.
Withdrawals prior to age 59 1/2 may result in a 10% penalty, in addition to any ordinary income tax. The guarantee of the annuity is based on the financial strength and claims-paying ability of the underlying insurance carrier. Annuities should not be purchased as a short-term investment.
Money Market Funds
Money market funds are an essential part of any successful investment program. Nearly every investor has a need for one or more of the important benefits money market funds offer. Competitive yields, convenience, relative safety, and daily liquidity are the most attractive money fund features.
Taxable money markets generally invest in short-term, fixed income securities, including: Commercial Paper Treasury Bills U.S. Government Agencies Certificates of Deposits Tax-advantaged money markets invest primarily in short-term obligations of tax-exempt entities, such as state and local municipalities.
Municipal Bonds
Individual municipal bonds, issued by states, counties and cities, fund a variety of projects such as schools and hospitals. The interest paid on these bonds is free from federal income taxes and, in some cases, state income taxes - making them the primary investments for tax-exempt income. They offer a wide range of benefits, including:
- Attractive current income;
- High degree of safety with regard to the payment of interest and repayment of principal;
- Dependable income;
- Wide range of choices to fit your investment quality, maturity, type of bond and geographical location; and Marketability in the event you must sell before maturity.
Mutual Funds
Whether you are a small or large investor, or prefer conservative or aggressive investments, mutual funds work to give you an opportunity for capital appreciation or competitive yields and liquidity. That is because mutual funds (companies that pool the assets of many shareholders) provide diversification - with the added benefit of professional management. In addition, most mutual funds offer special features helping to make them among the most popular and convenient investment choices available to today's investors. Whatever your investment objectives and desired level of risk, there are mutual funds to match. From conservative to aggressive, from immediate income to long-term growth - you choose the fund or funds that best meet your investment needs:
- Fixed Income or Bond Funds
- Equity or Growth Funds
- Balanced Funds
- Specialized Mutual Funds
Inquire today from your Investment Executive and discover how you can put your money to work - in mutual funds.
Mutual Funds are sold by prospectus only. Investors should consider the investment objectives, risks and charges and expenses of the funds carefully before investing. The prospectus contains this and other information about the funds. Please read the prospectus before investing or sending money.
Private Money Managers
Managing your investment portfolio can become more challenging as your income and assets grow. While there are a number of ways to build a diversified portfolio, including individual stocks and bonds, mutual funds, and unit investment trusts, new investment opportunities become available to you as your assets increase in value. Separately managed accounts offer unique advantages compared with other investments because they provide a level of service and sophistication that is generally available only to large institutions and very wealthy investors.
Because separately managed accounts offer a higher level of service, investors are usually required to make a minimum investment of $100,000, depending on the asset management company. Separately managed accounts may be more appropriate for investors who do not have the time, experience, or inclination to manage their own portfolios, and value the capabilities and experience that a professional investment manager has to offer. Discuss with your Investment Advisor Representative how the personalized, professional approach of a separately managed account can help make your investment goals a reality.
Professional Asset Management might not be suitable for all investors. Since no one program is suitable for all types of investors, this material is provided for informational purposes only. We need to review your investment objectives, risk tolerance, and liquidity needs before we can recommend suitable programs for you.
Retirement Plans
The advantages of having a retirement plan for your business, regardless of size, are many. Retirement plans offer: income tax deferral, a method to help you and your employees save for retirement, and a tool for boosting employee morale. The enclosed chart highlights the main features of retirement plans used by organizations. Should you have any questions, or if you would like more information about any of the retirement plans available through Raymond James Financial Services, Inc. Financial Services, Inc. please contact your Investment Executive.
We offer retirement plans for individuals as well as businesses.
- Traditional IRA
- ROTH IRA
- Education IRA
- Rollover IRA
- Simplified Employee Pension (SEP) Plan
- SIMPLE IRA Plan
- Profit Sharing Plan
- Money Purchase Pension Plan
- Paired Plans
- 401(k) Plan (including Safe Harbor 401(k) plan)
Taxable Fixed Income
As a stockholder, you are a part owner of a business, able to enjoy the unlimited upside potential-or downside risk-associated with a particular company. A bondholder, on the other hand, is a creditor, which is why bonds are known as debt-as opposed to equity-securities. When you purchase a bond, you are essentially lending money for a specific period of time, at a fixed rate of interest. Bonds are often considered a more secure investment than stocks, since bondholders may have a senior claim to a company's assets in the event of a corporate restructuring.
Both the public and private sector issue bonds. The former includes the U.S. government, as well as state and local municipalities. The latter comprises both privately held and publicly traded corporations. Bonds are a reliable alternative for the companies that issue them to banks and other lenders who might demand less attractive financing terms than the capital markets are able to provide, such as a higher rate of interest. The four most popular types of fixed-income securities issued by the U.S. Treasury are Bills (T-bills), Notes, Bonds and TIPS (Treasury Inflation Protected Securities). Public and private companies-including financial service firms, industrial concerns, transportation providers and utilities-issue corporate bonds, commonly known as corporates.
There is only one way to begin building a bond portfolio that is right for you. In fact, it is no different from the advice you might receive if you decided to construct a stock portfolio: Start with a plan that works. Please call your Investment Executive to explore the possibilities in fixed income.
Unit Investment Trusts
The unit investment trust concept originated in Scotland many years ago. It appeared in the United States in the 1920's. UITs gained popularity through the 1930's, partly in response to the crash of 1929. This popularity appeared until the 1960's when they re-emerged as a means to increase the availability of tax-advantaged municipal bonds to the average individual. Today, the UIT is much more than just a tax-advantaged municipal bond vehicle. The UIT world also includes taxable debt instruments, equities, and global investments.
A Unit Investment Trust is created when an investment company assembles a FIXED portfolio of securities chosen to accomplish a specific investment objective. Shares in this portfolio, called "units", are then offered to individual investors, with the minimum investment usually set between $1,000 to 55,000. There is a sales charge to purchase a UIT which ranges from 2-6% and is built into the purchase price. Prior to 1995, this sales charge was always up front and there were no redemption fees. In 1995, products were introduced which include deferred sales charges deducted from the net asset value over the first year of the trust.
Unit Investment Trusts are similar to open-end mutual funds but their differences are significant. Mutual fund managers may and customarily do make frequent changes in the fund's portfolio. A unit trust holds a known portfolio which is purchased when the trust is started. No new investments can be added or deleted from the initial portfolio except in rare circumstances. As a result, the unit trust has no ongoing management fees.
Cashless Stock Option Exercise Program
If you are an employee of a company whose stock is publicly traded, you may have the opportunity to share in the company's prosperity through the purchase of stock. Perhaps, your company has given you the benefit of an option to buy shares of their stock. If so, you may benefit through your participation in the Employee Stock Option Program from Raymond James Financial Services, Inc.
An Employee Stock Option Exercise Program (ESOP) allows employees of publicly traded companies to purchase a specific number of shares of their company's stock at a price predetermined by the company. Companies may set different requirements as to when an employee qualifies to exercise his or her options. Generally, the stock must reach a certain price level, or there may be a set time horizon as to when the employee may exercise. Employees may wish to contact their Human Resources department to confirm the requirements of their specific option program. Please call your Investment Executive for details of the program.
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