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Executive Q & A with Mike Carroll: Trust company head enjoys serving people, families

by Paula Burkes
Published: Sun, July 22, 2018

Mike Carroll, with Heritage Trust, for Executive Q&A Photo by Jim Beckel, The Oklahoman

“It’s about the people, stupid.”

Mike Carroll, CEO of Heritage Trust Co., said the variation of a phrase coined by political consultant James Carville perfectly sums up his business philosophy.

“People want a relationship with someone in their corner,” Carroll said. “They want to know who the decision maker is and want to look them in the eyes and touch them.”

With the backing of Nancy Payne Ellis, Carroll, a former senior vice president with Liberty National Bank, and his trusts team there started Heritage in September 1997, after Liberty was acquired by Bank One.

“My employees were concerned that the banking industry was becoming all about the numbers and selling products,” he said, “and that we were leaving behind the people with whom we’d worked for so many years and to whom we felt a duty.”

Today, Heritage manages $1.2 billion in assets, Carroll said. But what’s most important, he said, is the people: its 35 employees and 700 relationships. Bond Payne, Ellis’ son, chairs the company.

From his offices in the Journal Record building downtown, Carroll, 66, sat down with The Oklahoman on Monday to talk about his life and career. This is an edited transcript:

Q: Tell us about your roots.

A: My great-grandfather and Kansas native Lewis Carroll participated in the Oklahoma Land Run. His wagon, diary and revolver are on display at the Oklahoma Historical Society. I don’t know if I should be proud to say that he was a Sooner. He’d already staked a homestead in Kay County when he came to Guthrie to file the claim. My mom was from Pauls Valley where I was born. When I was 2 months old, my parents moved to Williston, South Carolina, where they both worked in the Savannah River Plant nuclear facility. My younger brother and sister still live in South Carolina. I also had an older brother who’s deceased.

Q: What was your thing growing up?

A: Williston is a small town; the population then was around 6,000. The closest big city is Augusta, Georgia, about 40 miles away. We were an hour and half from the coast, where I often went offshore fishing with my father. Growing up, I was involved in sports (basketball and baseball), church and scouting. I especially loved the Boy Scouts, including the camping and leadership skills I learned. With the help of several friends’ parents, I stayed with it and became an Eagle Scout. When I raised my own boys, I was a scout leader, including leading a 70-mile adventure in northern New Mexico in 2000. All three sons are Eagle Scouts too. Today, my oldest works in technology in Boulder; my middle son is a doctor at St. Francis Hospital in Tulsa; and youngest, an executive with Sonic Corp.

Q: What brought you to Oklahoma?

A: I won a scholarship to Oklahoma Christian University, where I chose to major in accounting. In high school, I’d already taken calculus, trig and geometry, so I was pushed two years ahead. My last two years at Oklahoma Christian, I worked nights for First National Bank, balancing the bank and processing checks. On good days, I’d go in at 4 p.m. or 5 p.m. and be out at 10:30 p.m. But at the end of the month, we could be there ‘til 3 a.m. When I graduated college in 1975, First National invited me to take a job opening on the day shift. When I started, I only knew about balancing banks and nothing about trusts. But I learned on the job, and advanced to vice president/head of operations.

Q: What did you learn in a theater class at Oklahoma Christian that helps you in business?

A: That it’s about your motivation; anybody can memorize lines. In other words, it’s not what you’re saying, but why you’re saying it that’s important. Funny. I just took theater because my college girlfriend did. But I learned that if I really listened to somebody, including clients, and understood a problem, I might be able to put a deal together.

Q: You said you’ve been lucky. How so?

A: When I left First National in February 1982, I asked if I could keep my stock. But since I was going to Liberty National Bank, a competitor, they told me “No way; you have to cash out.” Then Penn Square Bank collapsed that July, so the cash-out price I’d been given was the maximum stock price anybody got. Meanwhile, I had to work one year before I could buy stock at Liberty, so I came out ahead on that side, too. I tell people I’ve lived a charmed life.

Q: Who’s been your biggest mentor?

A: The late Don Balaban, who hired me at Liberty, was my boss for several years and, at age 65, came with me, Dick Kerrick, Ron Bowles and Cathy McKinzie (who’s still with us) to Heritage. He was honest and really cared about people. But we didn’t think alike at all. I was more liberal and he was more conservative. His pat answer was “No,” and mine was, “We can figure it out.” But I loved the man so much. He gave me what I needed, because he could find what was wrong with a deal. Together we were very formidable. Since his death, I frequently ask myself, “If Don were here, what would he be saying?”

Q: To what do you attribute Heritage’s success?

A: It’s always about the people and holding true to principles. We don’t sell any products, and we don’t take any commissions, sales incentives or administrative fees. We have no vested interest in anything, but the best interests for our clients. Most competitors can’t say that.

Heritage, AmeriTrust Merge

The Heritage located at 621 N Robinson Ave in Oklahoma City, OK.

By: Brian Bus, Journal Record, June 29, 2018

OKLAHOMA CITY – The merger of AmeriTrust Corp. of Tulsa into Oklahoma City-based Heritage Trust Co. and its parent company Argent Financial Group closed Friday, officials said.

The state Banking Department approved the deal in May, allowing the companies to continue to operate separately in their respective markets under one Oklahoma charter while both benefit from access to Argent’s $19 billion in assets.

“AmeriTrust and Heritage both have common roots coming out of big-bank trust departments,” Heritage Chairman Bond Payne said. “Both of us were pioneers in the independent trust space in the 1990s, and we’ve each spent the last 20 years building sustainable, independent, wealth management firms.”

“They’ve got a successful practice, and the last thing we want to do is disturb their relationships with their clients,” Payne said. “We just want to build on what they’ve got, and hopefully they can help us do the same.”

AmeriTrust Chief Executive Harvie Roe, who founded the company 21 years ago, will continue to manage the Tulsa operation. Fellow owner and AmeriTrust director Jerry Hudson will join the board of the merged company. Payne said no further leadership changes are expected.

Roe said the merger was initiated by his company when board Chairman Robert Biolchini died in 2017 and the ownership family decided it was time to divest – management succession was disrupted at the board level rather than the daily executive level, he said. The companies’ management teams have known each other for many years, so the merger was a natural fit.

Argent is domiciled in Louisiana and offers trust administration, retirement plans, estate planning and charitable organization administration. In addition to the company’s billion-dollar asset base, it is also responsible for managing 2 million mineral acres for families, institutions and business clients.

Aside from financial planning and trust administration, Heritage also offers management services in oil and gas and real estate. The company was founded in 1998 and now has offices in Ponca City and Southlake, Texas. It merged with Argent in 2015.

AmeriTrust, formed in 1997, provides similar trust management and administration services. The company on its own is responsible for more than $600 million in client assets.

How to approach legacy assets in your estate planning

Legacy assets may not always be worth much, but it’s still important to handle them in the right way: by communicating with your family members about your wishes.

By Mark Hartnett, president, Argent Family Wealth Services

After a loved one passes away, surviving family members frequently find themselves squabbling not over money, but over personal items left behind.

In many cases, the value of these so-called “legacy” assets is more sentimental than monetary — a great-grandfather’s shotgun, for instance, or a mother’s engagement ring.

These assets may not be worth much, but it’s still important to handle them in the right way — by clearly specifying in your will who gets what. The key is to remain intentional with your planning.

The first and most important step is to communicate with your family members about your wishes. Ask for their feedback and collaborate as a group to ensure everyone is on the same page regarding the fate of your ‘67 Chevy. No matter how small the legacy asset, list it in your estate. Doing this now will go a long way to keep the peace and avoid potential sibling quarrels.

You may determine it best for some assets to be sold, such as those with high monetary value. But many legacy items are likely to be sentimental, which could make them worthwhile to pass along as keepsakes to a special niece or grandson. Have a plan for either avenue by mentioning everything (and everyone) by name. Consider the following checklist:

What percentage of value does it represent of your estate? The item may have great value to you both monetarily and personally, but it could be sold to benefit all surviving family members equally upon your death.

Are there future storage or maintenance costs to consider? It’s not uncommon to forget these details. If you own a classic car, for example, you should consider the cost of storing the vehicle, needed maintenance or regular specialty washes to protect its appearance. These add up over time.

Is there a rate of depreciation to consider, or is it increasing in value? Weigh the item’s past, present and future value. Everything is evaluated differently. Some items might be best to sell immediately or within a few years. Others may be worth significantly more if they’re kept in good shape for a couple of decades. Research these values and seek proper appraisal.

These are just a few things to consider. There are many other angles to keep in mind when it comes to different legacy assets, which is why you should consult with a wealth management advisor. Most importantly, be sure to keep everyone apprised of your plans and wishes for these treasured possessions so that your gifts remain gifts — not a potential burden or kindling for a dispute.


Humble Confidence

By Kyle McDonald, chief executive officer


About five years ago, I figured out what sets our company apart.

It was November 2013 and I was reading a blog post by TV sportscaster Samantha Ponder in which she talked about growing up, and what has changed and what has stayed the same throughout her life. As a young woman, Samantha said, she didn’t feel particularly pretty and was kind of an outcast. Today, things are just the opposite. She is a telegenic, highly successful professional.

What has stayed the same throughout her life, she said, is the way she grounds herself in good times and bad by working to maintain an attitude of humble confidence – being sure of herself, her beliefs and her skills without letting it go to her head.

That idea of “humble confidence” struck a chord with me. It gave words to how I’d been thinking about Argent Financial Group for some time. It describes how we are with each other and with our clients. In fact, I think it’s the definition of a fiduciary, which has been fundamental to our company since we began.

The client is at the center of Argent’s organizational model.

Being a fiduciary means you are in the service business, and to serve someone you must place your needs behind the needs of the other – i.e., be humble – but you also must have confidence in your abilities, or your service will be of little value.

I think it also means that you are not “salesy.” Our responsibility as a fiduciary is not to sell a product, but to learn what is in the client’s best interest and do all we can to see that those interests are met. Because of this, our primary focus is on building relationships built on trust and respect, because you can’t really understand what a client needs until you have formed a relationship with him or her.

Humble confidence also means that the client is at the center of Argent Financial Group, and the closer you are to the client, the more vital you are to the health of our company. This means the higher up you are in our company’s internal structure, the more people you serve here. This is illustrated in the infographic of our “Client Relationship Model” that accompanies this blog, which shows how everyone in the company serves the relationship managers who directly serve our clients. This is an example of how humble confidence pervades our entire organization.

Because we foster a culture of humble confidence here, we naturally attract people who feel the way we do about serving others. In fact, our commitment to having a strong, supportive company culture is a result of our discovery several years ago that an attitude of humble confidence is what makes Argent the kind of company it is. And “discover” is the right word. The foundation of humble confidence goes back to the beginning of our company. It is a concept we have held true to all along; we just didn’t have a name for it. It’s kind of like an onion: As we peel back the layers, we find what was there all along.

It’s the same with culture. I now know that we had been thinking about culture since the beginning. That is, we have always known that we wanted to have a company where people were treated with care and respect, and we have always acted on those beliefs. As the company continues to grow, we learn more and more about ourselves, and the more we learn, the better our company becomes for both employees and clients.

Stay Humble; Be Confident.

What Every Investor Needs to Know About the Fiduciary Standard

There’s a lot of jargon in the financial service industry. And much of it probably flies right over the heads of most investors.

But if there’s one word that every investor should know and understand, it’s “fiduciary.”

The fiduciary standard is a set of regulations requiring advisers to always act in the best interest of their clients, to disclose any potential conflicts of interest, and to be transparent about how they’re being compensated.

“Being a fiduciary is the highest legal duty of one party to another. It has a legal, moral and ethical component,” said John Allen, Market President of Argent Trust’s Greenville office.

At Argent, all of our trust advisers and registered investment advisers follow the fiduciary standard. But throughout the financial services industry as a whole, this standard is far from universal.

According to a 2015 report from the White House Council of Economic Advisers, Americans lose about $17 billion a year in investment returns due to advisers and brokers steering them toward securities that aren’t in their best interest and may include higher fees and lower returns than similar products.

The SEC has recently announced plans to expand the fiduciary standard to some advisers who currently aren’t required to follow it. And while that could be good news for investors, there may be unintended consequences.

To help understand what all of this means, let’s tackle a few big questions regarding the fiduciary standard.

Who has to follow the fiduciary standard?

To answer that question, it helps to understand the overall makeup of the financial services industry. Financial advisers are broken down into three client-facing groups: trust advisers, registered investment advisers (RIAs) and broker/dealers. Trust advisers and RIAs have been legally required to follow the fiduciary standard since 1940. Most broker/dealers are currently exempted from the requirement, though some voluntarily choose to follow it.

At Argent, providing this level of service is baked into our company culture.

“We’ve worked under the investment fiduciary standard for decades,” said Timothy Barrett, Senior Vice President and Wealth Adviser in Argent Trust’s Louisville office. “Our attitude is different. We don’t sell on performance. With many stockbrokers, they’re constantly trying to beat benchmarks, sometimes at the expense of long term goals. We sell on services and on our fiduciary responsibilities. We take good care of our client’s money and do what’s in the best interest of families.”

Why is the fiduciary standard important?

When you invest your money, you want to feel secure that your financial adviser is putting your needs before their own. Without the fiduciary standard, an adviser only has to make sure that an investment is suitable for their clients — even if similar ones might be a better fit. This is known as the “suitability standard.”

“It doesn’t have to be the best product or the cheapest product, it just has to be appropriate,” Allen says.

Some proprietary products have a variety of hidden fees attached to them that non-fiduciary advisers aren’t required to disclose to clients. They also aren’t required to disclose conflicts of interest, which could include receiving a bonus to promote a particular investment.

“A front-end loaded fund might pay the broker 6 percent up front, for example, with a small management fee going forward. Securities with a rear-end load would charge a fee when you get out,” Allen says.

Does that mean I shouldn’t invest with brokers?

Brokers have an important purpose in the financial services world, says Byron Moore, an Argent Advisor in Ruston, Louisiana. They’re often the only resource available to investors who don’t have a large amount of money, and because they don’t have the additional fiduciary requirements, their services tend to be less expensive as a whole.

“It’s a basic rule of economics. If you impose a higher cost, through increased regulation, on an industry, it’s going to show up somewhere. It could show up in reduced supply or trimmed back services,” Moore said. “There has always been a need for people to just execute transactions. Using a broker involves a lower cost, and if you’re capable of looking out for your own interest, that may be all you need.”

What do the proposed fiduciary rule changes mean for me?

If you’re a client of Argent, any changes being proposed won’t affect you at all. The current debate strictly involves the world of broker/dealers. Currently, only broker/dealers who oversee retirement plans are required to follow the fiduciary standard. The Securities and Exchange Commission wants to expand that requirement to all broker/dealers, a change that could come as early as this fall.

“I think that the regulation is well intentioned, like a lot of things, but by the time the sausage is made, it causes as many problems as it solves,” Moore says. “It helps to some degree, but a lot of it is about how things appear instead of substantively changing the playing field.”

However, any increased level of transparency is ultimately a good thing for investors, Barrett says.

“I don’t want to buy a refrigerator that’s simply marked up and could be purchased cheaper elsewhere. I don’t want that at Best Buy; why would I want that with my broker?” he says.

How can I feel secure that my adviser is looking out for my best interest?

Ask your financial adviser if they are serving you in a fiduciary capacity. If they’re not, take that fact into account as you weigh the pros and cons of investments that they suggest to you.

If you’re looking for an adviser and you don’t know where to start, your best option may be asking people you know.

“Talk to friends and neighbors you trust. Ask who they use, if they’re good, if they communicate with clients the way they want to be communicated with. I always suggest interviewing at least three candidates before deciding to work with any kind of financial adviser,” Moore says.

Ultimately, Barrett says, the reputation of an adviser or a company carries as much value as any legal standard.

“From a purely competitive side, the reputation of being ethically minded is what keeps you in business,” he says.

How Argent is driving employee engagement to transform company culture

By Brooks Campany
Director of Recruiting, Engagement and Culture

At Argent, client satisfaction is a big measure of our success. But it’s not the only one.

We know that having happy employees makes for a more motivated and — let’s be honest — pleasant workplace. So, we’re in the midst of a conscious push to nurture our culture and engage each of our 240 employees spread across 25 offices and 12 Southern states. Although we’re not all in the same place physically, we want each employee to feel that they’re part of a wider workplace community.

The results of our recent annual Gallup survey are evidence that we’re making progress. The responses we gathered from the survey showed an actively engaged workplace culture with a high level of satisfaction. And that’s a great thing to see.

The survey, given at the end of 2017, included 12 questions that produced their own scores in addition to two composite pieces of data: an Engagement Index and an Overall Satisfaction Score. Taken as a whole, these 14 data points/measurements allow us to measure our progress year over year, and also provide a picture at how we compare against other companies.

The results

Here’s what we found:

  • The Engagement Index, with approximately 90 percent participation, increased 4.6 points from 3.94 in 2016 (on a five-point scale) to 4.12 in 2017. Although that may seem like a small point increase, last year our Engagement Index placed us in the 59th percentile of the Gallup database. This year, we’ve leapt up to the 82nd percentile.
  • Our 2017 ratio of engaged employees versus actively disengaged ones dramatically increased to 256 percent of our 2016 ratio. In 2016, the ratio was 4.8 to 1 — that is, one actively disengaged employee for every 4.8 engaged employees. In 2017, that ratio was 12.5 to one.
  • Our Overall Satisfaction Score also significantly increased, from 4.24 to 4.42 on a five-point scale. This score places us in the 96th percentile of the Gallup database — a significant ranking!

Digging a bit deeper into specific questions, we were encouraged to see that employees responded positively to the statement “My supervisor cares about me.” The overall score of 4.48 out of 5 ranked in the 93rd percentile among companies in the Gallup database.

How we compare

In 2016, employees gave average scores below four to half of the 12 questions. In comparison, in 2017, we only had two questions receive average scores below four:

  • Our lowest score related to employee recognition. Although it increased from 3.32 to 3.58 year-over-year, a gain of 7.8 percent, we still only ranked in the 62nd percentile. This is an area that we acknowledge needs additional work.
  • Although responses to the statement “I have a best friend at work” also received low scores, we think the wording of the question may not have accurately expressed the goal of quality workplace relationships that we hope Argent employees’ experience.

Looking forward

As a whole, we think there’s a lot to be proud of. But there’s also room for improvement. So where do we go from here?

In 2018, we’ll place a greater focus on improving recognition of our employees. We think a key aspect of this will be in strengthening the relationships between managers and their direct reports. To accomplish that, we’ll provide training to our managers to give them the tools for leading their Management by Objectives (MBO) process. In addition, we’ll resume our TINYpulse employee surveys, with an emphasis on questions that give us data to better structure our manager training efforts.

We know our company is only as strong as its employees, so we intend to keep up our efforts to maintain a healthy internal culture at Argent in 2018 and beyond.


Tax reform is here. What does it mean for high-net-worth individuals?

As we enter tax season, the real-world effects of the recently enacted Tax Cuts and Jobs Act of 2017 are becoming clearer for many taxpayers. Although there remains a great deal of detail to be understood, from what we know today, there are plenty of changes for high-net-worth individuals to be excited about.

Estate taxes

A significant change in the new legislation is an increase in the estate and gift tax exemption to roughly $11.2 million ($22.4 million for married couples). This doubles the former exemption of $5.6 million for individuals and $11.2 million for couples. Only a small percentage of households paid the tax at the old levels, and even fewer will pay it now.

Tax reform

The real effects of the recently enacted Tax Cuts and Jobs Act of 2017 are becoming clearer for many taxpayers.

For high-net-worth households who might have been affected before but are now safely under the line, this change could make a difference in the way they approach their financial future.

“The new tax laws may change their planning,” said Timothy Barrett, senior vice president and wealth advisor based in Argent’s Louisville office. “They may have created trusts to capture and preserve a $5- to $6-million estate tax exemption, or double that for a couple. With the exemption amounts now doubled, couples with estates currently smaller than $10 million may be able to simplify their planning tremendously or switch their focus to income tax planning. But be aware that most of the personal tax changes revert back to 2017 law after 2025, which complicates permanent solutions.”

“Depending on how much you have and what age you are, 2018 ought to be a year to review and decide what is right for you and your individual financial situation,” said Howard Safer, CEO of Argent’s Nashville office.

Tax bracket changes

Marginal tax rates under the new tax bill will be lower for many taxpayers starting in 2018 and running through 2025. The top rate has been reduced from 39.5 percent to 37 percent, and will now apply to individuals with over $500,000 in income and couples with over $600,000.

Previously, the top tax rate had applied to individuals making $426,700 or more and couples making $480,050 or more.

A couple filing as “married/joint” with combined income between $237,000 and $351,000, for instance, will see their marginal tax rate fall from 33 percent to 24 percent. Assuming there are no changes in other deductions, this could result in a tax savings of around $10,000.

“Lowered brackets are one piece of much more complex tax change. It all depends on your mix of state and local taxes, mortgage interest and other itemized deductions and whether it makes sense to use the new higher standard deduction. Some people will end up keeping more of their income, and the rate changes are meaningful for all tax brackets. But there are too many moving parts at this point to make a definite call on how much someone will save,” said John McCollum, senior vice president – investments in Argent’s Atlanta office.

“Even though many details are yet to be worked out, the change does benefit high earners who aren’t independently wealthy, because you don’t jump to that top rate so fast now, ” Barrett says.

Pass-through income

A new deduction for pass-through businesses could benefit many high income earners who have an ownership stake in a business. Sole proprietors, LLCs, partnerships and S corporations may be able to deduct 20 percent of qualified business income, albeit with some limitations. This may create an opportunity for certain taxpayers to form limited liability companies that would be eligible for the deduction.

“People will be trying to take advantage of pass-through entities,” Barrett says. “Any high-earner who can work on a non-employee basis will want to explore using a limited liability company.”

Fewer itemized deductions

Some taxpayers may see a benefit from the near-doubling of the standard deduction, which has been raised to $12,000 for individuals and $24,000 for couples in 2018, up from $6,350 and $12,700, respectively, in 2017.

However, new rules regarding itemized deductions — affecting state and local taxes, medical expenses and mortgage and home equity loan interest, among other areas — will play out differently for every taxpayer depending on their individual financial situation. Some may opt for the standard deduction when they may not have before.

“One approach that may be useful for many taxpayers is bunching, in which deductions such as charitable donations are pooled every other year to maximize tax savings through itemization, with taxpayers taking the standard deduction on alternating years,” Safer says.

Boost to the economy

The tax bill’s benefits to corporations are also likely to benefit individual high-net-worth investors. In addition to receiving a permanent cut in the corporate tax rate, from 35 percent to 21 percent, companies will benefit from a sharp drop in the tax rate for repatriation of foreign earnings. This change will allow companies with large amounts of overseas income to bring it back to the U.S., paying 15.5 percent instead of the old rate of 35 percent.

“Many companies had accumulated large amounts of cash earned overseas, and the vast majority was just sitting there. By reducing their tax burden, it eliminates barriers, real and perceived. Companies are going to increase dividends and pay more to employees — you can find hundreds of those stories. More importantly, that cash is going to get invested,” McCollum says.

There is a great deal of detail about these changes that won’t be fully understood until the IRS releases its regulations on how to put these new tax changes into effect.

“The last major tax reform was in 1986, and it took years to fully understand and make that come together,” Safer says. “These laws will evolve in their interpretation.”

“The effects on individuals and pass-through businesses will be more complicated, but the benefit will be real for sure. It just remains to be seen how these various pieces will end up working together to change behavior,” McCollum says. “The bottom line of the tax change is that it’s putting more money in the hands of businesses and consumers to spend and invest instead of sending to the government, and I think that’s why the market has reacted so strongly.”

Fourth Quarter Investment Commentary

Looking Back: 2017 Market Review

The fourth quarter capped yet another stellar year for U.S. stocks. Larger-cap U.S. stocks (Vanguard 500 Index) gained 6.6% for the quarter and ended the year with a 21.7% total return. This was the ninth consecutive year of positive returns for the index. The market’s 1.1% gain in December crowned 2017 as the first year ever that stocks rose in each and every month. The broad driver of the market’s rise for the year was rebounding corporate earnings growth, supported by solid economic data, synchronized global growth, still-quiescent inflation, and accommodative monetary policy. U.S. stocks got an additional catalyst in the fourth quarter with the passage of the Republican tax plan, presumably reflecting investors’ optimism about its potential to further boost corporate after-tax profits, at least over the shorter term.

Foreign stock returns were even stronger, with developed international markets gaining 26.4% (Vanguard FTSE Developed Markets ETF) and emerging markets up 31.5% for the year (Vanguard FTSE Emerging Markets ETF). In the fourth quarter, however, these markets couldn’t match the S&P 500, gaining 4%–6%.

Moving on to bonds, the core bond index fund (Vanguard Total Bond Market Index) gained 3.5% in 2017. This return was close to the index’s yield at the start of the year, as intermediate-term interest rates changed little during the year with the benchmark 10-year Treasury yield ending at 2.4%. Although the Federal Reserve raised short-term rates three times (75 basis points total), yields at the long end of the Treasury curve declined and the yield curve flattened. Corporate bonds across all credit qualities and maturities had positive returns. High-yield bonds gained 7.5% (ICE BofA Merrill Lynch U.S. High Yield Cash Pay Index) and floating-rate loans rose 4.1% for the year (S&P/LSTA Leveraged Loan Index). Investment-grade municipal bonds (Vanguard Intermediate-Term Tax-Exempt) rebounded from a flat 2016, returning 4.5%.

Click Here to read full brief

Monthly Market Brief-January 2018

Each month, our Heritage Investment team publishes a market brief to provide an overview of the major factors influencing the US economy, including a summary of key sectors and the current positives & challenges.

Click Market Brief January 2018 for updates.

Here are some key highlights:


  • Non-farm payrolls rose 148000, still favorable though lower than expected. Unemployment stable at 4.1%.
  • Fifth month of solid growth in manufacturing payroll, 25000 in December and 31000 in November. Proving to be the driving force for the economy. Best run for manufacturing payrolls in 3.5 years. Construction payrolls are also on a five month winning streak, led by increasing sales of new homes. Housing and construction sector accelerated into year-end as proven by their strong payroll gains.
  • Oil prices steadily moving close to $60 which is the highest since 2014. Higher prices will likely inflate imports (worsening the trade deficit), but is also expected to boost retail sales and manufacturing (specifically energy equipment). Talks about the administration lifting restriction on offshore drilling could increase supply and put downward pressure on the oil price.


  • Trade deficit deepening: Deficit increased to $50.5 billion in November compared to $48.9 billion in October. Partly attributed by the increase in imports on consumer goods and oil imports.



Monthly Market Brief-December 2017

Each month, our Heritage Investment team publishes a market brief to provide an overview of the major factors influencing the US economy, including a summary of key sectors and the current positives & challenges.

Click Market Brief December 2017 for updates.

Here are some key highlights:


  • Sales of new homes increased 6.2% in October to 685000 – a new high! This is not signaling to a housing bubble since the sales surge is not coupled with a price surge. Median price of a new home is up only 3.3% on the year.
  • Rising consumer confidence is at a new expansion high (129.5 in November). Largely due to optimism in the job market and expected stock market gains.
  • The stock market highs may partly be due to expectation of corporate tax cuts and their on going effects. GDP growth has been 3% last two quarters while consumer spending as of October has been at 4.2%, posing no threat of over heating.


  • International trade deficit is expected to widen in October to $47.1 billion, up from September’s $43.5 billion, due to falling exports and a jump in imports of consumer products.
  • Growth in corporate profits have continued to lag the growth of the stock market. Pre tax profits packed in 2012 and really have expended only 10% over the past 5 years.


Monthly Market Brief-November 2017

Each month, our Heritage Investment team publishes a market brief to provide an overview of the major factors influencing the US economy, including a summary of key sectors and the current positives & challenges.

Click Market Brief November 2017 for updates.

Here are some key highlights:


  • Despite the hurricane disruptions, Payrolls rose 261,000 in October. In just under 4 years, unemployment gone down from 7% in 2013 to 4.1% in 2017
  • Dow’s bullish run (up 19.1% YTD) and confidence in the job market has been fueling this year’s increasing consumer confidence.
  • The US economy has been resilient, real GDP increased at an annual rate of 3% in the third Quarter of 2017, primarily due to an increase in consumer spending, inventory investment, business investment and exports. This back to back quarterly growth of 3% is a first in three years.
  • Total exports obtained new highs, rising at 2.3% and were largely driven by financial and information services. The decline in dollar has made US products less expensive to foreigners.
  • Another positive is the contraction in imports. Consumer imports and vehicle imports have both been slowing, two trouble spots that have traditionally deepened the deficit.


  • Another positive is the contraction in imports. Consumer imports and vehicle imports have both been slowing, two trouble spots that have traditionally deepened the deficit.

Good Intentions Can Diminish Over Time

Moore for Your Money
By Byron Moore

Question: My plan is to leave everything to my wife after I’m gone and she’s doing the same with me. Then when the second one of us is gone, the kids will get everything more or less equally. That’s what our wills say. We are both in second marriages and both us have our own set of children. But they are all adults, on their own and doing fine. Everyone gets along fine. Isn’t this simple approach the best?

Answer: Your plan strikes me as loving, well-prioritized, simple… and potentially disastrous.

I’ve got no issues with what you intend to do, nor with the intentions of everyone involved. But good intentions have a way of diminishing over time and under stress. Your children are grown. You gave them a home and an upbringing and that’s now bearing the fruit of stability and independence in their own lives as they start their own families. You want to be sure your wife is taken care of if you pass before she does.

But your good-hearted intentions are no guarantee that those intentions will be followed. Consider just a few things that could prevent your intentions from becoming reality.

Lawsuit. I’ve had more than one widow in my office whose husband died as a result of an accident. In one case I recall, the fault of the accident was clearly the husband’s, who had died in the accident. Imagine losing your spouse in an accident, then being sued for his or her causing the accident!

If you simply leave everything of yours to your wife, those assets may be vulnerable in the event of a lawsuit.

Next spouse. People have been known to get married after the death of a spouse. You may swear up and down you won’t, but… see my earlier comments about good intentions. If you or your wife remarries, will they then leave “everything” to that next spouse? Maybe. But isn’t “maybe” a problem? Do you really want someone you’ve never met to inherit what you and your wife have built together?

Future outlaw. Your adult children are all getting along well now. That’s wonderful. But have you ever known of couples that divorce after 20 or 30 years of marriage? I’ve got a whole list of them. After you and your wife are gone, do you want to leave your life’s wealth to your children, who might then have split it with a spouse that splits?

Financial rookie. I have no idea if this caution fits your situation or not. But many couples have one spouse who “handles the money” with little or no interest or involvement by the other. I’ve seen plenty of examples both ways – sometimes the wife calls all the financial shots. Other times, that’s the role assumed by the husband.

If your marriage works like that, do you want your wife’s first year of widowhood to also be her rookie year as the financial manager of the family wealth?

These are only possible scenarios to spark your thinking. I am not an attorney and this column does not contain legal advice. You need to talk to an experienced, qualified attorney concerning all of these matters.

An attorney may suggest the use of certain types of trusts, ownership arrangements or management agreements made ahead of time to address the specifics of your situation. You won’t know any of that until you speak with an attorney.

Your good intentions are a wonderful motivator and a great place to start. Just don’t stop there. Make sure there are structures in place to carry out once you are gone what you so nobly intend while you are alive.

Otherwise, your good intentions might die when you do.

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