Archive for oklahoma city – Page 2

INVESTMENT OUTLOOK – 2nd Quarter Heritage Market Brief

SECURITY SELECTION COMMITTEE VIEWPOINTS

Second Quarter 2016

THEMES

  • Despite a number of positive economic releases, the Fed made an unsurprising decision in March to leave the Fed Funds rate at a target of 0.25%-0.50%, citing spillover risks from weakness in global economic growth.
  • The U.S. labor market continues to improve as 215,000 jobs were added in March, and the labor force participation rate finally made a move in the right direction to 63% from a cycle low of 62.4% in September 2015.
  • Despite recent interest rate increases, the FOMC remains committed to gradual increases while balancing long-term goals of maximum employment and inflation of 2%.
  • While average hourly earnings increased 2.3% year-over-year, Fed policy makers believe increases of 3%-4% would have to be seen before materially impacting prices.
  • The U.S. consumer remains healthy with real disposable income increasing 2.9% year- over-year; however, this has not yet translated to a considerable increase in spending.
  • Thin inventory and strong demand continue to push housing prices higher, with many markets rising to pre-financial crisis levels.
  • The March ISM Manufacturing Index reversed a contractionary trend in place since September 2015 as it posted a reading of 51.8, driven largely by new export orders.
  • Inflation remains below target as indicated by the year-over-year Core Personal Consumption Expenditures Index (PCE less food and energy) reading of 0.96%.
  • The Fed’s median forecast for 2016 GDP growth is 2.4%; however, this may prove difficult if consumers continue to save increased disposable income rather than increase spending.

SECURITY SELECTION COMMITTEE VIEWPOINTS SECOND QUARTER 2016

HERITAGE TRUST COMPANY

  • While interest rates remain range bound, individual bonds held to maturity should continue to provide downside protection.
  • It is likely that volatility will continue as the Federal Reserve is expected to continue raising interest rates, S&P 500 stocks no longer appear cheap relative to earnings, and revenue growth remains challenging.
  • Emerging market economies remain at risk to rising U.S. interest rates; however, the asset class should be additive to long-term returns as demographics are favorable and the sub- asset class remains attractively valued at less than 11 times next year’s estimated earnings.

ASSET ALLOCATION

Even after the Federal Reserve raised interest rates for the first time in nearly a decade in December 2015, we expect the central bank to remain committed to an accommodative monetary policy which should keep current yields low relative to historical levels. Thus, we believe an overweight in stocks relative to bonds is appropriate from a risk/return perspective. Our focus on valuations has led us to believe that U.S. small-cap stocks are becoming more attractive after underperforming their large-cap counterparts for the last two calendar years. We are still maintaining our underweight to U.S. small-cap equities
but to a lesser degree than over the past couple of years. Despite weaker growth outside the U.S., we remain disciplined and maintain a strategic allocation to foreign markets, especially emerging markets where valuations appear much more attractive. Foreign small-cap stocks should be additive to the portfolio return in the long-run as small-cap companies tend to enjoy higher earnings and cash-flow growth relative to large-cap companies. Since, much of our small-cap exposure is in European small-cap companies, European accommodative policy should prove to be beneficial in the long-run as well. While our fixed income exposure remains underweight due to the current risk/return profile, we continue to purchase individual fixed income securities as bonds play a vital role in the portfolio.

We believe alternative exposure remains vital to portfolio diversification. While
we maintain a position in U.S. REITs, we have taken the opportunity to trim where necessary due to our belief that the asset class has potentially reached overvalued territory after outstanding growth throughout the recovery.

These views represent the opinion of the Security Selection Committee which are based on qualitative as well as quantitative factors. These quantitative factors are primarily driven by valuation research which then forms our subjective assessment of the relative attractiveness of asset classes and subclasses over a 3- to 5-year time horizon.

On Wellness and Financial Stress

by Brad Knowles, Heritage Institutional

Let’s talk about wellness. There is financial wellness, physical wellness, emotional Brad Knowleswellness, and probably a few other wellnesses that I need to learn more about. For years, we have heard people talk about corporate wellness programs: smoking cessation programs, weight loss programs, counting calories, and earning points for activities like walking or gym memberships. Some companies that have implemented these programs have seen significant decreases in employee absenteeism and health insurance premiums plus an increase in productivity.

Not too long ago my lovely wife said that she wanted to “clean up” her diet — to eat better and eat smarter.  Like all good husbands, I volunteered to join her.  She had spent a considerable amount of time researching exactly how to do this.  We started our venture on the first of the month and planned to “eat clean” for 30 days without cheating. I will admit, I was shocked. The food was great. I had more energy than I could ever remember having ever. By the end of the 30 days, I lost two pant sizes. I felt like a new and improved me.

Today, we still eat pretty clean. We subscribe to the 80/20 rule. 80% of the time we eat clean, and 20% of the time we just eat whatever sounds or feels good. I will confess, I don’t always feel that great after I put away a mountain of fried food.

In the last few months, I have started to see articles and studies that are connecting financial wellness and nutrition. Financial wellness articles have regularly discussed the stress caused by financial hardship. Stress causes us to trade our normal healthy lifestyle behaviors for much less healthy behaviors. Stress can cause depression, inactivity, unhealthy food choices, binge eating and drinking, and many other things.  I never considered the cause and effect relationship between financial stress and health, but it is real.Print

In a 2015 study conducted by the American Psychological Association (APA), they found that 72% of adults feel stress about money at least some of the time, and 22% experience extreme financial stress.  When the stress is extreme, health suffers. Many respondents reported thinking about skipping or did skip doctor visit because of financial concerns.

Stress at home doesn’t stay at home.  It invades every aspect of our lives like an unwanted house guest. It takes up mental and emotional space, it weighs a ton, and it grows like a weed.  Many studies have reported that employees miss work due to financial stress. One study reported that 37% of employees in the study spent three hours or more thinking about their financial stress at work. When employees worry about their financial stresses at work, they lose focus and productivity decreases.

Fortunately, Heritage Institutional has a new found focus on Financial Wellness. We are currently researching effective ways to help employees decrease their financial stress. A recent study of HR professionals said that 81% offer retirement plan education to employees, however, most do not provide any financial literacy training. We believe a solid retirement plan plus financial literacy education for employees is not only the smart thing to do, but the right thing to do. Stay tuned.

Professional Perspectives: Business Succession Planning

by Greg Jones CPA, CVA, Partner,  Eide Bailly LLP

The vast majority of businesses in the United States are closely held, family businesses. As a Certified 6692Public Accountant in public practice, I have had the opportunity to work with hundreds of individuals who own and work in a closely held business. I’ve found that the personalities of owners vary. Some are entrepreneurs who have made (or lost) more money than I will see in a lifetime. Others are conservative, never borrowing money and preferring to take the safe road rather than risk everything. Regardless of their style, each successful business owner will probably ponder a question similar to this one: “Who will run my business when I am gone?” If you are that business owner, this question may keep you awake at night. It is a question in which the answer is usually unclear. Fortunately, there are solutions; the best strategy includes designing a succession plan.

Before a plan can be put in place, I usually ask my clients a few basic questions:

  • What role does your business play in your family’s life? Possible answers may include:
    • Providing income
    • Providing employment for family members or long-time employees
    • Providing an opportunity for family members to work together
    • Providing a family identity, such as a legacy from an earlier generation
  • What would you like to see happen to your business in the future? (To whom do you want to transfer the business to?)
  • What is the annual after-tax income you want during retirement (in today’s dollars)?
  • As it relates to your business, what would you like to see happen to your family in the future?
  • In your absence, is the company positioned to run without you?
  • How much time do we have to execute a plan? (What is your desired retirement date?)

Once the above questions are answered, an owner will generally know whether the business will be transferred to a third-party, key employees or family members.

A third-party (perhaps a competitor) can simply purchase the business from the owner. This transaction is simple and typically efficient. The sale can be structured to achieve the selling owner’s goals while limiting the tax burden.

In some cases, a business owner may want to transfer ownership of the company to a key employee or group of employees. This strategy can yield wonderful results if the management team of the company is strong enough to manage the business without the owner. A shortfall is that the key employee(s) may lack the funds to buyout the owner; the owner may end up financing much of the buyout.

In the case of a desired transfer to family members, harmony among the family is an important factor. It is not uncommon for one child to work in the family business while his/her siblings pursue other careers. This is a difficult situation and one that cannot be ignored. Too often I see a family business split several ways when the owner dies. The owner may know one child should receive controlling ownership in the company, but wishes not to upset the rest of the family by creating a succession plan. In a recent case, the son of a business owner, who already managed the business prior to his father’s death, was left with a minority interest in the company. Thus, he was forced to consult his siblings on every major decision of the company, even though those family members knew nothing about the business.

An important component to a business succession plan is to include it as part of a well thought-out and executed estate plan. Gifts of stock, for example, may be part of the succession plan and a part of the overall estate plan. Coordinating the business succession plan with the estate plan is critical.

Family meetings are always a good place to begin discussions about business succession. Additionally, open up communication with key employees and find out their goals. Find trusted advisors to help you work through the business, financial and emotional aspects of a business transition. The sooner you develop and implement a plan, the better the chances that your family and business will be successful for years after your departure.

Greg has more than seven years public accounting experience and provides tax planning and preparation services to a variety of clients, including oil and gas companies, manufacturers, professional service firms and closely held family groups. As a Certified Valuation Analyst, he provides business valuation services for clients in connection with estate planning, buy/sell agreements, partner disputes and employee stock ownership plans. Learn more about Greg here. 

The Heritage Branding Wins Awards

Congratulations to our friends at SAXUM and the advertising community on their wins at this year’s Oklahoma City ADDY awards recognizing stellar advertising work. SAXUM created the brand identity for The Heritage, the former Journal Record building in downtown Oklahoma City, and received a Gold ADDY and Silver Award.The Heritage Logo_Primary

According to SAXUM account supervisor Rachel Hinderman, the campaign won the following:

INTEGRATED BRAND IDENTITY CAMPAIGN
Title: The Heritage – Branding
Award: ADDY Award (gold)

Category: ELEMENTS OF ADVERTISING | VISUAL | LOGO
Title: The Heritage
Award: Silver Award

View the 2016 OKC ADDY winner book here.

 

 

Heritage Book Review : PREPARING HEIRS

This month’s book recommendation comes from Nancy Ellis, Chairman Emeritus and Member of the Board of Directors.

Nancy selected:

Preparing Heirs: Five Steps to a Successful Transition of Family Wealth and Values

“Preparing Heirs is a road map for families that desire to build a successful family business that will go into all generations of business,” said Ellis.

From the publisher:41tEVFJiKTL._SX300_BO1,204,203,200_

Preparing Heirs discloses the surprising findings from the authors’ research into the legacies of 3,250 wealthy families. With extraordinary insight, they reveal what the relatively small number of successful families had in common-how they achieved and maintained family harmony, and ensured the smooth transition of their wealth to well-adjusted heirs. They also warn of the wide range of factors that cause the majority of wealthy families to fail in their transition. Preparing Heirs offers clear, concise, well-organized, and easy-to-follow instructions that will enable you to evaluate your plan for transitioning family wealth. Preparing Heirs is an assessment tool that can be used in conjunction with the services of qualified professionals such as attorneys and accountants. It addresses the major causes for the 70% failure rate in estate transitions, which lie within the family itself and are within the family’s control. This book can help you develop a plan to transmit the family values underlying the accumulation of wealth and prepare your heirs to be good stewards and thoughtful administrators of that wealth.

To find out more about the book, click here. 

5 Ways to Show Your Financial Plan Some Love

Valentine’s Day is typically about roses and chocolates, but nothing is lovelier than a beautiful investment strategy. Below are five things a savvy investor does to show their financial plan some love. womanheart

1. Stay Curious

Whether you manage your own investments or pay someone to manage them, be informed. Every person should have enough understanding of financial nomenclature to ask educated questions regarding his or her investment accounts, stocks, bonds, mutual funds, etc. Also, be sure to review your statements. It is very important to keep up with your financial position. You never know when you might come across something in your statement that needs clarification. If you do have questions about your financial statement, financial position, or performance, do not be afraid to ask questions. Being inquisitive is key to understanding your financial position, and it is likely you will learn in the process. Your financial advisor should always be willing to provide answers to your questions in terms you can understand, as well as provide you with your financial statements. If your advisor is being evasive, proceed with caution.

2. Control Expenses
Remember that fees, trading costs, and timing of tax gain/loss recognition are the only controllable components of investment returns. Your goal should be to maximize your NET return after subtracting trading costs, management fees, taxes and inflation. If possible, investments should be held for at least a year to recognize favorable capital gain rates, and if you do not know how much you are paying in fees, ask! If your financial advisor leads you to believe you are not paying a fee, find out how they are paid. Is it through 12b-1 fees, loads or commissions? If so, ask yourself if that advisor is truly working in your best interest or working in their own best interest by making investments that increase their commission.

3. Increase Your Savings
At the beginning of every year, you should make it a point to increase your retirement plan contributions and/or personal savings.  Don’t just stop at the amount your employer will match, and if applicable take advantage of Roth options.  While it seems simple, most people do not actively follow a budget and instead, think they intuitively know what they spend and where. But by being intentional about your family’s budget, it will ensure you can accomplish your long-term goals and sets a good example for your children and grandchildren. Make sure you talk with them about the savings process and help pass on these important disciplines.

4. Rethink Charitable Giving
If your individual stocks saw significant capital appreciation last year and you are planning on making a gift to a charity this year, consider making a gift of those shares of stock.  By gifting appreciated stock, you will get the full tax deduction, without having to sell and recognize capital gains.  This allows the charity to receive more, and you’re able to give (and deduct) more.  Also, if you are 70 ½ and are required to take a distribution from your IRA or retirement plan, that amount can also be gifted directly to a qualified charity without recognizing the income.  Contact the business development officer at your favorite charity to find out if this is an option.

5. Talk About Death
Finally, no one likes to talk about the inevitable, but you need to make that a priority this year. That’s what investment is all about: taking care of you and yours. Talk with your family about your estate plans. Take time to create a will or revocable living trust if you do not already have one. Be sure to check the beneficiaries listed on your IRAs, 401(k)s, payable-on-death accounts, and insurance policies. Has someone preceded you in death, been married or divorced? Update the beneficiaries on those accounts if necessary, as they are not subject to your will or probate. Taking time to think through and talk about these issues with your loved ones will ensure your wishes are carried out.

Happy Valentine’s Day from our family to yours. We love serving you.

Facebook: Facebook.com/HeritageTrustCompany
Twitter: Twitter.com/HeritageTrust

Image courtesy of stockimages at FreeDigitalPhotos.net

Our Perspective – Courageous Retirement Plan Design

by Brad Knowles, Heritage Institutional

There are myriad reasons why an employer maintains a qualified retirement plan. They may use it asBrad Knowles a talent attraction and retention tool. They may see it as a necessity to keep pace with industry peers. But perhaps the most important reason is to provide a means through which their employees may save for the future. The plan should mean security and dream fulfillment for a loyal workforce.

Over the years traditional pension plans have faded and been replaced by defined contribution (primarily 401(k)) plans. But these defined contribution plans were never meant to carry the full load of retirement savings. They were meant to supplement the much more robust and well-designed (for impactful retirement savings) traditional pension plan. A pension plan places all of the decisions, and responsibility, in the hands of the employers, who tend to possess a greater degree of sophistication than do many employees. In contrast, most supplemental defined contribution plans shift those decisions to employees. Unfortunately, studies haveshown that many, if not most, of these employees are ill-equipped to make good decisions in planning for their futures.

So what’s the answer? Employers have to become more courageous. They have to start by answering the question, “what is the purpose of our plan?” If the answer is “to create the most efficient retirement savings tool possible for my employees,” they have to accept the fact that they need to take a step back in time. They need to make their 401(k) plans operate more like the traditional pension plans of old. They need to become more paternalistic. They need to go back to making good decisions on behalf of their employees. Some of these decisions may take the form of plan design. Some may take the form of diverting more corporate focus and attention to their plan. And some may require contemplating the best use of corporate dollars.
Courageous plan design includes redesigning plans to eliminate potential points of leakage like in-service withdrawals, hardship withdrawals and even loans. It includes taking advantage of behavioral finance to include automatic enrollment and automatic escalation features to ensure employees get into a plan then defer appropriately. It includes conducting prudent due diligence in regards to investments and fees. It includes the employer considering bearing the administrative costs of the plan instead of passing them onto their employees.

Some of these may seem like drastic changes, and some may seem miniscule in impact. The truth is every single incremental change may have a large impact on an employee’s ability to reach his/her retirement goals. At the end of the day, even the wisest employees don’t make the best decisions. However, it is within the employer’s power to help them avoid mistakes, if the employer has courage.

Behavioral Finance and Plan Design

401(k) plans have been around for more than 30 years now, and we have learned much about what has worked and what has not. As pension strategies have migrated from the traditional defined benefit (DB) plans to the ubiquitous defined contribution(DC) plans, two key events occurred. Plan sponsors removed themselves from the enormous funding implications and investment responsibilities inherent in DB plans and transferred these responsibilities to the participants. Unfortunately participants have not picked up these responsibilities.

As a plan sponsor, if you subscribe to the view that success of a 401(k) plan is really measured by your employees’ ability to replace their income at retirement, then this effectively becomes the definition of a successful plan. If we agree, then we have work to do. Currently, our industry spends nearly $1 billion annually on employee investment education and support, and we have yet to move the needle in terms of achieving viable retirement outcomes. We now know employee education alone is not the answer. Participants are making all the same retirement investment mistakes as they made 30 years ago.

The science of behavioral finance has been very helpful in illuminating why most participants do not engage with their plan. Studies have shown participants have no interest in learning how to fly the jet; they want the pilot to do this. The job of pilot then falls to the plan sponsor.

Issues of lethargy, intimidation, procrastination, loss aversion, hyperbolic discounting (retirement would be great, but I really want that new gadget now) are debilitating to participants, but can be overcome by the influence of a concerned plan sponsor. We have all the tools to help effect positive change.

A Great Time to be Courageous

Over the past several years, we have worked with our clients to move the needle when it comes to Courageous Plan Design. Each year, we calculate how many positive plan metrics our plan sponsor clients have been able to implement. In 2014, that number climbed to its highest yet. Now there is a big push to show how the behavioral finance behind Courageous Plan Design can help achieve those positive plan outcomes we all seek.

Brad Knowles is the Managing Director of Heritage Institutional and is one of fewer than fifty advisors nationally to earn the Certified Behavioral Finance Analyst (CBFA) designation.  You can read more about Brad here

INVESTMENT OUTLOOK – First Quarter 2016 Heritage Market Brief

SECURITY SELECTION COMMITTEE VIEWPOINTS

First Quarter 2016

THEMES

  • The Federal Reserve raised rates by 25 basis points in December 2015 for the first time in nearly 10 years, signaling confidence in the U.S. economy.
  • Despite recent interest rate increases, the FOMC remains committed to gradual increases while balancing long-term goals of maximum employment and inflation of 2%.
  • Inflation remains below target as indicated by the year-over-year core Personal Consumption Expenditures Index (PCE less food and energy) reading of 1.33%.
  • The U.S. economy added 292,000 jobs in December, and the unemployment rate remained unchanged at 5%.
  • While wage inflation moderated some in 2015, wages still advanced a respectable 4.5%.
  • Consumers appear healthier as year-over-year real disposable income increased 3.1%, and consumers are saving income at a 3-year high of 5.5%.
  • While consumer health has improved, declining consumer confidence from 99.1 in October to 90.4 in November has kept consumers from spending discretionary income saved from lower oil prices and higher wages.
  • In November 2015, manufacturing entered contraction territory for the first time in 36 months as the strong dollar continues to weigh on exports.
  • While interest rates remain range bound, individual bonds held to maturity should continue to provide downside protection.
  • It is likely that volatility will continue as the Federal Reserve is expected to continue raising interest rates, S&P 500 stocks no longer appear cheap relative to earnings, and revenue growth remains challenging.
  • Emerging market economies remain at risk to rising U.S. interest rates; however, the asset class should be additive to long-term returns as demographics are favorable and the sub- asset class remains attractively valued at under 11 times next year’s estimated earnings.
  • Structural unemployment as well as a slow recovery from a severe recession may be playing a key part in the lowest labor force participation rate in nearly 40 years.

ASSET ALLOCATION

Even after the Federal Reserve raised interest rates for the first time in nearly a decade in December 2015, we expect the central bank to remain committed to an accommodative monetary policy which should keep current yields low relative to historical levels. Thus, we believe an overweight in stocks relative to bonds is appropriate from a risk/return perspective. Our focus on valuations

has led us to believe that U.S. small-cap stocks are becoming more attractive
after underperforming their large-cap counterparts for the last two calendar years. We are still maintaining our underweight to U.S. small-cap equities
but to a lesser degree than over the past couple of years. Despite weaker growth outside the U.S., we remain disciplined and maintain a strategic allocation to foreign markets, especially emerging markets where valuations appear much more attractive. Foreign small-cap stocks should be additive to the portfolio return in the long-run as small-cap companies tend to enjoy higher earnings and cash-flow growth relative to large-cap companies. Since, much of our small-cap exposure is in European small-cap companies, European accommodative policy should prove to be beneficial in the long-run as well. While our fixed income exposure remains underweight due to the current risk/return profile, we continue to purchase individual fixed income securities as bonds play a vital role in the portfolio.

We believe alternative exposure remains vital to portfolio diversification. While
we maintain a position in U.S. REITs, we have taken the opportunity to trim where necessary due to our belief that the asset class has potentially reached overvalued territory after outstanding growth throughout the recovery.

These views represent the opinion of the Security Selection Committee which are based on qualitative as well as quantitative factors. These quantitative factors are primarily driven by valuation research which then forms our subjective assessment of the relative attractiveness of asset classes and subclasses over a 3- to 5-year time horizon.

Professional Perspectives: Dynasty Trust 101

By:  Scott Sewell, attorney and shareholder McAfee & Taft in Oklahoma City

This article was originally posted in Spring of  2010

Scott_Sewell_08202015

Scott Sewell

Since joining McAfee & Taft A Professional Corporation in 1982, I have been assisting individuals and families with careful planning for the management and disposition of their assets. One of the most powerful tools available to these individuals and families is the dynasty trust. Properly structured, a dynasty trust can keep an individual’s assets from being included in his or her estate, so the assets can pass estate tax-free from one generation to another.

A dynasty trust is designed to hold assets in trust without direct ownership being transferred to any beneficiary (i.e., your children, grandchildren, great-grandchildren, etc.). The value of the dynasty trust is that the trust’s assets are available to provide for the health, education, maintenance and support of each and every one of your descendants. Then, for example, when a child dies, the remaining trust assets will pass to individual trusts for each of that child’s children. This pattern can go on repeatedly through the generations as allowed by state law. As long as the dynasty trust does not allow too much access by the beneficiaries, the trust’s assets are not regarded by the IRS as being “owned” by the beneficiaries and are therefore not subject to estate tax in their estates when they die. This presents a marvelous opportunity for the trust’s assets to grow for future generations because any appreciation in those assets is also exempt from estate taxes. An additional benefit to the dynasty trust is that, because the trust’s assets do not belong to any of the beneficiaries, the assets are generally protected from creditors of the beneficiaries in the event of lawsuits and divorce.

One particularly important aspect in the creation of a dynasty trust is the selection of a trustee. A corporate trustee is often the best choice because an individual will not live long enough to carry out the trust’s provisions. In addition to longevity, a corporate trustee offers the following advantages:

  • It is a specialist in handling trusts and has investment and tax expertise.
  • It is impartial — free of emotional bias and conflicts of interest with the beneficiaries.

When considering the implementation of a dynasty trust into an estate plan, the key questions to ask are (1) Do you want your assets to be protected from future divorces and lawsuits your children may face and (2) Do you want your assets to be able to grow and pass federal estate tax free from your children to grandchildren? If the answer to either question is “yes,” then you should consider a dynasty trust as a part of your estate plan. Transferring wealth to future generations without the assets becoming subject to the claims of ex-spouses, creditors or the IRS is the way that dynasties have been created in the past and the way in which dynasties can be created in the future.

Scott Sewell’s practice is principally focused on the representation of individuals, families and business owners in the areas of strategic estate planning involving wealth preservation and transfer, estate and trust administration, and business succession.

Fiduciary Duty: Know your Trustee

by Kevin Karpe, Senior Vice President, Trust Officer

fi·du·ci·ar·y: “ A fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence.

 “Fiduciary”, “fiduciary duty” or “fiduciary standard” are terms we hear from time to time. We all recognize that a Board of Directors has a duty to its shareholders.  We know an executive has an obligation to act solely in the interests of his employer.  And we know elected officials have the sworn duty to prudently administer public resources.   In each example, the board member, the executive, and the elected official are all considered fiduciaries.   Common Law says fiduciaries are bound by equity to suppress their own interest in favor of a client, shareholder, employer or even taxpayers. At Heritage Trust Company, our fiduciary obligation results from an appointment as a trustee, an agent, a guardian or a personal representative.Kevin Karpe

All too often we hear in the news about how a member of a corporate board somehow places himself in a position of conflict by trading company stock based on information exclusive to the board. We read about investigations into why a politician has appointed a colleague to a post for which they are not the most qualified, or a stock broker receiving compensation for a transaction which is obviously contrary to the needs of his client. It is apparent many of those occupying fiduciary positions do not fully understand their obligation, an obligation to act with total loyalty at all times for the sole benefit and interest of another.

It’s difficult to know if our culture has experienced a measurable change in the application of fiduciary standards over time, but I’ve heard many in the investment industry attempt to explain the various degrees of duty and suggest if a conflict exists, it is simply remedied by a disclosure buried in the fine print of an account agreement.   It’s truly a shame an organization may be inclined to take the path of least resistance in the case of disclosure rather than recognize an opportunity to build loyalty with a client. Avoiding breaches of fiduciary duty or conflicts of interest might sound simple.   Breaches or conflicts are most typical in situations where a broker or agent is compensated in manner that is an incentive for him to recommend an investment or transaction that obviously ignores the best interest of the client. A variable annuity sold to a ninety year old woman is a good example of a fiduciary breach in the investment industry.

It’s refreshing to know that consumers are hearing more about fiduciary duty and as a result, the investment industry is now focused on formalizing internal standards. I find it interesting that their best examples are the policies of the old fashioned trust companies.

At Heritage Trust, we believe our experience counts. Our approach to our duty reveals solid relationships with our clients, their kids and grand kids will always contribute to successfully transitioning a legacy.

 Originally published by Heritage Trust in 2011.

Blaze a Trail

by Aaron Jack, Vice President, Director of Development and Marketing

A large reservoir near my home in Quail Creek has hills of varied size. Perfect for sledding in the rare instance of snow in OKC, the hills also represent a great workout opportunity. There are a number of options, but I’ve been pleased to settle on one that balances distance with the challenge of a steep slope. An admitted creature of habit, since choosing my hill I always return to that same starting point. Soon after incorporating the hill into my workouts, I noticed a path was beginning to appear from my steps. Whether the grass is overgrown from the summer rain or brown from a recent freeze, I can always find my spot. I take pride in the fact my hard work has blazed a trail.IMG_4553

Walking home from a recent workout, I reflected on the leadership and legacy lesson from the hill. Our clients have become successful in many ways. With success comes responsibility, and part of that responsibility is to leave a positive impact on our surroundings once we have moved on. Each of us have the chance to blaze our own trail personally and professionally. Three quick leadership/legacy thoughts come to mind:

  • Win the Day. The only way to create impact is one step at a time. I personally grow tired of trite corporate sayings. However, “It’s a marathon, not a sprint” is one that stands true to the test of time. The trail on the hill began with a single step, followed by thousands more. The best chance each of us have to influence our future is the opportunity of today. Take the first step.
  • Treat People Well. A simple thing, but sometimes the most difficult principle of all. I recently enjoyed listening to Sam Presti, renowned General Manager of the OKC Thunder, talking about the Thunder’s process of evaluating collegiate players. Certainly talent and basketball ability are the top priority, but Sam also stressed the importance of character in their evaluation process. They take extra time to interview student managers and support staff at the prospect’s university. Why? Because an important part of their evaluation process is how the player treats people — not just those people in leadership positions — but especially the ones that are in subordinate positions.
  • Leadership is Influence – A favorite quote of mine is “People remember 7% of what you say, but they always remember how you made them feel.” The most effective leaders understand this key principle. Influence is not given; it is earned. True leadership transcends title or position. Yes, there will be challenging times, difficult discussions, personnel issues to tackle, and family dynamics to overcome, but how we handle these tough situations defines our ability to positively influence those around us.

What Our Heritage Team is Grateful For

In honor of Thanksgiving, we asked some of our team members at Heritage to share what they are grateful for about the OKC community. We’d love to hear what you’re thankful for in comments.

maps_logoIn the community, I am most thankful that in 1993, Mayor Norick had the foresight to encourage a “yes” vote for MAPS at a time when the city was not doing at all well economically.  We all know the results – Billions in investment and a much stronger and vibrant economy.  One person can make a vast difference through strong leadership. – Lance Johnson

I’m most thankful for the opportunity to work with individuals who truly care about their clients. It makes for a very enjoyable place to work and allows us to work better as a team on a daily basis.” – Garrett D. Johnson

imagesI’m grateful for the #OKStandard project by the Oklahoma City National Memorial.  The movement has reminded us of how strong we Okies are and that we do have an amazing spirit of generosity.  We are challenged to continue fulfilling our standard of character by volunteering with an act of service, honor or kindness. – Jennifer Pellow

Being a nearly life-long resident of Oklahoma City, I’m very thankful that this fine town has developed such a pride for itself over the last decade.  It has always been a good place to live…now it is a great place to live…and the sense of pride that now exists around town has been a key driver of that transition. – David Luke

I am grateful for the Brookdale/Statesman Club independent living facility in 33357-1Oklahoma City.  They provide a wonderful atmosphere that keeps seniors engaged and socially active for a better quality of life. – Cathy McKinzie

As Oklahoman’s we are all too familiar with tragedies that touch us all. I am thankful for the outpouring of support, unity and love Oklahoman’s give to one another in the most difficult of times. – Shannon Reed

From the Heritage family, Happy Thanksgiving!