Investments and money management can be tricky and hard to navigate. At Bauer Heitzmann, we take the stress out of it! As fiduciaries, we are ethically bound to act in our clients interests when offering personalized financial advice.
Who is Bauer Heitzmann?
Plain and simple: Our mission is to invest wisely to help you make money. Not by blindly taking on risk or lining our pockets with hidden fees, but by hearing about your financial goals. We’ll apply our advanced algorithms and decades of experience to strategically invest money where we know it will grow. We manage the risk, you invest with confidence.
How do you invest differently than everyone else?
We are challenging the current archaic financial system with a method called risk budgeting. If your portfolio has more protection in place during market downswings, it is much easier to build wealth over time. We seek to add this protection and minimize risk with Dynamic Hedging Techniques and risk budgeting.
What does "hedging" mean?
Hedging means we take an action in the portfolio in an attempt to reduce a certain risk. Some techniques we utilize are short positions on the S&P 500, cash, and correlation hedges.
Why don't you use mutual funds or individual stock?
Our research and experience has shown that ETFs provide the same exposure to the markets we want and at a cheaper cost than mutual funds on average. ETFs are also more diversified than individual stocks so we can more easily reach our objective of quality risk-adjusted returns.
We generally do not use individual stocks or mutual funds but can customize such investments for our wealth management clients.
Who can invest at Bauer Heitzmann?
Any legal resident of the United States who is 18 or older, has a social security number, and a verified U.S. address can open an account.
Do you engage in tax loss harvesting?
Yes, we sell shares with the largest losses first, largest gains last, regardless of long or short-term tax status. We do this so investors are able to offset taxes on both gains and income.
Is Bauer Wealth Management a fiduciary? And what is the Fiduciary Standard?
Yes. Bauer Wealth Management is a Registered Investment Advisor (RIA) and all client-facing employees are Investment Advisor Representatives (IAR). This means both the firm and our advisors are held under the Fiduciary Standard.
The Fiduciary Standard requires Registered Investment Advisors to recommend products and services that are in the best interest of their clients. We strictly adhere to this standard and always strive to go above and beyond for our clients.
Is Bauer Heitzmann registered with the Securities and Exchange Commission (SEC)?
Yes, we are registered with the SEC.
Are my investments guaranteed to not lose money?
No, although we seek to mitigate risk in down markets, investments are not guaranteed and past performance is not indicative of future results.
If I fund via Automated Clearing House (ACH) how long does it take?
An ACH transfer is money moving from a bank account to an investment account at Bauer Heitzmann. It is usually completed in 2-3 business days. However, for security purposes, you must first link your bank account and go through a verification process.
Can I set up automatic deposits?
Yes. You can setup ACH deposits from your bank to occur one time, or on a reoccurring basis. This can be a great tool for saving and you can think of it as “paying yourself first.”
How many and what kind of accounts can I open?
You can open as many accounts as you need! We can facilitate you opening many different account types. Please see the list and description below of the available options:
Individual – Taxable
An account owned by one person. Any income earned (including dividends), is subject to income taxes to be paid that year. The taxes can be offset with any losses realized in the same year.
Joint (Rights of Survivorship)
A surviving member will inherit the total value of the other member’s share of account assets upon the death of that other member. All members of the account are afforded the power to conduct investment transactions within the account as well.
Joint (Tenants in Common)
A surviving tenant does not necessarily acquire the rights and assets of the deceased person. Each tenant determines how their share will be distributed upon death.
Joint (Community Property)
Community property accounts are owned by two married people who have acquired the property in the account during their marriage. In the instance of death or divorce, the property in the account is divided in half and ownership is split between the two account holders.
Only nine states allow community property accounts: Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington and Wisconsin
Joint (Tenants by Entirety)
An account for married couples. The consent of both spouses is required for any action to take place in the investment account. If one spouse, passes away, the other inherits the entire account. Only the following states allow tenants by entirety (outside of real estate or homestead property): Arkansas, Delaware, District of Columbia, Florida, Hawaii, Maryland, Massachusetts, Mississippi, Missouri, New Jersey, Oklahoma, Pennsylvania, Tennessee, Vermont, Virginia, Wyoming.
IRA (Individual Retirement Account)
Allows individuals to save for retirement that gives you tax advantages. You can contribute if you have taxable compensation but not after you are age 70½ or older. Pretax income, subject to specific annual limits, can be directed towards investments that can grow tax-deferred (no capital gains or dividend income taxes). Contributions to the Traditional IRA may be tax-deductible depending on the taxpayer’s income, tax-filing status and other factors. Withdrawals in retirement are subject to ordinary income tax rates.
Allows individuals to save for retirement that gives you tax advantages. You can contribute at any age if you have taxable compensation and your modified adjusted gross income is below certain amounts. Income, subject to specific annual limits, can be directed towards investments that can grow tax-deferred (no capital gains or dividend income taxes). Contributions to the Roth IRA are not tax-deductible. You can withdraw your contributions at any time with no penalties and withdrawals are tax-free.
Allows individuals to transfer assets from their former employer’s retirement plan, such as a 401(k), 403(b), 457, or Thrift Plan when they change jobs or retire without having to pay any taxes or penalties. You can either transfer an existing Rollover IRA to Altruistic Investing (i.e. an IRA that has already been rolled over from an employer sponsored account), or rollover an employer sponsored account to a new Rollover IRA account.
A Savings Incentive Match Plan for Employees (SIMPLE) IRA may be established by an employer (self-employed or small business with fewer than 100 employees) to offer retirement plans to employees.
A Simplified Employee Pension IRA may be established by an employer (can be self-employed) that can make equal tax-deductible contributions on behalf of their eligible employees. In return, the employer is allowed a tax deduction for plan contributions. Employees’ earnings grow tax-deferred until withdrawn.
Inherited or Beneficiary Traditional IRA
This is a Traditional IRA (see definition above) that has been inherited – e.g you were named as the beneficiary on the IRA account of someone who has passed it onto you.
Inherited or Beneficiary Roth IRA
This is a Roth IRA (see definition above) that has been inherited – e.g. you were named as the beneficiary on the IRA account of someone who has passed it onto you.
Trust & Custodial
The Uniform Gifts to Minors Act (UGMA) is an act in some states of the United States that allows assets such as securities, where the donor has given up all possession and control, to be held in the custodian’s name for the benefit of the minor without an attorney needing to set up a special trust fund.
An act that allows a minor to receive gifts such as money, patents, royalties, real estate and fine art, without the aid of a guardian or trustee. Under UTMA, the gift giver or an appointed custodian manages the minor’s account until the latter is of age (usually 18 or 21). The Uniform Transfer to Minors Act also shields the minor from tax consequences on the gifts (up to a specified value).
A trust whereby provisions can be altered or canceled dependent on the grantor. During the life of the trust, income earned is distributed to the grantor, and only after death does property transfer to the beneficiaries.
A trust that can’t be modified or terminated without the permission of the beneficiary. The grantor, having transferred assets into the trust, effectively removes all of his or her rights of ownership to the assets and the trust.
A trust that is created through explicit instructions in a deceased’s will. A testamentary trust goes into effect upon an individual’s death and is commonly used when someone wants to leave assets to a beneficiary, but doesn’t want the beneficiary to receive those assets until a specified time. Sometimes referred to as a will trust or trust under will, testamentary trusts are irrevocable.
How long does it take to transfer assets?
It depends on the type of account that is being transferred. An ACAT transfer from a brokerage firm is usually completed in 3-8 business days. Other transfer types like Non-ACAT and direct mutual fund can take between 2-6 weeks.
Transfers can be submitted by attaching your account statement from the firm currently holding the account to your secure online document vault.
How often do you re-balance my portfolio?
The algorithm is always working. It never takes a break. It calculates risk on a daily basis. This means we rebalance when risk thresholds exceed their budget limits. While this is typically a monthly rebalance, it could occur more or less frequently depending on market conditions.
Is my portfolio diversified?
Yes, we diversify your portfolio across many different asset classes and try to use non-correlated positions whenever possible. If we can choose two assets that have the same expected return, but do not move in tandem with one another, then we can buy both and effectively reduce risk without hurting potential return. We also use Dynamic Risk Hedging techniques to further mitigate risk where simple diversification can fall short.
Do all of your portfolios contain ETF's?
Our automated AVA™ offering use low cost, tax-efficient; commission-free ETFs in all or our portfolios.
The concierge wealth management offering generally uses these same portfolios as well, but more customization is available with individual stock portfolios and defined maturity bond ladders.
Can I process a Rollover of qualified money?
Yes! You can rollover funds from an employer sponsored plan (401k, 403b, etc…) into a rollover IRA with us. You can also transfer an existing IRA. There are no penalties for either of these actions.
If you are considering rolling over money from an employer plan into an IRA we suggest following these tips to decide whether an IRA rollover is right for you, based on FINRA’s, “The IRA Rollover: 10 Tips to Making a Sound Decision”.
1. Evaluate your transfer options. You generally have four choices. 1) Keep some or all your savings in your former employer’s plan (check with your benefits office to see what the company’s policy is). 2) Transfer assets to your new employer’s plan, if allowed (again, check with the benefits or human resources office). 3) Roll over your plan assets into an IRA. 4) Cash out your balance. (Be careful.) There are pros and cons to each, but cashing out your account is rarely a good idea for younger individuals. If you are under age 59½, the IRS generally will consider your payout an early distribution, meaning you could owe a 10 percent early withdrawal penalty on top of federal and applicable state and local taxes.
2. Minimize taxes by rolling Roth to Roth and traditional to traditional. If you decide to roll over your retirement plan assets to an IRA, you can choose either a traditional IRA or Roth IRA. No taxes are due if you roll over assets from a traditional plan to a traditional IRA, or if you roll over your contributions and earnings from a Roth plan to a Roth IRA. But if you decide to move from a traditional plan to a Roth IRA, you will have to pay taxes on the rollover amount you convert. It’s a good idea to consult with your plan administrator, as well as financial and tax professionals about the tax implications of each option. Tip: Special Treatment of Employer Matches in Roth Plans – The IRS requires that any employer match of contributions made to a Roth plan be placed in a pre-tax account and treated like matching assets in a traditional plan. To avoid taxes when rolling over a Roth plan that includes matching contributions from your employer, you will need to request the transfer of your contributions and earnings to a Roth IRA and your employer’s matching contributions and earnings to a traditional IRA.
3. Think twice before you do an indirect rollover. With a direct rollover, you instruct your former employer to send your 401(k) assets directly to your new employer’s plan or to an IRA—and you never have to handle the money yourself. With an indirect rollover, you start by requesting a lump-sum distribution from your plan administrator and then take responsibility for completing the transfer. Indirect rollovers have significant tax consequences. You will not get the full amount because the plan is required to withhold 20 percent to ensure that taxes will be paid if the rollover is not completed. You must deposit the funds in an IRA within 60 days to avoid taxes on pretax contributions and earnings—and to avoid the potential of an additional 10 percent tax penalty if you are younger than 59½. The IRS has introduced a self-certification procedure if you inadvertently miss the 60-day time limit. If you want to defer taxes on the full amount you cashed out, you will have to add funds from another source equal to the 20 percent withheld by the plan administrator (you get the 20 percent back if you properly complete the rollover).
4. Be wary of “Free” or “No Fee” claims. Competition among financial firms for IRA business is strong, and advertising about rollovers and IRA-related services is common. In some cases, the advertising can be misleading. Regulators have observed overly broad language in advertisements and other sales material that implies there are no fees charged to investors who have accounts with the firms. Even if there are no costs associated with a rollover itself, there will almost certainly be costs related to account administration, investment management or both. Don’t roll over your retirement funds solely based on the word “free.”
5. Realize that conflicts of interest exist. Your advisor who recommends an IRA rollover might earn commissions or other fees as a result. In contrast, leaving assets in your old employer’s plan or rolling the assets to a plan sponsored by your new employer likely results in little or no compensation for a financial professional. In short, even if the recommendation is sound, any financial professional who recommends you move money from an employer-sponsored retirement plan into an IRA could benefit financially from that move.
6. Compare investment options and other services. An IRA often enables you to select from a broader range of investment options than available in an employer plan, but might not offer the same options your employer plan does. Whether the IRA options are attractive will depend, in part, on how satisfied you are with the options offered by your current or new employer’s plan. Some employer plans also provide access to investment advice, planning tools, telephone help lines, educational materials and workshops. Similarly, IRA providers offer different levels of service, which may include full brokerage service, investment advice and distribution planning. If you are considering a self-directed IRA, consider the tradeoffs. Moving assets out of your employer sponsored plan may result in loss of access to benefits specific to that plan, some examples of which are: -Penalty Free withdrawals -Protections from Creditors and Legal Judgements -Access to Employer Stock -Loans -Required Minimum Distributions. *existing employer plan only 7. Understand fees and expenses. Both employer-sponsored plans and IRAs involve investment-related expenses and plan or account fees. Investment-related expenses can include sales loads, commissions, the expenses of any mutual funds in which assets are invested and investment advisory fees. Plan fees can include administrative costs (recordkeeping and compliance fees, for instance) and fees for services, such as access to a customer service representative. In some cases, employers pay for some or all of the plan’s administrative expenses. IRA account fees can include administrative, account set-up and custodial fees, among others. Before making a rollover decision, know how much you are currently paying for your plan. Compare that to the fees and expenses of a new plan or IRA. For more information about 401(k) fees, see the Department of Labor’s publication, A Look at 401(k) Plan Fees. For IRA fees, ask your financial professional to provide you with information about fees and expenses, and read your account agreement and any investment prospectuses.
8. Engage in a thoughtful discussion with your financial or tax professional. Don’t be shy about raising issues such as tax implications, differences in services, and fees and expenses between retirement savings alternatives. If your financial professional recommends that you sell securities in your plan or purchase securities in a newly opened IRA, ask why that recommendation is in your best interest. As with any investment, if you don’t understand it, don’t buy it.
9. Age matters. If you leave your job between age 55 and 59½, you may be able to take penalty-free withdrawals from an employer-sponsored plan. In contrast, penalty-free withdrawals generally are not allowed from an IRA until age 59½. Once you reach age 70½, the rules for both traditional employer plans and traditional IRAs require the periodic withdrawal of certain minimum amounts, known as the required minimum distribution (RMD). The RMD rules also apply to Roth 401(k) accounts. However, the RMD rules do not apply to Roth IRAs while the owner is alive. If you are still working at age 70½, however, you generally are not required to make required minimum distributions from your current employer’s plan. This may be advantageous for those who plan to work into their 70s.
10. Assess the tax implications of appreciated company stock. Some retirement plans feature company securities (such as stocks, bonds or debentures)—and, as with earnings on other investments, any increase in their value will typically be subject to ordinary income tax when you withdraw the securities from the plan. But if you’re considering a distribution of company stock or securities when you leave the company, be aware that special IRS rules might allow you to defer paying taxes on the appreciation (which the IRS calls “net unrealized appreciation”). Consult your plan administrator and financial and tax professionals about tax scenarios related to appreciated company securities. The decision to move your retirement nest egg or stay put is an important one. In many cases, you don’t have to act immediately upon switching jobs or retiring. Take the time to assess your options. Ask questions and do your homework to determine what is best for you.
Please reach out to firstname.lastname@example.org for assistance with an Employer Sponsored Plan rollover.
Who is your custodian and what is their purpose?
We use two highly qualified custodians depending on the best way we can serve our clients. Fidelity Investments and Millennium Trust Company.
Fidelity Investments and MTC are custody and clearing engines that are powering the future of digital wealth management. Both of these clearing firms deliver speed, efficiency, and flexibility to firms ranging from innovative start-ups to blue-chip brands that choose to grow with them. They allow registered investment advisors (RIAs), digital advisors, fintech firms, broker-dealers and full-service firms to provide the seamless digital experiences consumers expect and to reach more investors and serve them profitably. They are registered with the SEC, a member of FINRA, and are participants in SIPC. For more information, visit www.fidelity.com or www.apexclearing.com.
We partner with MTC and Fidelity for a variety of reasons such as increasing the security of your investments and SIPC and FDIC insurance. We also believe that outsourcing custodial services better allows us to focus on investment management and asset allocation.
Are my investments insured through SIPC?
Yes, SIPC insurance is provided on all investment accounts. This means your securities are insured up to $500,000 for each client (including $100,000 on claims for cash). SIPC covers against losses stemming from a member broker/dealer’s financial failure.
Get In Touch
For common inquiries please review our FAQ page.
We can also be reached by telephone at (719) 575-9000 or use the contact form below to reach out to a Bauer Wealth associate by email.