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How to Plan and Invest in a Rising Interest Rate Environment

At Centura, we are dedicated to our role as stewards in leading our clients to purposeful financial planning and investing strategies to ensure their success. One of our goals is to help our clients navigate and understand challenging economic changes, such as the current rising interest rate environment. 

Listen to our podcast, Live Life Liberated, for a detailed discussion from Sean Clark and David Cariani as they outline financial planning and investment strategies to help you cope with rising interest rates.

What is a Rising Interest Rate Environment? 

In 1981, interest rates peaked at about 16%. For the next forty years, interest rates trended downward steadily and reached a low during the COVID-19 pandemic at about .05%. Rates currently stand at a little over 2.5%.

The rising interest rates cause the borrowing costs for both individuals and businesses to increase. This rise will result in a slowdown in economic activity because businesses will be less inclined to borrow money unless they are certain they will be able to earn more money than they paid to borrow.

This rise in interest rates will lead to what Sean and David call a “dampening in economic activity, both on a micro and macro level as the cost of capital increases.”

Who Does a Rising Interest Rate Environment Affect?

From a planning perspective, a rising interest rate environment affects anyone who is considering estate planning for estates that are at, near or above the estate tax exemption threshold or those who earn a high income. 

From an investing perspective, the rising interest rates affect investors who own assets and/or traditional fixed-income investments like bonds. 

How Does the Rising Interest Rate Environment Affect Planning?

In financial planning, interest rates are used to determine the economics of different strategies. Rising interest rates will have implications on a wide range of strategies and will cause the hurdle rates on those strategies to increase. 

As a result, financial planners may need to pivot to new solutions that will be better suited for a high-interest rate environment.

How Does the Rising Interest Rate Environment Affect Investments?

The primary risks of a rising interest rate environment include the potential for a loss in principal value as well as a loss of buying power.

For example, in the current inflationary environment, if an investor’s earnings are 2.5% and prices are increasing significantly–approximately 6-7%–the investor will have 4.5% less buying power at the end of the year than they did at the beginning. 

Additionally, short-term bonds are less sensitive to the increased rates of a high-interest rate environment than longer-maturity bonds. Longer-maturity bonds may lock in rising rates for longer-time periods whereas shorter-term bonds require a shorter commitment to the high rates and will allow investors to move on to better opportunities.

Alternative Investments to Consider Over Traditional Fixed Income 

Private Credit

Investors may enter private credit investments because of their floating rate loans, which will limit the interest rate risk associated with other forms of investment, such as traditional fixed-income investments.

Life Insurance

Life insurance can be a powerful vehicle for alternative investments. It provides downside protection, high liquidity, and an attractive upside potential relative to investments with a similar risk profile.

Check out episode 31 of our podcast, Live Life Liberated, to learn more about how life insurance solutions can be used as an alternative to fixed-income investments.  

Structured Notes

Structured notes, written by high credited banks, are customizable and well-suited for a rising interest rate environment and can help investors maintain returns. For more detail, listen in to Episode 35 of Live Life Liberated, “Structured Notes Simplified with Robert Sowinski.”

Real Estate

Real estate can appreciate with inflation on a long-term basis and prove to be a tax-efficient investment. According to Forbes, “real estate investments have the characteristic of performing well in a rising rate environment. In particular, income-generating real property and multifamily have historically…shown a greater ability to grow net income during expansionary periods than securities and other assets.”

Listen in to learn more about the rising interest rate environment and how it affects financial planning and investing, or check out our blog for more information, such as how Centura can help you liberate your wealth. 

Centura Wealth does not make any representations as to the accuracy, timeliness, suitability or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein.  All such information is provided solely for convenience purposes and all users thereof should be guided accordingly.

We are neither your attorneys nor your accountants and no portion of this material should be interpreted by you as legal, accounting, or tax advice.  We recommend that you seek the advice of a qualified attorney and accountant.

For additional information about Centura, please request our disclosure brochure as set forth on Form ADV using the contact information set forth herein, or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov).  Please read the disclosure statement carefully before you engage our firm for advisory services. 

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The Importance of Systems and Processes in Financial Management

Financial management is a process by which an individual or an organization organizes and enhances its financial situation through strategies such as:

  • Investment management
  • Retirement planning
  • Tax planning
  • Estate planning
  • And more

Managing your financial portfolio alone can feel overwhelming. At Centura, we act as a financial partner to our clients,  as we steward them toward the strategies that will work best for their unique situations. With that being said, we often use systems and processes to assist in the financial management process. 

What are Financial Management Systems?

A Financial Management System (FMS) is the software and processes an organization uses to manage income, assets, and expenses. The FMS utilizes several functions to simplify financial management, such as maintaining complete audit trails as well as coordinating income statements, expense statements and balance sheets.

Further, a Personal Management System (PFM) performs similar functions to enhance the financial management of an individual or family, such as reducing accounting errors, maintaining audit trails, balancing checks, and automatically paying bills.

Why are Financial Management Systems Important?

Financial management systems and personal management systems are important because they secure long-term financial organization and efficiency. This organization will allow you to make fully informed decisions about your finances without being hindered by disorganized paperwork, accounting errors, or incomplete or inaccurate records. 

What are Financial Management Processes?

Financial management processes are, in their simplest terms, plans and procedures which will help an individual, family or institution reach their financial goals.  These processes can include a series of steps, such as:

  • Identifying financial goals
  • Gathering financial and personal information
  • Analyzing financial information
  • Developing a customized financial plan to achieve these goals

Read on to learn How Centura Supports Goals-Based Investing. 

Why Are Financial Management Processes Important?

You Gain a Better Understanding of Your Portfolio

Processes can build an accurate and complete account of your existing financial situation through the meticulous collection of detailed financial information, identification of existing strategies, as well as the development of an understanding of your financial goals, values and desired outcomes. 

You are in a Better Position to Plan for the Future

Going through a financial plan can unlock your “what-if” scenarios. Consider how your financial plan will change if:

  • You have to take care of your parents or family members
  • You or a member of your family are injured in an accident
  • You decide to become more philanthropic
  • The value of your stock drops
  • Your interest rates increase significantly
  • You decide to move
  • The college tuition for your child(ren) increases

Financial Management Processes Set You Up for Future Success

Regularly creating a financial plan can help you analyze your baseline, goals, existing strategies, and what-if scenarios. Through this analysis, you find what plan would best fit your needs.

At Centura, our advisors aim to understand not only your financial needs but also life events that may impact your finances. We work to create a relationship with you in order to guide you toward the best financial decisions.

It Helps You Keep a Pulse on Your Financial Performance

Implementing financial systems and processes that work for you is an essential aspect of analyzing your financial performance. Performing these processes on a regular basis allows you to make adjustments when necessary and gain a better understanding of your overall performance.  

These regular adjustments ensure your plan is efficient, evolving with market conditions, and continues to align with your financial goals. 

Interested in using financial processes to enhance your financial management but not sure where to start?

We want to help! Learn more about our 5-Step Liberated Wealth Process and how Centura can help you liberate your wealth. 

Centura Wealth does not make any representations as to the accuracy, timeliness, suitability or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein.  All such information is provided solely for convenience purposes and all users thereof should be guided accordingly.

We are neither your attorneys nor your accountants and no portion of this material should be interpreted by you as legal, accounting, or tax advice.  We recommend that you seek the advice of a qualified attorney and accountant.

For additional information about Centura, please request our disclosure brochure as set forth on Form ADV using the contact information set forth herein, or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov).  Please read the disclosure statement carefully before you engage our firm for advisory services.

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Strategies For Managing a Concentrated Stock Position

At Centura, we are dedicated to providing superior risk-adjusted returns and employing passive, active, and alternative investment strategies in our portfolio designs for our clients. As per our investment philosophy, our goals are to:

  • Build diversified, cost-efficient portfolios 
  • Integrate alternative investments
  • Implement tax mitigation strategies

We believe that to achieve these goals, our role is to act as stewards for our clients through: 

  • Helping them fully understand their investments and portfolios 
  • Outlining their options
  • Providing purposeful strategies to ensure their success. 

One of the tools we use to connect to our clients is our podcast, Live Life Liberated. It provides and breaks down relevant financial information in a detailed discussion geared towards our clients. 

Listen to “What To Do When Your Wealth Is Tied up in a Concentrated Stock Position?” for an informative discussion from Sean Clark and David Cariani on what concentrated stock is and how an investor can mitigate risk in a concentrated stock position.

Understanding Concentrated Stock and the Risks

Concentrated stock can be defined as “the holding of a single stock that represents 10% or more of your overall portfolio.”

Those who may find themselves in a position of high concentrated stock include: 

  • Founders of companies
  • Long-term executives
  • Long-term investors
  • Pre-IPO employees

Concentrated stock can “cut both ways” by bringing great fortune by increasing the total value of a portfolio as well as posing several prominent issues.  These issues include but are not limited to:

  • A lack of diversification
  • Tax issues
  • Downside risk exposure

For example, Yahoo’s stocks peaked in 2000, benefiting investors with a concentrated position, before severely dropping a few years later and tanking the portfolios of investors. 

Mitigating Risk with Downside Protection

While a concentrated stock position can prove to be a high-risk investment, there are strategies investors can employ to minimize this risk.

Options

Options can be used to mitigate downside risk exposure through hedging strategies that increase in value when the investments you are protecting drop. 

Sean and David simplify this practice as “buying insurance to the downside of your position or giving up the upside of this position and [earning] income for doing that.”

Options can include:

  • Listed Options
  • Publicly Traded Options
  • Over-The-Counter Derivative Contracts

Equity Collars

The equity collar method includes “buying an out-of-the-money put option while simultaneously writing an out-of-the-money call option.” This combination provides downside protection for the owner because the put option gives them the right to sell their stock position at a given price in the future while the sale of the call option provides the investor with the income they can use to pay for the purchase of the put option. 

Sean and David describe this flexible strategy as “giving up part of the upside to buy insurance for the downside.” 

Exchange Funds 

Owners can also choose to enter their stock in a non-taxable event, or exchange fund. An exchange fund is an arrangement or partnership between shareholders of different companies in which owners pool their large holdings of a single stock for exposure to a broader index. 

Exchange funds allow the owners to:

  • Diversify their holdings while maintaining their concentrated position if they wish to hold onto their stock
  • Avoid taxes from capital gains

Use Gifting Strategies to Reduce Capital Gains Tax

Gifting to a Charity

An owner that has a highly appreciated stock with unrealized gains may benefit from a charitable gifting strategy. The owner collects credit for the charitable gift while the receiving organization gets the full value of the gift at the time it was given. 

David and Sean break down this strategy in the following scenario:

If an owner has 30% basis and 70% gains and chooses to give away $100,000 of that to a charity, the owner can earn a $100,000 worth of deductions for their contribution without having to realize the $70,000 of gains. The charity can sell this gift in a non-taxable transaction and earn the full $100,000 of value.

Gifting to Family Members

An owner may also choose to give to a family member of a lower tax bracket in order to shift to a lower tax environment. While the family member will not be able to sell the gift tax-free, such as a charity can, they can potentially pay a significantly lower rate in taxes. 

Listen in to learn more about what to do if your wealth is tied up in concentrated stock or check out our blog for more information, such as how Centura can help you liberate your wealth. 

Centura Wealth does not make any representations as to the accuracy, timeliness, suitability or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein.  All such information is provided solely for convenience purposes and all users thereof should be guided accordingly.

We are neither your attorneys nor your accountants and no portion of this material should be interpreted by you as legal, accounting, or tax advice.  We recommend that you seek the advice of a qualified attorney and accountant.

For additional information about Centura, please request our disclosure brochure as set forth on Form ADV using the contact information set forth herein, or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov).  Please read the disclosure statement carefully before you engage our firm for advisory services.

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How Centura Supports Goals-Based Investing

In today’s world, the amount of information an individual has access to is endless. With that being said, it can be challenging to navigate the world of wealth management. With ever-changing market cycles and fluctuations, it’s important to understand your financial goals and how they will guide your portfolio.

How can you sift through all the noise to understand what is best for your financial goals and risk profile? Let’s discuss.

The Role of Emotions in Your Investment Decisions

Understanding the role that emotions play in crafting your wealth profile is one of the first steps in reaching your financial goals. 

In an SEC-sponsored research paper, it’s reported that “investors tend to fall into predictable patterns of destructive behavior. In other words, they make the same mistakes repeatedly. Specifically, many investors damage their portfolios by under diversifying; trading frequently; following the herd; favoring the familiar (domestic stocks, company stock, and glamour stocks); selling winning positions and holding onto losing positions (disposition effect); and succumbing to optimism, short-term thinking, and overconfidence (self-attribution bias).”

Knowing this, how can you understand when you may be falling into these predictable, not so profitable, patterns?

It all begins with an understanding of your goals and your risk profile. These two items are the basis for building out a financial portfolio that performs for your needs. 

Your Advisor’s Role in Achieving Your Financial Goals

Wealth advisors that thoroughly understand your goals and your risk profile can make a huge difference in navigating your wealth. At Centura, our advisors use the Liberated WealthⓇ Process to guide our client relationships. Our goal is to understand your wealth, identify inefficiencies, design new pathways, and liberate your wealth.

So, what does this process look like?

Uncover

As we mentioned above, it all starts with understanding your risk profile and your financial goals. During this step of the process, Uncover, our team collects data, discusses your purpose and path, and discovers all that we need to know about your current wealth profile. This discovery is a crucial step in the process of understanding how our advisors can help you build sustainable wealth.

Unlock

Following the Uncover step, our advisors Unlock the initial plans, scenarios, and strategies to move forward with your portfolio. From the information that is gathered in the Uncover step, our advisors identify your existing strategy and establish a baseline plan. In this stage, your advisor is looking at the “what if” scenarios associated with your portfolio and using them to guide potential new strategies. 

Design

The next step of the Liberated Wealth Process is to actually craft the plan—the Design phase. Your advisor will put together a multi-phase action plan, combined with a wealth scorecard to track your progress.

Liberate

You have now reached the point of implementation. The Liberate step of the process is to implement the plan, coordinate necessary professionals, implement the portfolio, and report on the scorecard.

Steward

Lastly, you get to the Steward step of the process. This step is an ongoing effort of monitoring your plan, reviewing, and recalibrating as needed. The advisor you are working with will help steward you through all of the life events that come your way, whether that is retirement, having a child, starting a business, and the list goes on.

Our goal at Centura Wealth Advisory is to steward our clients toward achieving their financial goals. Want to learn more about why stewardship is at the core of everything we do for our clients? Read on to find out why stewardship is at the core of everything we do.

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Estate Tax: What to Expect from Upcoming Changes

Last year, our team posted an article titled, “A Brief History of the Estate Tax and Potential Implications for the Upcoming Election.” A lot has changed since then, and it’s important to reflect on the predictions and outcomes of the estate tax changes that may occur in the next year.

What is the Current Estate Tax? 

Estate Tax is a tax on your right to transfer property at your death. When our first article was written, there were very few taxpayers that encountered the Estate Tax because the exemption level was at an all-time high. 

Currently, the threshold of estate tax exemption is at $11.7 million at a 40% tax rate. This tax only affects the amount above the $11.7 million thresholds. 

The Tax Foundation provides an example of what the future could look like: 

  • “The value of the original asset is $100 million
  • The value of an asset after $1 million step-up in basis repeal exemption
  • The Capital gains taxed at ordinary rates 39.6% + 3.8% NIIT = 43.4%
  • The capital gains tax owed is $42.96 million.
  • So, then the value of remaining assets in the estate are:
  • Biden’s estate tax exemption ($11.7 million)
  • Added to the taxable estate, and estate tax rate (40%)”

Following this example means that with the value of the original asset being $100 million, the total taxes being paid is $61.10 million, with the effective tax rate being 61.1%. 

The Proposed Gift and Estate Tax Exemptions

The current proposal includes a reduction from the current $11.7 million (inflation-adjusted for 2021) threshold to a $5 million (inflation-adjusted) threshold proposed to start on January 1, 2022. The 40% estate and gift tax rate did not change, and the changes will not be retroactive if this proposal goes through. 

What to do before the proposed tax plan goes into effect

There is a short period of time before any tax changes go into effect. As you begin planning for the next year, think about where you may want to adjust your portfolio to account for these potential changes. 

Because the proposed tax plan is not retroactive, any gifts that end before 2021 will not be subject to the updated tax structure. There are also a few things to consider while you plan.

What is a Grantor Trust?

Grantor Trusts are trusts that separate the Grantor and contributor for both estate tax purposes and income tax purposes. The Grantor would be considered the “owner” of the trust for income tax purposes, transactions between trusts, and they are considered “disregarded.” This means that assets sold or exchanged with the trust will not trigger income tax consequences. 

However, this Grantor Trust must be established prior to the new plan going into place in order to be grandfathered into the current tax plan. 

QRPT, GRATs, and CLATs

The use of life insurance trusts, Grantor Retained Annuity Trusts (GRATs), Qualified Personal Residence Trusts (QPRTs), and Charitable Lead Annuity Trusts (CLATs) may also be affected by this updated tax plan. It’s important to ask your wealth advisor what trust options may be affected by the updated tax plan in 2022, in order to take advantage of the current tax plan while you can. 

Will the estate tax changes affect me?

The estate tax of those worth $11.7 million or more (individually or $23.4M jointly) is a federal tax that will affect those taxpayers. Any updates to the federal estate tax will affect all states. 

However, some states also charge a state estate tax. The Tax Foundation reports that the states that have an estate tax in 2021 include: 

  • Oregon
  • Minnesota
  • Illinois
  • Maryland
  • Vermont
  • Connecticut
  • New York
  • Rhode Island
  • Massachusetts
  • Maine
  • Hawaii
  • Washington, D.C. 

As you look to plan for your family’s future be sure to consider the implications of updates to tax plans. Do you have a strong strategy for your family’s future? Get started on your strategy by reading our article, “Generational Wealth: Transform Your Strategy to Make It Last.“

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Five Questions to Ask Your Financial Planner

If you’re new to financial planning, it can be difficult to know what questions to start with—even if you’re not new to planning, this is true. Here are five questions to ask your financial planner at your next meeting.

What is Your Wealth Advisory’s Philosophy? 

If your personal philosophy aligns with your wealth advisor, chances are it’ll be a successful partnership.

For example, Centura Wealth Advisory believes in Liberating your Wealth® through many different avenues and passions. At the end of the day, finding an advisor that will understand you, and that you trust fully to navigate through the calm and stormy waters is important.

What’s Your Financial Planning Process? 

It’s important to know what the plan is with your investments and wealth. Centura Wealth follows the Liberated Wealth Process®, but our process might look different than another advisory. As an example, our process follows these five steps:

Uncover

Holistic discovery by gathering and understanding data; the client’s purpose, path, and professional roster. 

Unlock

The next phase is to follow a precise design by analyzing and triangulating existing strategies, establishing a baseline plan, considering “what if” scenarios, and identifying a planning scope.

Design

The design element is a core piece of the Liberated Wealth Process®. The design element includes a multi-phase action plan, a wealth scorecard, and charting new pathways. 

Liberate

Understanding purposeful deployment. This includes implementation and advancement with plan implementation, coordinating professionals, portfolio implementation, and scorecard reporting.

Steward

The final step of the Liberated Wealth Process® is to monitor and pivot through purposeful deployment. This includes plan monitoring, timely recalibration, and life events reset. 

This is one detailed explanation of what a process can look like to a client. It’s important to understand what the short and long-term goals are for your wealth management, and understanding your advisor’s process is the first step to completing those goals. 

What is Your Company Culture Like? 

You want to work with people you enjoy and who are going to go the extra mile to manage your wealth. Understanding their company culture can unlock what future meetings and communication will look like.

Centura Wealth likes to highlight creating energy in the workplace, but this is not everyone’s style. Hear from the Centura Wealth team as they provide an inside look at how the company culture looks like, “Seeking the Best: An Inside Look at Centura’s #1 Asset.”  

Roby Kotcamp, Senior Wealth Advisor explains the culture. “One of the things that strikes you about Centura from an associate, employee, partner perspective, is that really there’s an embracing of people where they’re at. Real encouragement for people to be their authentic selves is valued.”

This is one example of a company culture that is founded on the goal of encouraging its’ own team and clients. 

What is Your Client Retention Rate? 

When you’re picking out a restaurant to eat at, where do you look first for input? Past customers write reviews and post photos that you’re likely to sift through before selecting.

Similarly, it can be helpful to ask about their client retention rate to gauge if they have a loyal clientele base.

How Much Will This Cost Me?

It’s important to ask about pricing upfront, so there are no surprise extra fees or costs along the way. Or, does the financial planning firm receive any compensation recommended for investments?

Since your financial planner is working with your money, it should be an initial conversation to avoid any miscommunications.

The terms ‘wealth manager’ and ‘financial advisor’ are often thrown around, but what are their differences? Learn more on our blog post, “Wealth Manager vs. Financial Advisor.” 

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How Intention Influences Financial Planning

Tim Maurer with Forbes said it best, “Personal finance is more personal than it is finance.” 

Financial planning is a big step towards Liberating your Wealth® and will come more naturally if intention plays a role in decision making. 

In the basics of journalism, the questions that are used to determine the intent of a story are: 

  • What?
  • When?
  • Who?
  • Where?
  • Why?
  • How?

These questions can loosely be applied to financial planning, and are a great guideline to follow when navigating through intention. Are those questions following your goals and intention with your financial planning?

For example, if at one point you wanted to highlight philanthropic efforts as an important foundation for your financial plan, that is one intention that can answer the six journalistic questions. 

Liberate your Wealth®

If you’re trying to Liberate your Wealth®, odds are intention is at the forefront of your decision-making. This is great news. If your mind and heart are wanting intentionality to influence your financial planning, then the processes and strategy to do so will become more tangible. 

Family Involvement

One example of intention influencing financial planning is succession planning and inheritance. The intention behind financial planning is to set up your family members for success and provide for future generations. Since there is a passion for protecting your loved ones, the intention fuels the fire of financial planning. 

It can also be broken down into smaller moments within financial planning. For instance, talking to aging family members about wealth and inheritance can be a difficult conversation. Therefore, the intention must be behind the conversation about financial planning. 

Find your Why

Centura Wealth acknowledges that as a wealthy family, you likely carry the burden of your wealth. Because wealth has many complexities and responsibilities, it can be easy to lose intention in the daily tasks of financial planning. 

Finding your why is remembering back to when your career (or need for financial planning) started. 

  • What were your passions and goals for your wealth?
  • Are those still true to your planning efforts now? 

If you feel like you have strayed from your original goals, that’s okay. This is why intention does influence financial planning, and your purpose with your intention can always be found again. 

Choosing a Financial Advisor or Wealth Manager

Are you confused about the difference between a financial advisor and a wealth manager? Learn about the differences here to help you understand who you’re wanting to partner with. The main difference between the two roles is clientele needs. If you want to hire someone who works with intention, then it’s worth taking the time to find an equal match. 

Centura Wealth strives to create energy inside and outside the office. Some of our advisors have embarked on trying new meditation strategies, patterns, and exercises to create energy. Find out how it’s going here, “How Does Centura Wealth Create Energy?” 

employee talking about experience at Centura
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Seeking the Best: An Inside Look at Centura’s #1 Asset

Do you ever wonder what it’s like to be a part of the Centura Wealth team? Watch the video below to learn more about how Centura works to balance personal and professional life for all of our employees.

As an advisory, we believe in encouraging people to be their authentic selves and motivating them to achieve their North Star, or the legacy they want to leave behind. The North Star is a bearing point in someone’s journey. It embodies our client’s and our employee’s goals, values, and purpose for their life and their wealth.

Tell us about your experience at Centura Wealth Advisory

Derek Myron, Managing Director

“We founded the company in 2014, and I’m one of the original founders. I think that being in financial services, there’s a lot of different models for service. And we saw a need to really add value to the folks that we serve.”

Tigran Muradyan, Associate Advisor

“A friend of mine introduced me to Centura Wealth Advisory. It’s interesting working as a financial wholesaler. I have the opportunity to really visit many different financial advisory offices as a consultant. And you get to see their best practices, their approaches, their ideologies, kind of the dos and the don’ts. 

And I could truly say that this is home for me. This is one of the best financial advisory offices in the country that truly takes the care, and a holistic approach to meet high net worth clients’ needs.” 

Zoe Singh, Associate Advisor

“My name is Zoe and I am an associate advisor at Centura. And I started here as an intern back in 2017, and I was a student at SDSU, at the time, and I really enjoyed the internship here. It was my first internship, so you could say this was my first real job. And it was a great experience because I really liked everybody here.”

What’s unique about Centura Wealth Advisory? 

Dana Levin, Client Relationship Manager, Philanthropic Strategies 

“We offer a lot of really unique benefits to working on our team, in terms of comradery, but we also have experts in a variety of different spaces.

We have people who are insurance experts. We have people who are planning experts. I bring the unique value proposition of having somebody specific to philanthropy, which really sets our team apart from your standard RIA. 

And we really pride ourselves in being ahead of the game, ahead of the strategy, so that we can really add the most value for our clients. Being part of that team, and gaining new colleagues with the drive to be better will only enhance our impact.”

Kyle Malmstrom, Managing Director, Co-Chief Investment Officer

“What is different about our firm is we live to the values that we set forth in our company, and we make decisions based on those values. 

One of the things we bring to our clients is excellence. We try to deliver A-plus work, A-plus service, A-plus solutions, and we take a lot of pride in the work that we do, and we spend a lot of time and effort to get it right.”

Who does Centura Wealth Advisory serve?

Matt Griffith, Senior Wealth Advisor 

“We have a variety of clients. I think the type of client that fits well is, some who has experienced a catalyst; there’s something in their life that’s happening, and they’re saying, “Look, we need help figuring out some of this complexity.” And maybe it’s just, “Over time, our income has continued to drift higher. How do we handle and look to mitigate some of the taxes around this higher income?” ”

Who are you looking for to join the team?

Derek Myron, Managing Director

“We’re looking for people who are intellectually curious, who have a thirst for constantly learning new things. In the planning environment, laws constantly change. You have to constantly be talking to centers of influence, who are figuring out new ways to provide value. The types of people that we’re looking for are people that are just not satisfied and are constantly want to learn new things. 

And in every relationship, whether it be a client relationship, a center of influence, or an employee, we’re looking to figure out how we can create exponential value. How do you plus me together add up to be more than two? How does it get to be three, or four, or five?”

What is the company culture like at Centura?

Roby Kotcamp, Senior Wealth Advisor 

“The culture of Centura is really one of the most impressive things that I’ve seen in some time.

One of the things that strikes you about Centura from an associate, employee, partner perspective, is that really there’s an embracing of people where they’re at. Real encouragement for people to be their authentic selves is valued.”

Kyle Malmstrom, Managing Director, Co-Chief Investment Officer

“Here at Centura, we believe everybody has a north star. I have a north star, all of the employees here have a north star, our clients each have their own north stars. Our job, my role, and our firm’s role is to help people achieve their north star. 

And by the north star, I mean, what’s important to you in your life? What is it that you want to accomplish? What is the legacy you want to leave? How do you want people to remember you? And our job is simply to help facilitate that. And oftentimes,  we do that in a financial capacity. 

Our job is similar to a life coach in helping people understand, “Hey, you can do this, you can achieve that. And here’s the best way to do that.” ”

How has the culture impacted you personally?

Libby Dingfield, Vice President, Growth and Development 

“We have an executive coach that the entire company gets to work with. Right now, we’re currently reading a book together, and we meet and discuss how we’re going to implement that into our own lives.  It’s not only how we can better ourselves here at work, but how we can grow as individuals and become truly more well-rounded people? 

Because anytime you’re going to grow professionally, you have to do the work to grow in your personal life as well.”Hear more directly from the team on their goals, and how implementing them has created energy in the workplace and their personal lives on our blog, “How Does Centura Wealth Create Energy?” 

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How to Sustain Wealth in an Ever-Changing Market

Sometimes the emotions of investing can cause quick reactions, following the trends—which isn’t always the most successful.

The Liberated Wealth® Process helps us uncover and solve big and small challenges. Sometimes these are common issues and opportunities for wealthy families, and sometimes they are unique. 

Unique opportunities can include emotional investing that can happen with trends and quick reactions. But there are ways to implement room for risk and create a diverse portfolio that can sustain for generations.    

Understand The Motivation 

The psychology behind quick judgments reveals a lot about human nature. 

Just like there are stages of grief, there are emotional stages of trading and wealth. Committing to a snap decision with a high-risk can bring a roller coaster of emotions: excitement, hope, anxiety, fear, panic, and relief (if all goes well). This is true for financial planning in general.

Investor behavior has been the target of many studies because investment (even when unwanted), is powered by emotions. Ask yourself some of the following questions about your potential investment: 

  • Why am I investing? 
  • Does this align with my long-term goals? 
  • Can I pivot my wealth if this fails? 
  • What do I want in life and does this decision support this?

Setting Goals Instead

Implementing long-term goals is always a good idea, especially when you might have a history of pulling the trigger on quick investments that failed. Dollar-cost averaging and diversification are two approaches that investors can implement to make consistent decisions that are not driven by emotion.

Life is About Balance! 

At the end of the day, finding a balance of overconfidence and underconfidence might find you not in the sweet spot of the exhilaration of investing, but the confidence of having sustainable wealth. 

And better yet, there is a tangible way to measure balance—a diversified portfolio! 

Talk to one of our trusted wealth advisors today at Centura Wealth Advisory to learn more about liberating your wealth!

Centura Wealth does not make any representations as to the accuracy, timeliness, suitability or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein.  All such information is provided solely for convenience purposes and all users thereof should be guided accordingly.

We are neither your attorneys nor your accountants and no portion of this material should be interpreted by you as legal, accounting, or tax advice.  We recommend that you seek the advice of a qualified attorney and accountant.

For additional information about Centura, please request our disclosure brochure as set forth on Form ADV using the contact information set forth herein, or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov).   Please read the disclosure statement carefully before you engage our firm for advisory services.

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Should You Consider Adding Structured Notes to Your Portfolio?

Professionals have compared structured notes to the innovative mindset behind mutual funds—with the main draw being zero interest rates. In the past, structured notes were a high-risk, high-return investment that only very wealthy investors could get involved in. Recently, however, the transition to using more technology for investing has opened the door for more individuals and families to invest using structured notes.

Centura Wealth Advisory works with clients to build a diversified portfolio when financial planning, and considering structured notes is a step toward having a more diverse portfolio. 

Listen to the recent Live Life Liberated podcast, “Structured Notes Simplified with Robert Sowinski,” for a professional perspective. 

What Are Structured Notes?

There are different types of structured notes that can be helpful to understand before investing.

 There are a few categories to know for understanding structural notes: 

  • Maturity
  • Underlying Asset
  • Protection Amount
  • Return/Payoff

Structured notes can be compared to a “hybrid security.”  They combine the features of various financial products into one. Structured notes combine bonds and additional investments to offer the features of both debt assets and investment assets.

Structured notes aren’t direct investments, but derivatives. They track the value of another product. The amount on a structured note will depend on the issuer repaying the premium and underlying bond. 

How do they work? 

The basic ways structured notes can be ‘structured’ are the following:

  • Provide downside market protection
  • Provide upside (or enhanced) participation
  • Provide regular payments/income in the form of coupons if certain market conditions are met
  • Provide a payout/return at maturity if certain market conditions are met

The U.S. Securities and Exchange Commission (SEC) provides more detailed information on structured notes: “Structured notes have a fixed majority and include two components—a bond component and an embedded derivative.”

Financial institutions, as a result, are generally responsible for designing and issuing structured notes, so then the Broker/Dealer can sell them to individual investors.

Potential Risks

It’s important to understand that structured investments will not be a perfect match for all investors based on their risk profile and current portfolio. They are risky as your investments can sit idly without growth

The SEC lists the risks that come with investing in structured notes: 

  • Market Risk
  • Insurance Price and Note Value
  • Liquidity 
  • Payoff Structure (which is affected by participation rates, capped maximum returns, and knock-in feature)
  • Credit Risk
  • Call Risk
  • Tax Considerations

Talk to us! 

If you’re interested in structured notes and diversifying your portfolio, speak to one of our trusted financial advisors today.

Ready to get started? Let's talk.

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Our planning fee pricing for income tax planning services is determined using a standardized matrix based on Net Worth, Income, and Meeting Frequency. This base planning fee price may be adjusted to account for increased complexity or the occurrence of a future income event. To project tax savings, we analyze prior year tax returns to determine their past tax liability to project out the following year’s tax liability. Based on facts collected and confirmed by the client, we then identify and evaluate applicable tax strategies and the estimated annual tax savings they would produce if implemented. The estimated annual tax savings are then divided by the annual engagement price proposed to/agreed to by the client to determine the multiple on estimated annual tax savings generated as it relates to the planning fees paid. Please note, these initial projections are preliminary and based on our current understanding of the client’s situation. Outcomes may vary based on client’s decisions or chosen course of action regarding the implementation of recommended strategies, their specific goals, and risk tolerance.

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