The deadline for establishing a Traditional IRA or a Roth IRA in order to make a 2022 contribution is Tuesday, April 18, 2023. All applications must be signed and submitted (including e-signature applications) to Advisor Services in good order by Tuesday, April 18, 2023.

The contribution funding deadline for Traditional IRA and Roth IRA Accounts is Tuesday, April 18, 2023, regardless of whether the client has filed an extension with the Internal Revenue Service (IRS) to file their tax return.
It is very important that IRA contribution checks and deposit manifest clearly indicate the contribution year as 2022 or 2023. Per IRS regulations, if a tax year is not indicated, the contribution will be coded and processed as a current year contribution. In order to adjust 2023 contributions to 2022, a letter of instruction is required from the client no later than Tuesday, April 18, 2023.

“RMD Time”—Required Minimum Distributions (RMD)

Of course, clients’ The Wheeler Group LLC can reach out to us with any specific RMD questions. Since it is highly dependent on your unique situation (i.e. age, holdings, etc.) you need to reach out to your personal financial advisor. Here are some general RMD points of discussion:

  • For clients who attained the age of 72 in 2022 and are taking advantage of the April 1st, 2023, extension please see below to determine applicable deadline regarding Required Minimum Distribution (RMD).  Note:  Any requests to sell mutual funds, stocks, or bonds in order to make an RMD must be received by Advisor Services prior to the dates noted below to allow for trade settlement and processing.
Year client reached the age of 72RMD MUST be made by:Investments must be sold by:
2022Friday, March 31, 2023Wednesday March 29, 2023
  • Clients are subject to a 50% federal excise tax on any percentage of an RMD not taken by the required deadline.

As fiduciaries, we are here to help our clients. However, when it comes to tax advice and preparation, you need to contact your CPA, or accountantcy provider. At The Wheeler Group LLC, we DO NOT PROVIDE TAX ADVICE. We are trusted financial advisors and as such, we are here as a financial resource to provide valuable information and keep you on track. At the same time, never hesitate to reach out and contact us. Here’s to a healthy, prosperous 2023 to you all. Aloha!

A New Word for the New Year

Recently, I had a client ask me, “hey, Garrett, are you a fiduciary?” Yes, I am, I told her. And thanks for asking, I replied. I worked hard to earn that right to answer in the affirmative. The fact is that every client should ask their potential advisor the very same question. Yes, it is an odd word, but arguably the most important word in financial planning and wealth management. Unfortunately, few people are familiar with what it truly means. It originates from the Latin word, fidere (“to trust”). But it is so much more than just a word. As fiduciary financial advisors (vs. commission-based agents), we are legally obligated to act in your best interest when helping you make decisions about your money. This is a huge differentiator.

One would think that all financial advisors would be obligated to do this, act in the best interests of their clients. However, less than 15% of financial advisors are fiduciaries, yet the majority of consumers think that EVERY financial advisor is a fiduciary. To be clear, only financial advisors who are fiduciaries are required to act in the best interests of their clients. Scary, right? For this reason, I want to share three reasons why you need to have a fiduciary financial advisor in your corner—no matter your stage in life.

  1. Objectivity: When making choices about your retirement savings, assets, investments, or anything else, a fiduciary will look objectively at your financial picture.
  2. Disclosure of Conflicts of Interest: A conflict of interest is when someone is in a position to make a decision based on an ulterior motive. Fiduciaries are required to disclose and avoid conflicts of interest.
  3. Scope of Financial Concerns: As fiduciaries, we are here for you when it comes to any and all questions you may have about your money. Whether it’s a one-and-done meeting or a nurturing a long-term relationship, you can come to us.

I hope these three considerations have armed you with the knowledge to vet potential financial advisors. If you are looking for a fiduciary, or if your current advisor only provides a suitability standard of care, we would love to connect with you. Please reach out to us for an introductory conversation. And, as always, our initial advisory session is without cost or obligation to you. We’re on your side. Our goal is simple, to focus on what best meets your objectives. 

Together, let’s make 2023 a year to remember.

Ideas without action are worthless. —Harvey Mackay

Hau ‘oli Makahiki Hou! Happy New Year!

Legal disclaimer

The content on this page provides general consumer information. It is not legal advice or regulatory guidance. The TWG updates this information periodically. This information may include links or references to third-party resources or content. We do not endorse the third-party or guarantee the accuracy of this third-party information. There may be other resources that also serve your needs. Aloha!

Retiree Regrets and Mistakes to Learn From and Avoid

“It’s good to learn from your mistakes. It is better to learn from other people’s mistakes.” — Warren Buffett

I recently watched a CBS Morning news segment entitled, ‘What would you tell your younger self?’ Great segway into planning for a long retirement, God willing, right? Stats say that many retirees are not happy with the way they prepared for retirement. The way I see it, today’s workers can learn from these regrets and avoid them by creating a retirement plan and sticking to it. Yep, I know, easier said than done.

Planning for retirement can seem confusing and complicated, so it’s not surprising that two-thirds of retirees say they have regrets about how they prepared for it, according to a recent survey. More worrisome is the fact that many of today’s workers continue to do the same things the retirees wish they had not. So, I suggest to younger people that they learn what can go wrong in retirement NOW, to avoid it later in life. Same old story: If I only knew what I know now, right? Anyway. Life is unpredictable. Help yourself. Do what you can to plan for a long life.

After 22 years of helping people with planning for a rewarding retirement, I hear a lot of the same things repeated from retirees about what they would have done differently. Many preretirees ask themselves questions like, ‘Have I saved enough money to retire?,’ or ‘Will I be able to maintain the standard of living I’ve grown accustomed to?’. Financial planners cite three retirement phases: Go-Go, Slow-Go and No-Go. In the Go-Go years, typically 65 to 75, healthy young retirees spend a lot on travel, hobbies, and scratching life-long dreams off their bucket list. Retirees are less active between 76 and 85 in the Slow-Go years and tend to spend their No-Go years of 86 to 100 quietly. More than more than half (55 percent) of retirees said they have retirement planning regrets. The Washington Post ran an article entitled, “The top regrets of retirees” (https://www.washingtonpost.com/business/2018/12/10/top-regrets-retirees/). Citing a Global Atlantic survey (2018 survey of 4,200 pre-retirees and retirees in the United States), here are three (3) regrets of retirees:

1.               Being too reliant on Social Security.

2.               They did not pay down debt before retiring.

3.               They didn’t save enough.

See the article for more details. One point it made was that thirty-nine percent (39%) of retirees reported spending more than they expected. And consistent universally in the financial planning world, the article reiterated, “The risk of running out of money is real.” When you get right down it, why waste your energy mourning the past? Move on. You can’t change the past. And if you do have regrets, well, avoid spending too much time in what my mother (author, Dr. Linda Wheeler, https://www.drlindawheeler.com/) calls, ‘the tunnel of suffering.’ She tells audiences, ‘Don’t grow roots there…work to get out!’ So, the point is, adapt and take a page from the late poet and author Maya Angelou’s playbook. Angelou said, “Do the best you can until you know better. Then when you know better, do better.” What else is there, right?

Another idea is to focus on what really matters. At 88, Clint Eastwood was asked, “How do you remain so young and active?” The now 92 y.o. Clint replied, “I don’t let the old man in.” Yep, tough mindset for sure. Some fight the frailty aspect of aging. Others just give in, saying c’est la vie. All I know is that life is unpredictable. In my practice, we discuss risks in retirement. Longevity happens to be one of them. Optimists will comment, what is wrong with living a long life? Nada. It is about addressing the risks if you choose. My partners at St. Francis Healthcare are sponsoring a FREE virtual LTCi educ session I am conducting tomorrow evening via Zoom. Join us. Here is the link to register: https://www.stfrancishawaii.org/s/courses

Heard of FTX? Celebs Sued in $1 Billion Ponzi Scheme

By now you have heard about the implosion of FTX. Among others, the Brady’s, Shaquille O’Neal, Steph Curry, David Ortiz, Shohei Ohtani and Naomi Osaka. Even “Mr. Wonderful”, Kevin O’Leary is apparently named in the lawsuit. The suit said FTX needed these big names, “to continue funneling investors into the FTX Ponzi scheme…” It also said their “misrepresentations and omissions” make them liable after FTX’s downfall.

So, what does FTX do? We all know the term cryptocurrency. It is ubiquitous. Let’s face it, “Crypto” is part of our vernacular today, but what is it? That’s the problem, we don’t know what it is. It’s crazy. I learned that there are over 17,000 different types of cryptocurrencies. Yup, 17k. Get this, it’s become so acceptable as ‘currency’ today that some professional stud athletes are requesting that their salaries be paid in Bitcoin. Scary, but true. We all have a choice. It’s your decision.

Many equate FTX with Bitcoin, as being one in the same. Two of a kind. They’re two very different things. With equities, that’s like saying Apple stock is the same as Revlon stock. Very different, one is very profitable (and some say, overvalued), whereas the other is bankrupt. The crypto understanding gap is huge; we need accurate information. Understanding what it is, and what it is not crucial.

A WSJ article (11/17/22) spells it out. Entitled, “New CEO Says FTX Suffered ‘Complete Failure of Corporate Controls”.

Closer to home, here’s a question I get from well-intentioned clients: ‘Hey G, should crypto be a part of my investment portfolio?’ My boilerplate response, ‘it depends’. My response is often twofold: Number one, do your due diligence (your homework) based on your risk tolerance (crypto is not for the frail at heart). Secondly, why do you have an interest in crypto? Of course, like all investing, most blurt out: ‘to make money’. But is it worth the immense risk? To be sure, there’s a lot of equities and securities out there that are equally risk oriented. But why crypto? Because it’s exciting and relatively new? I get it. But please do your research.

Despite the long-term unknown, I actually believe that cryptocurrencies will be around in the future. At least some iteration of it. In what form exactly? Who knows? One thing I do know is it remains an emerging asset class. And if you’re going to invest serious money (‘serious’ is relative to you), you need to triple-down on your research. Go deep and study. It’s your money. I’ve said it repeatedly vis-à-vis investments—caveat emptor (buyer beware). We live in the age of scams and scammers. Protect yourself or just don’t play the game. It is zero-sum. It’s just too easy to fall prey to these rip-off artists with their slick, manipulative marketing. Research. Take your time. And I implore you, do not invest your life savings into crypto. Unless, of course, you’re willing to lose it all. Not unlike Vegas in that way.

Compliance Statement

In full transparency, I have a small investment in Bitcoin through Gemini. However, I do not put myself out as an expert in Cryptocurrency, nor do I have specialized knowledge in blockchain technology. I am a licensed fiduciary; fee-based financial advisor (series 7, 65, 63). This is not an offer to sell or buy any security or interest. The content of this article is strictly for informational purposes only. It is not intended as professional or expert advice in any way. Seek advice from your legal counsel, and/or financial advisor.

Does it Payoff to Have a Financial Advisor?

Valid question. Here’s a Vanguard study with the facts. Again, as I’ve always said, it depends. Your unique situation drives everything.

We’re in the fourth quarter of 2022, and I feel it’s more important now than ever to review your overall financial plan with a fiduciary level advisor. Here’s one reason from Bank of America’s investment division. BofA says, “economic growth won’t approach ‘normal’ until as late as 2025. So what? Well, this could mean your current financial plan might leave you without enough money to last your retirement. And with longevity being a huge risk in retirement, it matters. In addition, ’emotionally-charged decisions to sell off large quantities of stocks or other investments now lock in your losses, removing any chance for future growth. Research suggests people who work with a financial advisor feel more at ease about their finances and could end up with about 15% more money to spend in retirement.1

Consider this example: A recent Vanguard study found that, on average, a hypothetical $500K investment would grow to over $3.4 million under the care of an advisor over 25 years, whereas the expected value from self-management would be $1.69 million, or 50% less. In other words, an advisor-managed portfolio would average 8% annualized growth over a 25-year period, compared to 5% from a self-managed portfolio.2

Assuming 5% annualized growth of $500k portfolio vs 8% annualized growth of advisor managed portfolio over 25 years. The hypothetical study discussed above assumes a 5% net return and a 3% net annual value add for professional financial advice to performance based on the Vanguard Whitepaper “Putting a Value on your Value, Quantifying Vanguard Advisor’s Alpha”. Please carefully review the methodologies employed in the Vanguard Whitepaper. The value of professional investment advice is only an illustrative estimate and varies with each unique client’s individual circumstances and portfolio composition. Carefully consider your investment objectives, risk factors, and perform your own due diligence before choosing an investment adviser.

1. Journal of Retirement Study Winter (2020). The projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of your future results. Please follow the link to see the methodologies employed in the Journal of Retirement study.

2. Vanguard (July 2022), Putting a Value on Your Value. he projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of your future results. Please follow the link to see the methodologies employed in the Vanguard whitepaper.

This is not an offer to buy or sell any security or interest. All investing involves risk, including loss of principal. There are no guarantees that working with an adviser will yield positive returns. The existence of a fiduciary duty does not prevent the rise of potential conflicts of interest. The Wheeler Group LLC is a licensed Investment Advisor Representative and fiduciary-level advisor.

Long-Term Care Insurance is NOT for Everyone

November 2022 is Long-Term Care (LTC) awareness month, so let’s be real. When it comes to LTC insurance, ‘caveat emptor’–“let the buyer beware.” My position is that traditional long-term care is NOT for everyone. Don’t be sold a bill of goods. Do your due diligence (your homework). You may not be a candidate for this type of coverage.

The good news is that people are living longer. The bad news is that the longer we live, there is a greater risk that we will need long-term care services, which can be costly and financially devastating, especially here in the islands. A colleague of mine, Mike Pinkans, who is a well-respected CFA & CFP, shared a recent study suggesting that only 16% of Americans have financially prepared for a possible LTC need while statistics suggest that 70% of those age 65 and older will need it. That’s a cavernous divide. Why? People understand the need, they just haven’t done anything about it.

Let’s be clear: Long-term care doesn’t just affect an individual; it impacts their entire ohana. Family members provide most of the informal care, which requires time, willingness and sacrifice. I have a friend going through this situation right now. They’ve divided up the days between siblings to care for their mom. And their mom knows the all-too-real physical and emotional toll it takes on the family caregiver. It can be very stressful and taxing. Mom previously took care of their dad, who has since passed. With Long-term care insurance in place, it puts people in control, preserves their dignity and independence, protects assets and provides choice of care settings. Having a long-term care plan can save your relationships too. Nothing is more important, to me.

What place comes to mind when you hear the words “Long Term Care?” If you’re like me, ‘Nursing Home’. But let me ask, have you ever known anyone who needed assistance or help to get through the day? They were probably at home, right? So why don’t more of us have LTCi? It’s the old, ‘it won’t happen to me’ syndrome. But with glaring statistics suggesting that 70% of those age 65 and older will need it, it’s a weak argument against the need to carry such coverage. But again, an expert, fiduciary-level analysis needs to take place. With no assets comes no need for protection. With capital assets comes the real need to protect them. But yes, it is complicated because it involves emotion; revolving around dignity, control and independence. So it requires expert advice; not product peddlers.

My connection to disability and long-term care (LTC) insurance isn’t strictly a professional one. It’s a personal one too. For this reason, I believe every American deserves that some level of financial protection.

Do you actually need Long-Term Care Insurance(LTCi)? The chances of needing long-term care are 7 out of 10. Parallel, did you know that every 3 seconds someone in the US develops dementia? I did not. One thing I do know is that disabilities primarily occur due to illness, not accidents. The chances are only 7 out of 100 that you will have an auto accident sometime in your life. It is a further anomaly to have a life changing auto accident; but it happened to me in 2005(spinal cord injury). What kind of financial lifestyle would you be returning to after you recovered and then you lived another 50+ years? Unfortunately, for many, it means spending down a significant portion of your savings and assets.

So, the bottom-line question for you remains, if it does happen, will you be able to afford to pay the bills yourself? We know this: If you become disabled, so that long-term care is required, it is killer expensive. No doubt about it. And it’s not getting any cheaper anytime soon—especially in Hawaii, where a severe shortage of nursing homes is driving prices higher each and every year. Again, we live in paradise and the ‘paradise tax’ is no joke. So, ask yourself: if long-term care is so expensive, how long will my assets and investments last if I became disabled? That tells you whether you need LTCi.

As a financial advisor, I’m sharing with clients that National Long Term Care Awareness Month is a prompt to have conversations, learn the facts and analyze the options, and put something officially in place before a need arises.

Today, there are tax-advantaged ‘hybrid’ options to protect yourself and your assets. Learn about Extended Care and Long-Term Care Planning and discover new ways to protect yourself and your assets. Make it a goal to be financially and emotionally prepared to manage longevity for you and your loved ones.

Our goal is to make it as easy as possible to secure LTC coverage with the most consumer-friendly hybrid programs in the marketplace with features such as, no intrusive underwriting (no paramed exams, etc.). We deal with only the very best companies out there, all with an ‘A’ (Excellent) rating with A.M.  Speak to one of our specialists or attend one of our free webinars hosted by St. Francis Healthcare Systems of Hawaii. Find out if long-term care insurance fits into your plans. Call us today at (808)216-4147 or visit https://ltcconsumer.com/awareness-month-could-save-your-retirement/

The Roth 401(k) and Roth IRA: Pay Now or Pay Later

In 2001, when I joined this industry, Roth 401(k)’s just came into existence. Unlike a traditional 401(k), contributions to a Roth 401(k) aren’t tax-deductible, but the upside kicker is this: withdrawals are tax-free in retirement. A Roth 401(k) offer an after-tax contribution option with tax-free withdrawals provided these withdrawals are ‘qualified distributions’ made after a 5-taxable-year period of participation. Got that? It’s “a 5-taxable-year period”. This is a critical number. Also, if qualified distributions are either made on, or after the date participants attain age 59½, made after death, or attributable to a participant being disabled, it is entirely tax-free. (As a planning side note: If you’re a business owner or plan sponsor, a Roth 401k option opens up another cool feature that allows participants to take advantage of another—often overlooked and underutilized—tax strategy, that is, the “in-plan” Roth Conversion. (Ask your financial advisor about this unique strategy if it make sense for your entity).

By the way, did you hear? We got good news from the IRS. Well, a relatively positive outcome, anyway. For 2023 the 401(k) limit has increased to $22,500 (plus an add’l $7,500 ‘catch-up’ provision for those of us age 50+). In lockstep, the IRA limit has now risen to $6,500 (+$1k ‘catch-up’ rider). Changes mean that retirement savers, 50+ years old can now sock away a combined $30k/year in their 401(k)’s. Yep, $30,000! If offered at their workplace (in fact, an estimated 70% of 401(k)s now have a Roth feature), I think younger workers (<50) should seriously consider a Roth 401(k) to help minimize taxes in the long run. As you may know, there are no income limits for a traditional IRA, but how much you make has a direct bearing on how much you can contribute to a Roth IRA. However, Roth 401k’s are different. High earners can actually take advantage of the Roth option in their employer’s retirement plan, if they choose. The fact is, there is no income limit for Roth 401(k) contributions. At the same time, it is worth noting that there’s no income limit on deducting contributions to a traditional 401(k) account, either. So, when you get down to it, high income earners may be better off contributing to the traditional 401(k) and taking the tax deduction now at their high marginal tax rate than saving in a Roth account. It comes back to the old, “Now or later” issue, that is the question. No one can foretell the future. So you’ll need to decide. Of course, let’s not forget about Roth IRA’s. They have a place to play in the retirement planning world too.

If you want to take a deeper dive into Roth IRAs, or review your existing 401(k) plans and their benefits, please reach out to us. Because whether you’re feeling bearish or bullish, enlisting the guidance of a licensed “fiduciary” level financial advisor can help you make sense of it all. When you get down to it, it is more than retirement planning. You need a trustworthy, tax advisor. Because as they say, the day will come when Uncle Sam (aka the IRS) wants his pound of flesh. Just remember, you have (or at least, had) a choice in the matter. So, pay now or pay later. That’s for you to decide. Plan well, g.

Abundance: Mango and Ahi

You must take personal responsibility. You cannot change the circumstances, the seasons, or the wind, but you can change yourself. -JIM ROHN

As a financial advisor, we take our cues from our valued clients and the stock market. In that order. Right now, it is financial chaos, a tumultuous time for the macro, world economy. But personal planning still needs to take place; even more so now than ever. Earlier today, I just helped a 57-year-old female obtain long term care insurance. That’s smart protection, if you can qualify #1 and afford it #2. After that client, I rebalanced one of my client’s portfolios. Like many other investors, he is deeply concerned. Fortunately, he, unlike others, does not need his money right now. It’s a tough time if that’s the bucket you need to pull income from. Put it this way, ‘sequence of returns risk‘ is alive and well; it is all too real. Anyway, on to something more fun. Just like the market, deep sea fishing is volatile and unpredictable. Anytime you can get a leg up and capitalize on worthy intel, take it. Some information is more quantifiable than others.

One bit of information I’ve heard over the years from fellow anglers is that bumper crop years of mango here in the islands will equate to one huge thing for us offshore fisherman, and that is the venerable ahi. The prized fish; at least in my book. Aku, ono, mahi, etc. are all good too. Ask my boat neighbor and friend, Won, his thoughts and this expert bottom fisherman will inevitably say, a 30lb. onaga is mo’ betta (trumps it). That’s the beauty of fishing. You have choices to make. Lots of them. Again, just like life. It’s about making good choices that work for you. It’s your boat, you decide. I like that idea. And like life, sometimes you catch, sometimes bolohead (you don’t). I heard one old timer say that fishing is ’40 per cent luck, 30 per cent skill and 30 per cent hustle’. And then there is passion. The love of it. Today is Monday and already I can’t wait until Saturday, but I will. At least we’re fueled up and ready to take the Manu-o-Ku approx. 25+ miles offshore to the FADS (buoys) in search of bird piles and the big buggas that lurk beneath. A few weeks ago, my 1st mate (older brother, Milt) brought ono, ripe mangoes from his trees up on Kaleipohaku (St. Louis Heights) to share with our family. These were epic, sweet mango. It has been years since mango (aka, ‘the king of fruit’) has been this plentiful. Makes it that much more appreciated; big smiles for sure. In Civil Beat, I read Denby Fawcett’s article, “Is There Such A Thing As Too Many Mangoes?” Nope. No way. Freeze it if you must; we never do, we just eat ’em! But if I had enough to freeze, I would too (i.e., who doesn’t like mango bread, smoothies, whatever).

Then I received an e-newsletter from Jim Hori, of Lokahi Fishing. He reinforced my ideas of fishing and mango. He recently put out a ‘Lokahi Summer Forecast’. He states, “The summer fishing is heating up with the West Side Ahi tournament this past weekend really kicking off the Ahi hunt for the islands. With the heavy rains this past fall, and the huge mango bloom not like we have seen in several years, local knowledge indicates this could be an excellent summer season of Ahi and shoreline fishing including numerous schools of Halalu, early runs of Oama, abundance of Ika and balls of Nehu from shoreline to offshore.. The marlin have been biting off Kona and we should expect to see quantity and quality fish across the islands over the coming months.” I’m hoping and praying Jim’s prediction is on the money. I want it to be. The good news is that maybe it has just begun. The fact is Jim’s forecast has bore itself out with an actual monster catch by my friend, Butch Farm (Mary K). Butch and his crew recently landed an 1,168lb blue marlin off Oahu. Yep, a grander plus. And it couldn’t happen to a nicer guy; Butch (owner of Hobietat in Palolo Valley) helped me outfit the Manu-o-Ku, taught me to drive the boat and sold me quality island made rods equipped with Tiagra 80’s. And over the past few years, Butch–a former commercial fisherman–has given me numerous newbie pointers. Very cool guy. Here’s to mango, ahi and good friends. Remember this: You’ll never know, unless you go…hanapaa!

Sharks Still Circling the Military Bases: Life Insurance Sold as “Investments”

Back in 2001, I was naive. I joined a financial services group that focused on selling cash value life insurance policies to U.S. Service members. So this article come from personal experience, not textbooks. But I learned and changed for the better. After coming to the realization that several other companies had a handful of bad actors (agents) who masqueraded as, “Financial Planners” (who in retrospect were only life insurance peddlers), I couldn’t stand it any longer. I pivoted to the civilian world where I became a Investment Advisor (securities licensed series 65) and I’ve been ever since. I bailed because these bad actors were often misleading the very people who were fighting for our continued freedom. Sickening. And by 2003, my eyes were wide open on their indiscretions, and I needed to pivot away from what was a negative scene. Then came validating confirmation–with articles and lawsuits–of my beliefs and it was refreshing that others’ saw it too. Here’s a scathing article one from acclaimed Kiplinger: https://www.kiplinger.com/article/investing/t048-c000-s002-taking-aim-at-military-scams.html

In fact, in 2006 right here in Hawaii, we have scary living proof. The Securities and Exchange Commission (SEC) filed a lawsuit against a group who had their business sales offices at the ‘back gate’ of USMC K-Bay. Back gate operators are on every single military installation from Kaneohe to Pensacola, Florida. According to the article, the American Amicable Life Insurance Co. was found misleading buyers of its Horizon Life insurance product. By the way, the managers involved in this despicable actions are still hustling business here in Hawaii! The Honolulu Advertiser article goes on to say that the lawsuit alleges that, “American Amicable agents used deceptive sales pitches and mislead servicemembers into buying policies they didn’t need”. How did this come about? Some young, smart soldier reported these crooks. My piece of advice: Google advisors, companies and agents; you’ll be surprised with what you find. If it’s my money, I’d take those extra steps and protect myself. You should too! Here’s what just five minutes browsing got me in the way of facts. Read the case file and do you due diligence: https://www.casemine.com/judgement/us/59146dadadd7b04934327dd8

The most egregious element is how easy it is for responsible servicemembers to believe the agent selling these sometimes-fraudulent policies. Why? Because the agent selling the insurance policy to these young soldiers is also a higher-ranking VETERAN! The facts prove this to be true. https://www.military.com/money/insurance/supplemental-life-insurance/fraudulent-life-insurance-policies.html

A study by the National Association of Insurance Commissioners (NAIC) found that many oftentimes younger, gullible junior enlisted servicemembers would buy life insurance policies they didn’t need from an insurance agent that was a veteran, because they saw them as an authority figure. Makes sense. Like shooting fish in a barrel. But these are not fish; they are hard-fighting service members. Damn, right?!

There are good advisors out there, just use your common sense. There is no rush; do your due diligence! https://www.militaryonesource.mil/military-life-cycle/friends-extended-family/learn-the-warning-signs-of-military-scams/

And don’t get me wrong. I have colleagues who are properly licensed “Fiduciaries”, and any service member would be lucky to get their help. It’s the high-pressure, loud mouths who use their previous active duty ranking to deceive our troops. Caution is key because scams never stop; just new players come on post. As this Elgin Air Force Base article (“Navigating financial mind fields”) points out, “Scams do not die, they hibernate. The best way to protect one’s self when they arise again is to know what they were like before they went into hibernation.” Well put. Read about it for yourself: https://www.eglin.af.mil/News/Commentaries/Display/Article/902949/navigating-financial-mind-fields/

Buyer beware! Fast forward 20+ years and to my dismay, it is still happening on Hawaii soil in a huge way. I have learned the Schofield Barracks has a weekly indoctrination, a “Newcomers Event” organized by Army MWR here on Oahu, Hawaii and there are 2-3 insurance companies—some very reputable—showing up weekly to have soldiers complete lead forms so they can ‘help them’. Too bad the good agents have been bundled in with the bad. But think about it, how do you distinguish the qualified trusted advisor (hopefully a ‘Fiduciary’) from the shark (i.e. a ruthless, high-pressure tactics agent)? My advice: Don’t ever feel pressured to sign a darn thing. Trust your sixth sense. As Pres. Reagan put it, “Trust but verify”. Here’s a valuable resource, entitled ‘Troops Against Predatory Scams’: https://www.ilsos.gov/publications/pdf_publications/sec336.pdf

Here are some ‘Red Flags’ to be wary of; straight from this insurance industry watchdog, check it out: https://www.naic.org/documents/topics_military_life_report_to_congress.pdf

  • Agents pushing insurance products as so-called, ‘investments’ or ‘savings’ products. Insurance is not an investment no matter what they tell you!
  • Avoid allotments ‘handled’ for you; here’s another casefile on improper allotments: https://www.govinfo.gov/content/pkg/USCOURTS-paed-2_03-cv-04327/pdf/USCOURTS-paed-2_03-cv-04327-0.pdf
  • Non-military (former NCO’s and veterans) posing as financial advisors on veterans’ benefits.
  • Ex-military personnel acting as investment advisors in a group or classroom.
  • High pressure tactics to rush you to complete the purchase of a life insurance policy.
  • Finally, do not buy life insurance unless you intend to stick with your plan. It may be very costly if you quit during the early years of the policy. If you will not hold it for 15-20 years, you’ll be on the losing end!

Of course, the powers to be could help curb this wrath, but MWR needs the funds to give our troops fun stuff and take care of the ‘liberty’ time. This all takes money. For MWR, it must be hard to walk away from sponsorship dollars’, is what one local Hawaii MWR representative told me. Way back in 2008, this report (see link) was published. For a time being, it seems to have made an impact. Now I’m not so sure. Are we reverting backward? Are our defenses down? Again, it’s the top brass that needs to protect their service members. Without a doubt, I know they care about their hard-fighting teams and want to protect them. The question is, are they? 21st century systems are available; most are not high-tech, it’s common sense. On base marketing events needs to be tightened up. As a comparison, when we conduct educational events in the civilian world (i.e. most recently for doctors at a hospital) the administration of the healthcare facility dictates that webinar participants need to request the advisors information. Not the other way around, as is the case with the miltary at MWR events. I know this because I see it happening right now here in Hawaii. In high-level ‘education-oriented’ circles, the reputable organizations restrict the information given to advisors and the make the rules of engagement super clear (i.e. we as advisors don’t get the digits and email addresses). If the doc’s want to see us for planning, they reach out to us. We cannot chase them down, as is the case with military base events, in my experience. We respect doctors enough to treat them this way; why not soldiers, sailors and the Marines who actually fight for the freedom doctors have to do their great work? Don’t ask me; ask the top dogs in the military. https://media.defense.gov/2008/Apr/07/2001713266/-1/-1/1/08-075.pdf

“The Services are providing some personal financial training, but could improve
their consumer awareness training to alert Service members of unscrupulous
practices and inappropriate products before Service members arrive at their first
duty station.

Five Army, Air Force, and Marine Corps bases we visited provide 2 to 16 hours
of personal financial education from the time recruits begin training until they are
assigned to their first duty station. This personal financial education covers a
basic understanding of pay and entitlements, banking and allotments, and
checkbook management. However, the bases did not provide adequate consumer
awareness training to military Service members prior to arriving at the first duty
station on sales practices that have been declared false, misleading, deceptive, or
unfair for life insurance products considered inappropriate for most junior enlisted
Service members.”

In conclusion, the onus is on YOU. You need to learn about the various kinds of life insurance policies that are out there and pick the one that is best for you. My advice is to contact your base installation’s Financial Readiness Office. At Schofield Barracks, Hawaii, that would be the Army Community Services that has seen this type of shark-infested waters for much longer than many of you have been alive (it’s been going on at least since at least the 1980’s). Yup, this is nothing new. Protect yourself and your financial future. Educate yourself. Compound interest (‘Rule of 72’) takes time; but it also involves being in the right “investment” and not being misdirected into thinking cash value life insurance can ever replace a true equity investment in the long term. If what you need, and desire is an investment. If, on the other hand, life insurance is what you need, than consider your many options. Always remember, ‘the best life insurance program is the one that is in-force when you die’. So if you can’t afford to keep paying on an expensive permanent policy (can be $1000/mo.+), then you may need to reassess it in a serious way. Again, do your homework; due diligence, my friend.

And as they say, Caveat emptor, which means “let the buyer beware.”  That’s you. Be careful. I only bring it up because I care. Before I leave you, I want you to know that I have ‘no horse in the race’–I don’t market to the military here in Hawaii and I have no affiliation with any agents or licensed financial advisors(fiduciaries) who do. Here’s to you making good choices that serve you and your family; not the hard-selling hustlers. To be crystal clear: there are some very advisors out there, but you need to do your homework and above all, trust your gut, it’s probably right. Every industry has a few bad apples. Financial advice and insurance sales is not immune. My goal is to get them out of the proverbial barrel. In the meantime, good luck and thank you for your service to our great country. -mgw


M. Garrett Wheeler/The Wheeler Group LLC is a registered investment advisor with offices in Honolulu, Hawaii. Past performance is no guarantee of future returns. Investing involves risk and loss of principal capital. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.

Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. No advice may be rendered by The Wheeler Group LLC unless a client service agreement is in place.

The Great Resignation: Rolling over a Retirement Plan Account (i.e., 401k, 403b, etc.)

Have you heard of the Covid-19 phenomenon referred to as the Great Resignation? Statisticians tell us that the U.S. workforce had over forty million resignations in 2021 (approx. 3.95 million per month!). Yes, it represents a new annual record. Experts in the know say that trend will continue through 2022. If you are in this group, what is your intent with your retirement plan account sitting in your soon-to-be former employer’s plan? Are you happy with your current investments? Just remember, rolling over a retirement plan account (i.e., 401k, 403b, etc.) after changing jobs is commonplace. But avoid ‘cashing it out.’ Before we met, a flight attendant client of mine who is single told me that she had all intentions to cash out and just buy a Waikiki apartment, leasehold! And she was only 55 years old. With no income rolling in, how will the maintenance fee get paid? And of course, you want to eat, right? On top of that, it’s seven years before her social security kicks in. With no other income to speak of, she could not afford to wait beyond 62 and earn an additional 8% annually. And with money as cheap as it was (as of 3/24/22 interest rates going up), why tie it all up? With no pension, she needs a fund that can eventually create a guaranteed retirement income. IMHO, she needs to continue to accumulate funds; not cash out prematurely. Every client is different, but it sure helps to have a guaranteed income plan in retirement.


The Wheeler Group LLC is a registered investment advisor with offices in Honolulu, Hawaii. Past performance is no guarantee of future returns. Investing involves risk and loss of principal capital. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.

Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. No advice may be rendered by The Wheeler Group LLC unless a client service agreement is in place.