letter from the president - janneycom...retirement assets once you reach age 70½, the irs mandates...

At the beginning of the new year, I like to reflect back on how the Janney team has worked to serve your comprehensive

financial needs, and how important it is to continually improve upon your experience. In 2019, we’ve experienced growth in the number of clients who have completed retirement and education plans, invested through our professional investment management programs, and used our enhanced digital tools.

We appreciate the trust you place in your Financial Advisor and the entire Janney team; it is an honor and a responsibility to help you achieve your goals, and drives all that we do at Janney. As we enter 2020, I am enthusiastic about what’s ahead.

Positive Economic Outlook for 2020

Janney’s 2020 economic outlook from our Investment Strategy Group forecasts positive growth, despite uncertainties surrounding geopolitics, trade policies and other macro events. While the economic environment is an important factor to consider when reviewing and perhaps updating your long-term financial plan, your goals, priorities, obligations and family responsibilities remain the key drivers when investing for your financial future. Your Janney Financial Advisor can guide your path.

Be Prepared for the Unpredictable

A core financial goal most clients face is planning for the unpredictable. Maybe it is an unexpected illness that could require tapping into your savings earlier than expected to cover health care costs. Perhaps a concern about

how to prepare for long-term care needs while maintaining a comfortable living standard in retirement. For some, it is a desire to secure a legacy for your loved ones in the most tax-efficient way. Janney’s Financial Advisors and the specialists that support them take the time to understand your concerns, and can help you craft a plan to protect your family’s future.

Take Advantage of Janney’s Enhanced Online Resources and Capabilities

To enhance your online experience with Janney, we have made improvements to both our public website and our secure client portal, Online Access, allowing you to access information and perform certain account services easily, whenever and wherever you like.

With the wealth of information and resources available, you will find handling everyday financial tasks, from tracking your total financial picture to preparing for tax filing, easier and more convenient. Our educational and insights articles will also help you to have more productive and in-depth planning discussions in the new year.

The End Result—Support that Focuses on Serving You

As a valued Janney client, you are at the center of everything we do. We appreciate your continued trust in Janney and send well wishes for 2020.

Sincerely,

LETTER FROM THE PRESIDENT

T H E H I G H E S T S TA N D A R D O F S U C C E S S I N F I N A N C I A L R E L AT I O N S H I P S

— Timothy C. Scheve President & Chief Executive Officer

D E C E M B E R 2 0 1 9

WWW.JANNEY.COM • © JANNEY MONTGOMERY SCOTT LLC • MEMBER: NYSE, FINRA, SIPC • JANNEY UPDATE, DECEMBER 2019 • REF: 191205A • PAGE 1

BE PREPARED TO MEET LONG-TERM CARE COSTS

WITH CONFIDENCE

It’s wise to explore the range of long-term care insurance choices

available. Contact us to discuss how long-term care coverage choices could fit into your financial picture.

LOOK ABROAD — DECEMBER 2019 Mark Luschini, Chief Investment Strategist

Mark serves as Janney’s Chief Investment Strategist, with more than 30 years of investment industry experience. A recognized thought leader among industry and national media, he is a sought-after speaker for professional conferences and events.

JANNEY IN THE COMMUNITY


Brothers’ Brother Foundation

Janney’s Pittsburgh office commemorated the one-year anniversary of the Tree of Life synagogue shooting by volunteering to load boxes of medical supplies at Brothers’ Brother Foundation.

Level Up Summit

Janney was a proud sponsor of the Level Up Summit hosted by the African-American Chamber of Commerce. Members of Team Janney attended workshops and panels to help young entrepreneurs in the Philadelphia region.

Veterans Miracle Center

Janney’s Albany, New York office held a fundraising campaign benefiting the Veterans Miracle Center of Albany. The group donated numerous gifts, including coffee makers, toasters, pots and pans, and kitchen utensils.

U.S. equities have outperformed their global peers during the past decade. Looking ahead, we believe non-U.S. stocks are set to gain the upper hand, thanks to an improving global backdrop, a weaker U.S. dollar, and an increasingly irresistible valuation disparity.

Global Growth Recovery

Global growth should benefit next year from the dovish pivot by most central banks. The share of central banks lowering rates has reached 85%, which should stimulate growth in the coming quarters. Some of banks’ collective efforts may already be gaining traction, as it appears the global manufacturing downturn is coming to an end. Another stimulator is the auto sector, which is finally showing signs of life after being at the forefront of the manufacturing slowdown.

Trade War Concerns May Complicate Growth

We believe recession fears are overblown, but it may take some time for investors to overcome their concerns. That leads us to believe that equities may struggle to make new highs in the near term. However, if, as we expect, the expansion remains intact, the Federal Reserve’s dovish pivot will help support the economy at the margin and quite possibly fuel a renewed phase of the bull market in risk assets.

Softening U.S. Dollar Supports Growth Outlook

Capital tends to flow from the United States to the rest of the world when global growth picks up, putting downward pressure on the U.S. dollar in the process. A softer dollar will help to raise the value of overseas shares for U.S. investors, thus making international stocks more attractive in common-currency terms.

Foreign Stock and Bond Valuation Gap is Wide, Compared to U.S. Counterparts

Foreign stocks are currently trading at less-than-14-times forward earnings. This represents a significant discount to U.S. stocks, which trade at a forward price-to-earnings (PE) ratio north of 17.

The valuation gap between the U.S. and the rest of the world is even starker if we compare earnings yields with bond yields. Since bond yields are lower outside the U.S., the implied equity risk premium is markedly higher for non-U.S. stocks.

Non-U.S. Stocks Stand to Benefit from Conditions

Regardless of whether the secular outperformance of U.S. equities is ending, the cyclical backdrop that we foresee for at least the next 12-to-18 months—characterized by faster global growth and a weaker dollar—is likely to favor non-U.S. stocks.

For this reason, investors should remain overweight global equities and start increasing allocations to non-U.S. stocks at the expense of U.S. stocks.


Find out how using your Required Minimum Distribution (RMD) for life insurance may be a tax-efficient way to leave a larger financial legacy, in this excerpt from Reposition Assets for Tax-Efficient Wealth Transfer, an Expert Financial Insight from Janney Insured Solutions Group’s Peter Longo.

Learn more about repositioning assets, plus a few things to consider, in the full paper.

You can find it on www.janney.com or contact your Janney Financial Advisor for a copy.

You’ve worked hard to build up your nest egg and find yourself

in a position where you can enjoy a comfortable retirement and also leave a legacy.

Your goal is to pass more of your wealth on to your beneficiaries and less to the IRS. Using an asset-repositioning strategy to another vehicle, such as a life insurance policy, may be a way to help you do it.

How Does Asset-Repositioning Work?

When you apply this strategy, you exchange one of your existing investments for life insurance, which may be more tax efficient, depending on your circumstances.

Let’s look at one strategy you could consider using.

Required Minimum Distributions (RMDS) from Retirement Assets

Once you reach age 70½, the IRS mandates that you start taking distributions from any of your Individual Retirement Accounts (IRAs), or be subject to a 50% penalty. Many people use their RMDs to pay for living expenses.

However, if you don’t need (or want) this excess income, the asset-repositioning strategy could prove to be beneficial if your goal is to leave a legacy.

You can reposition the RMD’s after-tax value (as the amount gets included and taxed as part of your ordinary income for the year) into a life insurance policy premium payment. Then, you can use future RMDs to pay the policy’s ongoing annual premiums.

Your heirs will receive the proceeds of the life-insurance policy.

There are two potential advantages here:

• The death benefit has the potential to be larger than the total of the RMDs used to pay for the insurance.

• The death benefit payment is usually free of federal taxes, so your heirs shouldn’t get bumped into a higher tax bracket because of their inheritance.

Talk Over the Strategy with a Financial Advisor

If you’re considering repositioning your assets, it’s best to review your financial plan with your Financial Advisor and complete a comprehensive analysis of your current investments.

Your Financial Advisor will be able to help you determine if this strategy fits with your individual investment and estate-planning goals.

Janney Montgomery Scott LLC, its affiliates, and its employees are not in the business of providing tax, regulatory, accounting, or legal advice. These materials and any tax-related statements are not intended or written to be used, and cannot be used or relied upon, by any taxpayer for the purpose of avoiding tax penalties. Any such taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.


Janney Montgomery Scott LLC 1717 Arch Street, Philadelphia, PA 19103 | 1.800.JANNEYS | www.janney.com

This is for informative purposes only and in no event should be construed as a representation by us or as an offer to sell or solicitation of an offer to buy any securities. Neither Janney Montgomery Scott LLC nor its Financial Advisors are tax advisors. Please consult your tax advisor before implementing any tax related strategies mentioned in this publication. The information given herein is taken from sources that we believe to be reliable, but is not guaranteed by us as to accuracy or completeness. Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situation, or needs of individual investors.

CHECK OUT THE LATEST ENHANCEMENTS TO ONLINE ACCESS

Connecting to your financial goals and account information is now even easier, thanks to recent upgrades to Janney’s secure client portal, Online Access. When you log on to the site, you’ll see many familiar features, along with several new and improved ones.

Highlights to Explore

Here are just a few of the experience-enhancing updates you’ll find:

• View the information you want, in the order you want it, with customizable landing-page modules

• Get personalized messages from your Financial Advisor

• Gain a more comprehensive view of your financial picture with integrated account information (when you provide outside-account data in My Net Worth)

• Find the function you want more easily with streamlined navigation

• Update personal information, beneficiaries, and electronic delivery preferences (great for tax season), all in a new, centralized Profile area

More Mobile Advancements Ahead

A new version of the Online Access mobile app will be coming later in 2020. This version will use the latest technology to harness the power of native phone tools in both iOS and Android.

The Perfect Time to Connect With Janney Online

Not yet enrolled in Online Access? Contact your Financial Advisor or visit www.myjanney.com to register with a few easy steps.

INTRODUCING THE NEW JANNEY.COM

Designed with your needs in mind, Janney’s refreshed website gains a new look and expanded functionality.

You’ll be able to have more thoughtful conversations with your Financial Advisor after exploring insights on financial goal-setting and investing, as well as thought-leading perspective on a range of financial and investing topics. And the site’s clean navigation and responsive design let you find and view information easily, whether it’s on your desktop, tablet, or smartphone.

Visit the new Janney.com to:

• Understand how the financial-planning process helps you stay on track to accomplish your life goals.

• Feel more comfortable with the financial topics that matter to you and your family.

• Gain perspective about current market events and trends.

• Find tax-planning resources that ease the filing- preparation process.

• Take advantage of tools and resources you receive as a Janney client, at no additional cost, to help with your financial life management.

letter from the president - janneycom...retirement assets once you reach age 70½, the irs mandates...

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