Axiom | Vol 253

Featured: Meet The Axiom’s Guest Editor: Jeremy Lee | Inside: Earnings Season Shows An Economy Getting Hotter – Will The Fed Step In? | Poll: Can You Guess Which 3 Things Will Cost You Less In The Covid Recovery Economy? | MoneyDo: Business Owner Targeted – What Are You Going To Do With Your Family Business? (Succession Planning) | Ask Annex: Investment Fees For Roth IRAs | DYADT: Does Your Advisor Know How A Structured Settlement Affects Your Plan? | North American Harley Sales Up, European Sales Down | April US Consumer Confidence Jump | Stuff Tom Hears – 401(k) Services

Meet The Axiom®’s Guest Editor: Jeremy Lee

I’m Jeremy Lee, I work as a Wealth Manager for our Annex Ignite program and also am a part of our 401K Service Team.

I work directly with families and individuals in order to craft personalized financial plans to save more for the future and to reach their retirement goals.

I’m originally from the Sheboygan area, but currently live in Wauwatosa. When I’m not talking to folks about personal finance, I enjoy being outdoors whether it’s fishing, biking, or hiking with my two dogs. I enjoy building relationships with our clients and watching them grow over time!


Earnings Season Shows An Economy Getting Hotter – Will The Fed Step In?

Markets ended a volatile week as earnings season reported stellar gains. With GDP around 7 percent and the economy nearing pre-pandemic levels, what signs might indicate the Fed changing its policy? Annex Wealth Management’s Derek Felske and Deanne Phillips discuss.


“I love that the Axiom is coming DIRECTLY from the Annex Team. It’s short, concise, but yet very informative. I find that anyone, no matter their background in finance, can find something useful from these publications.

The best part is being able to engage with our team on different levels; whether it’s seeing results from likeminded individuals through our polls, getting a frequently asked question answered directly from a team member, or having the learning opportunity from our events. It really covers it all! The Axiom allows us to talk about what is relevant right now and in the future, which I find most folks are most concerned about.”

– Guest Editor: Jeremy Lee | Wealth Manager

Can You Guess: Which 3 Things Will Cost You Less In The Covid Recovery Economy?

The weather is heating up, and so is consumer spending. If you’re looking for a bargain this summer – a few items have seen significant price drops.


Business Owner Targeted – What Are You Going To Do With Your Family Business? (Succession Planning)

Many business owners find it hard to consider selling their business. It’s hard to imagine letting go of something you’ve worked, and sacrificed so the business can succeed.

Still, many understand that proper planning includes knowing when to sell. Some owners plan to walk away at retirement, satisfied with the income it generated through the years. Others consider the value of their business to be an integral part of their financial plan and wish to sell it at retirement. Much like selling a home, a business owner needs to spend time preparing the business for a sale.

It’s important to know what lies before you if you believe you’ll be selling at some point. The process isn’t as easy as putting up a sign and waiting for the phone to ring. Preparing your business to maximize its value and making it appealing to buyers can take as many as 3 to 4 years. This Week’s MoneyDo is to consider the steps you’ll need to take and questions you’ll need to ask in order to sell your business – even if you don’t think the sale will take place for a while. Here are several steps to consider:

Who are you going to sell it to?

Seems like a simple question, but it’s a critical thought to consider. Do you wish to sell your business to a key employee, or a group of several employees? How about family? If you decide to sell to employees or family members, perhaps the optimal strategy is to sell smaller interests over time to avoid saddling the new buyers with debt.

Clean up your business financials.

Several years prior to selling, have your year-end financials either reviewed or audited depending on the size of your business. “Reviewed” simply means a CPA conducts analytical procedures and makes inquiries to ascertain whether the information contained within the financial statements is correct. The auditor then provides limited assurance there are no material modifications needed to conform to GAAP (Generally Accepted Accounting Principles). An “audit” takes the process a step further. A CPA will test and prove processes are being conducted effectively, and must corroborate the ending balances in the client’s accounts and disclosures – which calls for the examination of source documents, third party confirmations, physical inspections, tests of internal controls, and other procedures as needed. Either a review or an audit will give a potential buyer more comfort compared to internally – prepared financials.

Consider comprehensive cleaning and updating.

Since you’re doing some financial housecleaning, make sure the business is efficient and operating costs are in check, accounts payable are in good shape and retail space is clean and presentable.

It may be tempting to drastically cut expenses to improve profitability, but cuts must be sustainable. For example, your business will not be attractive if technology or your office is out of date.

Focus on revenue.

As the saying goes, revenue is where “the rubber meets the road.” Businesses are typically valued as either a multiple of gross revenue or net income. Either way, increased revenue equals a more valuable company. Consistent revenue growth will look very attractive to buyers evaluating trends.

Prepare the business to run without you.

You should be prepared to step aside more often. A potential buyer may see a much easier transition if you’re no longer the face of the company at the time of the sale. Having a management team in place who will continue to run the company after the sale also provides value and could expand the pool of potential buyers.

  • Determine a value: Once your year-end financials are in place, it might be advisable to consult with a business valuation expert. For a fee of roughly $3,000 – $7,000, a third-party valuation can provide a realistic estimate of the value of your company.
  • Transition assets you wish to keep out of the business: An overlooked concept is considering what property held by your business you wish to keep, like cars or equipment. Transitioning that property out of the business will make for a cleaner sale in the future.

If the process of selling a business seems overwhelming, find a financial advisor you can trust to help walk you through the steps you’ll need to take. You’ve worked hard to build a business and a brand. Preparing before a sale is consistent with the same care you gave through the years, and can give you more peace of mind when the time to sell comes.


This week’s Ask Annex comes from Michael, who asks:

“My wife and I have Traditional IRAs, Roth IRAs and a non-qualified account with Annex. Currently investment fees for each account come out of each of those accounts. Would it be wise to pay the investment fees for the Roth IRAs out of the non-qualified account?”


We asked Annex Wealth Management’s Ron Johnson, CFP®:

A few years ago, it was common practice to bill taxable accounts for the investment fees since these expenses could be itemized on the schedule A of your federal tax return as a miscellaneous deduction. Since the Tax Cuts and Jobs Act removed miscellaneous deductions, the industry has gotten away from this practice.

You bring up a really good point. Does it still make sense to bill taxable investments the investment management fee associated with the Roth IRA? As you know, Roth IRAs are funded with post-tax dollars but grow tax free. Therefore, the longer funds stay in the account, the better. We agree with your insight. By paying fees out of the taxable account, the investor can leave more money in the Roth IRA to continue to grow tax free.

Thank you for such a thoughtful question and let us know if there is anything else we can do.


Does Your Advisor Know How A Structured Settlement Affects Your Plan?

What exactly is a structured settlement and how can it fit into your financial plan? Annex Wealth Management’s Eric Strom and Ron Johnson discuss.



North American Harley Sales Up, European Sales Down


April US Consumer Confidence Jump


Stuff Tom Hears | 401(k) Services


Annex Wealth Management provides free workshops, open to the public, on key wealth management topics.

Each week, we provide links to register for upcoming events.