Axiom | Vol 270

August Markets Positive While Fed Likely Delays Tapering

Meet The Axiom®’s Guest Editor: Derek V.W. Felske, CFA®

Hello, I’m Derek Felske, Chief Investment Officer at Annex Wealth Management. 

I’m originally from out east, where I went to college and graduate school. Today, I enjoy living in Milwaukee, where I keep tabs on my grown children, spend time with friends, and sharpen my competitive instincts by playing golf.


As Chief Investment Officer, I help head up Annex Wealth Management’s Investment Team and Investment Committee, which meets every week to discuss and refine our course of action as it relates to our overall strategy. I understand that the most popular part of Axiom is Week In Review, where I often appear to discuss the markets and economy. 

– Guest Editor: Derek V.W. Felske, CFA® | Chief Investment Officer

August Markets Positive While Fed Likely Delays Tapering

The markets continue to look good with the seventh straight positive month in August. Chief Investment Officer Derek Felske and Managing Director of Wealth Management Services Mark Beck talk about corporate profits continuing to grow, the labor markets still showing higher unemployment numbers, and how stagflation all play parts in the current state of the economy. They also discuss what the Fed is focusing on currently, and how they may delay tapering given the progress they still need to see in the markets.


Are you ready for pumpkin spice, boots and scarves? Or are you still poolside?

Poll: Does Labor Day mark the end of summer?


Since I help create Week In Review every week, I tend to enjoy other portions of The Axiom, like the MoneyDo. Few financial advisors spend as much time as Annex does giving away tips and insights that could help improve your finances and outlook. MoneyDo shows where our heart is, and why I love working at Annex.

– Guest Editor: Derek V.W. Felske, CFA® | Chief Investment Officer

Place Your Important Documents In A Safe, But Accessible Location

Most of us keep important documents around the house, including some that other people may need to access at critical times. When it comes to estate planning documents, keeping them safe is important, but ensuring someone can find them and access them is just as critical. Without access, those documents may be worth less than the paper they’re written on.

This week’s MoneyDo – determine a safe, but accessible place for your critical documents, and then make key people aware of how to access them.

If you’ve completed an estate plan, it’s likely your attorney provided you with a binder or document organizer to keep all your originals together along with extra sets of copies. Even if you have only done some rudimentary planning, you may have any of the following:

  • Financial (aka Durable) Power of Attorney
  • Health Care Power of Attorney
  • Living Will
  • Funeral Instructions/Directions, including cemetery deeds and funeral trusts
  • Last Will and Testament
  • Memorandum of Personal Property
  • Revocable Trust
  • Marital Property Agreement

You should always be in possession of the original documents, ensuring you have immediate access to them if you need them. Still, it’s important to keep them in a safe location like a fireproof safe in your home.

Once you have your critical documents secured, ensure that an additional person knows where your documents are and how to access them.

It may also be wise to provide the individuals you named as your power of attorney, executor or trustee with copies of those documents. If you aren’t ready to hand over copies, you should at least provide the appropriate individual with an inventory of the documents you have, and the location where the documents are kept.

As a precaution, be very deliberate if you choose to store these documents in a safe deposit box. The pandemic taught us many things, but one was that getting into a safe deposit box at your local bank is not always easy to do, even in the case of an emergency.

If you use a safe deposit box at a bank, be sure to add the appropriate individual as a joint owner on the safe deposit box agreement. Safe deposit boxes with a power of attorney will only work during the life of the box owner; the agent will not be able to obtain access after death, which create problems if the original will is held in the box! Safe deposit boxes in the name of a trust can also create problems if the bank does not have good processes and procedures about who is entitled to access.

Finally, you may wish to provide copies of the financial power of attorney to the institutions where you have accounts (bank, brokerage, etc…). By having it on file ahead of time, your agent can step in and immediately take care of your affairs.

Similarly, you may wish to provide copies of the health care power of attorney and living will to your medical professionals, so they understand your wishes and know who they can take direction from in the future.


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

If I were to switch advisors, who’s responsible for what in the process? And will I trigger capital gains?


We asked Annex Wealth Management’s Deanne Phillips, CFP®, CDFA®, ABFPsm:

Great questions…and the answers depend on whom you are switching to and where from.

In most cases, switching advisors on actively managed investment accounts or IRAs – where you are paying someone to manage them on your behalf – works like this: 

  • The new advisory team creates a new account with a custodian to take receipt of the account from the previous advisor.
  • The “new” team also does the paperwork and completes the transfer of the assets. The transfer is usually not dependent on the account owner to call their old advisor and let them know about this – that’s optional. This is subject to security transferability.
  • The account owner may be contacted by the old advisor to question why the accounts are leaving their management.

Here’s how Annex handles transfer situations: we work with you and do everything on your behalf. Our team sets up new account paperwork, notifies the operations office of your previous manager, and generates the transfer. You don’t have to contact your previous advisor (unless you want to) in order to make this happen.

Switching advisors from a retirement plan like a 401k or 403b (conducting a rollover) works differently and requires a little more involvement from the plan participant. At Annex, this includes conducting a rollover call with you and a client service manager to your plan administrator, working through any stock holdings in the plan and dealing with NUA (net unrealized appreciation) if applicable, helping you understand the tax implications, filling out the paperwork with you, and tracking the process. We are with you every step of the way, answering your questions and pushing the process along.

Capital gains are triggered in an investment account where holdings are sold, and gains are made. There are two types of gains that matter, from a tax perspective. Many investments work this way:

  • Short term gains happen on sales that occur when you’ve held an investment for under a year. These are taxed to your income tax bracket; counted as income.
  • Long-term capital gains happen when you’ve held an investment longer than one year and they are taxed more favorably, depending on your overall income.

At Annex, when we receive a new investment account, we bring the holdings over into your new account “in kind” where possible. That means that we transfer the holdings and shares as-is and without tax consequences. Then we work with our new clients on tax planning; looking at their tax return, estimating their current year’s tax picture with our team of tax professionals, and building a solid tax planning strategy around those gains and how much we should take in that calendar year, while taking into consideration the client’s entire holistic financial planning picture.

IRAs don’t have the same type of tax consequences, if transferred correctly: you’re only taxed when you take money OUT of the IRA, not when you roll it over custodian to custodian. Within an IRA, there is no tax consequence when you earn income on a holding or when you sell anything. Retirement accounts like 401ks are usually liquidated when a rollover is requested, and the cash proceeds are placed into the individual’s IRA without tax consequences.

It sounds like a lot to juggle – but our team is built to make processes like these as smooth and simple as possible. Let us know if you have any more questions.


Deanne Phillips, CFP®, CDFA®, ABFPsm

Director of Client Learning & Development


Does Your Advisor Help You With More Than Investments?

When you have a well-constructed estate plan in place, it makes distribution of assets far easier after you pass. Annex Wealth Management’s Estate Planning Attorney, Jill Martin, JD covers key aspects of inheriting money – the tax ramifications, the need to be patient, and why you may need to adjust your expectations.



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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.