Monthly Archives: September 2015

5 Ways to Boost Your Security Against ID and Credit Card Theft

By Bryan Mills

A week hardly passes without news of credit card and identity theft. Here are some security measures you can take, including some you’ve not likely heard of before now.

About a year ago, I was sitting down to dinner with my family when I got a phone call from a department store inquiring about my new credit card and recent purchases. I knew right away I had a problem because I’d never shopped at that store.

I left my dinner and started my own investigation. I spent dozens of hours tracking the frauds and thefts. I soon learned that five different credit cards had been opened in my name; new debit cards had been issued from my bank; and money had been transferred from my savings and checking accounts.

Naturally, I was completely appalled. Now I’m on a mission to make sure people learn from my experiences and consider putting into place new security measures, many of which I’d never known about—and I’m in the financial services business.

Here are five ways you can improve your protection against fraud:

1. Create secret “verbal passwords” on your bank and credit card accounts

Verbal passwords on all your bank and credit card accounts will save you time, money, sanity, and future chaos. Everyone enters a numbers-based key-code password when withdrawing money from a bank account at the ATM. Some, though not all, retail stores request an ID when you make a credit card purchase at the register. So why don’t banks require a password when you make a transaction at the teller?

Most banks won’t tell you to request a verbal password or phrase to be placed on your bank accounts. This is the most important thing you can do to protect yourself from the fraudsters lurking out there. Here’s how to do it:

Walk into your local bank and ask to speak with the branch manager. When you meet with the branch manager, request to speak about your accounts in a private office. Once you are in a closed office, instruct the branch manager to place a “verbal passcode” on all over-the-counter and phone request withdrawals, newly issued bank cards, and even transfers.

If the verbal password or phrase is not given, no information or transactions may proceed. I had this type of protection on one of my personal bank accounts. Unfortunately, I didn’t do this on the other one that was scammed for thousands of dollars in cash with a teller at a bank in a completely different state.

Most bankers don’t even check the signature card when given an over-the-counter withdrawal request. The verbal passcode or phrase will be your guardian and savior. One last thing: when you are asked to give your verbal password, never say your passcode or phrase out loud at the bank. Ask the teller for a piece of paper when asked for your passcode. Write it down, pass it to the teller and then take the paper back, tear it up, and put it in the trash.

2. Shield yourself from the “magic wand” with an RFID-protected wallet.

While shopping in crowds at the mall can be fun, you can also unknowingly expose yourself to a fraud device known as the “magic wand.”

“Wanding” is the process by which all your credit card information can be stolen by a $20 device that is able to read, record, and save it all in an instant. This information is then illegally used to create multiple cards that will be sold without your knowledge and permission.

You can stop this scam from happening by shielding your credit cards with an RFID-protected wallet (that stands for radio frequency identification device). These wallets can cost from $30 to $200. These wallets have a built in shield that deflects any credit card reading/skimming devices. Another cheap, quick and useful fix is to wrap your credit cards in tin foil. Yes, tin foil. This may sound crazy but it works. I happen to like a product called the Flipside Wallet. You may check them out at www.flipsidewallet.com

3. Protect your credit file like a pro

If you really want to control you credit file, open an Equifax account at www.equifax.com. Equifax is the best way to examine the accuracies of your credit history and manage your credit future. This service costs approximately $17.95/month.

Equifax gives you the power to lock or unlock your credit file. It’s your virtual credit file switch. Once you lock your credit file, no one can open a new credit card account–not even you. If you want to open a new credit card account or receive a bank loan, you have to login to your Equifax account and unlock your file with one flick of a virtual switch. This service also notifies you via email or text when key changes occur to your credit profile and if there is suspicious activity on any of your important financial accounts.

4. Never let your credit card leave your sight

When you’re shopping or eating at a restaurant, think twice before you hand over your credit card for payment. When your card leaves your hands and is out of your field of vision, this is when it can have its information stolen via a smartphone camera or mini card-reader called a skimmer. This type of fraud can happen in the moments you are waiting to get your card back. The best defense is to be present when your card is swiped (funny word, huh?).

5. Avoid making in-store credit card applications

I love to save money, especially during the special promotions and the holidays. Most stores will offer immediate credit and an attractive discount on all new purchases with a new on-the-spot application and approval.

Who is handling your paper application once it has been given to the store clerk? This information can be exposed to many unsavory people. If you really want the credit and a special discount, you can call the company’s credit department or fill out an application online ahead of time.

This protects you in several ways: The information you have given is with the headquarters representative. The conversation is usually recorded and stored. Once your application is approved and processed, it’s mailed to your home address. This will help keep your information safer. You may have to call a company representative for any in-store or online promotions that may be used with your newly minted cards.

Copyright © 2014 by Horsesmouth, LLC. All Rights Reserved


Protecting Assets and Reputation in the Midst of a Malpractice Claim

Besides being healers and caretakers, doctors are also business owners, putting them at risk for additional lawsuits and claims. There are many assets at stake when a physician faces a medical malpractice lawsuit, and it’s not just the assets related to the medical practice that can be vulnerable. Even if there is a settlement out of court, a doctor’s reputation, medical record and credentials could all be tarnished in the process.

The implementation of the Affordable Care Act has led to speculation about the broader impact on medical malpractice claims. A 2014 study by the RAND Corporation theorizes a rise of up to 5% in malpractice claims (1). The theory is based on an assumed increase in procedures and patient interactions from a higher percentage of the population being insured. Consequently, higher medical professional liability insurance premiums may be expected. Certain factors could have a broader impact on the risk profiles of physicians.

Standards Are Changing

A primary concern for physicians is that the quality and standard measures of the ACA could cause a shift in how “standard of care” is evaluated in the courtroom. The fear is that plaintiff attorneys could use these approved guidelines from specialty boards as “rules” for the standard of practice and patient safety. This would essentially allow operational guidelines to take precedence over proven clinical research.

Medical Professional Liability Insurance

Just as healthcare has undergone reform, some entities such as the Center for American Progress have suggested that a reform of medical malpractice law is necessary as well (2). One potential solution would be a safe harbor for physicians with legally-defined criteria for standard of care. Patients who bring malpractice claims must show evidence that their physician did not follow guidelines and meet the standard of care when diagnosing or treating their specific conditions. The ability to show documented proof that the physician did indeed adhere to established guidelines and upheld the standard of care is an effective means for defending such claims in the early stages of litigation.

Physicians can document their adherence to clinical guidelines by using a qualified health information technology system. Research published by the Archives of Internal Medicine suggests that adoption of Electronic Health Records could lead to a reduction in malpractice claims (3). EHRs allow for more effective communication between healthcare providers and cuts down on the delay in receiving patient information. Also, the documentation provided by EHRs could improve the chances of a successful defense in the earliest stages of a malpractice lawsuit.

Preparing a Defense

Statistics indicate that the majority of physicians will be sued for medical malpractice at some point in their career. In fact, a study published by the New England Journal of Medicine found that 99% of physicians in high-risk specialties will be sued by the age of 65 (4). However, there are some pro-active steps that can be taken when facing this ordeal.

Insurance carriers generally require to be notified at the first hint of trouble if there’s reason to suspect that a patient is considering a lawsuit. The insurer usually assigns a claims representative to investigate the claim, gather information and act as a guide through the litigation process. To maximize the defensibility of a malpractice claim, thorough records should be maintained and organized. Missing records and poor documentation in general could harm the chances of a successful defense.

Further, physicians should be cognizant of their rights when determining whether a settlement can be reached. In most cases, carriers won’t settle a claim without the doctor’s consent. However, some policies have a “hammer clause” that allows the carrier to assert pressure on their insured on whether a case should be settled. Even if the medical facts were on the doctor’s side, a settled claim can show up in a physician’s professional history, affecting their professional reputation and potentially increasing their future risk of similar claims. Having a consent-to-settle clause in a medical professional liability insurance policy may allow a physician to retain a higher degree of authority in this critical decision, and maintaining confidentiality in the terms of any settlement can eliminate or limit the impact of a claim on potential future claims.

Have Questions?

Advisory Services offered through Larson Financial Group, LLC, a Registered Investment Advisor. Securities offered through Larson Financial Securities, LLC, Member FINRA/SIPC. 

Larson Financial Group, LLC, Larson Financial Securities, LLC and their representatives do not provide legal advice or services. Please consult the appropriate professional regarding your legal needs.

(2) http://www.americanprogress.org/issues/healthcare/report/2013/06/11/65941/reducing-the-cost-of-defensive-medicine/
(3) http://archinte.jamanetwork.com/article.aspx?articleid=1203517
(4) http://www.nejm.org/doi/full/10.1056/NEJMsa1012370

Seven Ways to Fool Yourself

April 8, 2014 | By Jim Parker, Vice President DFA Australia Limited

The philosopher Ludwig Wittgenstein once said that nothing is as difficult for people as not deceiving themselves. But while most self-delusions are relatively costless, those relating to investment can come with a hefty price tag.

We delude ourselves for a number of reasons, but one of the principal causes is a need to protect our own egos. So we look for external evidence that supports the myths we hold about ourselves, and we dismiss those facts that are incompatible.

Psychologists call this “confirmation bias”—a tendency to select facts that suit our own internal beliefs. A related ingrained tendency, known as “hindsight bias,” involves seeing everything as obvious and predictable after the fact.

These biases, or ways of protecting our egos from reality, are evident among many investors every day and are often encouraged by the media.

Here are seven common manifestations of how investors fool themselves:

#1 “Everyone could see that market crash coming.”: Have you noticed how people become experts after the fact? But if “everyone” could see a correction coming, why wasn’t “everyone” profiting from it? You don’t need forecasts.

#2 “I only invest in ‘blue chip’ companies.”: People often gravitate to the familiar and to shares they see as solid. But a company’s profile and whether or not it is a good investment are not necessarily correlated. Better to diversify.

#3 “I’m waiting for more certainty.”: The emotions triggered by volatility are understandable, but acting on those emotions can be counterproductive. Uncertainty goes with investing. Historically, long-term discipline has been rewarded.

#4 “I know about this industry, so I’m going to buy the stock.”: People often assume that success in investment requires a specialist’s knowledge of a sector. But that information is usually already in the price. Trust the market instead.

#5 “It was still a good call, but no one saw this coming.”: Isn’t that the point? You can rationalize a stock-specific bet as much as you like, but events or external influences can conspire against you. Spread your risk instead.

#6 “I’m going to restrict my portfolio to the strongest economies.”: If an economy performs strongly, that will no doubt be reflected in stock prices. What moves prices is news. And news relates to the unexpected. So work with the market.

#7 “Ok, it was a bad idea, but I don’t want to sell at a loss.”: We can put too much faith in individual stocks, and holding onto a losing bet can mean missing opportunities elsewhere. Portfolio structure affects performance.

This is by no means an exhaustive list. In fact, the capacity for human beings to delude themselves in the world of investment is never-ending.

But overcoming self-deception is not impossible. It just starts with recognizing that, as humans, we are not wired for disciplined investing. We will always find one way or another of rationalizing an emotional reaction to market events.

But that’s why even experienced investors engage advisors who know them, and who understand their circumstances, risk appetites, and long-term goals. The role of that advisor is to listen to and acknowledge our very human fears, while keeping us in the plans we committed to at our most lucid and logical.

We will always try to fool ourselves. But to quote a piece of folk wisdom, the essence of self-discipline is to do the important thing rather than the urgent thing.

Have Questions?

‘‘Outside the Flags’’ began as a weekly web column on Dimensional Fund Advisors’ website in 2006. The articles are designed to help fee-only advisors communicate with their clients about the principles of good investment—working with markets, understanding risk and return, broadly diversifying and focusing on elements within the investor’s control—including portfolio structure, fees, taxes, and discipline. Jim’s flags metaphor has been taken up and recognized by Australia’s corporate regulator in its own investor education program.

Diversification does not eliminate the risk of market loss. Past performance is no guarantee of future results. There is no guarantee that strategies will be successful.

Dimensional Fund Advisors LP (“Dimensional”) is an investment advisor registered with the Securities and Exchange Commission.

All expressions of opinion are subject to change without notice in reaction to shifting market conditions. This content is provided for informational purposes, and it is not to be construed as an offer, solicitation, recommendation or endorsement of any particular security, products, or services.

Copyright © 2014 by Dimensional Fund Advisors LP. All Rights Reserved

Choosing the Best 529 Plan for Your Child’s College Fund

Provided By Matt Harlow, CFA, Chief Investment Officer at Larson Financial Group

College tuition continues to rise. Over the past 30 years, the average annual increase for college tuition has been 1.9% to 5% above the rate of inflation as measured by CPI according to College Board statistics. This long-term trend shows no signs of being reversed anytime soon. As a result, a pressing concern for many parents is whether they’re saving enough money for their child’s college education. The ever-shifting landscape of tax laws and college education funding rules only compounds this uncertainty.

529 college savings plans can offer attractive tax-advantaged benefits, however, a recent survey by Edward Jones found that 70% of Americans aren’t aware of these investment vehicles. Currently, there are over 50 different 529 college savings plans, with the onus for implementing these on the individual states.

Searching for the Ideal 529 Plan

Not only does money contributed to a 529 plan accumulate tax-deferred, but the earnings withdrawn are not taxed at the federal level as long as it’s being used to pay for qualified expenses. Many states incentivize the transaction by offering tax deductions on 529 contributions on your state income tax return. Five states (Oklahoma, Oregon, Georgia, Mississippi, and South Carolina) even allow you to take the deduction on the previous year’s tax return as long as the contribution was made by April 15th of the following year.

Financial Planning for Doctors

Many states are making this incentive even more attractive by increasing the value of the deduction. For example, in 2013, Arizona increased its deduction of $750 to $2,000 a year for individual tax filers and $1,500 to $4,000 a year for joint filers. Other states are in the process of taking similar action. However, there may be other considerations aside from tax breaks to weigh, which is why families are encouraged to consult with a qualified financial advisor.

Six states (Missouri, Kansas, Maine, Montana, Arizona and Pennsylvania) even allow one to claim a deduction for contributions to a 529 plan from other states. Residents of these states have the opportunity to shop around for plans with minimal administrative and investment fees. Nevada, for example, has an institutionally-managed portfolio of exchange-traded funds which allows them to keep their costs low.

Due Diligence

529 Plans also vary in the investment options they offer. Plans can be customized with a wide variety of investment options that range from conservative to more growth-oriented to match various risk tolerances. Some 529 Plans offer aged-based portfolios that automatically adjust to more conservative holdings as a child approaches college age.

Some 529 college savings plans can be obtained directly while others are advisor-sold, meaning they are purchased through a registered investment advisor. Carefully read the 529 plan issuer’s official offering circular or prospectus before investing.

Gifting from family and friends is made easier by the e-gifting program for 529 plans, available in 11 states. Once an account is opened, relatives can be emailed a link where they would enter their banking information and make a direct contribution to the account. There is usually no fee for this service (unless you’re using a 3rd party gift conduit), and the relative making the contribution is also eligible for a potential tax break.

Have Questions?

Advisory Services offered through Larson Financial Group, LLC, a Registered Investment Advisor. Securities offered through Larson Financial Securities, LLC, Member FINRA/SIPC.

Information gathered from sources believed to be reliable but is not guaranteed. Any information or opinion contained herein should not be construed as an offer, recommendation or solicitation to invest. Information provided is not to be deemed tax or legal advice. Consult your legal, tax and investment professionals for personalized advice.

Coordinating Group Benefits with Your Overall Financial Plan

Physicians have the responsibility of managing the risks inherent to their profession while protecting their current and future income. Fortunately, most practices and hospitals offer basic insurance and investment options for their employees. Coordinating these employee benefits with the rest of your finances is a crucial component in a sound financial foundation.

Insurance benefits can be a complex issue, but evaluating all the available options can help protect your family in the event of an accident or hardship. Most doctors are dependent on their income or assets to fund their investments and other fiscal endeavors, and seemingly minor setbacks can derail even the most carefully laid plans. However, if set up right initially, insurance plans require little time and effort to maintain.

Physician Disability Insurance Benefits

Prior to enrolling in a disability policy offered by an employer, physicians should take it upon themselves to exhaust all possible options for individual coverage. Holding multiple disability policies is one of the most effective ways to protect future income. Disability benefits provided by an employer are not permanent, and should be considered a supplement to individual coverage.

Disability Insurance for Doctors

A pro-active approach is crucial for protecting insurability down the road because you’ll never be younger and healthier than you are today. The amount of coverage you can obtain will vary depending on your income and specialty. If you are young, healthy and have a good credit score and driving record, insurance can be reasonably affordable if structured correctly.

Insurance is a commodity, but finding the policy that costs the least should not be the primary factor that influences your decision. Instead, your goal should be to find a physicians life insurance company offering the strongest coverage at the best available price. There’s no “one-size-fits-all” answer for determining what kind of coverage is most appropriate for your family. In the end, it comes down to how much income you’ll want to be available in the event that you are no longer able to provide for your family.

Health Insurance Benefits

Unlike disability insurance, there’s no benefit to keeping an individual health insurance policy on top of an employer-sponsored plan. Besides, group health insurance is usually more affordable than anything you can purchase on your own (and as a physician you usually have access to great group healthcare options). Employer health plans have the benefit of offering subsidized group rates by leveraging economies of scale.

Many employers offer flexible spending accounts (FSAs), which are tax-advantaged financial accounts that allow you to automatically deposit a portion of your pretax paycheck. These pretax contributions can be used to offset your out-of-pocket medical expenses. The funds can be used towards qualified medical expenses not covered by insurance such as dental and optometrist visits and certain “FSA-approved” over-the-counter medications and supplies for chronic conditions. Furthermore, you avoid both income and social security taxes on the money contributed.

Dependent-care FSAs allow you to reserve money for the care of dependents. They are often used for child care expenses, but they can also fund the daily care of dependent adults. Most Americans have the option of deducting the cost of childcare off their income for tax purposes. However, physicians are typically excluded from this deduction due to their annual salary being too high. Participating in a dependent care assistance plan would allow a physician to become eligible for tax savings that were previously lost due to high income.

Other Significant Benefits

Retirement plans are another common benefit provided to employees, and there’s hardly any scenario where it would make sense to decline an employer’s contributions into a 401(k) or some other comparable account. On top of this, some employers will match contributions to a retirement plan up to a certain percent. By opting out of this benefit, you are essentially leaving “free” money on the table.

Enrolling in a retirement savings plan can help establish financial security by reducing your tax liability. You can contribute up to $17,500 to a 401(k) or similar plan and that contribution will not be included in your taxable income. If you’re concerned that tax rates will be higher when the time comes to divest your plan down the road, it may be worth checking to see if your employer offers Roth 401(k) plans. Contributions to these plans won’t have any effect on your taxable income when deducted from your paycheck, but you’ll be able to withdraw the money tax free during retirement.

Think of group benefits as added compensation for all the dedicated work you perform on a daily basis. When reviewing your group benefits package, it’s generally advisable to take what is being offered and not leave anything on the table. You can always revisit your decision and determine if there’s any conflict or overlap between your group and individual coverage. The proper coordination of benefits with the fundamental goals of your financial plan will help mitigate risk and provide a solid foundation for your family that can weather the twists and turns of life.

Have Questions?

Advisory Services offered through Larson Financial Group, LLC, a Registered Investment Advisor. Securities offered through Larson Financial Securities, LLC, Member FINRA/SIPC.

Any information or opinion contained herein should not be construed as an offer, recommendation or solicitation to invest. Consult an investment professional for personalized advice.

Larson Financial Group, LLC, Larson Financial Securities, LLC and their representatives do not provide tax advice or services. Please consult the appropriate professional regarding your tax planning needs.