For the Bell Bank Wealth Management team in Fargo, exceptional service is an essential part of what makes the team unique. Each team member’s background and experience – including, for several, time spent working as a Bell Bank teller – contribute to a shared passion for serving clients. From goals-based investment management to strategic tax and legacy planning, the team works hand-in-hand to help clients navigate their financial journey with confidence. Meet several members of the Fargo team.
GET TO KNOW OUR FARGO TEAM
At Bell Bank, providing unequaled service is a core value. For Bell Bank Wealth Management’s Fargo team, that’s more than just a motto; it’s something every team member takes to heart, no matter their background or experience. Everyone is committed to putting their clients’ needs first, whether they’ve been with Bell for years or joined later in their careers.
Three advisors on the team – Jonny Berg, Gail Jacobson and Matt Bushard – started with Bell as part-time tellers in college. All three spent time in retail banking before moving to wealth management, bringing with them a unique perspective on working with clients face-to-face.
Other members of the team, like Nate Bence, took a different path to Bell. In Nate’s case, he joined from another wealth management firm and brought a more specialized knowledge and skillset to help clients plan for their financial future.
All of those collective experiences combine – and complement each other – to shape the character of the Fargo team and its approach to wealth management, said Craig Samuelson, Bell Bank Wealth Management’s chief operations officer.
“Every team member brings their ‘A’ game to work each and every day,” Craig said. “Our advisor team serves our clients’ needs and works alongside them to help achieve their financial goals.”
Read on to see
Gail Jacobson, CFP®, CTFA
VP/Senior
Wealth & Fiduciary Advisor
Gail has more than 23 years of experience with Bell, including over a decade in retail banking. She joined the wealth team in 2012 and works with clients on investment accounts, IRAs, trust administration and more. Gail gets to know her clients on a personal level to help them plan for the future.
“It’s rewarding to work with a client on their financial goals and eventually see the outcome of their hard work and dedication,” she said.
Gail is a history buff, and she enjoys traveling, doing genealogy projects and gardening with her 15-year-old daughter.
Jonny
Berg,
CTFA VP/Senior Wealth & Fiduciary Advisor
With more than 16 years of experience at Bell, Jonny started as a part-time retail teller and then joined the wealth team in 2013. Today, he works with a wide range of clients on IRAs, agency accounts and trust administration issues.
“I enjoy listening to clients’ goals, objectives and concerns and providing guidance to help them feel they’re wellinformed and well-positioned for the future,” he said.
Jonny enjoys spending time with his wife and three kids.
Matt Bushard, CFP® VP/Senior Wealth Management Advisor
Matt started at Bell in 2011 as a customer service representative and joined the wealth team in 2013. He works with high-net-worth prospects and clients to help them prepare for life before and after retirement, focusing on cash flow planning, tax planning and investment management.
“I have a passion for helping people connect all the pieces of their financial lives,” Matt said. “I enjoy seeing the plan we create come to life and the goals we hope to achieve become reality.”
Matt enjoys spending time with his wife and two children at the lake.
Nate Bence, CFP® VP/Wealth Management Advisor
Nate joined Bell in 2020 from a different financial services firm. He has more than 11 years of experience in the industry and works closely with clients to create financial plans focusing on their current and future goals. He also works with high-net-worth clients on navigating life transitions such as retirement.
“I enjoy helping clients achieve their financial goals and seeing the joy that those achievements bring,” Nate said.
Nate and his wife have two children along with three dogs, two miniature donkeys and two horses.
how Jonny, Gail, Matt and Nate talk about their roles at Bell.
HOW ENDOWMENTS AND FOUNDATIONS CAN NAVIGATE MARKET CHANGES TO BUILD A STRONG PORTFOLIO
Many endowment and foundation clients face unique investment portfolio challenges as they aim to support impactful giving while also funding organizational objectives and maintaining purchasing power in the face of inflation. With annual spending and distribution policies ranging between 4% and 6% of total assets per year, endowments and foundations must carefully balance growth, liquidity and risk needs to create a sustainable and robust portfolio.
Fluctuating economic conditions over the last 15 years have posed a challenge to this task, however, with changes in interest rates impacting the return from an endowment or foundation’s portfolio. Given the current economic
reality, here’s what these organizations can do to ensure their portfolios remain aligned with their long-term goals.
IMPACT OF INTEREST RATES ON FIXED INCOME
Because of the dual objectives of an endowment or foundation’s portfolio, proper asset allocation is essential. A balanced mix of stocks, bonds and alternative investments can drive growth, provide liquidity and minimize risk. From roughly 2009 to 2022, though, returns for bonds were negatively affected by a prevailing low interest rate environment, resulting in a lower return on fixed income.
Without sufficient returns from that part of their portfolio, many foundations and endowments shifted their allocations more toward equities during this period in order to achieve a higher rate of return to meet their required targets. In doing so, they also increased their overall risk profiles, making their portfolios more vulnerable to market volatility.
RETURN TO BASICS
Today, interest rates are significantly higher than they were several years ago, leading to higher projected returns for fixed income. This makes it important for foundations and endowments – as well as other longterm investors – not to be overly complacent with their asset allocations and risk profiles. Where higher equity positions were once necessary to generate better returns, a more traditional and balanced approach relying on fixed income can now offer sufficient returns without such a high level of risk.
MAKE REVIEWS AND ADJUSTMENTS AS NECESSARY
Given the changing nature of market conditions, it’s essential for foundations and endowments to regularly reassess and adjust their portfolio strategies and allocations. These reviews can help ensure their portfolios remain aligned with their long-term goals while also adapting to economic realities such as interest rate levels.
At Bell Bank Wealth Management, we have a team of knowledgeable, experienced professionals dedicated to working with endowments and foundations to advise and manage through these important decisions.
Where higher equity positions were once necessary to generate better returns, a more traditional and balanced approach relying on fixed income can now offer sufficient returns without such a high level of risk.
— Zac Wanzek
Chris Haarstick | VP/Senior Portfolio Manager
CONCENTRATED WEALTH: WHAT IT IS AND WHAT INVESTORS SHOULD KNOW
When it comes to getting rich, there are essentially two avenues someone can take (aside, of course, from the dumb luck of winning the lottery). The first is leverage, when you borrow money to purchase more of something in the hope that its value will grow. The second is extreme concentration, where you bet on a single asset such as a baseball card, an apartment building, or, for our purposes, stock.
Unfortunately, having a concentrated stock position is also an easy way to lose
money, as it can expose you to significant volatility. Overconcentrating your portfolio can happen in a number of ways. Perhaps you bought shares of a stock over time, or were compensated by your employer with shares of the company’s stock. For business owners, perhaps you invested a significant amount of your money in your own business. Whatever the case, it creates extra risk for you.
Let’s explore what this means for investors and what moves they can make to diversify their portfolio.
WHY THIS HAPPENS
For investors, falling in love with a single stock is all too common. A generation ago, it was Cisco, Dell, Qualcomm, Sun Microsystems and a host of others that became popular, then experienced a rapid decline in value when people realized clicks wouldn’t pay the bills.
Similar instances happen year after year. Household names like Kmart, Lucent, Nortel, Enron, GM, GE,
CenturyLink, Sears, Carvana, Zoom and, most recently, GameStop have all experienced declines of 50% or more in recent years, showing the danger of investing too heavily in any one stock. Large companies aren’t immune to this, either. When you look at the top 10 companies by decade, new leaders regularly enter the top 10, and old ones routinely exit. Thirty years ago, it was hard to imagine IBM, GE, Exxon and GM all falling out of the top 10, but it happened – and in some cases rather swiftly.
Even though there are plenty of historical cases outlining the dangers of portfolio overconcentration, why does this still happen? I’d argue it primarily occurs for several reasons:
• Investing in the market can feel overwhelming for an average investor, so only buying shares of a single company is an easy move to make.
• It can be comforting to buy shares of a business we’re familiar with. If we support a favorite brand by owning their product (think cars, phones, etc.), then owning their stock seems like a logical next step.
• We simply love it when their stock goes up. Unfortunately, this can create a dangerous reinforcement cycle. We
feel good when the stock goes up, then feel smart that we bought the stock in the first place, so we continue to buy more, and the cycle repeats.
MOVES TO MAKE
For investors who’ve built a portfolio that’s concentrated too heavily on any single asset, there are strategies you can take to make your portfolio less risky and potentially marginalize your tax implications. A few of the solutions are simple, and a few are more complex, but in general they revolve around creating a game plan and limiting your emotions. Strategies could include:
• Rules-based position management, which involves making systematic sales to reduce exposure
• Positioning hedging
• Advanced tax strategies
• Gifting shares of stock to family and/ or your favorite charities
• Taking advantage of the 2017 Tax Cuts and Jobs Act before it sunsets at the end of 2025
The approach you take will depend on your specific situation. Bell Bank Wealth Management can work closely with you to help develop a plan that’s appropriate for your portfolio.
For investors who’ve built a portfolio that’s concentrated too heavily on any single asset, there are strategies you can take to make your portfolio less risky and potentially marginalize your tax implications.
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WHEN IT COMES TO RETIREMENT PLANNING, KNOW THE NUMBER YOU’RE WORKING TOWARD
“How much money do I need to retire?”
This is a question we often hear from clients, ranging from younger workers just starting out in their 20s to people counting the last few months until they can enter their dream retirement. As with most things, the answer depends on many factors. For example, what do you want to do in retirement? Are you going to travel? Will you upgrade your home? Alternatively, will you downsize to a smaller one? Everyone’s answers to those questions will be different. There’s no one-size-fits-all retirement, and neither is there a one-size-fits-all answer to the question of how much you’ll need to retire. Instead, it’s important to consider several different factors, such as your current level of income and your expected future sources of income, to help you determine what amount you should be saving.
REPLACEMENT RATIO
First, you’ll want to figure out what’s called your “replacement ratio,” which is the percent of your preretirement income that you’ll need to live comfortably in retirement. Many wealth advisors recommend starting with a base of 70% to 90% of your pre-retirement income. That means if you have a gross income of $100,000 before you retire, you may need about $70,000 to $90,000 per year in replacement income after you retire.
Of course, your exact replacement ratio will depend on your retirement lifestyle and at what age you choose to retire. By thinking carefully about what your retirement lifestyle will be and how long you expect to be in retirement, you can begin to fine-tune your replacement ratio estimate.
INCOME SOURCES
Beyond your replacement ratio, it’s also important to understand the primary sources of your retirement income. This is an evolving answer. Traditionally, Americans have relied heavily on company pension plans and Social Security to fund the majority of their retirement. More recently, however, those traditional sources of income are becoming less prominent as IRAs, 401(k)s and personal savings are becoming a bigger piece of the retirement pie.
When it comes to Social Security, you might assume that since you’ve been paying into the program for as long as you’ve been working, the money will be there for you when you need it. The reality is not quite so simple. Social Security is a “pay-as-you-go” system, which means the money you’ve contributed over the years has gone to pay the benefit for individuals who were in retirement at the time it was deducted from your paycheck.
To add to that, demographics are changing as well. More people are entering retirement, and the number of Social Security recipients has been increasing at a higher rate than the number of workers in the country. This has put a strain on the program, making it essential to have other sources of retirement savings you can count on, including an IRA and/or 401(k).
KNOW WHERE YOU’RE GOING
No matter where your retirement income will come from, the most important thing is to know what you’re working toward and find a solution that fits you. Everyone’s situation is different, and your number will depend on your specific circumstances. By considering your current level of income and your goals for retirement, you can start to narrow in on how much you may need to retire – and then create a savings plan to get there.
James Kallod | Retirement Plan Educator
s Meet the Bell Bank Wealth Management Team in Fargo
s Portfolio Considerations for Endowments and Foundations
s What to Know about Concentrated Wealth
s How to Determine the Retirement Number You’re Working Toward
CORPORATE EARNINGS GROWTH HAS
REBOUNDED
Despite higher interest rates and other economic concerns, corporate earnings for large public companies have grown 5.4% over the last year. This has been driven primarily by two factors: strong consumer spending and companies protecting their margins despite the spike in inflation over the last three years. In short, the market weighs earnings over the long-term, and the world-class businesses within the S&P 500 Index have continued to deliver amid multiple headwinds.
