Leadership Changes Mark New Chapter for Bell Institutional Investment Management
Bell Institutional Investment Management (BIIM), a leader in investment solutions for insurance companies, foundations, private clients, family offices and more, is expanding its strategic leadership.
Greg Sweeney, who has led BIIM’s investment team as chief investment officer for the last 21 years, is stepping into a new role as chief investment and economic strategist. Zac Wanzek, who has served as deputy chief investment officer since 2021, is transitioning to the chief investment officer role.
Hear from Zac and Greg about their new roles inside this issue of Bell Wealth.
As chief investment officer, Zac will lead BIIM’s strategic investment efforts, working to ensure that BIIM continues to be a market leader providing best-in-class investment expertise to Bell’s institutional and wealth management clients. Zac joined Bell in 2012 as a portfolio manager, and has served as deputy CIO for the last four years in addition to serving on the BIIM investment and wealth management committees. Prior to joining Bell, Zac spent several years in public accounting, and as a consultant for insurance companies and other financial institutions across the country.
In Greg’s new role, he will continue to work closely with clients and provide guidance, support and mentorship to BIIM’s portfolio management team, while still contributing thought leadership in the form of his popular monthly, quarterly and annual economic outlooks.
“This is an exciting evolution for Bell Bank Wealth Management and Bell Institutional Investment Management,” said Patrick Chaffee, Bell’s executive vice president for banking, wealth management and insurance. “Zac and Greg’s partnership and expertise will help drive BIIM’s growth for years to come.”
“With this transition, Greg and I will be able to capitalize on our respective strengths and expertise,” Zac said. “I look forward to continuing to work sideby-side to support BIIM’s strategic direction.”
BUILDING ON MOMENTUM
In recent years, Bell Bank Wealth Management has experienced significant growth, having reached over $10 billion in client assets on the firm’s books. As the firm’s client base has grown, so too has the BIIM team – increasing to nearly 14 investment professionals with a broad depth of experience and credentials.
Greg and Zac’s new leadership roles will help BIIM build on that recent momentum, Greg said.
“The team has never been stronger, and this positions our organization well for our next phase of accelerated growth,” he added.
LOOKING AHEAD TO THE FUTURE
Later this year, Greg will mark 40 years of experience in the financial services industry and 33 years with Bell. He’s begun looking ahead to an eventual retirement, and this change is a gradual step in that direction, he said.
“The timeline for my retirement is still years away, but we’re making this transition with that future in mind,” Greg added. “Today, though, I’m excited to work with Zac to build on the success of our team and our department, and to provide the high level of investment service that our clients have come to expect.”
The team has never been stronger, and this positions our organization well for our next phase of accelerated growth.
Greg Sweeney, CFA® SVP/Chief Investment and Economic Strategist
With this transition, Greg and I will be able to capitalize on our respective strengths and expertise.
THE SUNSET OF THE TAX CUTS AND JOBS ACT IS COMING … OR IS IT?
Several provisions of the Tax Cuts and Jobs Act of 2017 (TCJA), enacted on Jan. 1, 2018, are set to sunset at the end of 2025, as we’ve summarized in past issues of the Bell Wealth newsletter. The results of the 2024 election, however, have given estate planners reason to believe that some portion or all of the provisions scheduled to sunset may be extended beyond 2025, or even made permanent – but that will depend upon Congress taking action by the end of the year.
With the fate of the sunsetting tax provisions in the TCJA up in the air for now, it is important for you and your advisors to monitor any developments while at the same time looking at your own situation to assess what is best for your estate plan and wealth
transfer goals. As we’ve discussed before, preparation and planning are paramount. Let’s look a little more closely at some key provisions set to expire and some actions you could take to get out ahead of the potential changes.
FEDERAL ESTATE AND GIFT TAX EXEMPTION
Pending action from Congress, the federal estate and gift tax exemption amount will decrease, effective Jan. 1, 2026, from $13.99 million per person ($27.98 million for a married couple) to the pre-TCJA amount of $5 million, adjusted for inflation (projected to be somewhere in the range of $7 million to $7.5 million per person, or $14 million to $15 million per married couple). What this means is, absent
action by Congress, a married couple can protect over $13 million more from estate taxes in 2025 than they will be able to on and after Jan. 1, 2026.
For those with assets in excess of the current federal exemption amount, using the entirety of the federal exemption before the Dec. 31, 2025 sunset could lower future estate and gift tax bills significantly. Some strategies to consider include:
• Transferring income-producing assets to family members who might be in lower tax brackets.
• Utilizing one spouse’s lifetime exemption. With this approach, one spouse uses their complete lifetime exemption by gifting assets while preserving the other spouse’s
exemption. This ensures that even after the scheduled reduction of the exemption amount under the current law, one spouse’s exemption will still be accessible come 2026 and beyond.
• Creating a Grantor Retained Annuity Trust (GRAT). GRATs are irrevocable trusts that serve the purpose of transferring assets away from the estate of the individual establishing the trust (the grantor), while guaranteeing a steady stream of income to the grantor. In such instances, the grantor, having moved assets into the trust, becomes eligible to receive a series of annuity payments for a designated number of years. Once the term of the trust ends, the assets remaining are distributed to the remainder
beneficiaries (usually the grantor’s children or grandchildren).
• Creating a Spousal Lifetime Access Trust (SLAT). A SLAT can help married couples take advantage of the current gift tax exclusion while also receiving income distributions for the marital household. This strategy involves the transfer of assets by one spouse into an irrevocable trust for the benefit of the other spouse, effectively eliminating these assets from the grantor spouse’s estate, and thereby excluding them from estate taxes. At the same time, the grantor spouse receives an indirect benefit in the trust’s assets by way of the spouse’s ability to access income and principal distributions.
INDIVIDUAL INCOME TAX RATES
Individual income tax rates also would be affected by the sunset. Marginal tax rates for individuals will revert back to pre-TCJA levels in 2026, with the top tax bracket going from 37% to 39.6%. A couple strategies to consider here include:
• Completing Roth conversions: With the tax brackets potentially increasing, it might be to your advantage to convert a portion of traditional retirement savings into a Roth account. This can give you more options for tax strategies in retirement, as individuals holding a blend of pre-tax and Roth savings could gain improved control over their future tax obligations. For instance, if you’re initially in a lower tax bracket when you retire, it might be prudent to withdraw from pre-tax sources first (as you would pay taxes on the distributions) and later, when facing higher tax brackets, tap into Roth sources (where you would not pay taxes on the distributions).
• Utilizing capital gains tax rates: Long-term capital gains tax rates are typically lower than ordinary income tax rates. If you have investments with significant gains, you may want to consider realizing some of those gains now before overall individual tax rates increase.
The time is now to start planning for the possible sunset of the tax provisions in the TCJA. Waiting until the end of 2025 or until Congress takes action could cause you to rush your planning, or result in attorneys or other advisors being unavailable to help you. Contact us today to start the conversation.
With the fate of the sunsetting tax provisions in the TCJA up in the air for now, it is important for you and your advisors to monitor any developments while at the same time looking at your own situation to assess what is best for your estate plan and wealth transfer goals.
— Stephanie Strand
Mike Kobbervig, CFP®, CEBS | SVP/Retirement Plan Services Division Manager
HOW BELL’S RETIREMENT PLAN SERVICES TEAM HELPS PARTICIPANTS PREPARE FOR RETIREMENT
Planning for retirement can be complicated, but Bell Bank Wealth Management’s retirement plan services team aims to make it easier for both employers and retirement plan participants. Get to know the services the team provides and how the team helps companies of all sizes.
A RANGE OF PLAN TYPES
Bell’s retirement plan services team provides 401(a), 401(k), 403(b) and 457 retirement plan services to approximately 225 employer plans. This represents more than 25,000 participant accounts in 48 states and $2.4 billion in assets. Through our recordkeeping relationship with Newport, an Ascensus company, the team offers a complete retirement solution delivered with superior, personal service.
A HIGHLY CREDENTIALED AND EXPERIENCED TEAM
Our retirement plan consultants take an active role in offering retirement plans designed to meet employer objectives and structured so that participants may achieve their goals for financial security at retirement. Our team has more than 150 years of combined experience with a range of industry credentials.
VALUE-ADDED INVESTMENT CONSULTING
Our investment platform offers a diversified array of investment options for retirement plan participants. Bell Institutional Investment Management serves as an extension of an employer’s retirement plan investment
committee, collaborating to ensure their retirement plan is optimizing its full potential for employees.
Through in-depth analysis of an employee participant base, we aim to have ongoing consultations in selecting guidelines and criteria for investment options, constructing a fund lineup based on the characteristics of plan participants, providing ongoing support and training for employer providers, and much more.
HOLISTIC FINANCIAL WELLNESS SERVICES
Employees who are better educated about retirement, and about the retirement plan they receive through their employer, are more likely to participate in and contribute to their
retirement account. That’s why we provide educational resources to employee participants about saving and preparing for retirement. We leverage onsite group and individual meetings, recorded videos, LinkedIn content, electronic flyers for company intranet sites and other media to reach participants where it’s convenient for them. Additionally, the financial wellness portal on our plan website provides a range of resources and helpful guides to make sure participants have the information they need.
UNEQUALED PLAN SPONSOR SUPPORT
We understand the need to streamline processes for employers, and we strive to minimize the daily administrative work associated with a retirement plan. Employers can expect simplified and automated administration, trustee services, timely reporting, compliance testing, tax reporting and a dedicated service center for participants.
In sponsoring a retirement plan for participants, employers are offering their employees a great opportunity
to prepare for, and eventually meet, their retirement goals. In this capacity, employers are assuming a fiduciary responsibility and standard of conduct, and we help employers understand their role and responsibilities.
The depth of our services and support is reflected in our plan sponsor survey results, which consistently show a 100% “very satisfied” or “satisfied” result from our employer plan contacts.
COMPETITIVE AND UNDERSTANDABLE FEES
We do not use a “one size fits all” approach to retirement plan pricing. Instead, we use custom pricing on
every retirement plan. Additionally, we benchmark retirement plan fees to a national database and conduct annual retirement plan reviews that include fee discussions. We do not keep any fund revenue received from mutual funds, as we allocate those fund revenue dollars back to the participant who held the mutual fund.
INTERESTED IN LEARNING MORE TO HELP YOUR BUSINESS OR COMPANY?
If you are looking for a retirement plan provider for your business or company, or are interested in switching providers, contact us today at 800.450.8949.
Our retirement plan consultants take an active role in offering retirement plans designed to meet employer objectives.
— Mike Kobbervig
About Retirement Plan Services
Over 200 plans
Nearly 25,000 participant accounts
More than 150 years of combined experience
Over $2 billion in assets
8 team designations + certifications
Dedicated team led by Bell retirement plan consultant
FINDING THE RIGHT BALANCE: HOW MUCH RISK IS APPROPRIATE FOR A PORTFOLIO
After several years of high stock market returns, many investors may be reassessing their portfolio positions. With high equity valuations, and uncertainty surrounding interest rates and the future of Fed rate cuts, this may be a good time to evaluate whether your asset allocation is still appropriate. Here are some long-standing principles that we use in our decision-making process to determine how much risk is right for a portfolio.
THE IMPORTANCE OF YOUR RISK POSTURE
When it comes to your portfolio allocation, one decision is more important than, and should set the basis for, all other decisions in your portfolio management process: the selection of a targeted “risk posture.” In other words, this is the balance between aggressiveness and defensiveness in your portfolio positions.
With an aggressive approach, you take on large amounts of risk (in the form of stocks) in exchange for growth potential over the long term. On the other hand, with a defensive approach, you take on less risk, usually in the form of bonds, in exchange for predictable income. In our view, your goal should be optimization, not maximization, and positioning yourself for the right balance. Preservation and growth assets should be combined to get your portfolio to the point on the risk/return continuum that’s right for your situation.
Determining what’s right for you will depend on a number of factors, including your wants, needs, goals, time horizon, financial situation and more. For example, if your goals are more nearterm, a high level of risk wouldn’t be as appropriate. However, if you’re saving for several decades from now, you can afford to take on more risk today in return for the possibility of higher growth in the future. Your advisor can help walk you through these different considerations.
CHOOSING WHAT’S RIGHT FOR YOU
Once you and your advisor define your “normal” risk posture,
you then have to decide whether you want to take a static or tactical approach to the markets. With a static approach, you maintain your allocation regardless of short-term market movement, while a tactical approach means you make changes based on market conditions.
Your approach here will depend on your personal preferences and comfort level. Can you stomach the ups and downs associated with normal market volatility, or do short-term losses give you heartburn? There’s no right answer for this, and in fact, your answer may change at different points in your life.
If you choose to be tactical and to make changes as the market evolves, we advise increasing your emphasis on offense when markets are beaten down to take advantage of opportunities. When markets are riding high, we advise increasing your emphasis on defense to reduce risk. Your advisor will help you decide on, and then implement, your preferred approach.
REVISIT YOUR RISK POSTURE REGULARLY
Let’s go back to the risk/return continuum I referenced earlier. On the left side of this continuum, you have a portfolio with less risk that offers a narrowed range of outcomes, and on the right side you have more risk and a wider range of outcomes. As I mentioned, there’s no right or wrong place to be here, and where you land will depend on your comfort level and personal situation – and both factors may, and often do, change over time.
For that reason, we advise reviewing your risk posture on a regular basis, after you experience major life changes, or during times of market uncertainty – such as with today’s market. If your life or goals have changed lately, be sure to communicate that to your advisor so they can make updates as needed. If you haven’t reviewed your portfolio lately, or aren’t sure if your portfolio allocation is still appropriate, give us a call today.
SEPARATING THE FADS FROM THE TRENDS
In his latest Economic Outlook, Greg Sweeney, Bell’s chief investment and economic strategist, writes that adjusting to changing financial markets means learning to distinguish fads from trends. Over time, as the chart shows, returns gravitate toward the long-term average, despite any short-term swings. Visit https://bell. bank/business/insights to read more of Greg’s analysis.
