is Business & Estate Advisers
E. Dennis Zahrbock, CFP
Business & Estate Advisers, Inc. is a financial resources
firm, whose knowledgeable team solves any problem using
creative solutions and exceptional service for each and
every client. Friendly interaction, concise communication,
confidentiality and integrity are key values held by the
years of existence, Business & Estate has finally drafted
and adopted a Mission Statement. Could it be that this is something
we should have had long before? Could it be that I just didn't
understand how to put one together? Could it be that two bright
young MBAs convinced him it was time to do so? Together, as
a team, here is the mission we created.
Way back when I was a young teenager studying for confirmation
we were given the Ten Commandments to memorize. We were also
given "the meaning" of each commandment. Well, above
is our firm's commandment, so what does it mean?
Ten Commandments of Business & Estate Advisers, Inc.!
1: Financial Resources Firm...Means we have the resources
either inside our walls or via our large network to resolve
any and all financial issues.
2: Knowledgeable...Our entire team is knowledgeable.
Those of us that produce our business are knowledgeable in all
financial products and their financial, as well as tax, implications.
Each of our support staff is extremely knowledgeable and capable
in the many tasks and services that must be performed to best
serve our client's objectives.
3: Any Problem...Means any problem. Although our stated
skills are in the financial services arena, we wish to help
our clients solve any problem they may be having. Sometimes
it's just a listening ear, but often it's a referral to someone
in our network that resolves the issue. Some of our general
business experiences have also allowed us to solve client problems
in the area of goal setting and business efficiency.
4: Creative Solutions...Although it can be said we are
conservative in product advice, it has never been said that
we lack for unique, innovative and creative solutions. For years
our clients have appreciated the fact that we "think outside
the box"! It shall always be our goal to be the most creative
problem solver in the industry.
5: Exceptional Service...Since re-focusing our company
some six years ago, there is not a week that goes by without
someone (unsolicited) saying to Sarah or me, "your Staff
provides the most exceptional service we have ever received."
Wow! It is our every intention to continue to maintain outstanding
and personal service to everyone that does business with us.
6: For Each And Every Client.. .This is one of the most
important parts of our mission. We do not want to be seen as
a firm that only takes care of our affluent client base, but
one that takes care of any client that appreciates our services.
We never want to give the impression that we do what we do for
the money. Although we are a profitable company, we do what
we do because it helps our clients. When they appreciate what
we do, we are most rewarded. Size of account has no bearing
on our mission statement. Appreciation by our client gains exceptional
service for all.
Meaning 7: Friendly Interaction.. .The office atmosphere we
provide and the friendly way we treat each other and our clients
is not an accident. We genuinely like each other and our clients
and treat them as we would any good friend.
8: Concise Communication...we have always prided ourselves
in being able to take extremely complex information and convert
it to a one-page, easy to understand solution. We shall continue
to provide these "bottom line" style answers to our
It goes without saying that the
relationship we enjoy with our clients is highly confidential.
But it is also necessary that we clearly make this statement
in our mission.
What could be a better word for Meaning
10 then integrity? We have always done so and will always continue
to have integrity at the top of our list. We currently practice
and shall always practice - always, always, always - the clients
needs come first and ours second. We will do what we promise
to do. This is one of our long-term core principals. And should
we make an error, we shall deem it our responsibility and fix
gave Moses the Ten Commandments, I suppose he knew when he started
with Number 1 that there would be ten. I'm pleased that, by
the numbers, we have Ten Meanings to our Mission Statement.
And, since I have integrity, I must admit I did not know there
would be exactly ten when I started this article. I guess, once
again, God was watching while I was writing.
By E. Dennis Zahrbock, CFP
best news of the Winter was Steph, Greg and Sabrina (born last
May) moving to the Twin Cities area. They purchased a nice older
home in Edina so are now close for visits and leaving our car
when we go to the Airport!
Duck Hunt in over twenty years was experienced the last weekend
in October. My two invitees, Russ Hagen and John Happe both
cancelled at the last minute so I had to make the drive to Canada
with my dog Ole. My friend Jim Eidsvold and his friends were
already in camp. The next morning the marsh had frozen so our
party broke ice for a couple of hours, creating some of the
only open water in the marsh. The ducks then began coming to
our spot and the six of us shot 48-ducks in the next three hours.
This memory will live for years. Russ and John better not cancel
before the Super Bowl, Sue and I hosted the first annual Mission
Jamaica Chilly Open. We created two nine-hole courses, the Montego
Bay Course and the Kingston Course on the Ice in front of our
home. We had over 60 golfers for this first event. With "ice
fees", sponsorship of holes and a NFL Jersey and Football
signed by Tommy, we raised over $5,000 for the Mission Jamaica
fund. Next year we hope to double this amount.
A very exciting
Super Bowl this year as our long-term friends Tom and Galyn
Brady's son Tommy was the QB of the Patriots. Last year the
three of them accompanied us to our Mission Jamaica week so
a special closeness was present when we watched the Patriots
win and Tommy being named MVP.
I and daughter Rachael ventured to Mission Jamaica for #5 for
Sue and I and #1 for Rachael. In addition to helping with building
projects our group was asked to bring the orphans to the beach
one day. They have done "beach day" for five years
now and it is the only day of the entire year that the children
leave the orphanage. Most of the kids are handicapped either
mentally, physically or both. It was a tough day for all of
us in keeping up with these kids, but the smiles will be remembered
forever. God has blessed us all.
BULLETIN BOARD OF
B & E team met for the 2nd annual staff retreat. Our cover
story depicts the fruits of our labor.
Sarah and Dennis conducted two seminars for Lorman Educational
Services titled "The Nuts and Bolts of 401(k) Plans".
Over 50 employers and human resource representatives from the
Twin Cities area attended the sessions. We're pleased to say
our ratings were high!
to Chicago to rehearse for his second main platform presentation
to the members of the Million Dollar Round Table. He is expected
to be speaking in front of 5,000 to 7,000 attendees at the June
meeting in Nashville.
Darvin braved their first family flight with all three kids
(ages 5,3, and 1) to Marco Island, Florida. Dennis & Steve
traveled to St. Louis to attend the Max Linn seminar conference.
Both came away with many new and exciting ideas.
Sue and Dennis plus two daughters, one son-in-law and three
grandchildren spend Easter plus an extra vacation week in Palm
daughters Stephanie and Lori attend the AALU meeting in Washington,
D.C. Steph and Lori get to tour some of the Washington museums
and monuments while Dennis improves his brainpower at the AALU
conference. One of the program highlights will be the speech
given by former New York mayor Rudolph Gulliani.
tax season, Sarah & Darvin will go for their annual R &
R in Deadwood, South Dakota.
Jules, Steve and Dennis travel to St. Louis for a four day educational
symposium at ValMark Securities. Dennis will be a featured
speaker at this symposium.
the big event in May happens on May 20th with Skip-A-Day XVIII.
& Estate Advisers will be sponsoring Jules in the Race for
the Cure Breast Cancer walk on Mother's Day!
Sarah & Dennis will be attending the 75th Anniversary meeting
of the Million Dollar Round Table in Nashville, Tennessee. This
is Dennis' 30th year of MDRT membership and Sarah's second (she's
two for two in qualifying).
Advisory Board Members
Third Party Administrator - EBSC
Q. How did you first become acquainted with Business &
Estate Advisers? Referral from another NAIFA member, Steve
During your association, what has Business & Estate Advisers
done for you? They have
been an advocate for my business and have referred business
has your service on the Advisory Board meant to you? Honored
to be asked.
in your opinion, makes Business & Estate Advisers different
from other financial services firms? They are friendly to
work with and detailed in their responses in our request for
KLAPPRICH, - Wayzata Fire Chief
did you first become acquainted with Business & Estate Advisers?
Through Fire Department Relief Association.
Q. During your association, what has Business & Estate
Advisers done for you? Improved the financial standing of
the Relief Association to raise the retirement benefits of the
volunteer fire fighters.
in your opinion, makes Business & Estate Advisers different
from other financial services firms? Personal friendliness.
best news of the Fall was the birth of our first grandson
Parker Wayne Zahrbock Bowman (which used nearly every
letter in the alphabet). Parker brings the total to three
so you other grandparents understand the joy and those
that aren't will hopefully someday have this experience.
He was born October 29, 2001, 9 lbs., 10 oz. and 22 inches
long! Lori, Steve and Big Sister Addison are proud as
Revised by Business & Estate Advisers, Inc. as an insert to
& Estate Adviser's
E. Dennis Zahrbock, CFP
article we'll discuss retirement planning, why you need to do
it and what options are available. Since our readers are in
their teens, it may seem like it is too far away to plan for
retirement, but the old saying "you can never start too
early" is important to keep in mind.
know if you have heard the story about the twin brothers, both
age 25. Brother #1 saved $1,800 per year from ages 25-35 (10-years)
and brother #2 spent $1,800 per year on having fun during this
same age span. Brother #1 then quit saving at age 35 while brother
#2 started saving $1,800 per year from ages 35-65 (30 years).
When age 65 retirement arrived brother #1 has $273,600 and brother
# 2 has $212,640. Why does brother #1 have $60,960 more? Because
interest compounding on brother #1's account over the 35 year
period more than made up for the 35 years deposits of brother
#2! Thus the moral of the story is start early and you won't
have to save for so long!
a moment to discuss retirement planning from various points
the Government's View
is good public policy to have the elderly be financially
secure. It is, thus, good policy to allow tax incentives.
the Family's View
financial security, support must come from children. It
is difficult to have parents live with you.
the Person to Retire's View
security allows options. Financial security creates no burden
on government or family.
is the Government's goal to not have to be responsible for providing
for the lifestyles of the retired workers, they wish to create
public relations campaigns that encourage people to save for
their futures. They also want to be certain that people who
save are not taken advantage of by unscrupulous individuals
the Government passed a law called ERISA (Employee Retirement
Income Security Act) which has been the law for retirement planning
ever since. The law, in its original form, provided great incentives
(tax deductions) and great retirement benefits (tax brackets
lowered) and great death benefits (benefit free of estate taxes).
The public relations campaign that the Government employed got
all American's excited about creating retirement savings and
security. The Individual Retirement Account (IRA) was introduced
with this legislation.
aside, if you've ever heard of a Minneapolis-based company called
Minneapolis Moline, their story on employee retirement was one
of the main reasons ERISA became law. Minneapolis Moline had
promised its employees a retirement benefit, but when it came
time to retire there was no money they ultimately vent out of
business in a state of bankruptcy. They had what was called
an "unfunded promise". ERISA changed the rules. Since
1974, an employer must provide a "funded promise".
That means that they must set funds aside during an employees
working years that can be drawn upon at retirement regardless
of whether the company remains in business! The funded promise
is deposited in a retirement trust account with very specific
rules (defined by ERISA) for the employee and retiree benefits.
a word of caution should be noted. The Government created great
incentives in 1974 and a great public relations campaign, however,
almost every year s ince 1974 Congress has met and changed the
rules created by the original law. About 95% of the time the
rules have been against the taxpayer and about 5% in favor of
the taxpayer. Yet, because of their public relations campaign,
the average taxpayer thinks of retirement plans as all good
and only a little bad. As we continue with this article, we
just want you to know that "too many eggs" in a Government
created plan (which they can also change) is not good planning.
view is really quite simple. Because of the Government's very
successful public relations campaign very few families are faced
with supporting their retired elderly members. This was certainly
not the case 60 and 70 years ago! Very seldom do we see in today's
world parents living with children because they "have to".
Yes, we see it because all parties want them to or because elderly
care is required, but seldom because of financial insecurity.
look at it from the retiree's perspective. What can be better
then to have enough financial security to be able to make choices
as to how to live, where to live, when to vacation, and the
like? Since ERISA, millions of Americans can now enjoy this
security. Let's examine how they did it and what you, as a soon
to be member of the workforce should know:
- In the
70's (as well as before) most retirement plans were sponsored
by employers which meant everyone did not have a plan. Most
retirement plans were also of the variety known as Defined
Benefit. These types of plans told the employees that
at retirement age they would retire with a defined benefit,
such as 60% of their pre-retirement wages. If a retired employee
could get 60% of pre-retirement wages plus social security,
in general, they could retire in a financially secure lifestyle.
- But as
the 80's and 90's evolved many employees found they were not
working for the same employer when they retired as when the
started so were not employed at retirement to collect the
defined benefit. The other type of plan known as Defined
Contribution became a more popular option. In this type
of plan each employee had their own account and whatever was
in the account was theirs. The employer contributed a set
amount (usually some percent of the employees pay) which is
called the defined contribution and the account earned whatever
it earned. If it earned a large amount it got larger and larger.
At retirement (or any time prior to retirement) the account
could be transferred to the employee's control in an IRA account
known as a Conduit IRA. Thus the employee had a great deal
of control at all times.
the best part of ERISA and a new amendment to ERISA passed
in 2001 is that Individual Retirement Accounts (IRA) can now
be combined into one single retirement spot. This can all
be in a 401(k) during working years and all moved to an IRA
after the working years. Prior to 2002 you could not combine
regular IRA's with 401(k) plans and thus, many employees,
had to maintain several different retirement accounts. This
was not only somewhat cost inefficient, it was also confusing.
A middle aged employee who has changed jobs three or four
times may have three to five different retirement funds. The
new law is allowing the employee to combine all to one!
- A simple
way to remember the difference between a Defined Benefit Retirement
Plan and a Defined Contribution Retirement Plan is to use
a wealthy individual enters a Dairy Queen and says to the attendant
"I want a Banana Split." Suppose, on the other hand
a youngster with 25 cents in their pocket enters the same Dairy
Queen and they say top the attendant "I have 25 cents please
give me the biggest cone it can buy!" In the first example,
the wealthy individual has defined the benefit (the banana split)
and has not worried about the cost. In the second example the
youngster has defined the contribution (the 25 cents) and can
only hope the attendant will give them a big cone!
also important to understand the "promise" in each
of the two types of plans. In a defined benefit the promise
is the benefit. Since its true cost is not known until actual
retirement, most employers are not willing to promise too
large a benefit. In a defined contribution the promise is
the contribution. This is known at the time it is made, thus
employers having good years can make a larger promise for
this year and then wait and see each year what they can afford
to promise. In a defined benefit an interest assumption is
made by the employer (within ERISA standards). If the employer
earns more then the assumption, the extra is given to the
employer. If they earn too little, the employer must make
up the shortage. Remember, they are promising a benefit not
a contribution or a pot of money! In a defined contribution
either the employer or the employee (in most cases today it
is the employee) selects the investment and the earnings become
theirs! On the other hand if they don't invest very well,
the losses or lower account value is also theirs!
- The Government
has amended ERISA to require that employers provide investment
education if they allow employees to choose their investments.
There is a very fine line between investment education and
investment advice, so much of the information is hard -to
get. Investment education reduces some fiduciary responsibility
for employers, while investment advice given by employer increases
that this Tips For Teens has given each of our readers the basic
understanding of the two types of retirement plans; defined
benefit and defined contribution. In future editions we'll cover
some of the various options available to the defined contribution
- A defined contribution plan promises a benefit at retirement.
- If a defined benefit plan assumes a 5% return on investments
and earns 8% the difference (3%) is the employers gain.
- Prior to 2002 an employee having several jobs in their
career could consolidate all retirement accounts into
one single IRA or 401(k) account, after 2001, this is
no longer available. T F
- Minneapolis Moline was a Twin City based company that
was part of the reason ERISA was first passed. T F
- Almost every amendment to Pension Law since 1974 when
ERISA was passed has improved retirement planning for
employees. T F
CORRECT ANSWERS WILL RECEIVE A PRIZE! PLEASE MAIL OR FAX
RESPONSES TO P.0. Box 679, WAYZATA, MN 55391 OR FAX (952)