Frequently Asked Questions about Investment & Brokerage Services

Our Investment & Brokerage Services department of our Wealth Management division offers services for individuals, businesses and non-profit organizations, including but not limited to:

• Comprehensive Financial Planning for investment, education, insurance, retirement and more.
• Investment Management utilizing brokerage accounts, IRAs, 529s, mutual funds, EFTs, annuities and more.
• Insurance planning utilizing risk management vehicles such as life insurance, long term care insurance and more.

‘Brokerage’ refers to the business or establishment of a broker.  A broker is an individual or firm that acts as an intermediary between an investor and a securities exchange (ie: the stock market).  

Furthermore, a securities exchange only accepts orders from individuals or firms who are members of that exchange.  Because many investment vehicles utilize a securities exchange, you need a broker to complete those transactions on your behalf. 

A fiduciary is a person (or organization) that act on behalf of others and are required to put your interests ahead of their own with a duty to preserve good faith and trust; therefore, a fiduciary is legally and ethically bound to act in your best interest.  

Working with a fiduciary, such as Fidelity Bank & Trust Wealth Management, means you can be assured a financial professional will always put your interests first.  Our highly experienced, knowledgeable team will provide you with peace of mind by not having to worry about conflicts of interest, misplaced incentives, or aggressive sales tactics.

Yes, we believe a financial plan helps you set clear and achievable goals by defining what you want to accomplish and creating a roadmap.  A financial plan also helps you develop an investment strategy based on your risk tolerance, time horizon, and financial goals.  It guides you in selecting appropriate investment vehicles and asset allocation to maximize returns while managing risk.  A financial plan helps you plan for retirement by estimating your future income needs and determining how much you need to save to maintain your desired lifestyle.  It helps you make informed decisions about retirement accounts, Social Security, and other retirement planning options. 

As a reminder, a financial plan is not a one-time exercise. It requires regular review and adjustments as your circumstances change. Working with a qualified financial advisor can help you develop and maintain a personalized financial plan that aligns with your goals and provides ongoing support and guidance.

Congratulations on your retirement!  When it comes to your retirement plan from your employer, you typically have a few options. The specific options available to you may depend on the type of retirement plan you have and the rules established by your employer.  Here are some common options:

• Leave your funds in the employer’s plan:  Some retirement plans allow you to leave your funds invested in the plan even after retirement. This option is suitable if you're satisfied with the investment options and the plan's administrative features. However, it's essential to review the plan's rules and fees associated with maintaining the account.
• Roll over to an Individual Retirement Account (IRA):  You may choose to transfer your retirement funds from your employer's plan to an IRA. This option allows you to maintain control over your investments and potentially access a broader range of investment options. Additionally, rolling over to an IRA can offer more flexibility in managing your retirement funds and implementing your desired investment strategy.
• Roll over to a new employer’s plan:  If you're starting a new job and your new employer offers a retirement plan, you may have the option to roll over your funds from your previous employer's plan to the new plan. This option provides the convenience of consolidating your retirement accounts. However, it's essential to review the investment options, fees, and other features of the new plan before making a decision.
• Take a lump sum distribution:  Depending on your retirement plan's rules, you may have the option to take a lump sum distribution of your retirement funds. This means you'll receive the entire balance of your account as a one-time payment. Keep in mind that a lump sum distribution may have tax implications, and you may be subject to penalties if you're younger than 59 ½.

Time in the Market is an approach that focuses on the long-term perspective and emphasizes staying invested in the market over an extended period. Investors who adopt this strategy believe in the power of compounding returns and understand that the market tends to trend upward over time. They aim to capture the overall growth of the market by staying invested, even during periods of market volatility. The key idea is to have a diversified portfolio aligned with long-term investment goals and to stay invested through market cycles.

Timing the Market is an approach that involves attempting to predict short-term market movements and making investment decisions based on those predictions. Investors who adopt this strategy believe they can buy low and sell high by identifying market trends, market tops, or bottoms. They may try to time the market by entering or exiting investments based on their assessment of market conditions, economic indicators, or other factors.

In times of market volatility, it's understandable to prioritize stability in your investment returns. While there's no guaranteed way to completely eliminate risk, there are several options that tend to be more stable compared to direct stock market investments. Here are a few options you might consider for potentially stable returns:

• Bonds:  Bonds are debt securities issued by governments, municipalities, and corporations. They typically offer fixed interest payments (coupon payments) over a specified period of time and return the principal amount at maturity. Bonds are generally considered less volatile than stocks and can provide a stable income stream. Government bonds, particularly those issued by stable governments, are often considered more secure than corporate bonds.
• Treasury Securities:  Treasury securities, such as Treasury bills, notes, and bonds, are issued by the U.S. government. They are considered to be among the safest investments available because they are backed by the full faith and credit of the U.S. government. They are generally low-risk and can provide a stable return.
• Certificates of Deposit (CDs):  CDs are time deposits offered by banks and credit unions. They typically have a fixed term (ranging from a few months to several years) and offer a fixed interest rate. CDs are generally considered low-risk investments as long as they are held until maturity. They provide a predictable return and are insured by the FDIC (up to certain limits).
• Money Market Funds:  Money market funds are mutual funds that invest in short-term, low-risk debt securities such as Treasury bills, certificates of deposit, and commercial paper. They aim to maintain a stable net asset value (NAV) of $1 per share and provide liquidity. Money market funds can be a relatively stable place to park your cash and earn a modest return.
• Fixed Annuities:  Fixed annuities are insurance products that provide a guaranteed rate of return over a specific period. They offer a fixed interest rate and provide a stable income stream during the annuity's payout phase. Fixed annuities can provide a measure of stability, but it's important to carefully evaluate the terms, fees, and financial strength of the insurance company offering the annuity.
• Dividend-Paying Stocks:  While stocks are generally considered more volatile, dividend-paying stocks from established companies with a history of consistent dividend payments can offer a degree of stability. Dividends can provide a regular income stream, and some companies have a track record of increasing dividends over time. However, it's important to conduct thorough research and diversify your stock holdings to manage risk.

Remember, no investment is entirely risk-free, and it's crucial to consider your own risk tolerance, investment goals, and time horizon when making investment decisions. It's often a good idea to diversify your investment portfolio across different asset classes to manage risk effectively. Consulting with a financial advisor can help you assess your specific situation and determine the most suitable options for achieving stability in your investment returns.