In Charleston, S.C., Anita Zucker is often described as a generous

WEALTH
SUMMER 2012
Legacy For Life
In Charleston, S.C., Anita Zucker is often described as a
generous philanthropist and highly respected pillar of the
community. Those who have watched her survive a major life
crisis describe her as a pillar of strength.
I N S I D E : No n-Qualifie d Re tire me n t P l an n in g
■
BB&T ’s Appro ach to Man ag ed Inve s t m e n t s
Legacy
For Life
by J O H U N T E R
|
photography by J O H N W A L S H
Ask most people to verbalize their personal
philosophy, and the response is likely
to begin with “Well…” followed by a
somewhat vague general description. Ask
Anita Zucker, and she will reply with
conviction in two words: “Tikkun Olam.”
The Hebrew phrase dates from the third
century. “It literally means ‘Repair the
World,’” she explains. “We all have an
obligation to take care of each other
and the planet.”
Anita Zucker inherited this foundational
focus from her parents, survivors of the
Holocaust who came to the United States
following World War II. “When they came
to this country, they were just thankful for
life. They taught me countless lessons, but
none more important than to appreciate
life, family and friendships.”
Today, she heads The InterTech Group, a
multibillion-dollar, family-owned holding
company with diverse businesses around
the world. Listed by Forbes magazine as
one of the world’s wealthiest women, she
is in constant demand as a speaker, fund
raiser, organizer, board member, advocate
and center of influence for economic
development initiatives and worthy causes
throughout her adopted hometown of
Charleston, S.C., and beyond.
Anita’s role as a community leader is a
longstanding one that she worked to
develop when she gave up a teaching career
to focus on her family. Her role as a business
leader is more recent – and was absolutely
not part of the life she envisioned for herself.
In 2006, her husband Jerry was diagnosed
with cancer. Despite a valiant fight, it soon
became evident that someone would need
to prepare as quickly as possible to take over
the fast-growing global conglomerate that
Jerry had built from scratch. Exhibiting
the same determination and partnership
that characterized their marriage from the
beginning, the couple spent long days over a
period of months ensuring that Anita would be
able to take over Jerry’s responsibilities as CEO.
“Like mine, Jerry’s parents are Holocaust
survivors,” says Anita. “Both families wound
up in Jacksonville, Fla. We knew each other
growing up and shared not only a common
heritage and personal values but also a strong
faith. Jerry’s parents were my teachers in
religious school. They introduced us, and the
rest just fell into place.
“Our marriage was a partnership in the best
sense of the word. Jerry was a prolific inventor
with degrees in chemistry, mathematics,
physics and electrical engineering and more
than 350 inventions and patents. I was just as
Companies – a huge and highly respected
retail chain in Canada. Our goal was to
simplify and find ways to gain efficiencies.
It paid off.”
She feels Jerry would also be pleased with
the continuity of his legacy in terms of
the company’s commitment to what it
calls the “3 P’s” – people first, then profits,
then use of those profits to take care of
others and the planet. “Our corporate
values emphasize integrity, honesty,
responsibility and teamwork,” says Anita,
“along with family, community service,
and health and wellness.”
Anita’s office is spacious but modest,
featuring a collection of family photographs
and memorabilia. By all accounts, the
office reflects her lifestyle – comfortable
but not showy. “Both Jerry and I came
from similar backgrounds. Neither family
had a lot of money, but there was a special
closeness and a commitment to giving. If
you couldn’t give financially, you gave your
time and talents. That stayed with us, and
it’s something we hopefully have passed
on to our children and they will pass on to
theirs.
Anita and her son Jonathan head The InterTech Group, focused on specialty chemicals, high-tech
fibers and precision aircraft parts. The company also invests in the leisure industry including
restaurants in Charleston, an ice skating rink and the South Carolina Stingrays hockey team.
passionate about my career as a teacher.
Fortunately, Jerry respected my career and
felt very strongly about the importance
of education – lifelong education. When I
gave up teaching to be at home while our
children were young, he recognized my
need to continue growing and giving of my
time and talents outside the home. I became
director of community relations for the
business, a position that gave me flexibility
to be with the children and also to begin
having an impact in the community.
“As it turned out, being in that role during
those years not only helped strengthen my
leadership skills but also helped me build
connections in the community, not just as
Jerry’s wife but for myself as well.”
In more ways than one, 2008 was a lifechanging point in time for Anita. “We lost
Jerry, and even though we had known it
was coming, there is no way to describe the
devastating impact. Ready or not, I had to
step in as head of the company and do so
in a way that inspired confidence. Adding
to the challenge, that was also the year the
economy tanked.”
Looking back, Anita feels that Jerry would
be pleased with the actions taken during
the past four years to weather the difficult
global economy. “Our son Jonathan gave
up a career in IT to join the business as
president, and together we made some
major decisions that took a lot of courage.
For example, we sold Hudson’s Bay
“As the business grew and prospered, Jerry
and I worked hard to avoid spoiling our
children. From the time they were very
young, we worked in soup kitchens and
visited orphanages together as a family.
As they got older, we involved them in
deciding which causes to support through
the family foundation. And now that they
are adults, I could not be more proud of
them and how they are using their lives.
“And now we have the next generation
coming along – five grandchildren so far.
My hope for them is the freedom and
encouragement to find their own way,
whatever it may be, and that they will be
guided by a strong sense of purpose focused
on helping others. To me, there is no
greater legacy.”
Yes, You Can! O
Business leader and philanthropist Anita Zucker is
often asked to address leadership development groups
and organizations that mentor women. Here she shares
examples of the strengths and strategies that have
helped her survive devastating loss and achieve success
as a teacher, wife, mother, community leader and,
now, CEO of a multi-billion dollar global business.
NE OF THE FIRST THINGS
I SHARE WITH OTHER
WOMEN – AND IT’S JUST AS
RELEVANT FOR MEN – IS TO
BE INTENTIONAL ABOUT LIFE.
It’s easy to simply live a day at a time,
reacting to whatever happens to claim
your time, attention and resources.
Probably because of my parents’ experience
as Holocaust survivors, my sisters and
I grew up in a home where life was
deeply appreciated and not taken for
granted. That, and my faith, shaped my
early thinking and led to my family’s
commitment to “Tikkun Olam”– using
our time, talents and resources to make
a difference in the world. That sense of
purpose has guided me through life.
IDENTIFY AREAS OF PHILANTHROPY
AND SERVICE THAT HAVE SPECIAL
MEANING FOR YOU.
I’m passionate about education and the
role it plays in personal success, so I spend
a lot of time on initiatives that improve
quality of education and expand access to
education. Recently, I’ve become deeply
interested in neuroscience because my
husband died from a brain tumor and
I have close friends who have suffered
from various neurological conditions. I’m
constantly reading and asking questions
and looking for ways to make a difference
in areas like these that can, in turn, make
a difference in the lives of others. In the
process, I’m growing as a person.
BELIEVE IN YOURSELF. TAKE
CHANCES. TRY NEW THINGS.
Yes, as a woman you may encounter
barriers but by far the most challenging
ones are internal – failing to recognize the
potential within yourself.
When I became director of community
relations for our company, I often was the
face and the voice of the company and
through many speaking engagements
gradually became more comfortable
in that role. That definitely took some
adjustment at first – “Me, the teacher,
speaking to a businessmen’s group or
medical board or economic development
council or whatever.” As it turned out,
this would be my training ground for
eventually leading our company, and
I could not have bought the caliber
of education I experienced and the
connections I established during
those years.
Approach every leadership
position with a strong
sense of mission.
What are the outcomes the group is trying
to accomplish, how can they be measured,
what resources are needed, and what
are the key steps? If you bring that kind
of vision and energy to the cause – and
can inspire others to join in – you’ll gain
respect and support among men and
women alike.
Bring your own style
to the position.
For me, there is no place for a “tough
boss” attitude. I like to work with people
rather than having power over them.
In our company, we have associates, not
employees, and there’s a strong emphasis
on teamwork and caring about individuals.
But I’m willing to make difficult choices
as well. There were times shortly after
my husband’s death when I had to make
business decisions that could have wound
up being excellent moves or very costly
mistakes, depending on which way the
economy went. These weren’t just figures
on paper to me; jobs and livelihoods were
at stake, but I knew it was essential to
convey confidence and an inner calm as
we announced these key decisions. I was,
and am, able to have that sense of calm
and confidence because I know we prepare
well and are staying true to the values that
define our company.
Surround yourself
with the right people.
You cannot do everything. Be willing to
ask for help. Delegating allows others to
grow and lets you allocate your time and
energy to the things that mean the most
to you. Whatever your age and stage in
life, interact with people who serve as role
models to you, helping you broaden your
perspective and continue exploring new
avenues of growth.
Keep learning.
Be curious, explore, find ways to continually
expand your horizons. Volunteer roles let
you serve in a variety of capacities related
to a wide range of issues. That’s where I first
learned to read a balance sheet.
Communicate!
Within your business, your family and your
community, there are important messages
that need to be expressed to build a shared
sense of purpose and strong relationships.
There are also important messages you
need to hear. Be a good listener as well.
Be financially astute.
Whatever your circumstances at any point
in your life, be a good steward of your
resources and learn all you can about
effective money management. Most
important, be knowledgeable about your
personal financial situation. Connect with
trusted advisors. Make sure all relevant
documents are prepared and up to date.
Monitor results regularly and don’t
hesitate to ask questions to clarify details.
Maintain balance.
Take care of yourself, make time for your
family, and find ways to give back. Each
is important, and together they provide a
sense of balance that contributes to your
health and your ability to handle stress and
enjoy life.
Be resilient.
Step back from time to time and assess
where you are. Celebrate your successes;
they’re confidence builders. Make
adjustments as necessary. It’s impossible to
know what lies ahead. I was totally fulfilled
in my marriage, my role as a mother and
my evolving role in the community. Jerry’s
death at age 58 turned my world upside
down. I lost my soul mate, the partner I
had grown up with, loved and respected for
more than 40 years. But, like my parents and
Jerry’s, I am a survivor. I was able to reach
deep inside and draw on a core of strength
that has taken me forward.
As I share my life story, I know that each
person’s circumstances are different but
I’ve found there are key leadership traits
that apply broadly regardless of gender,
industry, or whether you’re seeking to
grow personally versus in a business role. I
encourage each person to first determine
how you want to use your life. Define it
clearly enough to put it on paper in a few
crisp words. Identify the relevant skills, traits
and experiences you already have, and those
you will need to acquire to move forward.
Be positive and believe in yourself. Then go
for it – every day.
“You may encounter barriers but by far the
most challenging ones are internal – failing
to recognize the potential within yourself.”
Market View
with Jeffrey J. Schappe
It was good to see the positive performance of the S&P in the first quarter of 2012,
its best performance since 1998. However, it’s important to keep in mind some of
the unique drivers behind that performance. It benefited from a sea of liquidity and
reduced risk premiums and, fueled by only three sectors – financial, technology
and consumer discretionary – it was a rather narrow rally.
Since then we’ve seen progress diminish. Most Federal
Reserve data show the recovery at low levels or well
below average given the stage of the recovery, despite
unprecedented economic stimulus. We benefited earlier
from the warm winter pulling economic activity forward
earlier in the year, with the downside being a further
dampening going forward. While we hear talk of a double
dip recession, recognize that we are almost five years from
the start of the Great Recession so it would not be surprising
to experience a recession as part of a market cycle at this time. This premise is
supported by the Conference Board’s Index of Leading Indicators and following
the trend in comparison to past market cycles.
Much of Europe is in or near recession and we do not expect market performance to
improve until there is a concerted response including fiscal reform, European bank
recapitalizations, and ECB (i.e., German) debt guarantees. Emerging markets and
China have benefited from the consumption trends of the developed world, but as
developed economies continue to dampen, emerging markets will feel the impact.
Therefore, we maintain a strategic weighting to U.S. equities. At under 14x earnings,
forward valuations are not out of line with historic levels while still not cheap. An
additional silver lining, we hope, is that housing appears to be bottoming and should
improve in the next year or two. We continue to maintain a significant underweight
to international developed equities vs. the U.S. Treasuries continue to look
unattractive with the Fed’s goal to push investors into riskier assets.
While we are in a challenging and dynamic investing environment, we have
confidence that our asset allocation strategies and manager selections are structured
to best position our client portfolios to outperform and manage risk. Tough investing
climates can offer the best opportunities to take advantage of mispriced assets.
Jeffrey J. Schappe, CFA, is Chief Investment Strategist for Sterling Capital Management.
The opinions contained in the preceding commentary reflect those of Sterling Capital Management LLC, and not those of
BB&T Corporation or its executives. The stated opinions are for general information only and are not meant to be predictions
or an offer of individual or personalized investment advice. They also are not intended as an offer or solicitation with respect
to the purchase or sale of any security. This information and these opinions are subject to change without notice. Any type of
investing involves risk and there are no guarantees. Sterling Capital Management LLC does not assume liability for any loss
which may result from the reliance by any person upon any such information or opinions.
Investment advisory services are available through Sterling Capital Management LLC, a separate subsidiary of BB&T
Corporation. Sterling Capital Management LLC manages customized investment portfolios, provides asset allocation analysis
and offers other investment-related services to affluent individuals and businesses. Securities and other investments held
in investment management or investment advisory accounts at Sterling Capital Management LLC are not deposits or other
obligations of BB&T Corporation, Branch Banking and Trust Company or any affiliate, are not guaranteed by Branch Banking
and Trust Company or any other bank, are not insured by the FDIC or any other government agency, and are subject to
investment risk, including possible loss of principal invested.
A
s a business owner, have you been
concerned about either “taking care”
of your best employees and/or losing
key talent to a competitor? Further, are you
interested in providing a way to recruit top talent
to your organization? Employees, do you wish
you could put more money away for retirement
in addition to your 401(k) and other qualified plan
contributions? If so, it may be time for you to
take flight into the world of non-qualified
retirement planning.
Before takeoff, there are two equally important
considerations or “check-offs” to consider. The
first consideration is plan choice and structure.
The selection of the right plan (and structure)
will likely result in a successful expedition
defined by the goals and objectives you set. A
wrong choice may result in a plan that is not
efficient and does not achieve the desired effect
for engaging in the plan in the first place. The
second “check-off” is how to fund the plan. While
a non-qualified plan may be left unfunded, life
insurance is often the preferred funding vehicle of
choice. It will be important for you to keep these
two “check-offs” in mind not only as you begin
flight but throughout the journey, or life of the
plan chosen.
There are a number of rules that must be
navigated before “plan takeoff.” The most
important issues to consider include who may
participate and federal tax implications.
■ Who may be ticketed to fly? – Generally,
there are two different ways an individual may
“earn a ticket” to participate in a non-qualified
retirement plan. The first way to qualify is
income. Generally speaking, if an individual earns
more than the Social Security wage base ($110,100
in 2012), he/she is eligible to participate. This type
of qualification is often referred to as a “top hat”
qualifier. The second way to qualify is job title
and responsibilities. An individual who does not
qualify as a “top hat” qualifier may be eligible if
he/she is considered a manager or distinct from
the rank and file of the organization. Including a
participant who does not qualify may make the
plan subject to ERISA (the Employee Retirement
Income Security Act), impacting tax treatment.
The Plan and its Funding
Taking Flight into
the World of Non-Qualified
Retirement Planning
by B r y a n P . K o e p p , J . D . , CFP ®
and LOR I M c g u i r e , CLU , C h FC
■ Executive Bonus Plan(s) – An executive
bonus plan is a non-qualified retirement plan
that is funded by a cash bonus. The major
advantage of adopting an executive bonus
plan is simplicity. Executive bonus plans are
not subject to the “Enron rules” because a
deferral is not made to fund the plan. The
employer may take a deduction pursuant to
Internal Revenue Code Section 162 for the
amount contributed (or bonused) to the plan
participant. The executive will have to include
the salary increase in his or her taxable
income, but after paying taxes, the remaining
bonus will be available to fund premium
payments for a life insurance policy.
Even though the plan participant is taxed
on the bonus granted, a restriction may
be placed on the plan restricting the
employees’ access to plan proceeds for a
reasonable period of time. The employer
retains the power to release the restriction
and give the employee access to policy cash
values, thus encouraging the employee to
remain with the company and creating
“golden handcuffs.” If the employee fulfills
the agreement, he or she will eventually
have access to the policy cash values, as
well as the ability to provide his or her
beneficiaries with an income tax-free death
benefit. The “reasonable period of time”
standard is usually defined by state statute
or case law in the jurisdiction where the
plan is created.
■ Rules of the Air: Evolution of tax
implications since Enron – In 2004,
Congress enacted strict rules regarding
the funding and distribution of funds
from deferred compensation plans. These
rules, codified as Internal Revenue Code
Section 409A, were passed in response to
the bankruptcy of Enron. One of the major
reasons Enron faced bankruptcy was due to
the acceleration of non-qualified retirement
benefits to company executives. Income
deferrals to non-qualified plans must be
timed correctly, and distributions must be
made upon the occurrence of a “triggering
event” (death, disability, separation
of service, or change in control of the
employer).
THREE IS A CHARM:
PLAN OPTIONS
Following are three non-qualified
retirement planning aircrafts of choice.
Each type of plan will take off (deferral
choice and funding) and land (distributions
and plan recapture) differently.
■ “Traditional” Deferred Compensation
– A “traditional” deferred compensation
plan is a non-qualified retirement plan that
is funded by either the plan participant
who makes a deferral of current income
or a combination of a deferral by the plan
participant and a matching contribution
by an employer/business owner. Business
owners of “C” Corporations may also defer
compensation in a “traditional” plan. This
strategy may provide a means for a “C”
Corporation owner to transition or “exit”
their company through a third party sale or
key employee transfer.
some or even possibly all of the costs
of the insurance plan which would include
the actual benefits paid to the employee
along with the cost of insurance.
The plan
participant is
not taxed on the
plan proceeds until he/she
is eligible for a distribution based
on the triggering events specified
under the “Enron rules.” Investment
performance may be measured by company
growth, a crediting percentage, or other
formula. Like executive bonus plans,
“traditional” deferred compensation plans
may impose a vesting schedule on plan
participants which is subject to a
“reasonable period of time” standard.
In preparing for takeoff, the company
has a number of options that are available
to provide funding for the plan. The
company can fulfill its obligations to its
executives by establishing a fixed rate of
return that will be paid for out of general
operating assets when the payout is due.
The company may tie the executive’s
savings to particular mutual funds that
are selected and may also use deferred
annuities as a funding mechanism. Cash
value life insurance is also a popular
and efficient option, which if structured
properly can provide the employer with
access to cash value within the policy to
fund its obligation to the employee. In
addition, the employer is entitled to receive
any remaining death benefit which can
serve to fund future obligations.
■ Supplemental
Executive Retirement Plan(s)
– A Supplemental Executive Retirement
Plan (SERP) is a non-qualified retirement
plan that is usually funded by the
employer/small business with the option
of a plan participant match. Like
“traditional” plans, SERPs are subject
to the federal non-qualified retirement
plan rules under IRC 409A. SERPs often
resemble defined benefit plans as the
plan participant will often receive a
benefit based upon a percentage of
current income or formula.
To ensure a smooth takeoff and landing,
companies may opt to fund their SERPs
by utilizing current assets, a separate
sinking fund or through the use of
corporate owned life insurance (COLI)
insuring key executives they wish to
compensate. The benefits to COLI are
extensive but the key advantage is that
the business is designated as the
beneficiary of the life insurance policies.
Upon the death of a key executive,
the company will be reimbursed for
ADDITIONAL CONSIDERATIONS
■ Additional Protection for Employers/
Business Owners – Business owners
implementing a non-qualified retirement
plan should consider adding some additional
“flight protection.” Such protection includes
the execution of an employment agreement
by the plan participant. The purpose of an
employment agreement is to acknowledge
not only the existence of the plan but also
define the rights and responsibilities of both
the plan participant and plan sponsor.
Business owners should also consider having
their key talent execute a covenant not to
compete, a confidentiality agreement, and a
trade secret agreement (if applicable). All
such “flight protection” issues are subject to
federal and state law.
Non-qualified retirement plans provide
a stealth way to recruit, retain and reward
key talent. As you taxi to the runaway,
remember to “check off” on your plan
structure and how you intend to fund
the plan you ultimately choose. After
your “check off” is complete, you are
cleared for takeoff. If implemented and
managed correctly, this will be a flight
that your business and your key talent
will mutually enjoy.
Selecting the right non-qualified retirement plan
and structure is critical. A wrong choice may
result in a plan that is not efficient and does not
achieve the desired goals and objectives. Equally
important is determining how to fund the plan.
BB&T Lighthouse Project Focuses on
Helping Local Communities
Among the values that define BB&T, commitment to our
communities ranks high. During the past three years, BB&T
employees have donated more than 150,000 volunteer hours to
local charities and touched the lives of more than five million
people in 25 states through the BB&T Lighthouse Project.
One of the high-impact projects in 2011 was led by Laura Ellis,
Personal Trust Specialist in Charleston, W.Va., along with 21
other BB&T Wealth Team members and their families.
“The team harnessed their passion for feeding the hungry
in our community by helping Manna Meal Soup Kitchen,”
said Doug Reed, BB&T Wealth Team Director in Charleston.
“Manna Meal serves two meals a day, every day of the year
to Charleston’s hungry and homeless. Since its inception in
1978, it has served healthy, well-balanced meals to more than
1.25 million people. Our team helped make sure the trend
continued by weeding and mulching in the large vegetable
gardens that Manna Meal uses to supply almost all of their
produce. The team also provided $2,000 worth of kitchen
equipment and supplies.”
The Manna Meal project was one of five Lighthouse Projects
awarded the BB&T Spirit Award for 2011, contributing another
$5,000 to the soup kitchen.
Many other BB&T employees are quietly serving with similar
compassion and love of community. Learn more about them
by going to http://www.bbt.com/bbtdotcom/about/lighthouse/
default.page.
“BB&T has built our success as a community-based bank, and we know this is a tough and challenging period for our
communities and our country. We can’t think of a better reason or time for us to focus our energy on helping others.”
-Kelly King, Chief Executive Officer, BB&T Corporation
A Conversation With Andy Pulliam,
Head of BB&T Wealth Portfolio Management
P
lease provide
a brief
overview of
your background.
I graduated from the
University of North
Carolina in 1988 and
earned my MBA
from Wake Forest
University in 1992. I
have been interested in
investments for as long
as I can remember.
While the statistical
and mathematical
side of the markets is
important and gets a
lot of the press, you
must also be able to
relate to people on a
personal level. At the
end of the day, I find it
immensely satisfying
to help people build
investment strategies
that are consistent
with their objectives and individual
personalities. It feels great to see these
strategies come to fruition and see the
financial peace of mind a solid plan can give.
Why did you choose BB&T?
For me, it all starts with BB&T’s strong and
unwavering focus on values and doing
the right thing for our clients. I think we
have all seen in these last few years that
not all institutions have a strong emphasis
on values. BB&T has a very strong senior
leadership team, and I really like the
emphasis that BB&T puts on developing
talent and leadership, and on empowering
its employees to be advocates for all of its
clients.
Give us an example of an experience
that helped form your perspective on
investment strategy.
I know it is a popular answer, but 2008 made
a strong impression. And it was not simply
the market decline. You may recall that
there was a pervasive sense of dread that it
was somehow different this time; that this
was more than just a cyclical event. There is
a saying, “When the tide goes out you realize
who is swimming without a bathing suit.” In
other words, the true test of one’s character
and stability is borne out when times are
hard. The events in and around 2008 put a
stress test on the financial system as a whole.
Everyone suffered, and many investors were
in panic mode. One
of the most satisfying
accomplishments
of my career was
that in the midst of
all this turmoil, our
clients remained
relatively calm.
This was a strong
endorsement of our
core belief in hiring
the very best Portfolio
Managers, providing
them with worldclass technology,
and placing them
out in the regions
next to our clients.
Some competitors
have attempted to
gain efficiencies by
centralizing their
investment functions,
but our Portfolio
Managers are out in
their communities
with their clients, educating them on
current market conditions, and working
with them to build individual, customized
investment solutions that meet their
unique goals.
The market corrections of 2008 drove home
the necessity of having a clear and defined
process, great technology, and especially
the importance of the bond that is formed
between good Portfolio Managers and their
clients. Our clients knew that our welltrained, objective investment professionals
would walk with them every step of the way.
This partnership saved some clients from
making rash decisions in the darkest days of
the market pull-back – decisions that would
not have been beneficial to their financial
well-being.
How would you describe BB&T Wealth’s
approach to managing investments?
It starts with truly knowing the client. To
suggest investment solutions to a client
without knowing their circumstances is
analogous to prescribing medicine to a
patient before the symptoms are known.
There are two key premises. First, you
must have experienced investment experts
working directly with your clients. Second,
these experts must be objective. Many
investment firms say that their investment
experts are objective, but the proof is how
they are compensated. Our Portfolio
Managers’ compensation is not tied to
their investment recommendations. Their
decisions are based solely on the client’s
specific circumstances and objectives. You
must also give your Portfolio Managers
access to great investment managers
and tools to evaluate them. We have a
rigorous, well-defined process that seeks to
identify “best in class” managers who have
consistently added value.
In summary, we seek to understand our
client’s individual needs and situation,
integrate this information into a customized
investment plan, utilize some of the world’s
best money managers, and provide the client
with a dedicated team of skilled Wealth
professionals to pull it all together.
What is it about BB&T’s approach
that appeals to affluent investors?
An independent investment research
firm recently completed an in-depth
study of Wealth clients. The study asked
respondents, “What do you want from
your investment advisors?” The results
read like an advertisement for our Wealth
process. High net worth investors felt it was
crucial to have sophisticated advisors. As I
mentioned earlier, we have made significant
investments in our Portfolio Management
group. Our Portfolio Managers have
experience, expertise and proven relationship
management skills. High net worth
investors also felt it was imperative they were
getting independent and objective advice. It
is important to note that BB&T compensates
our Portfolio Managers in a way that does
not cloud their objectivity. High net worth
clients felt it was important that their
investment process was transparent. We
have clearly defined manager selection
criteria, and our investment results are
calculated by a third-party provider. Last but
not least, high net worth clients wanted an
integrated approach that took into account
all of their holdings and did so in a tax and
cost-efficient manner. Working in a teambased approach with trust experts, planning
experts and advisors, we look at a client’s
entire picture, using leading edge technology
to holistically manage overall portfolio risk
in a tax-efficient manner. Tax management
will likely be even more important going
forward, and our process evaluates the tax
cost of every trade, and does this in light
of each client’s individual tax situation. In
other words, it is not what you make that is
important, it is what you keep.
How does the current economic
environment compare to other
difficult times in your career?
There will always be volatility due to
economic cycles and changing investor
appetites, but I think the level of investor
worry has broadened to include the
fundamental financial health of our country.
I am asked as many questions about political
topics as I am about investment ideas. The
debt burden, combined with a polarized
political environment, is concerning for
many investors. As a result, clients are
generally more uneasy about the long-term
health of the market than they have been
previously. I think the mood has turned
from a return on principal to a return of
principal, as evidenced by the large balances
in money market paying very little interest.
The other thing I would offer is that
historically bonds have been a relatively safe
place to park money in uncertain times.
Given the low yield environment, some
investors have extended maturities and
lowered their credit quality standards in
an effort to attain higher yield. What may
have seemed like a way to reduce risk and
generate income could backfire if rates rise.
What key investment tenets do you
emphasize even in difficult investing
environments?
First, the worst time to make important
investment decisions is in times of crisis.
You should aim to make strategic decisions
when you can apply clear-headed logic to
your situation. These are also the times
to decide how you should, or should not,
react to significant market swings. Second,
understand that some people profit from
driving investment volume by creating
fear and uncertainty. Recognize that not
everyone is on your side, and try not to get
caught up in near-term noise.
Third, become a student of market history.
This can help you avoid emotional or shortsighted reactions. By looking at historical
reactions to market fluctuations, you will
get an idea of how human psychology can
distort the market beyond fundamental
value. Fourth, never be afraid to ask
questions about investments if you don’t
understand a holding or if its behavior just
doesn’t make sense. Investment mistakes
can often be averted with simple questions.
Last, the greatest investors have keen
awareness of their strengths AND their
weaknesses. Seek to understand your
weaknesses and put controls in place to
keep them in check.
News and Notes
BB&T Wealth Ads Available for Easy Viewing
Gifting Laws Scheduled to Change at Year-End
If you receive The Wall Street Journal or other high-end publications,
listen to your local NPR station or watch cable TV, you may already
be familiar with the new series of BB&T Wealth ads running this
summer and fall. Each captures a key point about BB&T’s distinctive
approach to helping clients build, preserve and pass on wealth
through the generations.
Unless Congress takes action, some key tax laws related to gifting will
change dramatically in 2013. As you consider opportunities for gifting
under the current laws, keep these upcoming changes in mind:
■
The federal tax exemption on lifetime gifts and/or estate
transfers to non-spousal heirs is scheduled to decrease from
$5,120,000 in 2012 to $1,000,000 in 2013.
■
The maximum federal tax rate on gifts above these exemptions
will rise from 35% to 55% in 2013, significantly reducing the aftertax value of the gift.
“These changes alone make it important to assess your gifting
strategies prior to year-end,” says Eliot Brandy, JD, CFP®, BB&T
Wealth Financial Planning Group Manager in Atlanta, Ga. “In
addition, the current environment, with its combination of low
interest rates and depressed values, creates great potential to
maximize the value of intra-family transfers.
“By gifting property during your lifetime, any appreciation in value
between the time of the gift and your death completely escapes both
gift and estate tax,” he notes. “Certainly, any gifting program should
only be implemented if you are comfortable that such gifts are
appropriate and timely within the context of your overall financial
strategy.
The ads and TV commercials are posted
on BBT.com/Wealth. Or scan this QR
code with your cell phone for an easy link.
“We encourage clients to take action now rather than waiting until
late in the year,” says Brandy. “Implementation can be scheduled for
year-end, but it’s important to begin the assessment now.”
BB&T Wealth magazine is produced for clients of BB&T Wealth. Content suggestions are welcome and may be
forwarded to your Wealth Advisor or BB&T Wealth, 2400 Reynolda Road, 2nd Floor, Winston-Salem, NC 27106.
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and registered broker/dealer subsidiary of BB&T Corporation, Member NYSE, FINRA and SIPC.
Insurance products are offered through BB&T Insurance Services, Inc., a wholly owned subsidiary of Branch Banking and Trust Company. Insurance.BBT.com.
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The information provided should not be considered as tax or legal advice. Please consult with your tax advisor and/or attorney regarding your individual circumstances.
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