Another government shutdown?

Congress returns from recess next week facing a month-end deadline to fund government operations for the next fiscal year. I’m concerned we could be looking at a reprise of 2013. That year, the federal government shut down on October 1 for sixteen days over a Republican proposal to defund the Affordable Care Act. Now, Republicans are talking about defunding Planned Parenthood, a proposal the President is almost certain to veto. More broadly, there is significant disagreement on funding for social programs generally (the President wants increased funding; the Republicans are calling for social program cuts). If these disagreements cannot be breached, the government faces an October 1 shutdown.

 

The difference this time is when the debt limit must be raised to allow the federal government to borrow additional funds. In 2013, the government ran out of money and had to borrow by mid-October, setting up an incontrovertible deadline that Congress had to address, reopening the government in the process. This year, we’re told that the government will not need to borrow more money before November or even December. So, if the government shuts down, what will force Congress to compromise and reopen it in the near term?

 

Historically, markets often are volatile as fiscal deadlines approach and Congress appears unable to agree on a solution – until it does. Investors might consider taking action to protect against volatility until these deadlines have been addressed. More aggressive investors might view a pullback as a buying opportunity; markets tend to recover nicely after Congress finally agrees to raise the nation’s borrowing limit (as Congress invariably will do here, likely at the last possible moment).

 


Andrew H. Friedman is the principal of The Washington Update LLC and a former senior partner in a Washington, D.C. law firm. He speaks regularly on legislative and regulatory developments and trends affecting investment, insurance, and retirement products. He may be reached at www.TheWashingtonUpdate.com.

Neither the author of this paper, nor any law firm with which the author may be associated, is providing legal or tax advice as to the matters discussed herein. The discussion herein is general in nature and is provided for informational purposes only. There is no guarantee as to its accuracy or completeness. It is not intended as legal or tax advice and individuals may not rely upon it (including for purposes of avoiding tax penalties imposed by the IRS or state and local tax authorities). Individuals should consult their own legal and tax counsel as to matters discussed herein and before entering into any estate planning, trust, investment, retirement, or insurance arrangement.

Copyright Andrew H. Friedman 2015. Reprinted by permission. All rights reserved.

WealthPoint Announces Key Acquisition, Merger

For Immediate Release

Media Contact: Chris Fiscus (602) 254-7312; ChrisFiscus@mosesanshell.com

PHOENIX, January 18, 2011 – WealthPoint, LLC, a leading provider of succession, exit and wealth transfer planning to affluent clients throughout the U.S., today announced the acquisition of Phoenix based Liquidity Partners and a merger with Pivotal Financial. Terms of the deals were not disclosed.

“These transactions will benefit owners of closely held businesses in much the same way family offices have managed to organize and simplify complex matters for their ultra affluent families,” said WealthPoint founder, Ryan Barradas.  “We have effectively become a ‘Family Business Office’.”

Liquidity Partners, owned by Paul Harding and Tim Young, helped clients maximize the value of their privately-owned businesses and plan for their eventual exit.  “The three firms combine talents, resources and tools to create a process that helps entrepreneurs plan the same way that they think,” said Liquidity’s Harding.  “Entrepreneurs spend a lot of time talking about proper planning, but for one reason or another, it never gets done. We believe it’s because they’re presented with a planning process rather than a decisionmaking process.”

Pivotal Financial, owned by Michael Olson, provided comprehensive planning and financial services to self-made entrepreneurs for the past 13 years. “Self-made business owners are the best instinctual decision makers in the world, yet ironically, they can’t figure out what to do next,” said Pivotal’s Olson.  “By merging our processes, we help people address their financial affairs in the same manner they think through entrepreneurial choices. We cultivate their natural ability to achieve instinctual clarity.”

The acquisition and merger clearly strengthens WealthPoint’s ability to assist self-made entrepreneurs plan for the future.  Another key reason many clients stop short of taking action is a fear of what they’ll have to do next in terms of pushing all of the financial, legal and business aspects to fruition.  “We eliminate that complexity and replace it with leadership,” said Liquidity’s Young.  “We take project management responsibility far beyond the plan design and take accountability for maintaining The Pulse of Progress.”

Long-term planning is especially critical today as the “Baby Boomer” generation ages at a rapid pace.  For Boomer owners, the demographic clock is ticking.  Boomer demographics, the law of supply and demand, the state of today’s merger and acquisition market and the “Boomer Mindset” constitute the “perfect storm” for Boomer business owners.  There are opportunities if prepared to sell the business now and significant dangers if they delay.  WealthPoint is uniquely positioned to help this group navigate what lies ahead.