Trust This. December 15, 2023.

👋 Happy Friday and National Ugly 🧑‍🎄 Christmas Sweater Day. Wear ‘em if you got ‘em!

Situation Awareness: Watch your inbox for annual trust maintenance fee invoices going out over the next few weeks. Also, be on the lookout for information about our revamped registered agent, annual report filing, and FinCEN BOI report filing services for 2024. We’ll handle all of that for you, and I think you’ll be pleasantly surprised by the cost.

1 big thing: New regs on financial advisers protects retirees

Financial advisers sometimes blur the line between providing solid investment advice and selling products, causing a lot of trouble for older clients. A new rule promises enhanced protection for retirees’ hard-earned savings.

Why it matters: The rule’s biggest potential benefit lies in its expanded definition of “investment advice” fiduciaries (that is, anyone who manages money for someone else.)

Under the new definition, financial advisers who make recommendations about retirement accounts, even once, will be held to a fiduciary standard.

  • Financial advisers who fall into this category must prioritize their client’s needs. This should significantly reduce conflicts of interest.

There’s a lot of money at stake. In 2022, Americans rolled over an estimated $779 billion from defined contribution plans (like 401(k)s) into various investment vehicles (like IRAs).

  • One-and-done rollovers are a lucrative target for financial advisers less interested in client welfare than high percentage-based commissions.

  • The new rules aim to remove the possibility of predatory practices—like encouraging rollovers that don’t benefit the client.

It’s about time. The Department of Labor’s proposal responds to a longstanding need in the financial field.

  • Before the proposed expansion of “investment advice” fiduciaries, the fiduciary standard applied only to advice about regular pension funds, exposing many Americans to biased financial advice and led to poor investment decisions.

There’s industry pushback, of course. One common argument is that consumers will enjoy fewer investment choices due to the new rule. (Closer examinations reveal that more choices usually mean including options that mainly benefit the advisor.)

The bottom line: The new rule requires advisers who present themselves as fiduciaries to act like genuine fiduciaries — agents acting in their client’s best interest without hiding conflicts of interest behind fine print.

The move promises greater transparency in the financial sector and it’s a welcome safeguard for everyone retiring.

2. Solivita Homeowners Triumph in Legal Battle Against Developer

Homeowners in Solivita, FL, recently won a grueling legal battle against home developer Taylor Morrison Home Corp. Their winnings include estimated average rebates of $10,000 and the end of unjust membership fees.

The victory extends beyond the 5,000+ households in Solivita to communities nationwide struggling to pay developer-imposed fees.

The crux of the issue: The case — which went to the Florida Supreme Court — revolved around a series of expensive membership fees that the developer charged community residents.

  • The developer didn’t include neighborhood features like clubhouses and pools in the cost of the homes. Instead, homeowners had to pay nearly $100 monthly for access — on top of their routine operation and maintenance costs.

Why it matters: It sets a precedent.

  • Before this case, it was common for developers in the Sunshine State to exercise financial control over their residential projects.

  • The practice resulted in costly experiences for unhappy homeowners.

Now, communities in Florida and nationwide can look to the Solivita precedent to question and contest developer fees.

  • This could reshape the financial dynamics of thousands of residential developments.

David vs. Goliath: Many Solivita residents are elderly and depend on pensions and social security, while Taylor Morrison Home Corp. is one of the nation’s largest residential developers.

Solivita homeowners showed determination and fortitude in the face of a legal battle that many would have deemed impossible from the start.

The bottom line: Although this story is about financial rebates and a potential reimagining of financial control in residential developments, it’s also about the power of community rights.

Going forward, real estate professionals — including brokers, property managers, and real estate investors — should know the ethical and legal implications of developer-imposed fees in developments or surrounding properties they manage. Ensuring that relevant fees are fair and lawful is a critical way to support transparency and trust in the residential development market.

3. Catch up fast

  1. The Fed held rates steady at its meeting on Wednesday and signaled that it will cut rates three times next year, sending the stock market soaring. CNN

  2. The Fed was wrong about jobs and inflation. You don’t have to put hundreds of thousands of people out of work to control inflation after all. HousingWire

  3. More analysis of the real estate commission lawsuits’ fallout potential. Orlando Business Journal

  4. Mobile home values increased more than site-built homes over the past five years. WRE News

  5. The top 10 markets for future multifamily construction. Bigger Pockets

  6. The math for buying a new home no longer works. WSJ

  7. Tampa’s luxury home market is booming more than any other place in the U.S. Axios

  8. A record share of mortgages are mortgage-free. Axios

  9. U.S. households are sitting on over $18 trillion in liquid assets. Markets Insider

  10. Review of 2023, the year the housing market froze over. Realtor.com

4. Pic of the day

This is from our 2021 Ugly Sweater Day when Rufous's ugly sweater beat out Philip and Joe's ugly bowling shirts. Photo: Haley Helbig

I’ve heard a lot about the power of visualization recently.

Why it matters: The power of imagined memories is as strong as that of actual memories.

Michael Phelps used visualization to set world records and win gold medals.

  • He would do visualization exercises regularly where he would imagine himself swimming fast, consistently, and winning the race.

  • His visualizations saved him when his goggles fogged so badly that he couldn’t see where he was heading. He was able to close his eyes and follow his “memories” to set a record during the Olympics.

Colin O’Brady used visualization to walk again after being burned over most of his body, to win triathlons, and to make it across Antarctica on foot.

This is an example of how our prefrontal cortex can overcome the fight-or-flight instincts of our “lizard brain” amygdala.

Why it matters: While we may not be swimming in the Olympics, running triathlons, or crossing the Antarctic, we do face a lot of scary moments every day.

  • Negotiating our first investment home purchase;

  • Taking that listing appointment for a super luxury home;

  • Making a marriage proposal;

  • Dropping off the kids for their first day of school.

The bottom line: Mastering the art of visualization and practicing it intentionally, like exercising our muscles, makes our imagination more powerful, creating vivid “memories” that can be recalled to get us through those times when we’re facing the reality of a scary situation.

With that power, we may find it easier to stand and “fight” rather than “flee.”

For now, though, I’m going to just imagine a River I could skate away on to get my mind ready for Christmas.

We hope you found this helpful — any feedback is appreciated and can be shared by hitting reply or using the feedback feature below.

Be on the lookout for our next issue! 👋

  • Our mailing address: PO Box 547945, Orlando, FL 32854-7945

  • Our physical address: 1901 West Colonial Drive, Orlando, FL 32804

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