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Category: LGBT Investors

Record Keeping 101

Hello savvy investors!

One of the best ways to stay on track with your financial life is to get organized. Here’s a great tip. You should split up your files between short term and long term records. Below is a list of what records fall in which category.

A great way to start off the new year is to go through your current records, purge what you don’t need and reorganize what is left. Then just maintain what you have! It will make your life much simpler down the road. Happy organizing!

Short Term records – keep for one year

• paid bills
• bank/investment statements
• canceled checks
• credit card statements
• health records
• resume (review and update yearly)
• income tax receipts (then put with your tax return in your long term records)
• major purchase receipts
• insurance policies (auto/house/boat)
After a year, clean out your files. Most major financial institutions have online access to statements. You may not even need a paper file for some of these documents.

Long Term Files
Long Term Files should include:

• bank statements (last 7 years)
• credit card statements (with home improvement expenses)
• receipts for home improvements
• warranties
• income tax records
• inheritance papers
• investment statements for all investments – stocks, bonds, mutual funds, retirements plans, annuities
• legal papers about formerly owned properties
• birth certificates
• social security cards
• burial deeds
• wills/trusts
• powers of attorney
• car titles
• house titles

Remember not to keep any wills, trusts, power of attorney paperwork in a safe deposit box. When a death occurs banks will seal the safe deposit box and people will not be able to access your paperwork. Keep documents of this nature in an accessible place and inform your next of kin their location.

Photo credit: Hey Paul Studios

Sharon L. Herman AAMS, ADPA is the CEO of Silver Key Wealth Management, and affiliated with LPL Financial. www.silverkeywealth.com Sharon.Herman@silverkeywealth.com

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Silver Key Wealth Management, a registered investment advisor and separate entity from LPL Financial.
Ms. Herman may only discuss and/or conduct transact securities business with residents of FL, MI, GA, VA, NJ, TX. www.finra.org. www.sipc.org

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2 Quick Year End Ways to save on taxes

The end of the year is coming! Now is a great time to take a look at your financial house and see how you can save money on taxes.

1. Contribute to your IRA.
Your IRA contribution may be tax deductible. This tax deduction holds true if you currently do not participate in an employer’s retirement plan. Even if you can’t take the full deduction, all of the growth in your IRA will grow tax deferred. It can help make your compounding opportunities more powerful.

2. If you have prior investment losses, you can use them against current investment gains.
Do you have losses from years past? They carry over from prior years and can be used against gains this year. It may make sense for you to sell some of your investments with gains, offset those gains with prior losses and not have or lower your taxable gains.

See if either of these two ideas will help you keep some money in your pocket!

It is of crucial importance that you seek the advice of a tax advisor before executing any of the above suggestions. Each individual’s situation is different.

Sharon L. Herman AAMS, ADPA is the CEO of Silver Key Wealth Management, and affiliated with LPL Financial. www.silverkeywealth.com
photo credit: 401(k)2013

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results.

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Silver Key Wealth Management, a registered investment advisor and separate entity from LPL Financial.
Ms. Herman may only discuss and/or conduct transact securities business with residents of FL, MI, GA, VA, NJ, TX. www.finra.org. www.sipc.org

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The 4 Boring Secrets to Accumulating Wealth

The secret is that it’s all really common sense in your approach.

1. Start saving when you are young.
We all know this can be tough. Young adults often have student loan debt, want to buy their first home, and retirement seems like a looooong way off. Many of us who are “old” selves would love to be able to go back and tell our “young” selves to save money!
Here’s a great example of how to become a millionaire:

If you put away $230 a month starting at age 21 in an investment that averages an 8% return, by age 65 you will have over $1,000,000. That’s only $230 a month.

If you start this program at age 31, you will only have $456,000 at age 65. You’ll only end up with half! You’ll still have a nice chunk of change at the end. The point is that an extra 10 years of compounding can make a big difference for the end result.

*This is a hypothetical and does is not reflective of a particular or actual investment. It is for demonstrative purposes only.

2. Don’t live to your means.
Whatever you bring home a month in pay, don’t spend it all. You don’t have to have the biggest house in the neighborhood. You don’t need the most expensive car. You really don’t need it. In the book “The Millionaire Next Door” Thomas Stanley found that the typical millionaire lives to 80% of their means, drives an older vehicle and doesn’t live in the high end neighborhood. They are living life for themselves, not to impress others.

3. Choose a career that pays well.
I know, this seems so obvious. There are many fields that are very honorable but just don’t pay well. It’s a hard reality. If you want to be financially independent, it’s tougher to do with a career that pays only $40,000 a year as opposed to one that pays $100,000 a year. Come up with a game plan to get yourself where you want to be financially. Your career plays a big part of it.

4. Pay yourself first.
Make saving for the future a priority. Get an emergency fund in order. Save up for retirement. These are the things that you will be extremely grateful for later in life. 65 year old you will look back and want to give 25 year old you a big hug and a thank you.

What is your plan to accumulate wealth?

Sharon L. Herman AAMS, ADPA is the CEO of Silver Key Wealth Management, and affiliated with LPL Financial. www.silverkeywealth.com
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Silver Key Wealth Management, a registered investment advisor and separate entity from LPL Financial.
Ms. Herman may only discuss and/or conduct transact securities business with residents of FL, MI, GA, VA, NJ, TX. www.finra.org. www.sipc.org

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5 Things to do when the Market is Volatile

Hello savvy LGBT investors! I frequently have people who are concerned about what to do when the market takes a significant drop. They get worried. They feel like they want to sell their investments and put money into cash until the market gets better. That could be the very worst choice you can make. Here’s why:

1. Market Volatility is Normal – Traditionally, the stock market has three to four drops a year that average 4-5%. It’s normal. Growth doesn’t happen in a straight line when it comes to investing. It goes up, it goes down. It goes up again.

2. If you have good investments a temporary downturn in the market isn’t anything to worry over. If your investment has good fundamentals, a good management team and a good future, DON’T PANIC. You have a good investment. The value of your investment may be down at the moment, but you know it has a solid management team. Don’t lose sight of the long term.

3. If you have your long term money in long term investments, don’t worry about day to day fluctuations. Just don’t; that’s silly. It’s like baking a cake that has to be in the oven for 45 minutes. You don’t worry because it isn’t done baking at the 15 minute mark, right? Same thing for your investment portfolio.

4. Keep your short term money in short term investments. Need money in the next year or two from your investments? Keep that portion in cash, or a CD. Then you don’t need to worry about market fluctuations.

5. Add more money to your investment! A downturn in the market is a good time to add money to your current investments! You get to buy them on sale. You like it when it was a higher price; maybe add to your positions when the price is lower, too.

photo credit: Kate Ter Haar

Sharon L. Herman AAMS, ADPA is the CEO of Silver Key Wealth Management, and affiliated with LPL Financial. www.silverkeywealth.com

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Silver Key Wealth Management, a registered investment advisor and separate entity from LPL financial.
Ms. Herman may only discuss and/or conduct transact securities business with residents of FL, MI, GA, VA, NJ, TX. www.finra.org www.sipc.org

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Creating Income Streams for your retirement

Once people get near retirement, they start thinking about income streams besides Social Security and pensions. There are several different methods to do this. Today, I’ll cover one of them. I’ll go over other ways to create income in retirement in other blog posts.

The first way to create income is by choosing investments that pay a dividend or interest and living off of the interest income.

Equities – Many equities pay a dividend. Usually this is paid out quarterly to the shareholder. Some pay out monthly, some pay out yearly, but quarterly is the most common. The dividend is a certain amount of money per a share owned. Most often, this is expressed as the” Dividend Yield”. For example, you see a stock that pays a dividend of 3.25%. What this means is that the dividend that is paid out is currently 3.25% of the stock price. So if the stock is $100.00 a share, the payout will be $3.25 over the course of a year for each share owned. Many investors hold dividend paying stocks, reinvest the dividends to buy more shares of stock. Once they retire, they “flip the switch” and start taking the dividend income from the equities.

Companies can change their dividend. If company performance is good, they may increase the dividend. This is usually an indicator of a healthy bottom line. Purchasing stocks in companies that have a history or rising dividends may be a good strategy for some investors. Over time, if the dividend keeps rising, you will give yourself a raise. That can be fruitful with rising inflation.

Bonds – When you purchase a bond, you are basically loaning money to a company or government entity. Over the duration of the term of the bond, the company agrees to pay the bond holder a certain percent return. For example, let’s say you purchase $10,000 of a bond that is paying 6% interest. Each year, the company will pay you a fixed amount of $600. When the bond comes to its due date, the company repays you your original investment amount. Bonds have different maturity lengths. Shorter maturity lengths (3-5 years) usually have lower interest rates, and longer bond maturities (20-30 years) usually pay more interest. You can liquidate a bond before the maturity date, but you the face value of the bond may be more, less or the same as what you purchased it for.

Fixed Annuities – Fixed annuities are products that are purchased from insurance companies. They are quite similar to CD’s (Certificates of Deposit). The two differences are that CD’s are FDIC insured. Fixed annuities are backed by the insurance company. The other difference is that fixed annuities grow tax deferred, where CD interest is taxable each year. As implied, fixed annuities pay a fixed interest rate for a certain term of time. This interest can be compounded until the annuity reaches maturity. The other option is that the interest can be taken as it is paid out. If an investor takes the interest as it’s paid out, then the interest will be taxable at that time. Withdrawals made prior to age 59 ½ are subject to 10% IRS penalty tax. Surrender charges may apply.

Alternative Investments – The last asset class is alternative investments. These are investments outside of stocks, bonds and fixed annuities. Some examples are privately traded REIT’s (real estate investment trusts) and BDC’s (Business Development Corporations). They frequently are for investors with a net worth of $250,000 or more. They aren’t as liquid as a stock or a bond. However, many pay a handsome dividend rate. They also don’t correlate to the performance of the stock and bond markets, so they have the potential to give investors a good income stream while not seeing the same performance volatility as a stock or a bond. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.

Investing in Real Estate Investment Trusts (REITs) involves special risks such as potential illiquidity and may not be suitable for all investors. There is no assurance that the investment objectives of this program will be attained.

There is no guarantee that the Business Development Company (BDC) will achieve its investment objectives. Investing in private equity and private debt is subject to significant risks and may not be suitable for all investors. These risks may include limited operating history, uncertain distributions, inconsistent valuation of the portfolio, changing interest rates, leveraging of assets, reliance on the investment advisor, potential conflicts of interest, payment of substantial fees to the investment advisor and the dealer manager, potential illiquidity and liquidation at more or less than the original amount invested.

No investment strategy assures a profit or protects against a loss.

These are few ideas to get you going on income streams. Look for future blog posts for other ideas.

Always talk to a seasoned financial advisor for advice for your particular situation.

I’m available to chat with if you have specific questions about your situation.

photo credit:ComputerHotline

Sharon L. Herman AAMS, ADPA is the CEO of Silver Key Wealth Management, and affiliated with LPL Financial. www.silverkeywealth.com
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Silver Key Wealth Management, a registered investment advisor and separate entity from LPL financial.
Ms. Herman may only discuss and/or conduct transact securities business with residents of FL, MI, GA, VA, NJ, TX. www.finra.org. www.sipc.org

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Why dollar cost averaging can be your best friend

What is Dollar Cost Averaging?

As an LGBT focused advisor, I get many questions about investing money each month to seek growth of your wealth. Dollar Cost Averaging is investing equal amounts of money into an investment over a period of time, and may be just the investment plan you need.

For example, let’s say that you want to contribute $12,000 into an investment account. You can deposit the $12,000 all at once. Another option is to Dollar Cost Average and invest $1000 each month.

Why not invest all at once?

For starters, most people aren’t very good at saving up a big sum of money then writing a check. Something always seems to come up and their money gets diverted to something else. That’s a pretty easy way to have your financial goals get off track.

If you set up your bank account to automatically have money sent to your investment account each month, then you don’t have to worry about writing that check. It’s done. Finished. Invested. A beautiful thing. Odds are that you going to “set and forget” and not notice the money being transferred.

Dollar Cost Averaging helps to stabilize your investments during a volatile market

Sometimes the market is up, sometimes the market is down. Sometimes your investment is up, sometimes your investment is down. If you invest some money each month, you are going to buy at both the lows and the peaks. It normalizes over time. That’s where the name Dollar Cost Averaging comes from. Your investment purchase price averages out over time. Actually, if your investment is going up over time, the price will go up over time. But when the market dips, you wouldn’t have put all of your money in at the high just to watch it drop.

How to get started

It’s easy! Most investment management firms, including mine, can set up DCA program for you. We can help you pick the right investment(s). You can pick the amount and the day of the month to invest. Then just watch your nest egg!

*Note – not all investments are available for dollar cost averaging. Some investments have a minimum amount to start, then you can DCA after the initial purchase. Please talk to an advisor for more information.

Dollar cost averaging involves continuous investment in securities regardless of fluctuation in price levels of such securities. An investor should consider their ability to continue purchasing through fluctuating price levels. Such a plan does not assure a profit and does not protect against loss in declining markets

Sharon L. Herman AAMS, ADPA is the CEO of Silver Key Wealth Management, and affiliated with LPL Financial. Sharon.herman@silverkeywealth.com

The opinions expressed in this material do not necessarily reflect the views of LPL Financial.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Silver Key Wealth Management, a registered investment advisor. Silver Key Wealth Management is a separate entity from LPL financial.

Ms. Herman may only discuss and/or conduct transact securities business with residents of FL, MI, GA, NJ, VA, TX. www.finra.org www.sipc.org

photo credit: Robert Donavan

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4 Main Points When Choosing a Financial Advisor

Hello my savvy LGBT investors! Today we are discussing how to choose a financial advisor!

Choosing a financial advisor can be a daunting proposition. Today, we’ll tackle some of the biggest questions and points that one should take into account during your search!

What kinds of registration(s) does the advisor have?

A well rounded advisor has a series 7, series 66 and a life/annuity registration.

A series 7 allows the advisor to sell all security products, except for commodities and futures.
A series 66 allows the advisor to be an Investment Advisor Representative.
An annuity/life license allows the advisor to handle annuity and life insurance transactions.
Having the series 7 and 66 allows an advisor to conduct fee based or commission business.
Having only a series 7 registration allows the advisor to only conduct commission based business.

Ideally, your advisor will have all three of these qualifications
. The reason I suggest this is that if a financial services person only has, say, an annuity/health registration, those will be the only products they can offer. Since one size doesn’t fit all, clients often are missing out on viable investment opportunities with a financial services person who isn’t fully qualified.

Are they independent?

There are basically two ways financial advisors work.
One is through a wirehouse broker/dealer.
These are the big firms whose names you are probably familiar with. These firms have production/sales numbers that their advisors must meet each month. They also frequently have proprietary products – meaning house brand products. They may not be the best investment product on the market, but the payout to the firm is usually more, because it’s their in house creation. Being that production numbers must be met and proprietary products are sold – sometimes there are situations where there is a conflict of interest between the goals of the advisor and the needs of the client.

The second way that financial advisors work is by being independent.
Being with an independent broker/dealer offers all of the same compliance oversight for the advisor and client as a wirehouse, but allows the advisor much more freedom to run their practice. There aren’t monthly production quotas, and most don’t have any proprietary products. For example, www.lpl.com is an independent broker/dealer.

I find independent advisors much more desirable, as they aren’t being pushed by the home office to hit a certain sales number. They also aren’t being nudged to use proprietary products. An independent advisor with series 7, series 66 and a life/annuity registrations is the solid combination for a client to have for transparency, ability to be placed in the appropriate investments, and unbiased client portfolio management.

In most cases, independent advisors are seasoned professionals. Most independent firms only allow experienced advisors to become affiliated with their broker/dealer. The advisor, in most cases, has an opportunity to utilize many more investment products when they are independent, as opposed to when they are with a wirehouse firm. Choice is good, right?

What kind of background do they have?
A fantastic, but little known resource is the FINRA broker check. http://brokercheck.finra.org/Search/Search.aspx
FINRA is the ruling entity over advisors. You can find out :

1. What registrations the advisor has (FYI – they do not track insurance registrations)
2. How long they’ve been in practice
3. How many firms they’ve worked for (ask questions if they have changed firms several times over their career)
4. Have they had any reportable events – arrests, bankruptcies, client complaints.

Do they have any professional designations?

There are many professional designations available that advisors can have. Most seasoned advisors have one. Ask the person you are working with if they have one and what it means. It’s nice to know that your advisor has taken the time to go above and beyond to educate themselves in their field.

Sharon L. Herman AAMS, ADPA is the CEO of Silver Key Wealth Management, and affiliated with LPL Financial. www.silverkeywealth.com

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Silver Key Wealth Management, a registered investment advisor and separate entity from LPL financial.
Ms. Herman may only discuss and/or conduct transact securities business with residents of FL, MI, GA, VA, NJ, TX. www.finra.org. www.sipc.org

photo credit: Dennis Jarvis

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Don’t be a Donkey with your Money!

Hello my savvy LGBT investors! We see it all of the time. Commercials for the sleekest sports car, the latest and greatest gadget, or whatever the newest “must have” item is.

Most people don’t even realize that they fall victim to corporate marketing and it may lead them down a bad financial path.
Advertising to purchase goods, whether it’s car, clothes, jewelry, or whatever, is a way to make you think that you can’t live without their product. That your hard earned money, your time, your effort is worthy for exchanging for their item.
Think about it. Let’s say you make $40/hr. Luxury car maker guy wants you to buy their car for $40,000. You have to give up 1000 hours of your life for that vehicle. Actually, you give up more than that, once your figure in gas, insurance, maintenance, etc. Is that car worth giving up a half of a year of work? Really? It will still get door dings. It will still depreciate. Most people I know get over the excitement of a new car within the first year that they own it. It’s just a car.

The same thing can be said for other high priced items. A Rolex watch costs from 5k up to 300k. I hate to tell Rolex owners this, but time is the same everywhere whether you own a Rolex or a Timex. Who made it a luxury brand? Rolex did with their expensive advertising! They convinced the consumer that they really need to have a Rolex watch to be somebody important! It’s just a watch.
You exchange some of your time on this planet for money
I understand that people get enjoyment from owning certain things. I certainly want people to enjoy their lives. All I am saying is that you are exchanging a certain amount of time on this planet for working to make money. Are the things you are buying worth the time you are exchanging? Think about it the next time you decide to make a big ticket purchase.

As a financial advisor, I frequently see people who “wear their money”.
They drive the fancy car, have the expensive clothes, jewelry, toys, and have nothing saved. They get 5 or 10 years out from retirement and start to panic. They didn’t have their priorities right.

Don’t be a Donkey!
I like donkeys. They are loveable and rather cute. I wanted to use a word that begins with an “A”, but this is a family blog. Just don’t be a dumb “donkey” when it comes to your money.
I’m not saying that you shouldn’t treat yourself to nice things from time to time.

But make sure when you purchase these things, they don’t detract from your most important financial goal – taking care of your future.
Save for financial freedom first. If you have extra money AFTER all of those things are set aside for, then look at how you spend your discretionary income. Don’t spend your money on expensive doo dads first, then figure out what you have left for retirement, college for the kids, etc.

What do you think of buying luxury brand items?

Sharon L. Herman AAMS, ADPA is the CEO of Silver Key Wealth Management, and affiliated with LPL Financial. www.silverkeywealth.com Sharon.herman@silverkeywealth.com

The opinions expressed in this material do not necessarily reflect the views of LPL Financial.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Silver Key Wealth Management, a registered investment advisor. Silver Key Wealth Management is a separate entity from LPL financial.
Ms. Herman may only discuss and/or conduct transact securities business with residents of FL, MI, GA, NJ, VA, TX. www.finra.org www.sipc.org

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Focusing on the LGBT community and why it’s important

People have asked me, why are you putting so much effort into this blog and website?
It’s simple, really. I love our LGBT community and want to give back.
My idea for lgbtinvesting.com came one evening when I was at a networking dinner at a local restaurant.

A financial advisor I didn’t know was sitting next to my wife. He started asking her what I did for a living. She told him I was a financial advisor, had my ADPA accreditation and liked to work with the LGBT community.

His response was, “Oh, I have some of those on the books.”
My wife said “Some of what?”
He said “Some of those. Gay people. I have them in my book of business.”

He spoke to my wife like we were things, not people. My wife was very angry, as was I.  I had only heard the tail end of the conversation, but pieced it together pretty quickly. I feel awful for his clients. This advisor doesn’t care about them as people. Heck, he hardly sees them as people. They probably have no clue as to what he really thinks, yet they have entrusted him with their life savings. That probably won’t be a successful relationship for those clients.

It was then that I decided to be a voice.
If I can pass on advice to help you further yourself financially, then I feel pretty good. I mean, if people are running up against a guy like “some of those” out there in the community, then how is anyone going to feel comfortable about having a personal discussion about financial plans and investing?

I’ve met many people who haven’t felt comfortable about coming out to a financial advisor.
Even though parts of DOMA have been struck down, and same-sex marriage is being legalized across the country, it doesn’t mean that everyone loves us… and let’s be honest; folks in the financial services industry have the reputation of being staunch conservatives who aren’t very supportive of the LGBT community. It’s really not a surprise LGBT folks are apprehensive. I’m stilling running into guys like the “some of those” that I met at that dinner. I’m sure people in the LGBT community are seeing it, too.

There are many couples who don’t feel comfortable telling all their business to someone who they aren’t sure accepts them.
They certainly don’t want to give business to someone who will use the money they make to support people who are against the LGBT community. Talk about shooting yourself in the foot! I’m betting if the clients of “some of those” knew what he said, they would be furious!

I want to provide the kind of guidance that will help you make decisions that will be fruitful to your future.
I want everyone to feel that they have a place to turn to get investment advice. I also want everyone to know they have an experienced professional available they can turn to, if needed.
So now you know why I started this blog and try to dispense good, useful information to everyone. LGBT investors need a place to call home.

Questions? I’m happy to answer them!

Sharon L. Herman AAMS, ADPA is the CEO of Silver Key Wealth Management, and affiliated with LPL Financial. www.silverkeywealth.com
An ADPA (Accredited Domestic Partner Advisor) designated Financial Advisor can assist you with your financial planning and investment needs.
The opinions expressed in this material do not necessarily reflect the views of LPL Financial.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Silver Key Wealth Management, a registered investment advisor and separate entity from LPL financial.
Ms. Herman may only discuss and/or conduct transact securities business with residents of FL, MI, GA, VA, NJ, TX. www.finra.org. www.sipc.org

 

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2014 Top 5 Businesswoman of the Year Award

Thanks Tampa Bay Business Journal! You made Sharon Herman one of the top 5 Businesswomen of the Year for 2014 in financial services!

We appreciate the recognition and support the community gives us.

Award is based on community volunteerism, business principals and customer satisfaction.

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