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Investment Services Since 1890

Investment StrategistInvestment Strategist

April 2017

Stifel Prepares for Accelerated Settlement CycleAt Stifel and all other U.S. firms, trades on stocks, corporate and municipal bonds, and unit investment trusts settle within three business days of the trade date. For example, if you place a trade on Monday, Stifel will post the transaction to your account immediately, and the trade will settle by Thursday. This is known as a “T+3” settlement cycle.

U.S. firms have operated on a T+3 cycle since 1995. Back then, trades often involved checks, cash, and physical stock certificates, which were time consuming to process.

Today, investors can transfer funds in the blink of an eye, and physical stock certificates are largely a thing of the past. As a result, U.S. financial firms are planning to move to a T+2 settlement cycle. The change will take effect in September 2017.

The shortened settlement cycle will improve market efficiency and reduce risk. It will also align the U.S. settlement cycle with the many foreign exchanges that have already adopted T+2.

What does T+2 mean for you?

The main benefit is that you’ll have quicker access to your funds after you execute a trade. It also means that you’ll have less time to pay for purchases or deposit physical securities to sell. If you purchase shares using a check, this could be a cause for concern. Fortunately, you have several alternatives to check writing. You can:

• Transfer money using Stifel’s Automated Clearing House (ACH) or wire services.

• Use Stifel Access to transfer funds from a linked bank account.

• Deposit a check using the Stifel Mobile app. Simply take a photo of the check and submit it using your smartphone. Check deposits received by 3:45 p.m. Central Time will post to your account that day.

Looking for more information on these convenient services? Contact your Stifel Financial Advisor today.

Stifel Offers e-Delivery of Tax FormsStifel is pleased to announce e-delivery of tax forms through Stifel Access. With e-delivery, you’ll enjoy:

• Faster access to time-sensitive tax documents.

• E-mail notification as soon as forms are available online.

• Elimination of mail delays.

• A Preliminary 1099 Statement if your Form 1099 is pending information from the issuers of your investments. You will receive another e-mail when your Form 1099 is available.

Note: If you received a “1099 Delay Letter” in the prior year, we encourage you to sign up for e-delivery in order to receive a “1099 Preliminary Statement.” You will only be able to receive the “1099 Preliminary Statement” if you elect e-delivery.

To sign up for e-delivery of tax forms, simply log in to Stifel Access and click on “eDocuments.” Select “Delivery Preferences,” and change the delivery preference for the “Tax Forms” option.

If you are already signed up for electronic statements and/or confirms, you still must log in to elect e-delivery of tax forms. Please note that if you do not elect e-delivery of tax forms, you can still access a copy of your most recent tax document online once available.

If you are not currently signed up for Stifel Access, create a login by going to www.stifel.com and clicking on “Stifel Access,” then “Stifel Access Signup.”

If you need assistance in logging into Stifel Access or changing your delivery preferences, please contact the Stifel Client Services team at (800) 679-5446 or snclientservices@stifel.com.

Stifel Completes City Financial AcquisitionIn January, Stifel completed the acquisition of City Financial Corporation and its wholly owned subsidiary, City Securities Corporation, an independent investment bank focused primarily on offering wealth management and public finance services across the Midwest and Indiana.

Established in 1924 and headquartered in Indianapolis, Indiana, City Securities Corporation has approximately 40 private client advisors in eight offices across Indiana that manage approximately $4 billion in client assets, and its public finance group is the leading underwriter of Indiana municipal bond issues.

“We are excited to welcome (City Financial CEO) Mike Bosway and his team to Stifel,” said Ronald J. Kruszewski, Chairman and CEO of Stifel. “We have known the management team at City Financial for a long time and have always been impressed with their leading market position in the public finance and wealth management businesses within the state of Indiana. The addition of City Securities’ private client and public finance businesses further underscores Stifel’s increased national presence in these two profitable and growing businesses lines.”

Watch Out for Social Engineering ScamsSocial engineering scams – those that rely on human interaction to trick people into divulging personal and account-sensitive information – are on the rise and becoming increasingly sophisticated. Financial services firms like Stifel are a frequent target of such scams, the most prominent of which is “phishing.”

Fraudsters commonly use e-mail in order to carry out their schemes. Keeping aware of potential red flags as you check your e-mail can help you avoid falling victim to social engineering. Ask yourself the following questions as you examine the various fields of the e-mails you receive:

If you answered “yes” to any of these questions, do NOT click on any attachments or enter your login credentials if prompted.

From:

• Is the sender someone you don’t recognize or personally know?

• Is the e-mail unusual or unexpected?

• Does the e-mail have an attachment or embedded hyperlink?

• Is the e-mail not from someone you usually communicate with?

• Is the e-mail from an e-mail address you recognize but seems very out of character for that sender?

• Does the domain on the sender’s e-mail address appear to be suspicious?

To:

• Was the e-mail sent or cc’d to other people you don’t know, or a random group?

Date:

• Was the e-mail sent at an unusual time outside of normal business hours – e.g., 2:00 a.m.?

Subject:

• Was the e-mail a reply – but you didn’t send an initial e-mail?

• Does the subject line appear odd? Does it not mean anything to you or match the e-mail content?

Message:

• Does the e-mail ask you to open an attachment or click on a link?

• Does the e-mail advise that opening the link or attachment will help you either obtain something of value or avoid something negative?

• Are there spelling errors, bad grammar, and/or punctuation or capitalization errors?

• Do you feel odd or uncomfortable with the e-mail and request?

• Is the e-mail promising or threatening in nature?

• Have you received subsequent e-mails attempting to talk you into opening an attachment or link?

Hyperlinks:

• Is the hyperlink misspelled – e.g. www.stifell.com?

• Does the e-mail only contain hyperlinks and no content or message?

• Does hovering the mouse over a hyperlink show a different web site than the link address displayed?

Attachments:

• Does the e-mail contain an unexpected attachment – reference to an invoice, bill, documents, etc.?

• The attachment has a potentially harmful file type – e.g., .EXE, .PIF, .COM, .HTA, .CPL, .MSC, .JAR?

One Financial Plaza | 501 North Broadway | St. Louis, Missouri 63102Stifel, Nicolaus & Company, Incorporated | Member SIPC & NYSE | www.stifel.com

Life Insurance: An Often Overlooked Estate Planning ToolHave you ever considered how your debts, expenses, and taxes will be paid upon your passing? Typically, your executor or trustee will coordinate any required payments. Depending on the nature of your assets, the executor or trustee may be forced to sell certain assets to create the liquidity necessary to make these payments. Furthermore, these payments will undoubtedly erode the value of assets passed on to your heirs. These pitfalls can be easily avoided by incorporating life insurance in your estate planning.

Although life insurance will provide your heirs with liquidity and replace any wealth lost to debts, expenses, and taxes, you must exercise caution to ensure that life insurance allows you to achieve your goals efficiently. If you own life insurance in your own name, the death benefit will be included as part of your gross estate and subject to the same taxes that you hoped to use the policy to cover. Accordingly, when incorporating life insurance as part of your estate planning, you should discuss with an attorney whether it would make sense to create an irrevocable life insurance trust (ILIT) to own the policy.

An ILIT is an irrevocable trust created to own life insurance. Rather than paying premiums directly to the insurance company, you would make gifts to the trust. The trustee would then use these gifts to pay the premiums. Because the trust is the owner of the policy, the death benefit will not be included in your gross estate.

If the trust is the initial owner of a policy, the policy will be excluded from your estate immediately. However, if you transfer an existing policy to the trust, you must survive the transfer by three years in order for the policy to be excluded from your gross estate. Furthermore, the transfer may trigger gift tax consequences.

Life insurance is a very powerful yet often overlooked estate planning tool. If you decide to incorporate life insurance in your estate planning, be sure to discuss with an attorney whether an irrevocable life insurance trust is appropriate.

Although life insurance will provide your heirs with liquidity and replace any wealth lost to debts, expenses, and taxes, you must exercise caution to ensure that life insurance allows you to achieve your goals efficiently.