Responsibly Managing Community Association Reserve Funds Using CD Laddering with Lynn Wealth Management

LA JOLLA, CA / ACCESSWIRE / July 16, 2021 / Community associations in California have a long and complicated list of codes and laws they need to follow. One of those is the requirement that they save money each month that is reserved to go towards the replacement and repair of common areas. A community association is a wide-ranging term that encompasses any type of members-based management group of a “common interest development” including HOAs, condo associations, owner associations, etc. Members pay funds every month to the association, which then manages certain aspects of the property, and is run in most cases by a board. These funds add up and must be managed appropriately to be kept secure. Banks are only able to insure up to $250,000 with the FDIC, which poses a problem for associations that are holding far more than that in reserve.

Lynn Wealth Management, a finance management firm, specializes in managing reserve funds for community associations and uses a CD laddering technique to ensure they have access to funds when they are needed. The Lynn Wealth Management team has developed and implemented a very disciplined and predictable strategy to help these groups manage the large amount of money they need to keep in reserve, have it insured, and have access to funds whenever it is needed for repairs and replacements.

How having a large amount of funds can pose problems for community organizations:

“There are over 54,000 community associations in the state of California, all required to keep funds in reserve. Because banks can only insure up to $250K through the FDIC, associations can find themselves with multiple accounts, sometimes ten or more,” says David Lynn, President of Lynn Wealth Management. “Trying to manage that is a paperwork nightmare, and boards may lose track of reserve assets because they are in so many different places. Then, when they need the money, it’s another nightmare to get it out if the banks’ records are not up to date with the current board members, not to mention the possibility of early withdrawal penalties.”

This can lead to a lot of hassle, frustration, and stress for community associations, as well as be very time-consuming. The system at Lynn Wealth Management is methodical, consistent, proven, and set up to be responsive to any situation, emergency or routine in which they need to access their funds. There are three main things the company does for clients: prioritize safety, optimize liquidity, and maximize yield. The team works with each board of directors on their association’s financial situation, needs, and goals through a series of detailed steps:

  1. A detailed review of the association’s balance sheets, financial statements, and cash flow needs in order to develop a CD ladder recommendation.
  2. Detailed investment recommendation using a CD laddering strategy, with CD investments that stagger maturity dates, keeping funds more readily available. Recommendations are sent a month before a CD will mature.
  3. Follow up on recommendations 30 days after they are made in order to keep communication open and clear between all parties.
  4. CD purchases from a large inventory of FDIC-insured CDs from all over the United States.
  5. Constant review and monitoring of each association’s accounts.

This system is tried and proven; the firm’s number one goal is to help community associations across California have a better experience with their reserve funds, diligently ensuring they are not putting their money at risk or that anything is slipping through cracks. Regardless of the amount an association needs to manage, Lynn’s team can find multiple CD’s from different banks, completely insured by the FDIC, with varying maturities. Generally, Lynn Wealth Management recommends 10% of an association’s funds be kept in liquid money market accounts and 90% invested in a CD ladder, which allows for easy access to funds. Whenever something comes up, the wealth management team is responsive and proactive, having everything set up to accommodate each board’s needs. The firm is a respected member of the Community Association Institute as well as the California Association of Community Managers (CACM).

David Lynn is a United States Navy veteran graduating from the Naval Academy in Annapolis and serving as a Surface Warfare officer. After his service, he started in the financial management field, getting into community association fund management fairly early on. Working with Merrill Lynch for twenty years and Morgan Stanley for ten, he started his own firm in 2019. Devoted to working only with community associations. He resides in San Diego and enjoys making exciting memories with his wife and four children.

Interested community associations can contact Lynn Wealth Management for a no-obligation CD laddering proposal, as well as to learn more about the services the firm offers. The firm will also provide investment management for excess operating and for special functions such as settlements and reconstructions. Reach out through the company website or email [email protected] to connect with Lynn and his team and see how this method of laddering CDs can save time, money, and effort for your community association.

Securities and Advisory Services offered through Prospera Financial Services. Member FINRA/SIPC.

Company Name: Lynn Wealth Management
Contact Person: David Lynn
Address: 8100 Paseo Del Ocaso, Suite C, La Jolla, CA 92037
Phone Number: 1-858-529-1951
Website Link: http://www.lynnwm.com/

SOURCE: Lynn Wealth Management

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