FAQ

1. What is a Financial Plan?
2. Who or what is a Financial Planner?
3. Who can benefit most from your services?
4. What is “Fee-Only” financial planning and why should that be important to me?
5. I understand the benefits of working with a Fee-Only financial planner, but I might need to obtain financial products. How will I be able to do that?
6. Do you provide anything other than comprehensive financial planning?
7. Do you work with those just getting started?
8. I already have substantial assets and am doing quite well financially – I think. Can you help me?
9. I’m in charge of the retirement plans and employee benefits at my firm. I would like to increase the number of employees who participate in our benefit programs. How can you help us?
10. What types of investments does your advice cover?
11. If you develop a financial plan for me, am I obligated to comply with the recommendations?
12. What is your investment philosophy?
13. How do you price your financial planning services?
14. How much will my financial plan cost?
15. Are your fees tax deductible?
16. Once my financial plan is completed, will our relationship end?

What is a Financial Plan?
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A financial plan, in its’ simplest form, is your set of answers to the important questions about issues that impact you and your future. A financial plan works best when it is in a written form. This makes it easier to communicate your intentions to other advisers (CPA, Attorney, etc.) or family members. It also serves as a reminder of where you are now, where you want to go and how you plan to get there. A plan could be all-encompassing or you could have a limited plan addressing only certain areas.

Who or what is a Financial Planner?
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That can be an easy question and a hard one all at the same time. Anyone can call himself or herself a financial planner. Some mortgage brokers, insurance salesman, stockbrokers, Registered Investment Advisors, money managers, CPA’s even some Attorneys use the term.

The field of financial planning is made up of several focused areas including: estate planning (legal), taxes and general finance (CPA/accounting), risk management (insurance) and investment (securities/real estate/banking). Historically most planners have evolved out of one of these four areas.

In more recent years, a number of colleges and Universities have developed programs in financial planning. UC Santa Cruz has such a program locally. Boston University, DePaul and University of Missouri have excellent programs as well. A graduate from such a program will have a good understanding of all the areas of financial planning rather then a more narrow view of someone with experience in just one field.

Asking a planner about their education and experience is important but perhaps the more important concern is their objectivity. All too often someone will purport themselves to be a “financial planner” but in reality they are trying to sell you something. The concern is that if the salesman (financial planner) does not have the best solution for your situation, you might be sold a product anyway. The other problem in a commission situation is the lack of transparency. You do not know what you are paying your financial planner because the commission is a hidden fee.

The alternative to a “salesman” approach is the “fee for service” concept. Pay the planner by the hour or for a specific project or service. Some planners work on a retainer basis, a set fee for the year. Some, mostly money managers, are paid on a percentage of the assets they manage for the client. Any planner should be very willing and comfortable discussing the cost of his or her service.

You would be confident that your interests always come first when dealing with an advisor who is a fiduciary. Registered Investment Advisors are required by State and/or federal law to act in your best interests at all times and to fully disclose compensation arrangements prior to service. This is not the case with a sales oriented advisor.

When you seek a planner, look for one who has the formal education, is unbiased in his or her recommendations (does not sell you products) and has had a good amount of experience.

Who can benefit most from your services?
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Any individual seeking financial peace of mind can benefit from our services. We serve people at all income levels, from all walks of life. Clients have the flexibility to work with us on either a one-time, as needed or on a periodic basis.

We welcome clients who simply need a one-time financial consultation or a second opinion, as well as those who need comprehensive financial planning. In addition, any corporation or organization seeking quality, unbiased financial education for their employees or members can benefit from our financial education programs.

What is “Fee-Only” financial planning and why should that be important to me?
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Because we are Fee-Only financial planners, all conflicts of interest regarding compensation are removed. We do not accept sales commissions; we work solely for our clients. Because we do not sell financial products such as investments and insurance, there are no third-party relationships or outside influences to taint our thinking and financial recommendations.

In addition, our firm is a Registered Investment Advisor (RIA); as such, we must comply with a host of regulations designed to protect the consumer.

I understand the benefits of working with a Fee-Only financial planner, but I might need to obtain financial products. How will I be able to do that?
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While we do not sell financial products, we will offer specific recommendations and opinions regarding the various products that may be appropriate for you. So, if you need to obtain an insurance policy or a new mortgage, invest into a portfolio of mutual funds, find an estate-planning attorney or tax professional, we can direct you to the resources you need to obtain these products and services.

Do you provide anything other than comprehensive financial planning?
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Yes. Although a comprehensive financial plan can provide the greatest benefits, we can limit our advisory services to your specific needs, such as cash management and budgeting, investment analysis or college education funding.

Do you work with those just getting started?
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Yes. There are no minimum income levels or net worth requirements. Everyone has financial needs. We are proud to work with people from all income levels, and all walks of life.

I already have substantial assets and am doing quite well financially – I think. Can you help me?
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Yes. People who need more sophisticated financial planning or advice will find our services appealing and beneficial. We can help you define an appropriate asset allocation to meet your goals. When someone has a myriad of accounts in many different places we can help you simplify your portfolio and still meet your goals. If you are looking for a professional review or a second opinion to ensure you are on track, we can provide that as well.

I’m in charge of the retirement plans and employee benefits at my firm. I would like to increase the number of employees who participate in our benefit programs. How can you help us?
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Corporate education is key in building employee participation. We can help your people understand the benefits of your programs. Please call to discuss your specific needs. We can custom-build an educational program for your company.

What types of investments does your advice cover?
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We provide advice for all types of securities, including mutual funds, stocks (as they relate to your portfolio holdings), bonds, bank deposits, and annuities. We also provide guidance on mortgages, budgeting and cash flow issues, 401(k), 403(b) and other retirement programs, life and disability insurance, etc. If it has to do with money and finances, we can provide counseling, guidance and/or resources for you.

Because we want our clients to know that they can call on us with any and all of their financial concerns, we utilize the slogan “Financial Planning and Advice for Everyday Life.” Clients are encouraged to call us when they have a major life event, such as a new job, a baby, a marriage or divorce, or if they are planning to buy a new home or start their own business.

We also encourage our clients to call us with more common everyday questions, such as: “How should I invest within my 401(k) or 403(b) plan?” “How can I reduce my taxes?” “What advice can you offer on refinancing my home?” “How can I maximize my Flex Spending Account, Cafeteria Plan or Section 125 Plan at work?”

If you develop a financial plan for me, am I obligated to comply with the recommendations?
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Absolutely not. Recommendations are offered to meet your needs and objectives, but you are under no obligation to act on these recommendations. In today’s competitive market, it makes sense to shop around for the best available product or service. For instance if we believe you have a need for life insurance, we will suggest the type of policy, which riders and what amounts may be best for you. It is totally your decision to acquire more coverage or not. We can direct you to several companies that can provide a quality product at competitive prices for you if you want. The same applies to estate lawyers, accountants, money managers and mortgage brokers. We will recommend, but it’s up to you to decide on the person or company with which to pursue the recommendation or not.

What is your investment philosophy?
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As financial planners and investment consultants, we believe in the following fundamental principals with regard to designing an investment portfolio and making specific recommendations. The purpose of a client’s investment portfolio is to fund current and/or future financial objectives. The design of the portfolio must take into account the client’s financial objectives, tolerance for risk, needs for current income or liquidity, and special considerations such as income tax and estate taxes.

The important thing to remember is that no one can predict the future. It is difference of opinion that makes a market. Investment and economic “experts” provided with the same information often come to different conclusions. We do not suggest that we can or that any of the money managers that we recommend, will make the correct decision every time.

We do believe, that studying the historic trends and relationships of investment classes can provide valuable insight. The appropriate allocation of investment assets for your goals and risk tolerance is the most important component in developing an investment portfolio.

We believe that having a diversified, well-balanced portfolio, following long-term buy-and-hold strategies, with low costs and having patience, will increase the likelihood that one will achieve their long-term financial objectives. See our Investment Philosophy.

How do you price your financial planning services?
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The fees are based on the project that we are asked to complete or on the actual time involved in meeting with you in person or over the phone, researching and analyzing your current situation, and providing specific recommendations. At the end of our “Get Acquainted” meeting we will provide you with a fee quote.

How much will my financial plan cost?
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Financial planning fees are determined on a project basis; the total fee for a financial plan will vary from client to client based on the specific needs and complexity of your situation. An estimate is provided at the Get Acquainted Meeting, but only after your personal needs are fully identified.

Are your fees tax deductible?
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Yes. Section 212 of the Internal Revenue Code permits an itemized deduction for tax and/or investment advice in the miscellaneous section of Schedule A. It is subject to a 2% floor of the adjusted gross income on a personal tax return.

Once my financial plan is completed, will our relationship end?
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The actual “engagement of specific services” may end but many of our clients choose to meet with us periodically. Because financial planning is a process, not an event, we offer periodic reviews as requested and/or are needed.