FAQs

 

What type of financial advisor are you and what professional designations do you hold?

I am a fee-only, independent advisor.  I am a Certified Financial Planner Professional (CFP®).  In the past (when I was under a commissionable structure), I’ve held my services 7, 66, and 63.  As a fee-only advisor now, I do not maintain those as current licenses.

 

Are you a fiduciary?

Yes! as a CFP professional, I am held to the CFP code of standards https://www.cfp.net/ethics/code-of-ethics-and-standards-of-conduct.

 

 

What services do you provide?

This was part of my motivation to go independent.  I provide several services including:

Investment planning (this is what every advisor does)

• Identify proper allocations based on time horizon (for each account), tolerance for risk, and capacity for risk.
• Be selective as to which investments in which accounts (for example, you wouldn’t want to use a fund that is not tax efficient in a taxable account where it generates unnecessary taxable income)
• Monitor the broad allocation and make tactical changes in response to macroeconomic shifts where appropriate.
  • Example 1: Bonds in 2021 were yielding less than 1% on a 10-year US treasury. It didn’t make sense to take the risk of rising yields with the upside of 1% yield.  In that situation, we would have considered reducing fixed income in favor of other assets like cash or floating rate credit.
• A year later, yields are at 4%+ and this is no longer our positioning (we’re now generally leaning towards high quality, shorter-term bonds)
  • Example 2: as the fed entered a tightening cycle, moving to higher cash flow, more defensive type companies made a lot of sense. We still hold this type of positioning today, but actively rebalancing as the weighting becomes heavy due to relative outperformance.

Tax planning

• Tax deferral strategies for business owners and employees while working.
• How to minimize taxes through optimal distributions and conversions of accounts in retirement.
• Capital gains optimization strategies
• Charitable strategies
• Family gifting planning
• Attached to this email is a sample tax report and scenario analysis where I can identify tax planning opportunities and model changes
• Additionally, we provide a “tax letter” that is prepared each year for you and your CPA. The truth is, you can do great tax planning, but tax forms don’t tell the whole story.  You would not believe how often something gets missed due to poor communication.
• We are even considering adding tax preparation services as a firm, which is a very possible option in the future. I have not made a final decision here, but I am leaning towards providing tax filing as a service as well in conjunction with the tax planning to improve communication. I would be open to your feedback if this is important to you –

Insurance planning

• This will relate to the below, but I do not receive commissions, nor do I sell products. I do, however, consult about insurance and how it fits into the plan and will work with partners to implement insurance solutions where appropriate.  I do not accept solicitor fees for these partnerships… I do not like the conflict of interest that it creates.

Estate planning

• I provide a review of current estate documents and structure to understand family goals and what’s in place today.
• If updates are needed, I can either partner with an attorney of your choice (I can make suggestions as needed), or I have software to build out a trust/will depending on your needs.
• Once we have the correct estate documents, the next step is to make sure that everything is titled correctly. Similar to the tax planning, you’d be amazed how much disconnect there is between the creation and implementation an estate plan.  For these purposes, this means that beneficiary designations are updated and real estate titling is proper so that none of these assets end up in probate.

Benefits Optimization

• For employees, I help with optimizing their suite of benefits through their company. Typically, a high-income earner will have 401k, equity compensation, HSA access, stock purchase plans, deferred compensation, etc.  I help them make sense of how they should go about implementing these to minimize costs and taxes over time.

 

How do you get paid? 

I either take fees based on the amount of assets (as a %), or flat fees on an hourly basis.  My percentage fee starts at 1% and tiers down from there.

 

For investing clients who pay a % of their assets, there are no additional fixed or flat fees for hourly work or consulting.

 

 

Do you invest client funds in commissioned products or proprietary products, participate in any revenue sharing arrangements or engage in principal trading (taking the other side of the trade with an investor)? 

Back to the first question, I dropped my series 7 license which is the license that allows you to “sell” financial products for commissions.  As an independent advisor, I can use multiple clearing houses (right now I use Charles Schwab and/or Interactive Brokers… over time, I may consider using the Fidelity platform as well).  I can also use any investment manager or fund offered through any of these clearing firms (meaning that we can hire from thousands of different non-proprietary investment managers).   I do not participate in any revenue-sharing agreements or take any solicitor/referral fees.  The only way that I get paid is either from the asset-based fee or fixed fee that I charge (which shows on your transactions as a separate line item), whereas commissionable mutual funds embed the advisor fee into the fund fee so that you do not see what you are actually paying.

 

Along the lines of conflict of interest, I feel it’s worth mentioning that I turned down an offer of $$ (5 figures) from LPL Financial when I started this business because the $$ comes with “strings attached” that I didn’t feel left my loyalty to the client. I would never want to tell their client that their money was at an institution because they “gave me a sweet deal”.  Schwab has a great offering that allows clients access to commission-free bonds, commission free ETF’s & stocks, access to any 3^rd party manager that we could want, among many other benefits.

 

 

 

What investments do you focus on—individual stocks and bonds or investment funds? Within funds, do you favor active or passive funds, exchange-traded funds or mutual funds, and what is the range of their fees?

Depending on the client, I can use a variety of solutions.   In certain cases (such as highly appreciated positions that wouldn’t make sense to liquidate for tax purposes), we might even keep someone’s investments from a prior firm if the benefit of the change does not outweigh the cost of the change.

 

That said, generally, I like to use low-cost index ETF’s (Blackrock and Vanguard funds are a good example).  The costs on these range from 0.03% to 0.1% depending on the fund. Occasionally, we may use funds with slightly higher expenses, but we actively seek to find funds with reasonable expenses.

 

I do have some select situations where we use actively managed funds. This is not as frequent, but can be appropriate at times.

 

I generally do not like mutual funds for several reasons… They are expensive, not as tax efficient, promise liquidity (without always being able to generate sufficient liquidity), and have complex internal expenses and rules.

 

What would be my all-in costs for your services? And do those costs mean you will actively manage my investments throughout the year? (The latter is especially important for those advisors who charge a percentage of assets.)

The only other fee that we have not discussed is the potential to hire a 3^rd party manager to manage the money.

 

As an example, I currently manage most of the portfolio’s that I handle.  I don’t believe in excessive trading just for the sake of “looking like we’re doing something”.  I make changes to accounts in reaction to macroeconomic factors.  I mentioned previously fixed income changes that were made last year… on the equity side as an example we tilted towards quality and high free cash flow yields back last year and that has not yet been unwound.  At a certain point, I’ll be looking to shift slightly into stocks that have higher long-term growth potential as opposed to near-term free cash flow yields.

 

These changes are designed to be strategic moves and not “trades”

 

If we were to outsource (say you wanted to have another company manage the assets because you like their investment strategy), they would have some % that they charge in addition to my planning fee (typically between 0.1-0.25% depending on how much assets) in addition to the expenses of the funds they use.

 

Another related note.  We strategically bill accounts to create optimal outcomes.  For example, a Roth IRA (which grows tax-free) can be billed to a traditional IRA (from money that has not been taxed yet).  This keeps more money in your more efficient accounts, reduces your net fees after taxes, and allows us to fully invest the accounts (I don’t like to hold more than 1% of an account in cash unless there is a specific reason).

 

 

What is the minimum asset level required, if any?

I do not have a minimum asset level.  For clients with assets under 300k, I do charge an additional “planning fee” of $250/month

 

Have you or your firm been subject to any disciplinary actions by regulators or others, and if so, what are they? 

Nope!

 

How long have you been an advisor? 

I started at Fidelity in 2013 after having been investing my own money since I was 19 years old.  I generally say that I’ve got 10 years of experience.  What I feel is unique about my background is that at Fidelity, I was fielding phone calls from Fidelity clients looking for planning help.  Because of the size and scale of Fidelity, I was talking to 15-20 individuals/families every day. I did that for almost 7 years, so I talked to roughly 20k people.  Any time a young person asks me, I tell them that they should seriously consider Fidelity as a place to start because there is really nowhere else that you can get that level of experience and amount of conversations.

 

During my time at Fidelity, I got involved with the local chapter of the Financial Planning Association and became the Director of NexGen (they have a young-professional group for 37 and under).  As the director, I worked with the other Ohio chapters to create an “All-Ohio NexGen Conference”, which we hosted for a handful of years and I got to meet some of the more forward-thinking individuals in my space, which is part of what has lead me to this move.

 

Will you be my primary contact or who will serve that role?  

I would plan to be your primary contact.  I feel that going independent allows me to focus more on the families that I serve, rather than focus on growing and being as big as possible.   For example, when I was at UBS, I may have been expected to handle up to 200 or so relationships.  Independently, that number can be closer to 50-70.  Going back to the services, I believe that this allows me to dedicate the kind of time and attention that is needed for true financial planning.