Regulators have still not finalized how to get investment and insurance advisors to work in clients' best interests. This means it’s your job.
Ask these questions to find out if your financial advisor is working in your best interests. Our answers are in blue:
- Are you always a fiduciary and can you put that in writing? Yes
- Does anybody else ever pay you to advise me, and, if so, do you earn more to recommend certain products and services? No
- Do you participate in sales contests or award programs creating incentives to favor particular vendors? No
- Will you itemize all your fees and expenses in writing? Yes
- Are your fees negotiable? Yes, depending on level of assets and level of service.
- Will you consider charging by the hour or retainer instead of an annual fee based on asset? Yes, but most clients prefer to pay on assets.
- Can you tell me about your conflicts of interest, orally or in writing? Yes – we literally wrote a book on this.
- Do you earn fees as adviser to private fund or other investments that you may recommend to clients? No
- Do you pay referral fees to generate new clients? Yes, we pay marketing firms for leads and we pay a discount brokerage firm referral fees.
- Do you focus solely on investment management, or do you also advise on taxes, estates and retirement, budgeting and debt management, and insurance? We provide investment management services and also advise on all other aspects of financial planning which includes tax optimization, estate design and implementation, retirement planning, budgeting, debt management and insurance. Additional fees may be charged for some services depending on their degree of complexity. Depending on the level of work we may charge additional fees.
- Do you earn fees for referring clients to specialist like estate attorneys or insurance agents? No
- What is your investment philosophy? Click here
- Do you believe in technical analysis and market timing? No
- Do you believe you can beat the market? Our goal is not to beat the market but to deliver a risk-adjusted return better than the market to optimize your odds of meeting your goals.
- How often do you trade? As seldom as possible but review investments constantly.
- How do you report investment performance? We use Morningstar to report performance as frequently as you would like to see it.
- What professional credentials do you have, and what are their requirements? Adam Wiles, Joey Hines, and Ken Moore are all Certified Financial Planning™ practitioners. Kurt Schumacher holds a J.D. as a tax attorney from Harvard. Amanda Baize is an Enrolled Agent (accountant). Both Amanda and Erin Sweatt have both completed training as planners. Ken also attained the Accredited Investment Fiduciary designation (a much easier designation than the CFP®) which he did not renew because he feels its principles mislead investors. Ken served as a fellow and is a graduate of the #1 International Business Program in the US and has been published in Money Magazine.
- After inflation, taxes and fees, what is a reasonable estimated return on my portfolio? Adam Wiles, Joey Hines and Ken Moore are all Certified Financial Planning Moderately Conservative clients expect to return 4-6% per year which is 2-4% after inflation. More aggressive investors have higher return expectations.
- Who manages my money? We do and we invest in the same assets as our clients.
