- How can I create a plan to create and preserve personal wealth?
- How should I provide for my children's education?
- How much should I have invested in company stock
- How can I analyze my corporate incentive package or early distribution options?
- How can I achieve a specific financial goal?
- Should I rollover my corporate pension plan to an IRA?
- Do I have enough money to retire how I choose?
- I just received a lump-sum inheritance. What now?
- When should I execute my stock options? How can I minimize the taxes?
- How do I create an estate plan so my heirs receive what I wish?
- How can I best give money to charity?
- How can I plan to minimize my current estate taxes?
- Am I adequately insured and at a fair price?
- Establishing and defining the client-planner relationship.
- Gathering client data, including goals.
- Analyzing and evaluating your financial status.
- Developing and presenting financial planning recommendations and/or alternatives.
- Implementing the financial planning recommendations.
- Monitoring the financial planning recommendations.
- Establishes the investor’s expectations, objectives and guidelines in the investment of the Portfolio’s assets
- Creates the framework for a well-diversified asset mix that can be expected to generate acceptable long-term returns at a level of risk suitable to the Investor, including:
- Describing an appropriate risk posture for the investment of the Investor’s Portfolio specifying the target asset allocation policy
- Establishing investment guidelines regarding the selection of investment managers, permissible securities and diversification of assets
- Specifying the criteria for evaluating the performance of the Portfolio’s assets
- Defines the responsibilities of the investor and the advisor
- Encourages effective communication between the investment manager and the investor
OK, let's be specific, how can financial planning help me?
Just by going through the planning process, you gain a better understanding of whether or not you are on track to achieve your goals and what changes you need to make if you are not.
Questions it can help you answer include:
I heard financial planning is complicated: what's involved?
The Financial Planning Process is not complicated but it requires a good deal of commitment and thoroughness. The process follows these six steps to help you plan for your goals:
What does 'fee only" mean?
We are fee only investment advisors - we strive to eliminate conflicts of interest and potential problems by not taking any commissions, trailing fees, or performance based compensation. We believe that what we are compensated for is our advice, not our ability to generate brokerage. This is the number one consideration you should have when looking for an advisor, who they are working for. We work only for you.
What is your investment philosophy?
Our investment philosophy is embedded in our name - Structured Asset Management. Structure refers to the types and quantities of assets that make up your portfolio. We believe that research has shown conclusively that individuals are vastly better rewarded by getting their asset allocations correct than by trying to pick securities, or time markets. We want you to have an investment plan that is structured for your needs.
We don't trade in and out, we don't try to figure out the next great thing and we don't hype what's hot in order to earn a commission from you.
We believe that having a diversified, well-balanced portfolio, following long-term buy-and-hold strategies, and having patience, will increase the likelihood that you will have a successful investment experience.
Why do you write an Investment Policy statement and what does it cover?
We write our recommendations into an Investment Policy Statement (IPS) which covers all the details of your investment plan and serves as the controlling document for all of our actions. The Investment policy Statement:
You mention Dimensional Fund Advisors on your web site; do they pay you to use their funds?
No, we are fee only advisors and take no compensation from anyone other than our clients whom we serve. We use a lot of Dimensional Fund Advisors funds in our client portfolios because we believe they are vastly superior to almost any other offering out there. DFA funds are based upon the best in continuous academic research.
They are institutional only; meaning they limit investor access to the funds, prohibit trading in and out, and have very low expenses. They can only be accessed through investment advisors who have gone through a rigorous approval process. This institutional only nature reduces turnover, costs, and taxes which improves returns for investors.
Why is it so important to watch costs? Aren't they all similar?
Keep this in mind as the best free advice you will ever get Costs Count - a 1% reduction in your costs will result in a 20% greater terminal balance for your portfolio over a twenty year period. That is a huge amount. It can make the difference between living the lifestyle you choose and living a lifestyle chosen for you.
It might not be quite as sexy to tell your friends that you reduced your costs by 1% as it is to talk about a hot stock, but it can be much more profitable in the long run.
There is a huge variation in costs among different investments and only a few of them are visible to the average investor. Tax costs, trading costs, custody costs, mutual fund expenses, annuity fees, and 12B-1 fees are just the tip of the iceberg and require careful management.
How often do you review my investments and my account?
We monitor our clients' investments on a monthly basis to search for information that may impact their holdings. Since our philosophy is long-term we recommend very little trading outside of rebalancing considerations. Each client's overall asset allocation is reviewed at least once a quarter when we make recommendations about rebalancing.
Over what period of time will my money be invested?
This very much depends upon your reasons for investing. Do you want to fund a college education for a child, save for a secure retirement or leave a legacy for generations to come? Each of these has different inputs that will impact your asset allocation. Remember that we design portfolios to help you achieve your goals based upon your goals, time horizon and risk tolerance. However, we generally do not recommend that you invest in equities if your time horizon is less than five years.
Do you work with individual stocks?
We do not generally recommend individual stocks in constructing portfolios. We believe research and experience have shown that broadly diversified baskets of equities are the best way to invest. We do however deal with individual stocks on a regular basis in two instances. A client who has an existing position in individual stocks, or who is receiving company stock as compensation needs an appropriate assessment and a strategy for managing their holdings. Hedging existing holdings and effective tax strategies always need to be addressed. We always work with your existing equity holdings to integrate them into your structured portfolio design.