Q. Are you a fiduciary?
A. Yes. All Certified Financial Planners ™ that are engaged in the practice of financial planning are held to the fiduciary standard. This is a very important point as many people in the industry are not fiduciaries and are not held to the fiduciary standard. The fiduciary standard is the highest standard of care. Conflicts of interest between advisor and client are avoided or if they cannot be avoided, disclosed in writing. Others are held to the suitability standard which means from a legal perspective that their guidance must be suitable. Here is a link to the CFP® web site for more information: CFP Board Fiduciary Duty
Q. How many years of financial knowledge do you have?
A. I have been in financial services continuously since 1993.
Q. What is your educational background?
A. I have a B.S. in Business Administration from the University of Colorado Boulder December, 1992. I have a M.S. in Personal Financial Planning from the College for Financial Planning May, 2011. Both are accredited universities.
Q. Do you have any disclosures or a criminal record?
A. No disclosures, no criminal record.
Q. How are you compensated for your services?
A. I am primarily a fee based planner. I work with clients in a few ways:
Plan only: If the client is interested in a financial plan, I will provide a financial plan for a cost of $2500. This will include as applicable goal identification and prioritization, budget analysis, Social Security maximization, pension maximization, current investment allocation, suggested investment allocation, analysis of stock options and restricted stock, college planning, Monte Carlo analysis to determine if you are on track for meeting your goals, strategy recommendations, estate planning strategy, debt analysis, and insurance needs analysis.
Portfolio Management: Includes a financial plan and the cost of the plan is waived. If the client is looking for ongoing help with the management of their assets I can manage the accounts and do all trading for them. For this, I charge a percentage of assets, generally 1%. I typically reduce the fee to .7% for assets over $1 million. I reduce the fee further to .5% for assets over $2 million. When acting in this capacity, the account will need to be transferred to Pershing/Bank of New York Mellon.
Portfolio Consulting: Includes a financial plan and the cost of the plan is waived. With a consulting agreement I charge a flat fee for guiding the client. With a consulting agreement, the client is placing their own trades and holds the account at a firm they choose. I will provide ongoing portfolio recommendations for what to buy and when and what to sell and when. The client can choose whether or not to implement my recommendations.
Q. How much will be deducted from my account on an annual basis?
A. Let me give an example. If your investable assets were $1,000,000 and I was charging you .7%, the total amount being deducted from your accounts annually would be $7,000. If I’m doing the trading for you and acting with discretion, the fee is paid quarterly in advance, and if we’re on a consulting agreement where you do your own trading at your own brokerage firm, the fee comes out in arrears. As an example, if I’m doing the trading for you and the account is held at Pershing/Bank of New York Mellon the quarterly fee would be $1,750 ($7,000/4=$1,750) and this fee is taken out at the beginning of each calendar quarter approximately 2 weeks after the quarter begins. If we start working together in the middle of a quarter, the first quarter would be prorated for the number of days I was helping you. Please be aware that I do everything in my power to keep your expenses low. I typically use no- load, index based, Exchange Traded Funds which typically have very low costs. For example, say a client is currently paying .8% for a no-load no-transaction fee mutual fund. I begin helping this client diversify their portfolio using index based no-load exchange traded funds with an average cost of .2% and I charge them 1% for my services. In this case, they were paying .8% for the mutual fund and self management and they are now paying 1.2% all-in for an incremental cost of just .4%.
Q. Under what conditions, should I leave and seek services elsewhere?
A. You would have the option of leaving at any time for any reason you see fit. There are no long term requirements.
Please be aware that markets fluctuate every day and that ETF investing carries risks including the potential for loss of principal. The use of stop orders cannot eliminate the risk of loss. Investing in options carries substantial risk and may not be appropriate for some investors. Asset allocation, which is driven by complex mathematical models, should not be confused with the much simpler concept of diversification. Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns. Additional risks are associated with international investing, such as currency fluctuations, political, and economic stability, and differences in accounting standards. Rebalancing may be a taxable event. Denton Olde nor Olde Wealth Management, LLC provide tax advice. You may wish to consult your tax professional regarding your individual circumstances.