There are a few areas that should be on your checklist before starting with an investment adviser. Experience, competence, and financial acumen should be at the top of the list. Professional designations, such as being a Registered Investment Adviser, indicates that the advisor will be held to the fiduciary standard, the highest in the financial services industry. Personal “fit” is an intangible factor which is very important. At the end of the day, you need to like and trust your investment adviser, as it will take a strong relationship to make savvy financial decisions during a time of capital market stress.
While subtle, there is a difference. A financial advisor is a generic term, typically used to describe a broker. Investment adviser is actually a legal term that describes a person (or company) that is registered with the Securities and Exchange Commission or state securities regulator. Therefore, the difference is how they are regulated.
Yes. An investment adviser is held to a “fiduciary standard” by regulators. That means they have a fiduciary duty to put their clients’ interests ahead of their own and disclose all conflicts of interest. A financial advisor is held to a duty of fair dealing, a lower regulatory standard that requires all investment products be suitable to the clients’ needs.
Yes. Sapling Wealth Management, LLC is a Registered Investment Advisor (RIA) firm and I am an Investment Adviser Representative (IAR). This means that my firm and I are held to a fiduciary standard of care, the highest in the financial services industry.
This means that I run a firm with one person. This enables me to simplify cumbersome compliance requirements that can be burdensome for other firms with even just a few employees. My cost structure is very low, as I work from a business office located at my home. My cloud based IT systems and processes enable me to be very efficient and serve clients with lower, smaller account sizes. Many of my clients believe their service is superior to what they get at a larger firm, as whenever there is a question they get me instead of a junior assistant.
I don’t have minimum levels and my clients dial into the level of service that works for them. For small business owners, that may include a financial wellness program & 401(k). For individuals, it can range from a financial plan to advanced wealth planning. My goal would be to closely match the service level to the need. Clients who are attracted to my model are primarily focused on having a plan and process to grow their liquid financial assets.
For most of my retirement plans, I typically schedule enrollment meetings 1-2 times in the first year at the client’s office. As the participants become familiar with the platform and service, I can migrate the enrollment meetings online via WebEx (a video conference service). I find it is very important to get people engaged in their investment strategy process, which helps for long-term retirement planning.
I almost always start an individual client off with an in-depth financial plan. This provides a road map for the future and serves as a marker for how far the account has come over a period of time. Then we will integrate the accounts I will manage on the Interactive Brokers platform, an annual winner of The Best Online Broker award by Barron’s Magazine. Wealth management services fall into three areas: investment consulting, advanced planning and relationship management. Investment consulting consists of performance analysis, risk assessments, asset allocation and cost/tax analysis. Advanced planning involves wealth enhancement/cash flow planning, wealth transfer and wealth protection strategies. Relationship management is comprised of working with the client and strategic vendors.
You can expect a highly customized and targeted plan individually tailored to your objectives. I identify the top areas of focus and itemize the services and financial plan cost before beginning the project. I charge $500 to begin the planning process and the balance is due when the client receives the plan and is satisfied with the final product.
Actually, I never take custody of any money. For retirement accounts, the money is held in a trust controlled by a trustee (usually the plan sponsor). For individuals, your money is held in a third-party custodian/brokerage account. As owner of this account, you authorize me to manage your brokerage account and instruct them to pay fees based on a pre-agreed fee schedule.