1926 E. Fort Lowell Rd Suite 100
Tucson, AZ 85719
Contact Us
Mon - Thurs: 9:00 - 5:00 AZ
Fri: 9:00 - 3:00 AZ
1926 E. Fort Lowell Rd Suite 100
Tucson, AZ 85719
Contact Us
Mon - Thurs: 9:00 - 5:00 AZ
Fri: 9:00 - 3:00 AZ
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25 years for alex CFA, CFS, ChFC, CFP®, CASL 20 for robin CFP 11 for david CFA
Because we are an independent RIA, we have tens of thousands of investment options to choose from. We focus on customizing our portfolios to our clients’ specific circumstances with an emphasis on tax and cost efficiency. We also try to maximize expected return based on the appropriate level of risk for an individual client using modern portfolio theory as a guide.
We generally start by running a financial plan to see whether a client’s goals are on track. Once we have determined this, we design a portfolio that we believe will have the best chance of them achieving all of their goals.
This portfolio is based on the client’s individual circumstances. Specifically their risk tolerance, withdrawal rate, and when they need the money. From there we work backward to design a portfolio that will have a good mix of liquidity, safety, and growth potential to have the best chance of achieving all of an individual client’s goals.Some of our clients have specific types of investments they want to avoid or concentrate in their portfolio. We of course try to accommodate that within reason if it doesn’t jeopardize their plan.
Most of our clients are close to retiring or already retired. Typically they’ve done a good job saving and want to make sure their money not only lasts throughout their retirement but is also invested prudently and efficiently taking into account risks, returns, and taxes. About ⅓ of our clients are small business owners such as medical practices that we help reduce their current income taxes by setting up retirement accounts for their businesses.
We feel it is extremely important to keep in communication with our clients. To that end we will invite the client in at least 2x per year to go over what’s changed in their life and to go over what our current outlook and thoughts are on the economy and markets. Often in this industry we see prospective clients who haven’t talked to their advisor in years. I don’t believe an advisor can effectively manage money for clients’ specific goals without talking to them for years. There are of course also monthly statements and online access as well. There is also no phone tree to reach us. An onsite employee of our firm will answer the phone during business hours and help a client as quickly as possible with whatever issue they might be having. Monthly reporting and online access as well.
We are fee based. This means we derive about 99.5% of our revenue from fees. Typically we charge 1% for the assets we manage. When account sizes get particularly large, we do discount. All of the services we provide are covered under these fees, so there is no hourly rate, nor any upcharges for additional meetings or whatever is needed.
Performance reports are currently done by morningstar although the vendor might change. They have online access. Because the portfolios are custom, the benchmark is the does it work for their plan/situation.
We use a committee approach and try to avoid unnecessary trades which can create tax consequences. Most trades are done to rebalance the portfolio based on risk tolerance and our economic outlook
The assets are custodied at Schwab or Fidelity and if we get hit by a bus then your assets are safe at those custodians. The custodian holds the assets and generates statements. This avoids the madoff problem.
We always act as fiduciaries as required by our internal philosophy and certain designations. There are times where we deal with products that do not require that we are fiduciaries. In those instances we inform the client that we are acting in a different role and will derive commission. We also tell them that if they prefer to buy the product from someone else they are welcome to. These product sales account for less than 0.5% of our revenue. Typically we do them so we can sell the client the lowest cost option so they don’t get talked into something they don’t need by a salesman.
We try to minimize conflicts of interest. Being fee based and not having proprietary products eliminates most of them. The primary conflict of interest we run into is when someone has to decide whether they want to pay us to manage money or do it themselves. This is obviously the whole point of the initial interview process for the client to decide whether they think it’s worth it.
We typically run a full financial plan that includes retirement planning, looking at whether an estate plan is needed, and a myriad of other things. These can range from helping a client decide whether a lease or a purchase of a car is better to what type of tax-sheltered retirement plan they should be using.
We are fee based. Typically, we charge 1% for the assets we manage unless it is a large amount. We do as a courtesy do some commission products such as term life insurance. This is relatively small as usually 99.5% of our revenue is from fees.
We gather information on the clients from goals to income to expenses and then run it through financial planning software. That helps us determine if they are on track or not. Sometimes we even find out they are saving too much or planning on retiring too late. Once we run the plan, we stress test it with different scenarios like long term care, different market conditions, or a big purchase. This continues during our relationship if a client changes their plan or is thinking about a big purchase.
That is pretty rare. We would have to get express permission from a client for that. It has happened a few times in the last 25 years.
This is situation dependent. Some clients will live off the income generated by the portfolio, some will require something much more complex. We have several methods we use depending on market conditions and specifics. We of course take into account every factor we can, such as taxes, health, and other sources of income etc.
This is a retiree’s #1 worry and in our experience, very few of our clients have experienced outliving their money. Unfortunately, there’s no magic solution. We will repeatedly remind our clients if their spending is higher than is sustainable. We have access to virtually every registered investment vehicle that isn’t proprietary, so our toolbox is diverse enough to give us the best options for solving this problem.
We are always conscious of the tax consequences of our actions and that is often the first thing we bring up when a client wants a significant amount of money. We utilize tax harvesting, roth conversions, and even spreading big distributions into multiple years if possible to minimize taxes.
We typically meet with clients at least a couple of times per year. At those meetings we will review the portfolio and our outlook on the markets and economy. For the financial plan, we will review it if anything major changes such as a changed retirement date or health issue. Additionally if there is any other major life event or significant market change. We also do it on request as frequently as asked.
Definitely on SS. When to start taking SS is one of the top three questions we get asked. We don’t do a lot with Medicare. Usually people just pick a plan based on the deductibles they want.
We charge 1% per year and unlike many advisors will also highlight the hidden fees. For example, we try to use tax efficient, low cost investment vehicles that average about 0.25% per year. Some other firms have hidden fees that can be as high as 2.5% per year on top of the advisory fee, as well as being tax inefficient.
We have decades of experience with financial planning and have seen many different strategies used and as such can offer initial guidance on what they should be looking for. We are not estate planning attorneys, although we frequently refer our clients to them.
Being independent, we can offer virtually everything that is out there. Some clients want high dividends, some want bond ladders, some want CD’s or treasuries. We even have more complicated strategies we use when interest rates are lower.
This is based on the client’s individual circumstances. Specifically their risk tolerance, withdrawal rate, and when they need the money. From there we work backward to design a portfolio that will have a good mix of liquidity, safety, and growth potential to have the best chance of achieving all of an individual client’s goals.
When the market doesn’t have significant movements, we use dividends to rebalance the portfolio. When there is a larger shift or a strategic shift, we will move the portfolios more significantly. We don’t base it on timing, but more on market movement. If we are targeting a 50/50 allocation and it moves to 50.5/49.5 we won’t rebalance, even if some time has passed.
Unlike many advisors, we definitely focus on the risks to the portfolio. Many people will first focus on returns, but that can be dangerous. We take the opposite approach and first look at risk tolerance and then try to get the best returns for a given risk level.
We use a third party performance measuring and reporting software. Currently we are using Morningstar, but that could change if we feel another company is better.
While we can use virtually everything out there, we believe that efficiency, both in taxes and in fees, is paramount. To that end, unless there is a compelling argument to the contrary, we typically use ETF’s. We find they outperform in many cases, without the high fees other options charge.
Fee only means that a firm’s only form of compensation is from fees. We are fee-based as about 99.5% of our revenue is from fees. We do this on purpose because it allows us the flexibility to use some products that only exist as commission products. While those instances are rare, sometimes they are appropriate.
Our fee structure is very simple. We charge 1% for the assets we manage, which covers all of our time and services. In the case of particularly large portfolios, that percentage can go down.
Our fees cover all of our time and services. That includes all the aspects of financial planning that we cover.
We typically meet with clients at least a couple of times per year. At those meetings we will review the portfolio and our outlook on the markets and economy. For the financial plan, we will review it if anything major changes such as a changed retirement date or health issue. Additionally if there is any other major life event or significant market change. We also do it on request as frequently as asked.
Our firm really focuses on service and communication. We actively invite our clients in for a review at least annually and usually 2x or more. We feel this is important because our clients’ situations change and the markets change and we want to make sure our clients know what we are doing and why. It always surprises me how often we run into someone who hasn’t spoken to their advisor in years. We don’t feel we can properly manage a portfolio if we don’t keep up with our clients’ current goals and ideals. Additionally, we customize our portfolios to the client. We do not have one overriding fund or model that we use for everyone. Each client’s situation is unique, and their plan likely should be different because of that.
That is pretty rare. We would have to get express permission from a client for that. It has happened a few times in the last 25 years.
Holistic wealth management means we take into consideration everything we can about a client’s situation. We generally start by running a financial plan to see whether a client’s goals are on track. Once we have determined this, we design a portfolio that we believe will have the best chance of them achieving all of their goals.
This portfolio is based on the client’s individual circumstances. Specifically their risk tolerance, withdrawal rate, and when they need the money. From there we work backward to design a portfolio that will have a good mix of liquidity, safety, and growth potential to have the best chance of achieving all of an individual client’s goals.Some of our clients have specific types of investments they want to avoid or concentrate in their portfolio. We of course try to accommodate that within reason if it doesn’t jeopardize their plan.
Annuities can have fees and they can also be without fees. However, just because there isn’t something called a “fee” doesn’t mean it’s free. For example, your 0.5% CD at the bank can have no fees. However, if prevailing interest rates are 5%, that still doesn’t make it a good deal. What is important to understand about annuities, and something they are really good at hiding, is how much will you actually get to take home? I would rather have 5% with a 1% fee than 2% with no fee. Whenever you are dealing with an annuity, you are dealing with a product offered by an insurance company. They are really good at math and will make money on you. Maybe you need their product, but they are not gifting you anything.
If an insurance company says something is guaranteed, then it is guaranteed up to their full financial strength and then maybe a backup of a State agency. HOWEVER, what you think they are saying and what their 400 page prospectus really says might just be different things. A common example is that an insurance company might guarantee you will earn 7% per year for 10 years. You will. However, you may not be able to take that money out, or may have to take it out over a set number of further years where that money earns 0%. All those years of waiting and earning 0% significantly reduce the amount you actually earn.
My understanding is that a certain amount of money is guaranteed by a state agency if the insurance company goes bankrupt. However, to my knowledge, no fixed contract has ever defaulted on their guarantees. That would be devastating for the industry so they work really hard to make sure that doesn’t happen, even if it means chopping up the bad paper and splitting it among other companies so they can say their products truly are safe.
Almost all annuities have lock up periods for your money. There generally are ways to get some of it out without penalty, and you can generally get most of it out after market value adjustments and surrender fees unless it’s an immediate annuity. There is in many cases, a value called something like an “income base” or similar that isn’t really your money and you cannot have that all at once. Often that is the number to which insurance companies attach things like bonuses and high guaranteed interest rates.
In my experience, almost nobody has done this, even the salespeople. If you are considering buying an annuity, get a second unrelated opinion. If it’s a great idea, then it will stand up to scrutiny. Typically when someone comes to us for a second opinion, they really don’t have a good idea of how the product works. We can go through the documentation and show them in black and white what will really happen. Unfortunately, that is often not what they thought would happen.
We believe that annuities are for very specific cases and most plans work just fine without them. It is very rare that we would recommend an annuity, particularly if current prevailing interest rates are low.
An annuity does have tax deferral which means until you withdraw money, you don’t have to pay taxes. Unfortunately, when you do withdraw, you take the earnings first and those are taxed at ordinary income rates which can be higher than for other investment options. If you never withdraw money from your annuity and die with it, you can be leaving a big tax burden to your heirs.
Annuities are designed to be long term investments and have penalties if you take profits out before you are 59.5 in most cases. Additionally, there can be surrender charges and market value adjustments charged against your principal as well.
Any death benefit besides a continuation of an income stream or a return of your current account value should be secondary when buying an annuity. If you are concerned with expanded death benefits, then there is life insurance. Don’t buy a wrench to install nails.
Beyond an initial free-look period, it is usually very costly to get rid of an annuity. Unless you wait out the surrender provisions, you will likely suffer a significant hit to your value. We recommend getting a second opinion before committing to an annuity. Once you have committed, it is often painful to undo.
Certain types of annuities can be passed on to your heirs, whether that be your spouse or child. You should understand exactly how this works, but that should not be the primary reason you buy an annuity. Annuities are designed to primarily benefit the annuitant, who is often the purchaser. Benefits to heirs are often secondary or nonexistent.
With a variable annuity, you can know the true internal fees. Those can be quite expensive and range up to 3.5% or more. Variable annuities have gotten a lot of bad press and are pretty rare these days. With a fixed annuity, you cannot see the true costs. If a bank CD is paying you 3%, you know the bank is making more than that. However, you don’t know how much. We recommend you focus on how much you get to keep, not what the fees are.
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