Information About My Financial Consulting Methodology and Philosophy

In this article, I offer information about my financial consulting methodology and philosophy. My practice is somewhat different than most people who use a term like “financial planner” or “investment counselor” or “money manager.” Here are a few highlights:

1. I am in the business of providing investment advisory services. As a fiduciary, it is my duty to act primarily for the benefit of my clients. While the extent and nature of my duty varies according to the nature of the relationship with each client and the circumstances their case, we only engage in ethical business practices. For more information, request a copy of My Code of Ethics which is also found in My Firm Brochure. Both of those documents are free of charge.
2. The first consultation with any client begins with confirming or gathering as much information as I can about you and the circumstances surrounding your finances. This is like the process I use to gather information prior to writing a financial plan or an investment plan with or without portfolio management. The initial consultation is more of an executive summary or “big picture” without the level of detail in a written plan.
3. In that first session I seek to find the problem you want me to help you solve. The quickest way to begin the process is for you to fill out my Communication Form on my website and send it to me. After I receive it and read it, I will call you so that we can go over it on the phone.
4. While my hourly rate for a consultation is equal to or a bit higher than what other financial professionals charge, my total fees are usually significantly less. For example, in my practice I do not receive compensation from commissions or other sales charges or performance-based fees that create a conflict of interest with my clients.
5. In a consultation session, I typically ask questions then provide my observations and recommendations based on the information you provide. Again, this is not the level of detail found in a written financial or investment plan.
6. While each client is unique and everyone’s financial situation is different, most of my clients are typically seeking independent, objective advice from a fiduciary so they can manage money better and make better financial decisions for their unique situation. The issues we may cover in consultation may include, but are not limited to: (a) Financial advice – including analysis of your retirement, risk, cash flow, net worth, or specialized planning for problems related to funding, financing, or refinancing scenarios. (b) My investment advice may include asset allocation and investment direction or market trends, selecting or retaining other advisers, investing in securities or other types of investments (such as coins or real estate), furnishing a selective list of investments or making specific securities recommendations.

There are some things my consultations do not accomplish:

• Guaranteed Profitable Recommendations – while it is legal for me to offer a list of all the profitable recommendations I have made in the past, including the names of those investments, the date and nature of each type of investment, it would not be personal advice for you. And, historic performance is not a guarantee for the future!
• Historic Performance Data – while it is legal to for me to reference past figures with the effect of socioeconomic conditions, income after expenses, gain (loss) calculations for actual investments, it would not be personal advice for you. And my performance standards, while professional, are not guaranteed to make a gain every time or prevent a loss when making investments for the future!
• Guaranteed Model Portfolios – while it is legal for me to adapt or adopt strategic asset allocation and tactical allocation in my practice, my historic performance is not based on “back tested” or “hypothetical model” figures. As you know, back testing involves developing a model applied to history. And you remember, hypothetical modeling is creating a theory then monitoring it as if real. My money management is real and forward looking with significant history. But it is not promoting back tested or hypothetical scenarios as is a common practice in the marketplace. However, I do perform investment advisory functions (including research) that while reviewing history is forward-looking and based on strategy that is personal advice for you. And remember, my real-world profit (loss) history is not guaranteed for the future.
• Guaranteed Profitable Algorithms – while it is legal for me to represent that my charts, graphs, formulas or other devices can be useful to determine which investments to buy, hold, or sell and when to buy or sell them; it would not be personal advice for you. And, computer programs have significant device limitations!
• Pro Bono Services – while not every moment is billable, I do charge my clients fair and reasonable fees. Also, I do not receive commissions or other sales incentives that create a conflict of interest between the “financial planner” and their “client” as is common in the marketplace. Neither do I charge performance-based bees which also create a conflict of interest with clients and “money managers.” If you are interested in my past (not so) popular books and academic writings on personal finance or you have questions about why I have not received commissions or performance based fees since starting my RIA firm in 2006, then ask me. There is no charge for these types of questions!

My preferred method of consulting is to work with clients by e-mail, mail, and phone. While I do occasionally consult with clients at my office or on their premises, or in video conference meetings, my schedule makes in-person consultations difficult. My experience is that we can develop a fitting long-term relationship where I can help you solve the financial problems you want help with by creating reports, directing investments, and making long-term financial plans by working remotely. I’ve been serving clients this way since the year 2006. Plus, it saves you time and travel expenses, and allows you to get your financial problems solved sooner!

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