Frequently Asked Questions
1. What do you do?We believe there are things in life that are more important than money. We will help ensure that financial decisions you make will be aligned with your most important goals and your most deeply held values.
2. How do you deliver on what you promise clients?Our job is to orchestrate the written plan that we help every client create. We also hold everyone involved accountable, including the client, to ensure the greatest probability that the plan does what it was designed to do. It all starts at our first meeting with a simple conversation about what’s important. Having this experience in our first meeting, which takes about an hour, is a very good way to determine if we might be a good fit in working together. And that’s the primary issue we ponder with anyone interested in our firm - will this be a mutual good fit or not? Will we bring value to the relationship?
3. What kind of clients do you serve best?We have a small community of clients (versus firms with thousands), most who live locally. We want to be convenient to our clients. We do have clients who have moved away and want to continue to receive the service we provide. We communicate with these clients via, webinar or conference call and of course in person in our offices. We have a specific ideal client profile. We work with financial delegators who are passionate about their goals, appreciate advice and expertise, and are eager to implement the financial plan’s recommendations. The clients we serve best have between $500,000 and $10,000,000 of investable assets.
4. What keeps you in this business?We have been helping clients make smart choices about their money and pursue their most important goals for decades. FMN was founded with the simple idea of helping people create a comprehensive financial plan, implement the recommendations, and then manage their plan and assets so they could do all the things they want to do to enjoy their life. The financial issues are the easy part - the science of financial planning. What motivates us is - the art of financial planning - empowering clients to make smart choices with their money, fulfill their aspirations, and see them experience genuine happiness in their lives. We make a difference by coaching people who believe money is a necessary tool but who also recognize that there are things in life more important than money.
5. Exactly how do you charge?The exact fee for the level of service your situation will require will be based upon conversations at our initial meeting.
We have a minimum financial planning fee for Comprehensive Financial Solutions. Of course, greater complexity increases our fee. Clients can choose to pay their fee every year, or offset the minimum annual fee by placing assets under management, as an example.
6. What exactly do your clients get for what they pay you?We provide ten services which we call deliverables. This involves an annual checklist of 143 checkpoints we cycle through for each client by way of our 3 Meeting Process. We have a team of subject matter experts in every area of finance. A common trait among successful clients is that they have had a comprehensive, checklist-driven annual process. This makes certain that nothing falls through the cracks and that the plan is on-track. In short, we help make sure their entire financial house is in order. For example… For every client our job is to ensure there is a fully-updated written and comprehensive lifetime financial plan at all times. We hire and oversee the investment process, making sure that the fees are competitive for the suitable investment strategy our team recommends. This kind of peer-review oversight is designed to protect you and your assets. We ensure that your tax return is filed on time, takes advantage of every opportunity for savings, and that there are never any major tax surprises. We ensure that there is a plan for what happens with your assets when you’re gone, and that there is a clear plan in place to manage your assets if you are unable or unwilling to manage things yourself. We review all of your personal, property and business insurance, look for gaps and make recommendations about how much you need, or if you need it at all.
7. Why should I work with you (rather than other advisors)?Our process is focused on establishing whether there will be a good fit in working together. If we both agree, then great. If not, our process is designed to give you clarity about your situation. So even if there’s not a fit, we will have added value and direction for you.
8. What’s the process if I become a client?The first step is to schedule an appointment and complete a Financial Road Map. Based upon a commitment to hire and a commitment to implement, we will then conduct a Numbers Review Meeting and a Planning Options Meeting. These are conducted within the first 30 to 60 days. We then schedule a meeting to begin implementing the elements of the plan that our team of subject matter specialists feels need the most attention. It is important to note that we are not in the plan "writing" business. We are indeed in the plan "implementation" business. Think of it this way, simply having a gym membership will not make you physically fit. Similarly, simply having a financial plan will not make you fiscally fit. You actually have to DO the work that the goal requires in order to achieve it! We ask every client to schedule 2 meetings annually (meeting once every 6 months is the minimum number of meetings needed to get the information we need from you to keep your financial plan up to date).
9. What makes you think I would be a good client?If the elements of our Ideal Client Profile and the process we follow resonate with you, then you will enjoy the journey. Candidly, neither of us will know for 12 to 18 months whether or not there is truly a good fit. In the meantime, we assure you that you will have an experience that is offered by very few financial advisor teams.
10. How can I be certain I can trust you (your firm)?Trust is an interesting thing, it is both earned and given. It’s not only a requirement of a meaningful business relationship, but any relationship. Our firm was built largely by referral. Our Ideal Client Community is responsible for building the great relationships we have. The highest purpose of our initial meeting is to determine if it will be a good fit for us to work together or not. If after an hour, it seems as though things should move forward, it will be obvious to both of us. If things are not going well, it should also be obvious. Our process is designed to determine if we can establish a relationship where there is mutual trust and value in moving forward together.
11. WHERE ARE MY INVESTMENTS AND MONEY HELD?
We utilize Fidelity’s Institutional division along with National Financial Services, the division of Fidelity specializing in holding investment management firm asset . Fidelity is a billion dollar company that is entrusted with nearly $3.2 trillion in client assets. Fidelity has over 41,000 employees across 184 offices worldwide. Thousands of independent investment advisors who oversee 25 million brokerage accounts use Fidelity. Your assets will be in good company.
12. DO YOU HELP WITH THINGS SUCH AS PLANNING FOR COLLEGE TUITION, BUYING OR LEASING A CAR, REFINANCING, ETC.?
Yes. These are very important issues in our clients’ lives, and we make sure we are involved. We help our clients reach their goals, not just invest their money. There are a lot of factors to consider when thinking about saving for college, buying a second home, investing in real estate, leasing a car, refinancing, etc. We empower our clients so they can make the most appropriate financial decisions possible.
13. HOW OFTEN WILL WE MEET FACE TO FACE?
Typically, we see our clients between two and four times per year—and more often if necessary. It’s important for us to know what is happening in your life so we can determine if there are any financial implications and/or strategies we can recommend. For example, it is always helpful if we know about any large one-time expenses in advance, any changes to your employment, issues at work, or hundreds of other issues that can come up in a conversation. We take advantage of the quarterly meeting to go over a client’s portfolio’s performance over the last three months. It is a great time to discuss what’s happening in the economy and in financial markets, what we predict for the future, and any specific allocation changes we recommend for a client’s portfolio.
14. CAN I CALL AND ASK QUESTIONS?
Since we don’t charge by the hour, our clients feel welcome to call us with any questions, issues, or just to brainstorm. We look forward to these calls and take pride in our ability to help our clients in any way we can.
15. WILL I RECEIVE INFORMATION ON THE PERFORMANCE OF MY INVESTMENT ACCOUNTS?
FMN will send you a quarterly performance report that summarizes how all of your accounts at Fidelity have performed over the previous quarter.
16. WILL I RECEIVE ACCOUNT STATEMENTS FROM FIDELITY?
Fidelity will send you (either via mail or e-mail, depending on your preference) monthly account statements for each of your Fidelity accounts.
17. HOW OFTEN WILL I GET ACCOUNT STATEMENTS?
Fidelity will send you monthly account statements directly, and FMN will send you quarterly performance reports.
18. WHAT KIND OF RETURN CAN I EXPECT ON MY INVESTMENTS?
There are many factors that determine your investment performance. These factors include your allocation and the return of the overall market. We will need to have a conversation about your portfolio before we could anticipate the kind of long-term return you can expect.
19. WILL YOU HELP ME INVEST MY 401(K) OR EMPLOYER-SPONSORED RETIREMENT ACCOUNT?
We review and make recommedations for all of your investments, including your 401(k).
20. WILL I GET HELP OPENING NEW INVESTMENT ACCOUNTS?
We understand that our clients are busy. We will do all applicable paperwork regarding your new investment accounts which includes all the necessary forms. We will provide them to you for review and signature.
21. WHAT IS YOUR VIEW OF MONEY?
Money is something to be earned, invested, and enjoyed. It has no intrinsic value and is valuable only because of what it can provide. What it provides means different things to each client. For some, it means security and knowing their family will always be taken care of. For others, it means independence and options. Part of our job is helping our clients discover what money means to them.
22. IS THE FIRM CONSERVATIVE OR AGGRESSIVE?
When we work with a client, our focus is on their specific and unique situation. We try not to have pre-conceived ideas or notions that can cloud our advice. We prefer to approach each client with a clean slate so we can provide solutions that help meet their needs. We are cautiously optimistic. Our tendency is to be more conservative than aggressive. We hope for the best but plan for the worst.
23. WILL I HAVE ACCESS TO MY INVESTMENT ACCOUNTS ON THE INTERNET?
Fidelity provides 24/7 client access to their accounts over the Internet.
24. HOW HAVE YOUR CLIENTS’ INVESTMENTS PERFORMED OVER THE LAST FEW YEARS?
This is one question we are most often asked and one that is nearly impossible to answer effectively. As a potential client, you deserve to know how a firm that is managing your hard-earned money has performed. We do not expect our clients to blindly trust us. However, it is difficult to provide a general answer to this question. An investment return is based, in part, on the allocation. Different clients have different allocations. One client may be in nearly all cash (for strategic reasons appropriate for that client), while another may have 80% of their portfolio in stocks. These two clients with very different allocations will also have very different investment returns. Which is more accurate? Each allocation and return is entirely accurate for that individual. This is why it is important to discuss your situation so we can make projections based on an allocation that may be right for you. We can then speak generally about how others in a similar allocation profile as close to yours have performed.
25. WHAT FACTORS DO YOU CONSIDER WHEN YOU RECOMMEND AN ASSET ALLOCATION?
Our objective is to know our clients and to create an allocation designed to meet their unique needs and goals. To accomplish this, we learn as much as we can about where that client has been, what resources they have available, their employment, goals, risk tolerance, and myriad other factors. We blend these personal factors with our thoughts and projections on the economy and financial markets. We run statistical calculations using complex software programs, adding the human element of reason and experience, to generate what we think is an appropriate investment allocation for a client. We then find what we consider to be the best stocks, institutional mutual funds**, retail mutual funds**, exchange traded funds**, and private investments for each asset class we have identified within your allocation. We monitor this allocation along with the changing market forces and our client's evolving needs and objectives into consideration. What was appropriate last week may no longer be appropriate now and in the future. We engage in thoughtful research, contemplation, discussion and timely action.
26. WHAT IS YOUR PHILOSOPHY ON ALLOCATION AND DIVERSIFICATION?
Our philosophy of asset allocation and diversification is based on our broad knowledge and extensive practical experience. It is a very dynamic,working philosophy. Like other aspects of professional and successful investing, asset allocation is part science and part art. A successful practitioner must have both fluency in the language of science and capital markets and the creativity to utilize that language in the service of a pragmatic and dynamic investment strategy. The process starts with the client. What are the client’s current and future funding requirements, adjusted for taxes and inflation? We consider quantitative and qualitative factors of their risk capacity and risk tolerance. We also consider trust and estate issues. We use an asset/liability and duration matching process to develop realistic cash-flow projections and the final allocation recommendations. Our perspective on asset allocation and diversification is supported by our ongoing education and research, which includes studying the work of leading academics and practitioners, as published in textbooks and professional journals, and our own experience in a variety of markets. The discipline of Behavioral Finance has made important contributions to our understanding of how investors and markets interact. The evolving field of investing has made a number of important advances in recent years. Some of the more robust advances are incorporated into our overall strategy and are mentioned in the following paragraphs. Asset allocation is less formulaic than once thought. Following the basic tenets of Modern Portfolio Theory in lock-step fashion may not generate the client’s’ required returns or the expected reduction in volatility. The basic premise that a portfolio of risky assets is less volatile than any one of those assets alone is still true. Attempting to put that theory into practice presents serious challenges. In theory, the correlations are stable. In the real world, the correlations between the major asset classes are very volatile. In theory, the markets are rational. Was the technology bubble rational? In theory, a long-term investor with a well-diversified portfolio will experience superior risk-adjusted returns. In practice, two or three extreme negative performance periods, coupled with cash demands on the portfolio, can put the portfolio in a loss position from which it will never recover. These factors and others require us to go beyond traditional weightings and asset classes to generate the hoped for risk-adjusted return in a client’s portfolio. We carefully evaluate asset classes to determine where the cost of active management is warranted; when it is not justified, we use low-cost, passive strategies. In some cases, we carefully match up managers with contrasting strategies and uncorrelated performance to form a less volatile strategy within an asset class. To determine if one or multiple managers should be used in a particular asset class, we conduct cost/benefit analyses. Our clients’ portfolios are adopting an increasingly global approach to asset classes in recognition of the somewhat reduced significance of national boundaries. Above all, alertness and flexibility are required to manage a tactical asset allocation strategy. Once the overall allocation has been determined, we can begin the process of determining what type of management will be most efficient for a particular client. Taxable accounts in general benefit from investment styles marked by low turnover. However, tax-advantaged strategies are of no value within an account structure that is already tax-advantaged. Passive strategies, such as Electronically Traded Funds and indexed mutual funds are characteristically low in cost and may be strategically utilized to lower the overall portfolio management cost. In certain asset classes, careful selection of active managers can lead to substantial improvements over benchmark returns. All of these factors must be carefully evaluated for each portfolio.
27. WHAT KIND OF RESEARCH DO YOU PERFORM ON YOUR CLIENTS’ INVESTMENTS?
We are an independent firm and have access to almost an unlimited amount of research. We are not tied to only the research our firm produces. This gives us great flexibility. It also takes a tremendous amount of work. Life would be much easier if we generated our own research and went with it, but it wouldn’t necessarily be better for our clients. We like to look at all of the factors, read research arguing both sides of the topic, and make our own decisions. Our research includes a tremendous amount of reading and digging. We use software and technology to help us gather and analyze the data.
28. HOW OFTEN DO YOU BUY OR SELL INVESTMENTS IN A CLIENT’S ACCOUNT?
We suggest changes to a client’s portfolio when one or more of the following occur: 1. If we anticipate changes to the economy or financial markets, we will overweight/underweight certain asset classes to help preserve our clients’ portfolios and/or to take advantage of an investment we think will perform well. For example, if we think small cap stocks are poised to perform well, we will shift more of a client’s investments in this asset class. Conversely, if we think real estate is overvalued, we will decrease our clients’ exposure to this asset class. 2. If we think an existing investment will under-perform, we’ll suggest selling it and moving into an alternative investment. We conduct a great deal of due diligence on the investments we recommend, and we monitor them constantly. There are a multitude of factors we consider including both qualitative (e.g., the broadness of a manager’s investment mandate) and quantitative (e.g., performance versus its peers). If, at any time, we are not happy with an investment, we’ll recommend selling it and buying a different investment. 3. Changes in our clients’ lives may necessitate changes in their portfolios. This is why it is important for us to know what’s happening with our clients so we can adapt their portfolios to their lives.
29. WILL YOU CREATE OR MODIFY OUR ESTATE-PLANNING DOCUMENTS (E.G., LIVING TRUST, WILL)?
We work closely with attorneys but we do not draft the documents. We are by trade estate planners and creative thinkers. We typically include a flowchart and recommendation of how an estate plan should be structured, and will work with an attorney to execute these plans.
30. HOW OFTEN ARE FINANCIAL PLANS UPDATED?
We update them as often as necessary throughout the year.
31. DOES THE FIRM HAVE RELATIONSHIPS WITH CPAS, ESTATE-PLANNING ATTORNEYS, AND OTHER PROFESSIONALS I MAY NEED?
We work closely with our clients’ other professional advisors. Most of our clients already have existing relationships and we are happy to become part of those clients’ teams. If a client doesn’t have an existing relationship with other professionals, we are more than happy to introduce them to CPAs, attorneys, mortgage brokers, and realtors.
32. DO YOU RECOMMEND INVESTMENTS IN *PRIVATE COMPANIES?
Private equity and venture capital investing can produce very substantial returns. All huge companies were once small. A nominal investment in the beginnings of Microsoft or Starbucks would undoubtedly be worth a substantial sum today. For some clients, investing a small part of their assets in riskier companies can make sense. We help our clients evaluate private equity deals and how they might fit into their overall investment allocation.
33. WHAT IS YOUR TYPICAL RESPONSE TIME TO A PHONE CALL OR E-MAIL?
We pride ourselves on being accessible. We return every e-mail and phone call within 24 hours and often within an hour or two.
34. WILL YOU PROVIDE CLIENT REFERENCES WE CAN SPEAK TO?
We can provide both client references as well as references of CPAs and attorneys that we have worked with.
35. HOW LONG DOES IT TAKE TO COMPLETE A FINANCIAL PLAN?
From start to finish, it usually takes about four weeks to develop the kind of comprehensive plan we provide our clients.
36. WHAT’S YOUR OPINION OF USING PASSIVE INDEX FUNDS?
We highly recommend using passive index funds for a part of your investment allocation. They are inexpensive, tax efficient, and a great way to match the performance of an index (something many active managers have a hard time doing consistently).
37. IF I WANT TO STOP WORKING WITH FMN, WHAT’S THE PROCESS FOR LEAVING?
It’s very easy. You just need to send us a letter. We would immediately inform Fidelity that you are leaving FMN, and you can provide instructions on where to transfer the account.
38. DO YOU USE FUNDS WITH FRONT-END LOADS OR BACK-END LOADS?
We only recommend no-load funds that don’t have these expenses associated with them.
39. ARE THERE ANY ASSETS CLASSES THAT YOU DO NOT INVEST IN?
Depending on our analysis, there may be one or more asset classes that we will not recommend to our clients because we think there is too much risk or because we think the asset class is overvalued and may drop in value.
40. CAN I SET INVESTMENT PARAMETERS SUCH AS NOT WANTING TO INVEST IN TOBACCO, ALCOHOL, OR FIREARMS COMPANIES?
This is typically called “socially conservative” investing, and it can be done. We’ve had success doing this for other clients, but we should discuss all of the factors thoroughly before implementing this strategy.
41. DO YOU INVEST FOR INCOME OR FOR GROWTH?
We invest for total appreciation; this includes both income AND growth. A 10% income return and a 10% growth return is still a 10% return. We will shift between income and growth depending on our client’s goals, risk tolerance, income objectives, and tax situation.
42. DO YOU MEET WITH CLIENTS IN THEIR HOME OR DO YOU PREFER THEY COME TO YOUR OFFICE?
It is best if clients come to our offices. We have access to our internal network, the forms that may need signatures, client documents, and specialized financial programs that make the meeting more productive for everyone.
43. HOW DO YOUR FEES COMPARE WITH THE FEES CHARGED BY OTHER FIRMS?
Our fees are very attractive when compared to most brokerage firms and banks. We keep our internal costs low and pass on these efficiencies to our clients.
44. WHAT’S THE DIFFERENCE BETWEEN FMN AND A FIRM SUCH AS MERRILL LYNCH OR UBS?
Think David and Goliath. FMN is an independent firm dedicated solely to our clients. We do one and only one thing, look after our clients’ finances. Providing comprehensive wealth management advice is just one of a dozen things the bigger firms attempt to do. In addition, we don’t have our own investment products, we don’t provide loans, we don’t have an investment banking arm, we don’t create products, and we don’t have a multi-million dollar advertising campaign. Gargantuan firms such as Merrill Lynch, UBS, Smith Barney, Morgan Stanley, and others attempt to be all things to all people. They have many masters to serve, and sometimes there can be conflict. They may make millions taking a company public and publicly recommend their clients buy that same stock to boost its price while, at the same time, criticizing that company behind closed doors. Many of these firms got into trouble doing this during the tech boom of the late 1990s. FMN is a registered investment advisor and broker dealer governed by the FINRA and the SEC.
45. WHAT IS A TYPICAL FEE FOR A FINANCIAL PLAN?
Most financial plans are $1000-$5000 In some circumstances, a financial plan can cost less. A typical financial plan takes anywhere between 25 and 40 hours of work and can consume a substantial amount of time and resources. Therefore, they are not cheap, but they are worth their weight in gold. It’s the only way to really be able to plan, develop an appropriate investment allocation, and make sure your finances are optimized.
46. WHAT IS A TYPICAL ONGOING MANAGEMENT FEE?
This fee is generally between 0.40% and 1.25% per year of the assets we manage.
47. WHAT ARE THE FIRM’S EXPANSION GOALS?
We don’t think bigger means better. In fact, in many ways, we think small and agile is better. We don’t want the inefficiencies that come with operating a large firm. We prefer to know our clients deeply and to remain small enough to serve them well. We will expand only as much as it takes to continue to provide our clients with unsurpassed customer service and expert financial advice.
48. DOES FMN PROVIDE FINANCIAL ADVICE BESIDES INVESTMENTS?
We provide 360° Wealth Management; we want to know about anything that affects our clients financially so we can provide comprehensive advice on risk management, insurance, identity theft, tax planning, estate planning, cash-flow, business transition planning, and more.
49. DOES THE FIRM FOCUS ON PRIMARILY SERVING SOUTHERN CALIFORNIA?
While most of our clients live in Southern California, we have clients across the United States. Through technology, it’s just as easy to serve a client 3,000 miles away as it is to serve a client who lives just down the road.
50. WHY DOES FMN HAVE A “PAPERLESS OFFICE” AND HOW WILL IT BENEFIT ME?
We strongly believe in utilizing technology to better serve our clients. We are a paperless office. This means that instead of paper documents and file cabinets, we have electronic copies of everything. There are several advantages to this. First, we can pull up your tax return, living will, or March account statement in seconds. Having access to all of your information instantly lets us provide more timely and better advice. Second, we tend to become warehouses for our clients’ records. If you misplace your living trust or need an old tax return, we can get you a copy in a hurry. Third, we can store and backup these files. If there’s a fire or a natural disaster, we can quickly relocate offices and still have access to all of your records. With paper files, this just isn’t possible.
51. HOW LONG HAS THE COMPANY BEEN IN BUSINESS?The company was founded in 1990.
52. WHAT KINDS OF CLIENTS DOES THE FIRM FOCUS ON SERVING?
FMN is a specialized firm that serves a select group of clients. While nearly everyone could benefit from good financial advice, we have chosen to focus on sudden wealth recipients, affluent individuals and families, and business owners who have the following characteristics in common: - They look forward to having a long-term relationship with a firm they trust. - They like the fact that we look at their total financial picture and not just a single account. - They are open to advice. - They are willing to take action and implement the financial advice we provide them. - They understand and appreciate the need for financial planning and investment advice. - They are friendly and easy to serve.
53. DO I NEED TO SIGN A CONTRACT THAT LOCKS ME WITH FMN FOR A SET PERIOD OF TIME?
We bill our clients quarterly, but you can terminate your relationship with FMN at any time.
54. HOW MUCH TIME DO YOU SPEND WORKING WITH EXISTING CLIENTS VERSUS BRINGING IN NEW CLIENTS?
A majority of our time is dedicated to serving our existing clients. We spend very little time marketing, prospecting, and networking for new clients.
55. WHAT IS THE FIRM’S POLICY ON PROTECTING CLIENT DATA AND PRIVACY?
56. HAS THE FIRM OR HAVE THE PRINCIPALS BEEN INVOLVED IN ANY INVESTMENT-RELATED ARBITRATIONS OR LAWSUITS?
**Mutual funds and exchange-traded funds are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from the Fund Company or your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.
*Interests in Private Equity and Venture Capital may only be offered to persons who qualify as accredited investors under the Securities Act, and a Qualified Purchaser as defined in Section 2(a)(51)(A) under the Company Act or an eligible employee of the management company.
There will not be any public market for the Interests. The Partnership Agreement generally prohibits transfers of interests without the consent of the General Partner in its sole discretion and federal and state securities laws also restrict transfers of interests. Investments in said Interests are speculative and involve a significant amount of risk due to, among other things, the nature of the funds proposed investments in early startup venture capital.