Creative Financial Design Blending the art of living with the science of financial planning peace of mind a registered financial advisor since 1984

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Frequently Asked Questions

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What is financial planning?

Financial Planning is the ongoing process of helping clients identify and quantify goals, evaluate resources, design and implement solutions to realize their goals. Putting the clients’ interest first at all times is essential to the effectiveness of the process and to their well being.


What is fee-only?

As a fee-only advisor we receive no commissions or trail commissions. We show clients the investment we feel are best for them, because the only person paying us is the client.

The majority of investment advisors are paid with commissions. This is usually a percentage of the amount you invest and a trail commission each year for as long as the client keeps that investment. The amount of the commission will vary widely based upon the type of investment and risk within the investment. Their are advisors who feel the amount of commissions they are going to receive is more important than giving the client the best investment. Some investment advisors are limited to only the investments that the company they are working for offers.

Another interesting item here might be that our fees are tax deducible in the year you pay them. The majority of commission paid are not tax deductible, except possibly as part of the cost basis after the investment is sold.


Why should I let you manage my assets?

How are you currently doing? How much time and effort do you have work on your investment portfolio.

We spend 24 hours a day 7 days a week studying, thinking and working with clients and their investments. I We are looking at those investments 5 days a week each time we prepare and meet with clients. We see trends long before the average person does.

Our contracts are set up so we charge on the initial investment and then on the December 31st value every year thereafter. This means that the more money you make, the more money I make. On the other side of the coin, the less money you make, the less money I make. The advisor who is paid by commission is paid the same amount of money, no matter what you make. Which investment advisor do you think wants your investments to grow the most.

Do you work with just very wealthy people?

It's nice helping wealthy individuals turn $1 million into $2 million, but it's even more satisfying helping someone reach their first $1 million to begin with.

 

How long does it take to do a plan?

An original comprehensive plan can take up to 4 weeks, but the plan itself takes a lifetime of review and tweaking. We usually meet with clients 3 to 5 times during the first year. Then we usually meet with clients 2 to 4 times a year, depending on their needs and wants.

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How do you determine fees?

Hourly fee is based on an estimate of the time and resources needed to develop, implement and monitor your financial plan. The total amount will vary depending how much work you want to do yourself before we meet and if we are to manage your assets after the plan is done. We do offset the cost of any asset management fees, by the cost of your planning fees, for one year.

This brings out a very interesting point: We charge lower fees than other advisors. Most financial advisors charge you a percentage fee based on the first $250,000 to $1 million that they manage and then another on your assets over $1 million that they manage. We charge based on the bracket your assets fall into, rather than charging a higher amount on the first portion and then a lower amount on the higher portion you invest. For example a manager who charges 1% for the first $1 million and .6% on the next $1 million you would pay $16,000 per year to manage your $2 million. With us you would fall into our third fee bracket and pay just .5% for the entire $2 million, You would pay us $10,000 to manage $2 million, that saves you$6,000. As my clients have heard me say for years. A dollar in your pocket is better than a dollar in someone else's pocket, even mine.


What does it cost to have you manage my money?

Rates are negotiable on a case-by-case basis depending on assets to be managed,needs and wants.


Can you show me your investment performance and give me references?

Prospective clients often ask to see our investment results. We could compute a global return for all assets under management; however we don’t believe this figure would be meaningful. We do not have a "typical" client portfolio. Each client's portfolio reflects their appropriate time line, return objectives, risk tolerance, tax situation and personal financial goals.  We do show existing clients their investment performance over various time periods, 4 or more times a year. 

However, the State of Michigan does not allow advisors to show prospective clients past performance, or give them our clients names as references. The State of Michigan feels past performance does not guarantee future performance and advisors would only give prospects references to clients who would give the advisor a good recommendation. We think they are right in both cases.


Extra thought:

Clients who have a prior planning relationship often come to us on the rebound from somebody posing as a real financial planner for these reasons:

1. They want a second opinion regarding the other planner’s recommendations.

2. They want objective advice from a fee planner as opposed to a commissioned salesperson.

3. They want to know if what they are doing is best for them.

If your current planner is doing a good job, we will tell you that and send you back to him or her. If he or she is not doing a good job, we will not have to tell you, after you have received our plan and recommendations. In that case you will probably be our client for life. I have many clients who have been with me for over 25 years. I have a few clients who have been with me for over 35 years, but sadly many of my original clients have died.


I have a question, but it is not answered here. How do I get the question answered?

Click here and ask your question in the comment area. We will get back to you as soon as possible.

 

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A Registered Investment Advisor Since 1984