How Do You Define Financial Planning?
Financial planning is a life-long process that assists you and your family in taking control of your financial future. Most people find that managing their finances is a challenge. We face many opportunities, obstacles, and hazards along the way. We struggle with anxiety relating to our personal financial circumstances. Further, many families are too busy dealing with the challenges of day-to-day life to think about next month; let alone retirement, which may be decades away.
We will analyze your specific circumstances involving the areas of insurance, investments, employee benefits, taxation, education funding, retirement and estate planning. The process we use assures that we will design a plan for your individual circumstances and risk tolerance.
By setting financial goals, developing and implementing financial strategies, and monitoring progress on a regular basis, the likelihood of achieving your results is greatly increased
Who Are Your Clients?
Busy people who want to simplify their lives. They realize that planning for their financial future is essential. They cannot count on company pensions or government promises to be the centerpieces of their retirement planning. They value good advice and do no wish to devote the time and energy required to become proficient in the various aspects of financial planning. They would rather devote their time to their families and other enjoyments that life offers. Most are successful professionals who realize that information readily available in the media will not give them the wisdom to properly plan their financial future.
What Is Your Investment Philosophy?
I believe in passive management. Once we design a portfolio specific to an investor’s needs and risk tolerance, unless events require a redesign, there should be no need to change the asset allocation. To maintain this asset allocation, we use annual rebalancing.
I believe that the best vehicles for long-term wealth accumulation are no-load, low-cost, tax-efficient index mutual funds and exchange traded funds (ETFs). Owning individual stocks increases a portfolio’s risk with no guarantee of greater than market returns. I do not believe in market timing. The future of stock prices is never predictable. The costs of active management and market timing are drags on an investor’s returns that are very difficult to overcome.
I am not an investment guru or fortuneteller. I cannot guarantee the future return of your portfolio because the future is unknowable. (This seems pretty obvious, but the retail brokerage industry tries to convince you otherwise). By studying the past we can get an excellent idea of the kind of portfolio that should allow you to reach your lifetime financial goals within your own risk tolerance.
I believe that managing downside risk is essential and that a portfolio should be designed with the lowest risk necessary to attain financial goals.
How Is A Registered Investment Advisor Different From A Broker?
Individuals who provide financial advice to the public use a wide variety of seemingly synonymous titles, such as financial planner, financial consultant, investment advisor, wealth manager, etc. However, they are not all held to the same legal standards of conduct.
The Securities and Exchange Commission and State Securities Agencies classify people who offer financial products and advice into two major categories –
Brokers – A broker acts simply as an agent, effecting transactions in securities for others.
Investment advisors – An investment advisor is anyone who is in the business of giving advice on investments and securities to clients for compensation.
Brokers are exempt from registration as an investment advisor if giving advice is incidental, not primary, in their business and no special compensation is paid for such advice.
An Investment Advisor is required by the SEC or State (depending on the type of registration) to act as a fiduciary, that is to say, on behalf of another. Registered Investment Advisors must put the interests of their client ahead of their own. The recommendations of an Investment Advisor must be those that he or she believes are the best choices for the client. By law, an Investment Advisor must disclose to you, in writing, their qualifications, all sources of income, possible conflicts of interests and any disciplinary action taken against them by the State Securities Agencies or SEC even if you do not ask. On Course Financial Planning is a Registered Investment Advisor currently registered in the state of Washington.
On the other hand, a broker is not held to a fiduciary standard, acts simply as a salesperson, and need only recommend suitable investments and execute trades promptly. A broker is not required to notify you of all payment incentives, conflicts of interest, disciplinary history, or qualifications unless you ask..
Where Will My Assets Be Held?
We do not act as a custodian or take possession of your assets. We utilize the services of Charles Schwab & Co. to provide this function. All accounts are titled in the client's name only. OCFP exercises a limited power of attorney in order to accomplish trades in client accounts in accordance with investment strategies developed in a client's financial plan.
Will My Information Be Kept Confidential?
How Do You Price Your Services?
We charge an hourly fee for a one time analysis of your affairs along with our recommendations. Those who wish to engage OCFP for ongoing portfolio management are charged an annual fee that is based on a percentage of assets under management.
Do You Share Fees With Other Professionals?
No. We receive no compensation from any source except the fee that you pay OCFP for portfolio management. Any additional engagements you may make with other professionals to whom we may refer you are completely separate from our services.
What Are The Benefits Of Having A Personal Financial Plan?
The successful implementation of a comprehensive financial plan will allow your family to achieve the following –
Insure that the loss of income due to premature death or disability will not cause a catastrophic change in family lifestyle.
Fund the education needs of children/grandchildren.
Your long-term health care needs will be addressed to insure your children will not have to provide for your support in your latter years.
Retirement will be at the time of your choosing at your pre-determined level of affluence.
Should you desire, your portfolio will be designed so as to increase in value over time, beginning a multi-generation wealth-building program.
Investment planning will be done to maximize after-tax return using low cost index mutual funds and exchange traded funds.
When you understand your financial plan, you will inevitably teach its precepts to your children. You will be better able to help aging parents with their financial affairs, if this responsibility should become yours.
Estate planning will minimize estate taxation, if applicable.
What’s The First Step?
An initial complementary meeting. We will discuss your values, concerns and goals. I can more fully explain my philosophy and services and answer your questions. This meeting is crucial, since we must agree that we will be able to establish a good long term working relationship.
Is This Really Necessary?
I believe families of significant wealth or income need professional advice on an ongoing basis to properly manage their assets in an environment of constantly changing tax law and investment options. Yes, you can do it yourself, but not without the commitment of large amounts of time and interest in the study of insurance, investments, taxation, employee benefits, retirement plans and estate planning. On Course Financial Planning will take care of all your asset allocation and investment decisions based on your individual needs, values, and risk tolerance. You can relax and enjoy your life.
At On Course Financial Planning we offer the opportunity of traveling to the future together with a limited number of other families. It is my hope that you would choose to join us on the journey.