Questions related to fees:
Do you charge a % of investment assets managed?
No! We strongly believe in transparent, fixed annual fees for 3 primary reasons:
We partner with First Ascent Asset Management to manage your non-employer investment accounts when we mutually agree it is in your best interest. You would pay their fee directly which does not change how we are compensated. See First Ascent FAQ for more details.
Why do you charge based upon income and net worth? Will my fee ever change?
We believe our fee should be directly tied to the value that we provide. Based upon our experience, we believe that income and net worth are the best indicators of complexity. As your income and net worth grows, your complexity grows, and our value grows.
Your fee will not increase unless there is a significant change in either your net worth or income. You will always know exactly where you are in the fee level range. If you enter into a new fee level, you will graduate to that new fee evenly over two years.
For example, if your current fee is $1,875/quarter and you’ve entered the next fee level of $2,500/quarter, you would pay $2,187.50/quarter in the first year of the new fee and $2,500/quarter in the second year of the new fee.
How do you calculate net worth?
Your net worth is your total assets minus your total liabilities. We will calculate this for you.
Total assets include:
- Investment accounts
- Vested stock options/restricted stock
- Personal and rental real estate
Total liabilities include:
- All debt – student loans, credit cards, car loans, mortgages, HELOC, etc.
Excluded assets include:
- Personal property
- Business assets/valuation
- Unvested stock options/restricted stock
Assets and liabilities are measured based upon their fair market value.
Can I cancel my ongoing planning relationship?
Yes, of course. You can cancel the relationship at any time. Our clients pay their annual fee on a monthly/quarterly basis. The fee is billed in arrears, rather than in advance, which means you would owe one final prorated fee from the date of the last fee until the date you cancel.
Questions related to services:
What is your investment philosophy?
Passive, low cost and tax-efficient. According to S&P Dow Jones Indices, 85% of active managers failed to outperform the S&P 500 index. We do not want you to pay higher fees and higher taxes to try to be that 15% that outperforms the market. We strive to track the index and make sure that your investment strategy is customized to your goals.
We help you select the best investment funds in your employer sponsored plans and then partner with First Ascent Asset Management for your non-employer sponsored accounts (taxable accounts, Roth IRAs, etc.) when it is in your best interest.
Who is First Ascent Asset Management and why do you partner with them?
First Ascent Asset Management is our outsourced investment manager. Think of them as our own investment team – they set the investment strategy, execute the trades, move money, etc. with our overarching supervision. We work with you to develop a customized investment strategy and then partner with them to execute the strategy when we mutually agree this is in your best interest. We will always be your point of contact – they work entirely behind the scenes.
We use them to free up our time to provide the most value to our clients through proactive financial planning. Managing investment portfolios is incredibly time consuming and has largely been commoditized in the industry. We cannot manage a superior investment portfolio for you, but we can proactively help you make the best financial planning decisions to accomplish your goals.
First Ascent charges you 0.35% of the assets they manage, but with a maximum fee of $1,400 per household between $400,000 and $3,000,000 of investment assets. In other words, once your household investment assets exceed $400,000 – your fee remains fixed at $1,400 until you exceed $3,000,000 at which point they charge $500 per extra $1 million. For example, if you have $2 million of household investment assets, you pay $1,400 for investment management. If you have $4 million of household investments, you pay $1,400 + $500 = $1,900 for investment management.
We receive no type of fee from First Ascent. We help you determine if it is in your best interest to use them, and then you pay their fee directly.
Where are my assets held? How do I keep track of everything?
Wherever you want! We are completely indifferent on where your assets are held. You don't need to uproot your financial life to work with us.
If you want to use First Ascent, then your accounts will be held at Charles Schwab, which is insured by the SIPC for up to $500,000 per account type and are protected against losses resulting from the failure of the broker-dealer. Please note, unlike FDIC insurance for banks, SIPC does not protect against losses due to normal swings in the market. An explanatory brochure is available at http://www.sipc.org.
Regardless of where your assets are held, you will have your own customized client portal to show your entire financial life in one place. You can see all of your accounts, net worth, spending, etc. in one place via your computer or phone.
Why should I work with you instead of doing this myself?
We think working with us vs. doing it yourself is like completing a home renovation. You can watch YouTube videos, read articles on google, etc. and try to do it yourself to save money, or you can hire a professional to do it for you. If you do it yourself, it will likely a) take a lot of time, b) cause added stress/frustrations and c) result in missing things you didn’t know to look out for.
Some people are naturally gifted with finances which is great. You probably could do this, but it comes down to determining the best use of your time. We can’t go to your kid’s soccer game for you, but we can free up your time so you can.
In addition, money is emotional. It is really hard to make objective financial decisions when you are so close to the situation. People’s brains are hard wired to buy high and sell low. According to DALBAR, the average equity fund investor earned 4.88% vs. the S&P index of 8.5% over the 10-year period ending in 2017. The major reason? Investor behavior. We help you reduce this gap, especially when markets are tough.
How do you make referrals to other professionals (estate planning, CPA, etc.)?
A very valuable aspect of working with us is the ability to tap into our professional networks. We know experts, or know how to find experts, in nearly every field related to your personal financial situation. We have spent substantial time getting to know these experts – their ideal client, how they charge, scope of services, etc. so that we can make the referrals that best fit your situation.
We will never accept any type of fee sharing arrangements. We pride ourselves in always eliminating conflicts of interest, so you have the peace of mind that the referrals we make are always in your best interest.
Questions related to who we serve:
I don’t really fit exactly into one of the example clients – can I still work with you?
Yes, of course! The example clients are meant to provide common situations that we see. You may have different goals, pain points, life circumstances, etc. which is great. However, if you don’t buy into our core beliefs, we will not be the best fit for you. We pride ourselves on not being for everyone, but we will help you find someone who is a better fit for you.
Do I need to have a certain amount of money to work with you?
Absolutely not. We don’t have investment asset minimums because we don’t charge based upon solely investment assets. Our fee is based upon your income and net worth.
We do have a minimum fee of $625/month or $1,875/quarter for ongoing, retainer clients. If this fee would be too high for you, then we are happy to make referrals for lower-cost alternatives.
Do I need to live in Rhode Island to work with you?
No! Our firm is virtual and the plan is always to be virtual. Technology enables us to work with clients from all over the country. We have clients in 21 different states and counting!
However, our network of experts is strongest in the RI, MA and NH areas.