Before you get in too deep, raise that paw and ask these 5 questions for Financial Advisors. Here are a few to get you started…along with our answers.
Over the last 20 years I have given away as much financial education and guidance as I could. I seemed to always have a line of fellow Federal Agents in my office. They were asking about how to reduce debt, invest in their TSP and pay for their kids’ education. There was one overarching problem in all the stories. We are so busy serving others, we sometimes forget to take care of ourselves. So I created this firm for us. It’s a way to guide Federal Agents by meeting them where they are on their financial journey. It’s also a healthy way for me to now give back and stay connected with those I love as I enter my “work optional” years. Now, on to 5 questions for Financial Advisors…along with our answers for your convenience:
# 1: How do you get paid?
There are a ton of fee models in the world of finance. It can be a bit dizzying to understand the ways that Financial Advisors and Planners get paid. In its simplest form, there are three basic fee models.
Advisors can be Commission-Based, where they earn a commission from the sale of financial products. Life insurance is a great example. Sell the insurance, make a commission off the sale.
Meanwhile, other Advisors use a Fee-Based model. This means the Advisor can charge a flat-fee, say $5,000 for a financial plan. But they are also allowed to get paid commissions – back to the sales of financial products.
Finally, there is the Fee-Only model of how Advisors get paid. Think of this as a smaller subset of Advisors. These Advisors do not earn commissions. The Advisors only charge a fee in exchange for the services provided. These Advisors are fiduciaries. They are required to put the best interests of their clients at the forefront of their work.
Truth be told, the idea of which fee model is “best” is the source of much debate inside the profession. To be frank there are, as with anything in life, pros and cons to all of these fee models. The bottom line will always be that you need to develop trust with your Advisor. You need to feel confident that he/she is honest at heart. We picked the model that we felt best reduced conflicts of interest, provided transparency, and was packaged with elegant simplicity.
Our Answer for: Financial Coaching & Education = Flat-Fee
We charge a flat monthly fee for our self-directed MoneyArmor Membership option. We also offer a discount if the year is paid in full. Members also have access to add-on services. They can opt-in for private hourly sessions and estate planning with a CFP® professional. This provides for personalized guidance within membership.
Our Answer for: Financial Planning = Fee-Only
Financial Wellness – SWORD Level & Financial Ops Planning – WINGS Level: We charge an initial onboarding fee and a flat monthly fee thereafter. At either of these two levels, we also offer investment management services for clients who don’t have the three “Ts”.
We don’t get paid in any other ways. No referral fees, no commissions, no undisclosed revenue sources. We don’t even charge extra for our Dad jokes.
Wait, what are the three “Ts”?
We enjoy teaching families how to invest in low cost, time-horizon specific investments on their own. This puts clients in the driver’s seat by reducing fees – including ours. We encourage a “quit-messing-with-it” mentality when it comes to investing. However, sometimes the three “Ts” come into play:
Time – a client simply doesn’t have or want to make the time to do their own investing.
Temperament – a client can’t gain distance from their emotions (most of us can’t, quite frankly) so they are prone to making mistakes such as timing the market, exiting when inappropriate, and taking unnecessary risks that are not aligned with their values.
Talent – a client doesn’t wish to wrap their available brain power around investing;
other things in life take precedence and require their attention.
When a client doesn’t have all three “Ts”, they can lean on us as a trusted partner. We have the time to get them invested wisely, the temperament to walk with them through turbulent days, and the talent to guide them in the alignment of their money to their true inner values.
# 2: If I don’t live near you, can we still work together?
Some Advisors are down the street. Some Advisors are virtual and some are a mix of both. Let’s face it, 2020 changed the way we all live and work. On a positive note, the year taught us that remote work can and does work. It just takes the right mix of technology and personalities. So pick an Advisor whose style of delivery fits you and yours!
Our Answer:
Yes! We are based out of the Raleigh, North Carolina area. However, we designed our firm to operate remotely. As such, we work virtually with clients all over the United States.
# 3: What services do you offer?
A great first question when interviewing potential Financial Advisors is to ask if they focus on a niche of clients. If they do serve a niche, ask what types of corresponding services are available. Do they just serve a wide variety of clients who walk through their door? If so, you’ll have to dig deeper. Investigate how familiar they may be with your current pain points and problems. Remember, you are trying to decide how comfortable you are with that Advisor’s level of focus on your issues.
Our Answer:
Our mission is to meet Federal Agents where they are and then walk with them toward financial independence. To do that we help with areas such as:
– Cash Flow Planning
– Debt Management
– Education Funding
– Employer Benefit Reviews
– Estate Planning
– Financial Monitoring
– Goal Setting
– Investment Management & TSP Strategies
– Net Worth Analysis
– Retirement Planning
– Risk Management
– Tax Planning
When it comes to finances, we want to help you live the adventure of today, while planning for your tomorrow.
# 4: How often will I hear from you?
It’s important to think about how frequently you want to hear from your Advisor….and how personalized you want those communications.
Our Answer:
For our SWORD & WINGS level clients, we typically meet once or twice per year formally. We offer touch points in between. Client education is also a big focus for our firm. We publish regular insights in one form or another (e.g., newsletters, blogs, vlogs or email updates) to address relevant financial topics and happenings specific to the Federal Agent families we serve.
We also hold client education events (e.g., webinars/office hours) on an assortment of topics. Clients who participate in our investment management services – the majority of our clients – also receive a quarterly performance report. This clearly displays what is going on in their accounts so they have peace of mind.
Additionally, clients are always welcome to schedule a call or shoot over an email with questions or concerns. As Federal Agents we know that the value of financial overwatch begins with communication. It can be chaotic and loud out here. Communication is how we as a firm remain a clear signal amidst all the noise.
# 5: Will you help us with our investments?
Many Financial Advisors place investments front and center when speaking to clients. As my grandmother used to say, “tread carefully” here. Investments are important, no doubt. But we’d really like you to think about what is taking place if the first thing an Advisor talks about is investments.
Step back and remember that investments are but one spoke in the wheel of your financial plan. Other spokes could include debt management, taxes, college planning and estate planning. Again though, at the center of this wheel is your financial plan. And at the center of that plan are you and your family. That means when interviewing Advisors, be sure to see if their focus will be on your hopes…your dreams…your purpose in life – your ikigai (ee-key-guy)! Having said this, it’s still important to ask about an Advisor’s general philosophy when it comes to investments.
Our Answer:
We prefer methodologies that are time-tested and proven to work over the long haul. There is plenty of investing noise in the world. That noise will easily distract and derail you from building wealth. We are here as a reminder that although our approach isn’t fancy, it works. We’ve always believed that time in the market is more important than timing the market.
Our role is to inject a sound investment strategy into your financial plan and then keep you on target. Behavioral finance lessons teach us that sometimes investors can be their own worst enemy. Thus, our value as an Advisor shows up as we help guide you in areas such as:
- Automating monthly contributions so that we follow a “pay-yourself-first”
mindset and harness the power of dollar-cost averaging. - Rebalancing your portfolio to avoid drifting too far from the collaborative
strategy we have in place for you. - Helping you avoid emotional decisions that can damage your portfolio.
“Simplicity is the ultimate sophistication.” – Leonardo da Vinci
