Frequently Asked Questions
During this initial meeting, we’ll help you determine what types of material and data to collect for us to do a preliminary review, and we’ll give you an idea of how we can benefit you. We’ll discuss exactly what types of services you wish, and then provide you with an estimate of the hours involved and prepare a written contract. Once officially engaged, we’ll continue to help you with the data gathering process until we have all necessary information related to your questions. Then we’ll present to you a short term, medium term, and long term plan (as desired). You can then decide if you would like to implement any part of the plan on your own or with another professional, or if you would like to retain our services for help in putting any part of your plan in action.
After an initial engagement period is completed, we are also available for a periodic checkup, or to discuss any new issues or life changes which have come up. One benefit of an hourly arrangement is that you pay only for the services you actually use, and only when you need them.
While some financial planners also select and manage investments, most investment management firms will provide only limited financial planning, particularly for questions or issues not directly related to the investment accounts they oversee.
Although much of the language on the Form ADV is somewhat boilerplate, it is an important legal document which should be reviewed by anyone who is considering hiring any financial planner or investment advisor. Our Form ADV can be downloaded here.
What if my spouse/partner and I disagree about finances and have very different philosophies towards money?
We have substantial experience in working with couples, and find that our financial planning process results in frank discussions which can lead to mutual understandings in the relationship and a unified financial plan.
We also do “tax-preparation tutoring” where we can work with you “side by side” (with tax software of your choice) and prepare your taxes together as we explain how various rules affect your current taxes and tax planning. The goal is to provide education, and hope that you learn enough to confidently prepare your own taxes the following year.
I’m researching advisors and compensation methods, what are some pros and cons of paying for hourly services?
What are some pros and cons of working with an advisor with an assets-under-management (AUM) fee structure?
There are several potential conflicts-of-interest related to AUM fees, however. An advisor has an incentive to attract your assets and keep them invested. Thus, there is an inherent bias against giving advice which may result in fewer assets in your accounts (and thus fewer AUM fees), such as whether you should pay down your mortgage or other loans, give to charity, or give gifts or other asset transfers for estate planning purposes. Also, since the largest client accounts pay the largest fees, there may be a bias towards preferentially giving time or attention to clients with the most assets, at the expense of clients with smaller accounts. Finally, an AUM agreement results in the advisory firm getting paid throughout the year regardless of the amount of work performed. In many cases, those fees charged can buy a lot of hours of personalized financial planning and hourly investment management.
Although the fiduciary standard is currently the highest standard which applies to the industry, it is still a fairly weak legal standard and by no means protects clients from conflicts of interest. Thus, separate from any legal requirements, we also pledge to work under a higher ethical standard, sometimes referred to as a stewardship or optimum standard. This is not a legal concept, but is instead a moral principle that compels STK Planning to protect and promote the financial well-being of others through ethical behavior and prudent decision-making as we provide leadership and guidance of clients’ financial affairs. Our chosen standard of conduct is higher than ordinarily required and encountered in commercial business.