After making recommendations for investment selection or changes to the client, the client can then choose to implement that advice. We are certainly available to help with any of the practical details, if needed, in terms of opening accounts and making transactions. We do not have “custody” of any client money or investments, and do not bill any fees against any of your accounts. Our investment advice is designed to be low-maintenance and does not typically require anything more than
annual rebalancing. However, clients who have accounts at Vanguard or Charles Schwab can give us authorization to view, and also (if desired) to transact on your investments. This allows us to easily check-in on your investments. In addition, we can directly implement any changes if you direct us to do so. Note that we will never have any authority to move money to or from our personal assets, withdraw fees, change addresses or beneficiaries, etc. Nor will we ever make transaction you haven’t asked us to implement for you.
No. About half of our clients do not have any affiliation with the field of medicine. Our clients include individuals of all professions as well as small business owners. We do feel, however, that we have some extra insights into some of the financial circumstances typical of physicians.
We start with a 60 minute telephone/video conference consultation to discuss your needs and goals, and also determine if we are a good fit for each other. This initial meeting is $250. Time spent in excess of 60 minutes is billed at our standard rates, which are currently $360 per hour.
During this initial conversation, 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 what types of services you may need, and then provide you with a rough estimate of the hours involved. Once officially engaged, we’ll continue to help you with the data gathering process until we have all necessary information related to your questions, and provide you with planning roadmap.
One benefit of an hourly arrangement is that you pay only for the services/advice/education you need and use, and only when you want or need them.
Financial planning involves all aspects of your financial life: income, expenses, spending and retirement goals, tax considerations, insurance needs, ability to save or invest, and the best avenues or accounts in which to direct your savings. Investment management on the other hand, is more specific, and refers to the selection of investments within your investment accounts, and then the ongoing review of these investments if there are changes in your financial plan.
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.
Officially known as the “
Form ADV – Investment Adviser Brochure and Brochure Supplement” the Form ADV is used by Registered Investment Advisory firms to register with the Securities and Exchange Commission and state securities authorities. Part 2B is the “plain English” portion which contains information such as the types of advisory services offered, the adviser’s fee schedule, disciplinary information, and conflicts of interest. The brochure is the primary disclosure document that investment advisers provide to their clients and is required to be made available to a client prior to working together.
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 from our “about us” page..
Attitudes about finances are strongly tied to one’s personality, upbringing, and beliefs. Although financial planning relies heavily on “math”, the practical aspects of money management can be inherently emotional and affected by personal feelings and biases. Differences in attitudes among couples can strain a relationship and lead to poorly executed plans, or no plan at all. By necessity, financial planners must create a plan which both parties find acceptable.
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.
No. We prepare taxes for many people who do not also need or want any financial planning or investment management.
We perform 1040 tax-preparation services for individuals, couples, and families, including those with self-employment income and rental activities. We do not do s-corps, partnership, c-corps or other such entity returns. We can prepare taxes for residents of most states.
Tax-preparation is billed separately from our financial planning and investment management services. Tax-prep is billed on a fixed-fee basis, and depends on the complexity of your situation.
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.
Hourly or fixed-fee services are considered the most conflict-free method of providing financial services. Clients pay only for the work performed, and pay for professional experience and knowledge directly applied to their situation. There is no financial incentive to the planner to suggest any particular investment or course of action. Also, all clients are treated equally, as the hourly rates are the same for most clients. On the other hand, due to being “on the clock”, some clients may hesitate to contact us when they have issues, questions or new situations.
With an AUM arrangement, fees are based as a percentage of the value of the managed accounts, and are usually deducted from a client account on a quarterly basis. Some clients find this automatic fee-deduction to be convenient. One can ask questions to the advisor regarding your investments throughout the year, and the time for this advice is “pre-paid” in the form of the fee deductions. Thus, one gets (theoretically) “non-metered” amount of time for the AUM fee.
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.
When used in the context of a Registered Investment Advisory (RIA) firm such as ours, a fiduciary is a person or firm who has a legal and ethical obligation to put the client’s financial interest ahead of their own. All RIAs are required to operate in a fiduciary capacity. In contrast, most stock brokers and insurance agents who sell investments are not bound by a fiduciary standard. Make sure that any financial planner or investment manager you hire is an RIA working under a fiduciary standard.
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.
