1. What is a CERTIFIED FINANCIAL PLANNER™ Professional (CFP®)?
A CERTIFIED FINANCIAL PLANNER™ (CFP®), is a financial planning credential awarded by the Certified Financial Planner Board of Standards, Inc. to individuals who meet education, examination, experience, and ethics requirements. A CFP® professional has proven competence in all areas of the financial planning process, including financial statement preparation and analysis, investment planning, income tax planning, education planning, risk management, retirement planning and estate planning. The Code of Ethics requires: Integrity, Objectivity, Competence, Confidentiality, Professionalism, Diligence, Fairness and Disclosure of Conflicts of Interests. Certified Financial Planners™ are ethically required to act as a Fiduciary. That is why the Advisor you select should display the CFP® certification marks.
2. What is a FIDUCIARY?
Registered Investment Advisors (RIA) are legally required to act as a Fiduciary. CERTIFIED FINANCIAL PLANNER ™ Professionals (CFP®) take an oath with the CERTIFIED FINANCIAL PLANNER ™ Board of Standards to act as a Fiduciary.
The definition of a Fiduciary is one who acts in the utmost good faith, in a manner he or she reasonably believes to be in the best interest of the client. We are held to the higher “fiduciary” standard rather than the “suitability” standard usually associated with brokers, registered representatives, insurance agents, bankers, and certain financial planners. While they may operate in a morally responsible manner, they are under no legal obligation to act in your best interest. Instead, their first duty is to their employer and their employers’ profit – not yours. The company’s best interests may drive recommendations, advice, and buy/sell decisions.
The five legal responsibilities of a Fiduciary are:
- Put client's interests first
- Act with the utmost good faith
- Provide full and fair disclosure of all material facts in an ADV Part 1 and Part 2 brochure
- Do not mislead clients
- Expose all conflicts of interest to clients
3. What is Fee-Only?
A Fee-Only financial advisor as one who is compensated solely by the client with neither the advisor nor any related party receiving compensation that is contingent on the purchase or sale of a financial product. The Advisor may not receive commissions, rebates, awards, finder’s fees, bonuses or other forms of compensation from others as a result of a client’s implementation of the individual’s planning recommendations.
4. What is a Registered Investment Advisor (RIA)?
A Registered Investment Advisor has a Fiduciary responsibility to provide advice that is at all times in the best interest of the client. A Registered Investment Advisor operates independently of a bank or insurance company, which means that the Advisor has no requirements or incentives to sell proprietary products. This enables the Advisor to provide advice that puts the interest of the client above their own at all times. An Advisor that is not a Fiduciary must abide by the “suitability” standard of care which means the advice must be suitable but not necessarily in the best interest of the client.
5. What is a Firm Brochure (Form ADV 2A & 2B)?
Under strict regulatory rules, Registered Investment Advisors must provide their Firm Brochure (ADV 2A & 2B) to all prospective clients and yearly thereafter. It discloses the services, compensation, investment strategies, conflicts of interests, and disciplinary history among other things. Brokers, insurance agents, and bankers are not legally required to provide similar information. That is why we think you may be better served by a Registered Investment Advisor. You can download a copy from this website ADV 2A & 2B.
6. Has your firm or any member of your firm been subject to any regulatory discipline by any regulatory body for unlawful or unethical actions?
No. We have never been disciplined for any reason.
7. How are you compensated?
1. WEALTH MANAGEMENT
For clients with asset under management $500,000 and above, the fee for Wealth Management includes both investment management and comprehensive, continuous financial planning.
The annual fee is charged as a percentage of assets under management (AUM), according to the following schedule:
Assets Under Management
Annual Fee (%)
$750,000 to $1,000,000
$1,000,000 to $5,000,000
For example, clients with $850,000 in assets under management (AUM) will be charged annually 1.00% for the first $750,000 plus .75% on the next $100,000.
Unlike other firms, we may combine the account values of family members living in the same household to determine the applicable advisory fee. For example, we may combine account values for you and your minor children, joint accounts with your spouse, and other types of related accounts to meet the stated minimum. This can help lower the aggregate fee percentage charged. We will act in our clients' best interests and choose the lowest client fee rate when making a householding calculation, in effect reducing our total advisory fee to such clients.
WFS does NOT charge performance-based fees, which are fees calculated on the basis of capital appreciation within client accounts.WFS does NOT invest in any funds that charge initial or deferred sales charges.
WFS does NOT charge to provide investment advice on a client’s employer retirement plan assets.
WFS does NOT share in any portion of the brokerage fees/transaction charges imposed by TD Ameritrade.
WFS primarily uses no load mutual funds or exchange traded funds. WFS strives to obtain the lowest price when purchasing shares in mutual funds or exchange traded funds. WFS strives to invest in the least expensive share class of the fund whenever practical.
We offer one hour of financial planning services to family members of existing Wealth Management clients with over $1,000,000 in assets under management at no cost. We may waive this minimum at our discretion.
When considering WFS or other firms to manage your assets, we strongly recommend that you become an informed consumer. It is very important that you read the ADV forms (both the 2A and 2B) carefully before you commit to working with a financial advisor. Fees and disciplinary issues are very important (among others). Regarding fees, you should know of any other fees you may or will be charged. You should know when and how often. You should know if the Advisor you are considering will receive commissions, rebates, awards, finder’s fees, bonuses, revenue sharing, or any other form of compensation based on his/her recommendations of insurance or investment products. The ADV forms 2A and 2B should be on the firm's website. If it is not on the website and the Advisor is hesitant to provide it, then we suggest that you continue your search. Regarding the advisor's integrity and the trust, you expect to have with the person handling your money, you should read Part 2B of the ADV. It is a bit like a resume and will disclose any current disciplinary issues or past disciplinary history.
In our case, WFS is a Fee-Only firm. The definition of Fee-Only is that the Advisor is compensated solely by the client with neither the Advisor nor any related party receiving compensation that is contingent on the purchase or sale of a financial or insurance product. The Advisor does not receive commissions, rebates, awards, finder’s fees, bonuses, revenue sharing, or other forms of compensation from others because of a client’s implementation of the recommendations.
Mutual funds and exchange traded funds charge fees to the client. These fees are described in each fund's prospectus and generally include a management fee and possibly other fund expenses. These fees should be reviewed with your advisor prior to making purchases. TD Ameritrade may charge transaction fees when purchasing or selling securities. Our goal is to minimize these fees by trading only when it is appropriate.
To fully understand the total cost, you will incur you should review all the fees charged by Mutual Funds, Exchange Traded Funds (ETF's), WFS, and TD Ameritrade.
Clients will be charged in arrears. If the portfolio management agreement is executed at any time other than the first day of a calendar quarter, our fees will apply on a pro rata basis. This means that the advisory fee is payable in proportion to the number of days in the quarter for which you were a client. WFS will deduct the wealth management fees at the end of the quarter, directly from your account through TD Ameritrade, which holds your funds and securities. We will deduct our advisory fee only when the following requirements are met:
- You provide our firm with written authorization permitting the fees to be paid directly from your account held by TD Ameritrade.
- WFS will provide a quarterly performance report which includes the amount of the fee, the value of the assets on which the fee is based, and how the fee was calculated.
- The custodian, TD Ameritrade, agrees to send you a statement, at least quarterly, indicating all transactions including the amount of the advisory fee paid directly to our firm. You should review all statements for accuracy. WFS will also receive a copy of your statements. If you do not receive a statement directly from TD Ameritrade, contact both TD Ameritrade and WFS.
Long-standing clients were subject to the minimum account requirements and advisory fees that were in effect at the time the client entered into the advisory relationship. Therefore, minimum account requirements and advisory fees may differ among clients. At our discretion, we may waive this minimum account size based on the facts and circumstances at the time. Fees and account minimums may be negotiable.
WFS clients have access to institutional funds that offer lower fees based on a higher minimum investment requirement. WFS can meet that requirement by aggregating the firm's total assets under management.
2. PORTFOLIO REVIEW
The cost of this service is $1,500. This service is a one-time offer for new clients to get to know us. Clients who choose to upgrade to Wealth Management will have this fee waived.
3. RETIREMENT PLAN CONSULTING TO BUSINESS OWNERS
Fee for this service will be negotiated with the plan sponsor and based on assets under management and complexity of assignment. For services that involve ongoing asset management, these fees will be charged based on the schedule outlined in the service contract of the plan service provider or the investment advisory service agreement if the assets are held at TD Ameritrade. These accounts will be billed quarterly in arrears. WFS will bill the client or the 401K vendor, or TD Ameritrade will directly deduct the fees from the account(s). WFS will not directly debit any account without receiving written authorization from the plan fiduciaries. If the portfolio management agreement is executed at any time other than the first day of a calendar quarter, our fees will apply on a pro rata basis, which means that the advisory fee is payable in proportion to the number of days in the quarter for which the plan is under management. Further, the plan fiduciaries will receive an account statement delivered at least quarterly.
8. Do you have a minimum?
A minimum total account size of $500,000 is required for Wealth Management Services. The minimum is $500,000 in investable assets, which includes a total of CDs, Mutual Funds, Stocks, Bonds, Annuities, IRAs, 401(k), and pensions. Real estate is not included. Several household accounts can be combined to reach the minimum.
9. Who will have custody of my assets?
Your assets will be in your name and under your control at all times. TD Ameritrade, the custodian, sends statements directly to you. These statements include all transactions, trade confirmations, portfolio holdings, and performance with total return figures.