Our firm has maintained a leadership role in the investment advisory profession by continually developing and providing solutions to the financial issues facing our affluent clients. We are celebrating our 35th anniversary in 2020.
The firm has over 900 client relationships and we manage over $2 billion in discretionary assets under management. Many of our clients have been with us for decades and have now seen their children and grand-children become clients.
Founded in 1985 as a commissioned-based advisor, in 1993 we were among the first in the country to become a fee-only financial planning practice. As a fee-only financial advisor, our revenues derive solely from fees paid directly to us by our clients. We have no potential conflicts associated with commissions or proprietary products. For clients with significant assets, we will offer assistance in estate planning, insurance planning, income tax planning, and all other areas of personal financial planning.
Our financial planning program provides clients with a complete evaluation of their financial resources, financial decisions, personal risk tolerance, and capital need requirements. We identify, quantify, and prioritize the client's personal and financial goals. An investment policy, including an asset allocation model, is implemented and managed by the firm and is designed to achieve the client's goals. A copy of this investment policy is provided to clients so they can follow along with the strategy and understand the thought process that goes into the asset allocation recommendation. Our team will help direct and implement financial planning recommendations and we will continually monitor the investments and the progress of a client’s financial plan.
There are a few things that we think are unique and special about our firm. We are accredited investment fiduciaries.
First, we believe very strongly in the fiduciary standard. This standard mandates that we put our clients' interests in front of our own and that we must try to minimize conflicts of interest and disclose any that remain.
This is very different from a broker's suitability standard, which says that an investment only needs to be suitable for a client and may involve the advisor getting paid a commission to recommend a certain product.
Our cash reserve policy is different than in most firms and has helped steer our clients through recent downturns relatively well. For clients that need to draw money from the portfolio, we recommend carving out one year of expenses and keeping this money set aside in a separate interest-bearing account. This account is mainly invested in cash equivalents and short-term bonds. As the client draws down the balance, we opportunistically look for ways to refill this bucket. As a result, the client knows where their living expense money is; as such, they don't need to sell assets at depressed levels to free up cash flow, and the balance of the portfolio can be invested in long-term investments. We do not believe an income approach makes sense because it may force us to build a portfolio that relies on only dividend paying stocks and high income producing bonds (i.e., junk bonds).
Our experience and education. We have served clients in our capacity for 35 years. All client-facing advisors are Certified Financial Planner® professionals and follow the CFP Code of Ethics. Our Chief Investment Officer is a Chartered Financial Analyst, the top money management credential. Other designations held by members of the firm include CPA®, AIF®, AIFA®, RMA®, ADPA®, CRC®. and a PhD in Personal Financial planning.
Our approach to recommending an investment allocation is much more detailed than other firms and is at the core of our service offering. We utilize both a client's risk tolerance and retirement planning analysis to arrive at an asset allocation that allows them to meet their goals while enabling them to sleep well. Most firms arrive at an allocation recommendation based solely on a risk tolerance questionnaire. We tailor our recommendations to our clients’ specific needs, goals, and objectives. Clients must set their own goals. It is our responsibility to educate them in the process and to assist them to define, quantify, and prioritize their goals.
We work with clients of all kinds, including individuals, entrepreneurs, families, trusts, and endowments. The firm has also experience in working with physicians, attorneys, retirees, divorcees, and widows.
The firm is structured as a Limited Liability Company. The operation of the business is in the sole control of the firm's professionals. Fiduciary Network, a passive investor, is a non-managing owner.
Our staff ownership includes Professor Emeritus Harold Evensky, CFP®, Founder, Professor Emeritus Deena Katz, CFP®, Founder; Matt McGrath, CFP®, Managing Partner; Lane Jones, CFP®, CFA®, Chief Investment Officer; David Evensky, Chief Marketing Officer; Mena Bielow, Chief Compliance & Financial Officer; John Salter, PhD, CFP®, Wealth Manager (TX); Katie Salter, CPA, Senior Vice President (TX); Brett Horowitz, CFP®, AIF, Wealth Manager; Taylor Gang, CFP®, AIF, Wealth Manager; David Garcia, CFP®, CPA, Wealth Manager and Josh Mungavin, CFP®, Wealth Manager.
Yes—despite having offices in Coral Gables, FL and Lubbock, TX. Around 30% of our clients are located outside Florida. So, whether you're in West Texas or New Mexico, we can help you. Our planning software, MoneyGuide Pro, is collaborative and web-based, enabling us to work online with clients, regardless of location. Additionally, we use web-conferencing such as Zoom, enabling us to provide our office presentation via the Internet. Finally, many of our out-of-state clients find Miami and Key Biscayne a very attractive locale to visit during the winter!
Not generally. Occasionally, it will be necessary to react quickly to management changes or other situations we may encounter. The custodian will immediately provide trade confirmations, and the trades will be reflected on the next monthly statement from the custodian. Of course, we will discuss any changes as soon as practically possible.
Clients work directly with our financial planning professionals. They will be assigned to a Wealth Management Team consisting of a Wealth Manager and Financial Advisor. Our professionals keep detailed notes on conversations and meetings, and paperwork sent to the client or received is saved electronically in our system. Should a client need to speak to someone right away and their team is unavailable, any other professional should be able to access enough information to help that individual.
All recommendations and guidance provided are based on the ideas and principles of the collective firm. The recommendations of the firm are derived from an Investment Committee and a Planning Committee. These committees are made up solely of EK-FF practitioners. The Investment Committee discusses the current investment managers, alternatives, asset allocation, and outlook/expectations for the future. The Planning Committee discusses any advice that will be disseminated to our clients such as 529 Plan research, Social Security decisions, Roth IRA conversions, etc. The Principals of the firm have overall responsibility for all accounts and recommendations.
Generally, we do not recommend that a client trades in their investment account. We will, however, be happy to open a trading account for our client to make his or her own investment selections and trades.
With a client's permission, we will always work with their other advisors. In fact, we strongly advise our clients to permit us to work as a team on their behalf. Allowing us to speak with other advisors directly and/or provide data and information assists in seamless handling of our clients' financial needs. Let us stress again: We initiate these relationships specifically upon permission from our clients.
Absolutely. When we first work with a client we collaborate and establish an appropriate asset allocation. We then provide an Investment Policy Statement (IPS) that will include a detailed asset allocation based on our core and satellite policy design. In those cases, where we have information regarding a client's current investments, we will provide our observations. Prior to implementation of the policy, we will discuss, in detail, the specific recommended investments we will utilize to implement the IPS.
Limited discretion is the authority our clients provide our firm relative to their investment portfolio. It authorizes the custodian of the client's assets (e.g., Fidelity, TD Ameritrade and Charles Schwab) to accept our instructions regarding purchases and sales within the account. As we hold no securities licenses and don’t get paid via commissions, we have no incentive or ability to 'churn' the account (i.e., trade the account to benefit our firm through the receipt of increased commissions). Limited discretion does not allow us to have funds disbursed from the account, unless we have instructions from the client or for payment of our management fees.
No. We are registered investment advisors, not brokers. We hold no client assets. The only funds we receive from clients are the management fees. When given limited discretionary authority, we generally recommend the establishment of accounts at major low-expense brokerage firms (i.e., Charles Schwab, TD Ameritrade and Fidelity). They act as independent holders of client money to ensure that Bernie Madoff cannot happen here. We have negotiated special, lower cost institutional pricing for our clients at these firms.
We are solely compensated by fees paid by our clients directly to our firm. We receive no commissions or referral fees. This is part of our fiduciary standard. A copy of the fee calculations are sent to all clients every quarter so that there is no ambiguity.
We may charge an initial planning fee of $4,000. Half of this fee is due upon the execution of the contract. The other half is due upon delivery of the Investment Policy Statement and our recommendations. Given that we expect our clients to move forward and establish a long-term relationship with us after the delivery of the Investment Policy Statement, we will credit these fees back to the client when calculating the ongoing quarterly management fees.
We charge an annual fee based on a client’s Assets Under Management, billed quarterly in advance. Our clients can elect to terminate the relationship at any point in the future and have the fees for the remainder of the quarter refunded back.
We will meet with a client as often as necessary and are available when needed, but recommend that during the first two years, we meet more often since the relationship is new. We ask our clients to contact us if there are any changes in their financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if they want to impose, add, or modify any reasonable restrictions to our investment advisory services. We also provide our clients with customized quarterly reports. Finally, we send out emails, letters, and blogs with news of upcoming seminars, webinars, conference calls, and investment thoughts. The goal is to educate our clients and provide them with complete information so that they can make informed decisions.
We formally monitor our managers' performance on a weekly basis. The Investment Committee monitors the managers in detailed monthly (e.g., cash positions, turnover, expenses, investment size, quality, maturity, as well as absolute and relative performance), and we review activities in our discretionary accounts on a daily basis.
We do not generally 'trade' our client accounts for the sole purpose of ‘doing something’ since we are long-term investors who abhor unnecessary trading costs. However, we do have a carefully constructed rebalance procedure. Specifically, we rebalance our clients' accounts according to the dictates of the Investment Policy Statement that reflects their needs and circumstances. We will also make special trades for tax purposes, changes in investment strategies, or changes in management or management style.
Asset Allocation (diversification) is the strategy of spreading investments over a variety of different asset classes and management styles in order to reduce the risk of substantial loss. Lack of proper diversification can cause investors to miss unexpected opportunities and/or expose them to unforeseen investment pitfalls. Allocating capital according to a carefully planned diversification guide enables investors to achieve the greatest possible risk adjusted, after-tax return, commensurate with their needs, willingness to bear risk, and need for current cash flow.
Although we are familiar with the criticism of the Brinson, Hood & Beebower study (especially the challenges raised by Kritzman, Ibbotson, and Jahnke) there is little disagreement that asset allocation/portfolio policy is a significant determinant of long-term portfolio performance. We believe in maintaining a forward looking strategic asset allocation for core holdings and only infrequently revising that allocation. We believe in broad rebalancing to the strategic asset allocation; however, the influence of taxes and transaction costs leads us to conclude that rebalancing with fairly wide bands of latitude is the most appropriate solution.
We believe long term real equity returns are more likely than not to be less than the returns of the last 70+ years. In such a low return environment, the drag of taxes and expenses will exceed the additional returns associated with current wealth management investment practices. Consequently, we believe the multi asset/class, multi manager investment policy model adopted by wealth management advisors is no longer appropriate for individual investors. We believe that in today's economic environment an institutional core and tactical satellite portfolio is the appropriate base policy design for individual investors.
We believe in the weak form of the EMH. We thus reject the use of classic technical analysis and market timing. However, we believe in the judicious use of tactical strategies as applied to satellite portfolio allocations.
We believe in the conclusions of the Fama/French research that there is a "value" factor, and over time, value equity portfolios will provide superior returns, but with potentially higher risk. We also believe eliminating growth allocations will result in interim performance divergence from the broad markets our clients would find unacceptable, therefore we overweight value but do not exclude growth.
We believe the choice between active and passive management is not either/or; we use both. In general, we believe diversification among traditional active strategies should be combined with passive strategies, subject to the constraints of expenses and taxes.
We believe the performance of professional money managers will generate results far superior to a client's or wealth manager's direct security selection and management. We believe effective portfolio implementation should include consideration of professionally managed funds, individual separate account managers, and exchange-traded funds.
We believe managers should be selected and evaluated based on their philosophies, processes, and people. Once selected, managers should be allowed periods of under-performance if they remain consistent to their philosophy and process. Evaluation of managers should entail a detailed review of all available pertinent information, including both fundamental qualitative attribution and return factor analyses. However, the ultimate decision to hire or fire should be based on fundamental data. Performance should be measured against appropriate investable benchmarks, not broad market indices.
We believe a clients' personal situation should be regularly reviewed to determine if they are continuing to move in the direction of achieving their goals. This includes revisions in strategic allocations as a result of revised assumptions and/or changing client circumstances or goals. Our responsibility is to assure that our clients 'stay the course' and do so with a minimum of emotional pain. Our focus is always our clients' well-being and the achievement of their goals, not the numerical performance of a portfolio.
We review accounts to determine if the portfolio composition is consistent with the asset allocation variance within the limits established. If not, it is rebalanced to maintain the risk/reward relationship mandated by the policy. This process may result in withdrawing assets from the investment managers who have performed well or adding assets to managers who have lagged in the most recent period.
We believe clients should seek total return, not just dividends or interest. The traditional concept of an 'income' or 'all bond' portfolio is archaic and places unnecessary and inappropriate restrictions on portfolio design. Return on assets comes in the form of income and appreciation. We don't design 'income' portfolios. We manage for cost and tax efficient cash flows by setting aside appropriate funds in liquid and targeted short duration investments in 'cash flow reserve' accounts.
We believe 'conservative' assumptions are a dangerous myth. An investment policy should not be prepared based on unrealistic expectations.
We believe a client's risk tolerance is a significant factor in the wealth management process. We measure success by our clients' ability to achieve their goals and sleep well during turbulent markets.
Rules of thumb are, at best, interesting conversation pieces and, at worst, disastrous guidelines for planning. They are never appropriate as standards when planning for the quality of our clients' financial lives.
Future returns are uncertain and risky; tax savings and expense reductions are riskless and provide guaranteed returns. We believe that, in a low return environment, a primary element of intelligent management is the minimization of the controllable elements of expenses and taxes.
We base our portfolio design on a total return policy. Total return includes both income and appreciation. Total return investing focuses on the net portfolio change in market value.
We do not believe in making any 'investment' goal with less than a five-year time horizon. Funds required in fewer than five years should be placed in money markets and/or fixed income securities (e.g., CDs, Treasuries) with durations equal to or less than the goals' time horizons.
Actually, we do not 'offer' any investments. We are financial planners, not money managers. A significant part of our practice is focused on the design and implementation of customized investment portfolios. In the implementation of our investment recommendations, we employ, for the benefit of our clients, many of the world's best money managers in a wide range of investment styles and classes.
As fee-only planners, we are solely focused on the best interest of our clients, and hence, restrict ourselves to utilizing investments that have no commissions. In addition, we focus on selecting managers and strategies that are cost and tax-efficient.
As an independent registered investment advisor, we have access to the entire universe of investment alternatives also known as 'best in breed'. We currently employ the following investments and managers:
Due to the fact that each of our clients' portfolios are uniquely positioned based on their asset size, mix of taxable and qualified assets, tax bracket, risk tolerance, and individual preferences, we do not have firm performance numbers that are available. We can, however, share with our clients a list of the current managers included in the portfolio and their performance over the preceding years.
Money will be invested according to personal time horizons and asset allocation. Generally, for funds needed in five years or less, we will restrict investments to cash equivalents (e.g., CDs, money market) and short- to limited-term bonds.
This describes a professional money manager who, based on criteria set by our firm, selects individual investments (i.e., stocks or bonds) for our clients. Thus, clients with a portion of their portfolio managed by a separate account manager will own positions in individual bonds and/or stocks.
Although the custodian of the assets is the official record keeper, our firm downloads complete data regarding all of the accounts under our discretionary management daily. Utilizing sophisticated, professional portfolio management software enables us to continually monitor our clients' transactions and tax basis.
Although custodians send reports with transactions and other information on a monthly basis, we provide a comprehensive customized quarterly report, along with updated reports at any time subject to our client's request. Clients also have daily access to our client portal which reflects their asset allocation, performance, transactions, and much more.
No. The custodian’s website continues to reflect your account's official record keeping. If there is any discrepancy between the data, you should rely on the custodian’s information. If you are looking to move money, place trades, change your address, etc., you would need to log into the custodian’s website to effect those changes. The portal is designed to give you access to pertinent information, arranged in an easy-to-follow format based on how our firm looks at your portfolio. We also post our quarterly reports, invoices, and other timely reports, but these reports are not meant to replace the custodian monthly statements.
Due to the financially sensitive information contained in your client portal, the portal company, Tamarac, did not want to use the same simple passwords (mother’s maiden name, date of birth, etc.) that are found on other websites. They intentionally wanted to make the passwords difficult to answer so that there would not be a chance that someone else could breach the system.
Alternatively, you can opt out of the challenge questions and instead add your mobile number to your client portal. Once you add your mobile number, instead of being prompted to answer security questions, you will be texted a secure code that you will need to enter to gain access to your portal.
We update the information each business morning, usually between 9am and 10am to reflect the prior day’s changes. If you log-in Friday morning, you’ll see the data for Thursday. The data over the weekend will still reflect Thursday’s close until we have a chance to update the system on Monday morning. “Sync in Progress” means that we are updating the information, and this should take about 15 minutes. Occasionally, we may need to update our system in the middle of the day, so we ask you to be patient and revisit the data a little later. Once the sync is done, your home page will refresh.
When you are in the client portal document vault and you have located the document you want to download, you will check off the box to the left of the Name/Description. Then click the ACTIONS drop down menu and select the Download option.
To upload a document to your Client Portal Document Vault you will want to go to the Document Vault tab, and click the ACTIONS drop down menu. Then click the Post Document option. This will open up a pop-up box where you can either click the SELECT OR DROP FILES HERE box to select files from your device to upload, or drag and drop the files into the gray space surrounding the blue button. Once you have posted the document, your advisor will receive an alert notifying them that a document has been uploaded.
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