Dear Friends & Clients:
You’ve probably heard us whistle this tune so often that you can sing along yourself: Among the best ways to maximize expected returns is to minimize the costs involved in achieving them. This begs the question: What about those fees you pay us, your advisor? Are we earning our keep?
It’s a fair and reasonable question. We divide the benefits of working with us in our role as your fiduciary wealth advisor into three, “good, better and best” categories.
Tangible Savings (Good)
As we’ve stated time and again, minimizing the costs of investing in our wild, wooly markets is integral to successful investing. In helping you achieve that goal more effectively than you could on your own, the cumulative cost savings can easily total more than our advisor fees. Following are three of the most hard-hitting examples.
We help you stay the course. A body of solid evidence substantiates that do-it-yourself investors (or those working with brokers whose recommendations are secondary to their commission-based trading role) face an enormous challenge knowing when to buy, sell or hold on tight. When the world is screaming, “DO SOMETHING!” it’s gut-wrenching to ignore the call, even when reacting threatens to derail your carefully laid plans. By providing a bastion of discipline to your investment experience, we help you avoid costly and nerve-wracking trades that are unnecessary, poorly timed or both.
We use low-cost funds to build your portfolio. Especially if you were trading individual securities or investing in actively managed funds, the savings derived from shifting to low-cost institutional funds can be profound. How profound? We would be happy to provide you with a cost analysis comparing the expenses in your Align managed portfolio compared to other possibilities you may be considering. Typically, the results are striking and eye-opening.
We help you minimize taxes. We are vigilant in minimizing the impact of taxes on your net worth by applying a variety of year-round tax-sensitive investment strategies, as well as by ensuring that taxes are carefully considered across the spectrum of your financial plans, such as retirement spending, college funding, charitable giving, estate planning and more.
Subtle Rewards (Better)
Beyond the hard-dollar values we seek to deliver, there are other ways we contribute more subtly, but potentially as significantly to your bottom-line results.
We bring you financial clarity. As much as we love to crunch the financial numbers that comprise your wealth, we are equally as enthused about helping you achieve those critical “ah ha!” moments, so you can contribute to your financial success. When you understand the essentials of investment theory — why we do, what we do — it makes you a better, more confident investor than you would likely be if you were going it alone.
We’ve got your back. We hope you’ll remain informed and engaged as described above. But you also get to delegate many of the granular details to us. This saves you hours in your day that would otherwise be sacrificed to poring over trade sheets, rebalancing tables and similar paperwork. We take care of monitoring and managing your portfolio for you, reporting the take-home results that matter, and acting promptly on your questions or requests.
We see your forest for the trees. Beyond simply managing your investment portfolio, we also seek to oversee and eliminate inefficient, potentially costly gaps or overlaps in your related wealth management activities and relationships such as your estate planning, charitable giving, tax planning, risk management (insurance), college and retirement funding plans and more.
We keep you in good company. By using Dimensional Fund Advisors for the core of your portfolio, we’re using funds that are only available to investors who are receiving similar advisor counsel. We believe it’s no coincidence that Dimensional was one of the few fund managers who received significant inflows of new assets during the Great Recession. While many (most) Do-It-Yourself investors were panic-trading — often to the detriment of their fellow shareholders —Dimensional and its advisor-supported model maintained a patient, long-term focus.
The Immense Immeasurables (Best)
Let’s say none of the above were true, at least not for you. You’ve learned all that you need to know about sound portfolio management, and you’re well-equipped to take over the helm. Maybe you’re entering retirement, with time on your hands. Or you’ve become an empty nester, and your stay-at-home spouse is ready to manage the process. Maybe you’re thinking about turning to an on-line service for automated, do-it-yourself investing at rock-bottom prices.
Bottom line, even if you can confidently answer “yes” to having the financial acumen, emotional temperament and practical tools to plan, implement and manage your own best investment portfolio, there is still a larger consideration: Is ongoing portfolio management really how you want to spend your free time?
Unless you wake up looking forward to conducting a thorough assessment of your financial action items, chances are good you would gain greater satisfaction by spending your time with loved ones, in your chosen career, on community activities or enjoying your personal interests.
Another important consideration is the legacy you are leaving for your spouse or other family members to manage. In the face of change, having an objective advisor who is deeply familiar with your personal wealth can offer immeasurable “assurance insurance” when family money management roles are in transition, helping to ensure that transitions occur smoothly, deliberately, and in your and your family’s best interests.
True wealth is the confluence of you and your relationships, of your intellectual and emotional needs, of your money and your mission. In our role as your advisor, we want to help you win by simply (but bravely) investing according to your most heartfelt personal goals amidst life’s many uncertainties. We win by helping you efficiently apply the right processes, tools and mindset to do just that. Tally up the results, and we hope you’ll agree that our advisory services are a winning — and fairly priced — solution.
We sincerely appreciate the trust and confidence you have placed in us. We know you have many choices when it comes to your wealth management needs. We pledge to do everything in our power to continue to earn your business by ensuring that our value far outweighs our cost.