Frequently Asked Questions
Align Wealth Management (Align) is a federally registered investment advisory firm headquartered in Oklahoma City, Oklahoma. Align also maintains an office in Tampa Bay. Align is comprised of a highly-skilled fee-only fiduciary wealth management team that helps successful people keep and grow their wealth. Our process combines decades of financial science with customized financial planning. We strive to deliver peace of mind by helping clients make the most of their one financial life.
Our advisors are Certified Financial Planners™ who can help you manage your investments, plan your retirement, reduce your taxes, minimize your risks, and leave a legacy to your loved ones. Recognized six times as one of America's best by Wealth Manager Magazine, Align has developed a solid reputation for its strong client-focused culture. Financial Times named Align as one of it's elite 300 independent advisory firms.
Our sole mission is to help you make the most of your one financial life. We believe in straight talk, good old-fashioned common sense, intense research, hard work on your behalf, and complete transparency. Importantly, we serve one master – our valued clients. We don't work for (nor do we accept compensation from) any brokerage firm, insurance company, or financial company. We are a "fee-only" firm, and we never accept commissions for the sale of financial or insurance products. Every ounce of our allegiance flows directly to our clients and every penny of our compensation flows directly from our clients via fully disclosed fees. And, speaking of fees, you'll find the total cost of our services to be most competitive.
We are backed up with a deep bench of wealth management professionals through our strategic alliance with Forum Financial Management. Forum is an independent registered investment advisor firm of 70 investment professionals (including CFPs, CPAs, CFAs, and attorneys). Forum provides Align and it's clients with a deep multi-disciplinary bench of high caliber professionals. Each Forum principal brings over 25 years experience in one or more aspects of financial management including: investment portfolio design, retirement, estate, insurance, and tax planning. Like Align, Forum is engaged in delivering wealth management services in the real world to real clients. Throughout the years, our ability to freely share ideas with other successful wealth management firms like Forum has proven extremely valuable to our family of clients. Together, Align and Forum manage over $7 billion.
Yes. After all, it is your money. When you need it, you should be able to get it. We do not utilize or recommend investments that contain any surrender fees or exit penalties of any kind. All of our recommended investments are always 100% liquid and accessible.
Of course. To do otherwise would be both unprofessional and incongruent (in our opinion). Besides, we think we run some of the best diversified portfolios in the world. So, ethics aside, our enlightened self-interest leads us to invest our own money right alongside yours.
Think about it ... does it really make sense for a financial advisor to recommend one thing to you and then invest his/her own money in something different? Without exception, the elite financial advisors that we've met invest right alongside their clients. When their clients prosper, the advisor prospers, and when their clients suffer, the advisor suffers. As it should be.
If this makes sense to you, when interviewing potential advisers ask them if they invest in the same investments that they recommend to you and ask to see their personal investment statements to confirm. To be clear, the personal wealth (excluding our homes) of all Align partners is invested in the same portfolios as our clients, as is our company's retirement plan. Of course, we gladly produce our statements to anyone becoming a client.
If you are comparison shopping among advisers, it is important to ask each of them the same questions. Request a financial planner interview questionnaire that will help you choose the financial advisor that is best suited for you and your family.
Align Wealth Management is a fee-only wealth management firm. We don't sell financial, investment or insurance products for commissions. Our revenues are derived solely from fully-disclosed professional fees paid to us by our valued clients. And speaking of fees, you'll find that the total cost of our wealth management services is among the most competitive anywhere. We are committed to ensuring that our value far outweighs our cost.
All of our services are provided on a fee-only basis, the fees cover all periodic client conferences, client meetings, performance reviews, portfolio reporting, tax reports, and cash flow projections. Our fees are billed on a quarterly basis, in arrears, and are calculated on the total portfolio value as of the last day of each quarter. Fees are calculated in accordance with the tiered schedule below:
|Account Size||Annual Fee|
|$750,000 — $1,000,000||1.00%|
|Advisory Fee for $2,000,000 Account||1.00%||0.95%|
|Third Party Portfolio Management Fee¹||Varies||None|
|Mutual Fund Expense Ratio||1.25%2||0.26%3|
|Mutual Fund Trading Charges||1.44%4||0.09%5|
There is no cost for our initial discovery meeting. We feel it's time well spent to first get to know one another — before we establish a formal business relationship.
We typically meet in-person 2 - 4 times annually with our clients who live in the Oklahoma City and Tampa Bay areas, based upon each client's preference. For our clients who live outside of these areas, we suggest regular updates via email, phone, web-conferencing and in-person meetings as appropriate.
Because not all income is taxed the same, we utilize a process called Asset Location. The goal of Asset Location is to minimize taxes on your portfolio as a whole by holding the right assets in the right accounts. It involves carefully determining which assets to hold in your taxable accounts (joint accounts and revocable trusts), which assets to hold in your tax-deferred accounts (IRAs and 401Ks), and which assets to hold in your tax-free accounts (Roths). For example, we would hold municipal bonds in a taxable account and we would hold a high-yielding REIT in a tax-deferred and/or tax-free account.
In addition to utilizing Asset Location, we take a number of additional steps to maximize your after-tax returns:
- During our investment screening process, we assess the tax-efficiency of each potential holding. Our objective is to identify investments that will deliver solid after-tax returns.
- We consider carefully whether it makes sense to continue to hold investments that we might otherwise sell once they have built up large capital gains. Using sophisticated portfolio trading software, we assess the opportunity cost of holding an existing position with a significant unrealized gain vs. selling and generating capital gain taxes. We review a variety of scenarios before making a final sell decision.
- When the markets are volatile on the downside, we look for opportunities to harvest capital losses by selling investments, or specific tax lots, that have unrealized losses that could be used to offset gains on a client's tax return.
- If we are planning on selling an investment position with a gain, we will first consider the holding period and if we are close to creating a long-term capital gain, (after a one year holding period), then we may consider holding the position for a few more days or weeks in order to allow the client to take advantage of lower tax rates on long-term capital gains.
- For our taxable accounts that include fixed income, municipal tax-free bonds are often used in lieu of taxable bonds.
Before any changes are made, we first analyze your existing portfolio and discuss our recommendations with you. Our overall goal is for your portfolio to make sense for you and your lifetime objectives, in the most cost effective manner. Ways we achieve this goal are to:
- Develop a firm understanding of your unique willingness, ability, and need to engage market risk via appropriate diversification
- Understand how all your assets will be used to meet your goals
- Minimize your investment expenses
- Manage for appropriate asset location between taxable and tax-sheltered accounts
- Eliminate any unnecessary complexity within your portfolio
- Minimize your taxes
We will accept securities into your managed account. However, most of them will not be retained unless they are the same securities currently being utilized in the target portfolio set forth in your investment policy statement. It is our professional and ethical duty to manage your portfolio to the best of our ability. This includes selecting and monitoring all securities held in your account. Of course, we will work with you to ensure that any transitions occur as smoothly and cost-effectively as possible.
Any investment that you currently own and desire to retain should be placed in a separate self-managed account. We can help you set-up a non-managed Schwab or TD Ameritrade account. However, because of our fiduciary obligation to our clients, we cannot take responsibility for this type of self-directed account.
Align Wealth Management is pleased to be among a select group of financial advisory firms with direct access to DFA funds. We often utilize DFA funds as components of our managed portfolios. We have no affiliation with DFA and we receive no commissions, kickbacks, or compensation from DFA. DFA is not our exclusive fund sponsor, and whenever we feel there is a better investment option for your particular needs, we use it.
As you may know, DFA seeks to protect the reliability of its funds, and to keep shareholder expenses low by requiring investors to access DFA funds via a select group of financial advisory firms. You can learn more about DFA by visiting www.dfaus.com.
We believe two keys to achieving your long-term financial goals are: (1) building a portfolio of holdings optimized to reflect your unique goals and risk tolerance; and, (2) sticking with that target portfolio over time. To achieve that second goal, you don't just buy and hold. You also have to periodically rebalance. Even as you stay firm with your investments, the market around you is always changing. For example, say you build a portfolio of half bonds and half stocks, balancing safety and expected wealth growth. After a while, if stocks outperform bonds, that "half" becomes more than half of your overall portfolio, and that's not what you planned. So we sell some of your stocks (selling high) and purchase enough bonds (buying low) until your mix is rebalanced to its intended 50/50 target. Sometimes we can use available cash flow (from deposits, dividends, interest and capital gains) to rebalance your portfolio by simply buying more of the underweighted asset.
Although we consider rebalancing to be an essential part of professional asset management, most investors rarely rebalance their investments on their own, and many advisors merely rebalance annually or quarterly, without much regard to what's happening in realtime. We take a different approach. To be on the lookout for any opportunities, we monitor our model portfolios daily. We then rebalance your portfolio whenever we determine that the amount of cash in your account is too high or too low, or whenever any component of your portfolio has drifted too far from your target allocation. Because rebalancing incurs transaction costs and can generate taxable gains within taxable accounts, we monitor regularly for rebalancing opportunities, but we are judicious about acting only when we feel it will truly add value to your long-term investment experience.
We rebalance based on the unique investment objectives described in your Investment Policy Statement (IPS), so we also strongly encourage clients to let us know whenever their objectives change, in case we need to adjust their allocations, their IPS, and thus their rebalancing activities.
The short answer is no. We conduct your rebalancing automatically as part of our overall client-focused services. We feel this approach ensures that important rebalancing opportunities are not postponed or lost by requiring you to fit an approval process into your already busy life. Instead, you give us advance permission to rebalance on your behalf. This permission is very limited, permitting us only to conduct periodic rebalancing or to replace an investment with one we deem superior, all in accordance with our written, customized, Investment Policy Statement to which we mutually agree.
Yes. Your custodian (Schwab or TD Ameritrade) will notify you by mail or email each time we make a change in your portfolio. These confirmations will give you complete details of each trade in your account. All trades are conducted in accordance with your written Investment Policy Statement, but we encourage you to be in contact with us whenever questions arise. We feel this creates a good balance between keeping you informed and involved, while minimizing unnecessary interruptions to your busy life.
Via our third-party performance reporting system, we maintain performance data on our model portfolio strategies. Please keep in mind that past performance is no indication of future results. It is important to understand that Align builds and manages portfolios for clients on a case-by-case basis and that our model performance is an aggregate of all of our managed accounts net of all fees and expenses.
Important Disclosures: Performance results are presented net-of-fees and reflect the reinvestment of dividends and capital gains. Portfolio returns are composite returns of all clients invested within the respective portfolios. Individual results may vary as each client’s portfolio is customized to their particular circumstances. In addition, returns will likely vary based on the timing of deposits and withdrawals, as well as the use of asset classes and investments that are not part of our current portfolio allocations. Returns are time-weighted returns. No current or prospective client should assume that the future performance of any specific investment or strategy will be profitable or equal to past performance levels. All investment strategies have the potential for profit or loss and past performance is no indication of future performance. Changes in investment strategies, contributions or withdrawals, and economic conditions may materially alter the performance of your portfolio. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will either be suitable or profitable for a client's investment portfolio. Historical performance results for investment indexes and/or categories generally do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment management fee, the incurrence of which would have the effect of decreasing historical performance results. There are no assurances that a portfolio will match or outperform any particular benchmark.
No. Align Wealth Management is not affiliated with Schwab or TD Ameritrade, nor are we compensated by any of those companies in any manner. We receive no fees, commissions, or incentives from Schwab, TD Ameritrade, or any other financial institution.
No. There is no reason to visit a Schwab or TD Ameritrade office to open accounts yourself. When you are ready to become an Align client, we will send you the necessary paperwork for your signature. We know your time is valuable and we like to keep things simple and easy for you
Schwab and TD Ameritrade send monthly statements to all clients for all accounts. These statements show account balances, trades, cash flows, and unrealized gains. Statements are available in paper as well as through email. In addition, Align will send you a detailed performance report each quarter that compares your portfolio's performance to a series of relevant benchmarks.
Yes. At the end of each year, Schwab and TD Ameritrade will send 1099s to you for each taxable account. This includes a realized gain/loss statement. Align can also provide a detailed tax report to you (and to your CPA if desired) detailing interest, dividends, short-term capital gains and long-term capital gains.
No, you can terminate the advisor/client relationship at any time for any reason (or for no reason at all). There are no termination charges or surrender fees. A final management fee will be drafted based on the number of days during the current quarter that your account was under our management.
No. Your assets are held in custody in your name at Schwab or TD Ameritrade. Align Wealth Management never takes custody of any of your assets. Instead, we are granted a limited power of attorney to do three things in your account: (1) trade securities, with discretion, in accordance with your Investment Policy Statement; (2) request that Schwab/TD Ameritrade send a check to you directly or to your bank; and, (3) be paid a quarterly management fee from the account based on our Investment Advisory Agreement. We have no other access or authority.
Yes. All accounts are insured on multiple levels. The coverage extended to you at Schwab and TD Ameritrade is extensive. For details on each custodian's coverage, please visit each custodian's website. Align Wealth Management also carries extensive Errors and Omissions insurance and a separate Fidelity Bond for retirement accounts and pension funds.
All personnel, including management personnel, are required to sign an Annual Ethics Statement that outlines our ethical standards. Everyone at Align Wealth Management adheres to that strict ethical code as part of our daily operations. In addition, our daily operations are governed by our policy and procedures manual, as well as by the Align Employee Handbook.
With fee-only compensation, you pay us a fair and transparent fee for the services we provide you. Refusing commissions or other compensation from third-parties removes conflicts of interest. This arrangement keeps us on the same side of the table and helps ensure we're focused only on your best interests.
Yes. Within six months of hire, Align Wealth Management advisors must have at least five years of industry experience and hold the CFP® professional financial planning designation or the CFA (chartered financial analyst) designation. In addition, each advisor is supported and supervised by Align's senior management team. Each advisor is required to comply with all of Align's practices and procedures.
A Fiduciary is a person who is responsible for managing the assets of another person and who stands in a special relationship of trust, confidence, and/or legal responsibility. As a Fiduciary, we have the legal responsibility to follow prudent investment practices, as well as to serve your best interest at all times. The Align Wealth Management Client Agreement specifically identifies Align Wealth Management as your investment fiduciary. We also have designed our operations to reflect prudent practices and procedures.
No. Commission-based brokers are not generally required to be fiduciaries. They are transaction-based and are not held to a fiduciary standard. Some brokers/advisors try to wear two hats, suggesting that some activities should be held to a fiduciary standard and some should not. This creates confusion and a lack of clarity in the client/advisor relationship.
If we identify a need for insurance products or suggest that you shop for quotes to increase the value of existing insurance plans, you have options. You can go to the open market for competitive quotes, or we can refer you to one of our insurance specialists. Of course, you can also do both. Align does not sell insurance products. However, we understand their importance in an overall financial plan and we incorporate them into your overall customized strategy when appropriate.
Yes. Align serves clients all across the United States. If you do not live near one of our offices, we can utilize technology such as the telephone, email, and web/video conferencing to accommodate you.
As an established client, you can continue with our services and we can continue to service your needs remotely via telephone, email, and web/video conferencing.