Lince Financial Planning Guide to Services, Process and Costs

Transcription

1 Lince ning Guide to Services, Process and Costs Investment advisor representative of and investment advisory services offered through Garrett Investment Advisors, LLC, a fee-only SEC registered investment advisor. Tel: (910) FEE-ONLY. Lince ning may offer investment advisory services in the State of Oregon and in other jurisdictions where exempted.

2 FINANCIAL PLANNING SERVICES Financial planning is the ongoing process of purposefully allocating your limited financial resources to seemingly unlimited alternatives. Our financial planning services are designed to address your questions and help you create a plan which allocates your resources to what s most important to you. So, what are your questions? What areas of your personal finances would you like to focus on? Cash Flow How can I create a spending plan that works? What s a good system to track my spending? How should I allocate extra money I can save? Debt and Savings Should I prioritize saving or paying off debt? In what order should I pay off my debts? How long will it take me to be debt-free? How much do I need to save for emergencies? Retirement When can I retire? How much do I need to save for retirement? What about if I plan to keep working part-time? How will I pay for health care in retirement? When should I start my Social Security benefits? When should I start my PERS or other pension benefits, and which payout option should I select? How much can I safely spend from my retirement savings so I don t run out of money? Which accounts should I spend from first? College How much do I need to save for college? Should I open a 529 savings plan? If so, which state s plan would be best for me? How do I prioritize between retirement and college? Which investment options should I choose? Investing What s the right mix of stocks, bonds, cash and other assets in my investment portfolio? Should I contribute to my employer s plan, or an IRA or a Roth IRA? Where is a good place to hold my IRA, Roth IRA or taxable account? Which investments should I choose for my employer-sponsored plan (401k, 403b, 457)? What about for my IRA or Roth IRA? What about for my regular taxable accounts? Should I rollover my 401k, 403b or 457 to an IRA? What strategy should I take with my stock options? Am I paying too much in investing fees? Housing Should I pay extra on my mortgage? Should I refinance my mortgage? If I want to buy a new house, what price range fits well with my other financial goals? Does it make sense to sell my current house? How does a remodeling or yard project fit with my other goals? Family Needs How can I arrange for the special needs of a family member to be taken care of? How much can I reasonably pay for a wedding? How can I balance caring for my aging parents with my other financial goals? Lifestyle How does buying a new vehicle fit into my plan? What about special hobbies and recreation? What about travel or a special family vacation? Charitable Giving How can I give of my money, assets, time, skills, etc. to the causes I most value? How much can I give and still meet my other financial goals? Retooling How can I fund starting a business? What about pursuing educational opportunities? What about developing my creative interests? Insurance Is my current coverage adequate? How much life insurance do I need? Taxes What can I do to be more tax efficient? Legacy Planning Which legal documents do I need? A will, trust, power of attorney, health care directive? Do I need to update my will or other documents? Do I have the correct beneficiaries for my retirement accounts?

3 You: 1. Prior to the meeting, complete our confidential online questionnaire, or download a pdf version to complete and bring to the meeting FINANCIAL PLANNING PROCESS Get Acquainted Us: 2. Work to understand your financial situation and areas you d like to focus on 3. Answer whatever questions you have 4. Provide you with a fee quote 3. All parties electronically sign client service agreement when ready 4. Begin pre-work for initial kickoff meeting Sign Agreement & Prep for Initial Kickoff 1. client service agreement 2. Send a list of what you need to bring to the initial kickoff meeting 1. Bring to the meeting the financial information we requested, the goal planning worksheet and the investor questionnaire Initial Kickoff 2. Review and clarify financial information 3. Understand and clarify financial goals 4. Understand you as an investor 3. Respond to questions we raise in the process of developing your plan 4. Provide additional information as requested Analysis and Development 1. Organize financial data 2. Analyze financial situation and goals and develop initial working financial plan 1. Come ready to interactively work on finalizing your financial plan (s) to Converge on 2. Go through financial statements 3. Go through investment details 4. Present our analysis and findings 5. Work with you to finalize financial plan 3. Meet to discuss investment plan if needed Investment Plan Development 1. Determine overall asset allocation and specific allocation for each account 2. Select specific investments and dollar amounts for each account 2. Wait for us to complete our report and send it to you Write Up Report 1. Write up final report with our recommendations, your action items and detailed reports from Morningstar and our financial planning software 1. Work to complete your action items from the financial plan report Complete Action Plan Items 2. Answer questions you have on the implementation of your action items (continued on next page)

4 1. Come ready to discuss status of action items, any roadblocks, and any questions or clarifications you have Follow-Up Coaching (continued from previous page) 2. Review status of your action items and provide coaching to complete implementation 1. Notify us at any time if you have significant life events between our scheduled meetings Annual Plan Update 2. Contact you to schedule your annual plan update FINANCIAL PLANNING COSTS We offer our financial planning services for a fixed cost or on an hourly basis. Your cost is determined by the details of your financial situation and the areas you d like us to focus on. Our complimentary get acquainted meeting gives us the opportunity to better understand these details, project the amount of time we will spend on your behalf, and provide you with a firm quote. You may pay as a lump sum ($500 initial deposit + remaining due when report is delivered) or via automatic ACH transfer ( electronic check ) payments from your bank account for a period of twelve months. Here s what you can expect for different costs: $600 (or $50/month): A single 2-hour meeting to address as many areas as we can, plus 2 hours of our time outside the meeting for very brief analysis and a summary report write up with our recommendations and your action plan. $900-$1200 (or $75-$100/month): Retirement, college and other goal planning utilizing our financial planning software. Also cover areas such as cash flow, debt and insurance planning. Does not cover investment planning. $1200-$1800 (or $100-$150/month): Previous services plus investment planning. $1800 and up (or $150/month and up): More complex financial planning and investment planning scenarios. INVESTMENT MANAGEMENT SERVICES Our investment management services are an additional offering we make available to our financial planning clients. Once your financial plan is designed (which includes your investment plan), you have the option of delegating to us the implementation and maintenance of your investments. We can manage your existing taxable and tax-advantaged accounts (IRA s and Roth IRA s). We can also work with the custodian(s) of your previous employer(s) plan (401(k), 403(b), 457, etc.) to roll over your assets into an IRA account which we then manage. Our investment management services include: The creation of a written Investment Policy Statement (IPS) which goes into the details of how your portfolio will be managed The setup of your accounts at our custodian Working with your existing custodian(s) to get your accounts transferred over to our custodian The initial trades in your accounts once they are set up and funded The review and update of your IPS on an annual (or as-needed) basis The annual rebalancing of your investments to return to your strategic asset allocation targets

5 INVESTMENT MANAGEMENT PROCESS You: Financial and Investment Plan Completed Us: 3. Carefully read through and understand IPS, ask for clarification if needed 4. Sign written IPS when ready Create Investment Policy Statement 1. Create written Investment Policy Statement (IPS) that goes into detail for how your portfolio will be managed 2. Submit the IPS for your approval 3. Come in to sign forms and for call(s) to existing custodian(s) 4. Sign and deposit check with account funds at our custodian (if needed) Initiate Transfer of Assets to our Custodian 1. Complete forms to setup accounts and initiate transfer of existing accounts 2. If needed, set up call(s) with current custodian(s) to start transfer process 2. Respond to our with your approval in a timely manner Initial Purchase of Investments 1. Send to you with specific trades for your approval 3. Once approved, place trades in your account(s) 1. Notify us at any time of changes that could impact your investment plan 3. Take part in annual investment plan review Annual IPS Maintenance & Rebalancing 2. Hold annual financial and investment plan review, update IPS if needed 4. Rebalance investments to return to strategic asset allocation targets INVESTMENT MANAGEMENT COSTS Some advisors charge a commission as high as 5.75% of the amount you re investing plus receive an ongoing fee called a 12b-1 fee. Some advisors charge an annual fee which is based on a percentage of your assets, typically 1% but often much higher. We offer our investment management services on a fixed cost basis, based on your financial situation and the number of accounts we re managing. Our typical investment management costs are in the $225-$1000/quarter range. Note that this cost is in addition to our ongoing financial planning costs. Payment for both financial planning and investment management will be automatically deducted from your investment account(s) on a quarterly basis. When managing your portfolio we favor the use of low cost investment vehicles such as index funds or ETF s whenever possible. When combined with our fixed advisory cost, the result is a cost-efficient professionally-managed portfolio.