Questions to Ask When Choosing a Financial Planner: Our Responses

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1 Questions to Ask When Choosing a Financial Planner: Our Responses Selecting a competent, qualified financial planner with whom you feel comfortable and one whose business style suits your needs is an important decision. The Certified Financial Planner (CFP ) Board of Standards has prepared a list of questions to ask to help evaluate a candidate. We have prepared our answers to provide the reader with a detailed understanding of our background, philosophy and services.

2 What experience do you have? Mark Aldridge has been a financial planner since Prior to establishing his own practice in 1998, Mark worked for four different financial services firms and gained a wide variety of experience working with retirees, small business owners and corporate executives. Today, our professionals provide the expertise our clients seek so they can reach their most cherished personal financial goals. In recent years, our focus has been on assisting clients with the management of their retirement and investment plans. For retirement, the focus is on planning and preparing both mentally and financially. When everyday is Saturday, what will you do with your time? We feel this question is as important as strategizing over appropriate investment selection and protecting real purchasing power. For all clients, we offer integrated financial planning to coordinate estate planning objectives and risk management needs with the other financial objectives. Survivor income needs, long term care and trust planning are other areas in which we have extensive resources to assist our clients. Mark s career experience has spanned across the following firms: Aldridge Financial Consultants, LLC/Raymond James Financial Services, Columbus, OH present Edward Jones, Columbus, OH Waller Financial Planning Group, Columbus, OH Robert J. Oberst, Sr. & Associates, Red Bank, NJ Crossroads Financial Group/Connecticut Mutual, Roseland, NJ Financial Planning Consultants, Middletown, OH ; What are your qualifications? What are your areas of specialization? Qualifications Mark started his career learning the fundamentals as a finance major in college. He is 1983 graduate of Miami University, Oxford, Ohio, with a B.S. in Business. Mark has earned several professional industry designations throughout his career beginning with the Certified Financial Planner (CFP ) in In 1990, he completed the requirements for the Chartered Financial Analyst (CFA) designation. The CFA is a qualification for finance and investment professionals, particularly in the fields of investment management and financial analysis of stocks, bonds and their derivative assets. Very few financial planners hold this designation, which is typically earned by stock and bond analysts and portfolio managers. As result, Mark has an uncommon perspective and appreciation of the thoroughness required in

3 security selection. This perspective has led him to primarily utilize managed accounts like mutual funds, closed-end funds and separately managed accounts as opposed to individual securities due to the focus necessary to gauge their unique risks and pitfalls. He added to his financial planning education with the Chartered Financial Consultant designation in Annually, he engages in numerous ongoing continuing education opportunities through conferences, online programs and reading industry related newsletters, books and other material. For the securities industry, Mark maintains the Series 7, 9, 10 and 63 licenses enabling to him to trade a broad range of securities. For insurance based products, Mark also maintains licenses to offer life, disability and long term care insurance and annuities. Specialization While we work with clients in all stages of life, our main focus is on retirement planning and investment management for retirees and soon-to-be retirees. Given today s extended life expectancies, we create customized financial strategies that are designed to give clients the best opportunity for achieving their goals throughout retirement. What services do you offer? Integrated Personal Financial Planning design a comprehensive plan to address all areas of a client s personal financial life including retirement, tax and estate planning, investment and risk management, education planning and special situations. Implementation and Monitoring are part of this ongoing process. We develop a Wealth Management Plan for each client. Retirement Planning and Investment Management design, implement and monitor plans to address these needs. Investment Management Only some clients wish us to address only this specific area of their finances and, in some cases, only a portion of their total portfolio. What is your approach to financial planning? All of our services use the same basic process, regardless of the level. Overall, we are big believers in balance. While we are strong believers in thrift and wealth planning, we also feel clients should be managing their life s affairs to live a full and rich life. Our process is as follows:

4 Initial Meeting and Introductions o We listen and learn about the clients initial goals, objectives & resources o Clients can kick our tires to see if we are a good fit for them o We each decide if working together would be appropriate Data Gathering o Clarify client goals and objectives o Collect statements for assets, income, taxes, Social Security, etc. o Review Investment Policy Questionnaire in detail Analysis of Data o Staff enters data in computer o Review existing investments, strategies, financial plans o Prepare initial projections and plans o Prepare initial Wealth Management Plan Develop Initial Recommendations o Create preliminary written plan of recommendations o Staff prepares client binder of analysis and recommendations o Review plan with client Implementation of Recommendations o Once confirmed with client, follow up as needed. o Establish new accounts o Transfer in existing accounts o Apply for insurance policies, if needed o Assist in working with outside advisors as needed. Monitor, Review, Adjust o We proactively contact clients to meet 1 to 2 times annually. o Review investment performance and plan progress o Implement changes as needed o Revise Wealth Management Plan as needed o We always accessible and encourage clients to call or us with concerns or questions. What is your approach to investment management? Our philosophy and approach has evolved over the years, but is rooted in the management of risks. Such risks include but are not limited to: interest rate, currency, longevity, social, political, reinvestment, business, financial, liquidity and purchasing power. To start, we develop a broad asset allocation policy with a client using an Investment Policy Questionnaire. For our broad policy, we determine target ranges that should be invested across Cash, Fixed Income (bonds), Stocks and Other investments. Our approach is not cookie cutter or one size fits all rather this policy considers the

5 risk tolerance, stage of life, income needs, growth needs, liquidity needs and other unique circumstances and needs of the client. We encourage clients to focus on time horizon needs and matching the portfolio to those needs. Today, most of our client investments are held in managed accounts via mutual funds, closed-end funds and separately managed accounts. Over 90% of our clients monies are held in this fashion. We have elected to move in this direction for several reasons: It has been our personal experience that typically it is more suitable for our clients to utilize several well selected portfolio managers, as opposed to our selecting individual securities. The managers can spend their time and energy on investment selection, whereas we spend our time more on portfolio management and client needs. The managers can initiate, add to, trim or remove a position in all client accounts more easily than we are geared to do. Like individuals with other unique gifts such as athletes, engineers or artists, we feel certain investment firms are a good fit for our clients needs. We utilize a select group of managers based on multiple criteria plus our ability to have a good information flow from the manager so we can understand their process and their ongoing results. While future results cannot be guaranteed, we feel this is a strong approach. A part of our risk management strategy is basically to select three to ten of these managers (each with different styles or investment objectives) to oversee a portion of the clients portfolio. We monitor the managers via third party research, meetings and conferences, and conference calls. We monitor and adjust client portfolios as needed. Part of this process includes reviewing portfolio results with the client periodically and making adjustments. The greatest benefit we offer clients in their portfolio management is our coaching and encouragement of good behaviors in following the investment strategy established. Multiple studies have shown that the average investor earns only 25% or 30% of the market return in a comparable portfolio or fund over time (source: Dalbar). In a nutshell, investors historically sell when the market is low and buy when it is high. Our focus is to help clients stay invested and be invested appropriately given their financial goals and needs.

6 Will you be the only person working with me? Mark Aldridge will be the primary person providing advice to you. Mark s assistant, Teri Doyle, handles the administrative duties for Aldridge Financial Consultants, LLC. If necessary, there may be times in which an outside advisor may be called upon to assist in a tax, legal or insurance matter. We always consult with you to gain your authorization prior to contacting one of these advisors whether they are someone you know or someone we are referring to you. How will I pay for your services? In general, we charge fees based on the portfolio size a client maintains with us. For clients with portfolios in the range of $100,000 to $1,000,000, these fees are roughly 1% annually, paid on a quarterly basis. In addition, Raymond James also charges some small transaction fees. These fees are absorbed by us for accounts greater than $500,000. Below is a summary of the programs available to clients based on their unique circumstances and needs. Investment Management Fees all newer clients of Aldridge Financial Consultants, LLC generally pay quarterly fees via the Raymond James Passport Fee program. In general, the minimum account size for this program is $25,000. Financial Planning Fees for integrated personal financial plans or situations in which a client seeks a plan but not ongoing investment management, we will charge a flat fee that is based on the time involved in the plan and/or research preparation. Securities Commissions for older client accounts or those accounts whose account size is less than $25,000, we can offer traditional commission based products. Insurance and Annuity Commissions Mark Aldridge will earn commissions for insurance based products such as life, disability, and long term care products or for immediate or variable annuities that are placed through his broker-dealer, Raymond James Financial Services, Inc. How much do you typically charge? Investment Management Fees fees for ongoing investment management start at 1.5% per annum for accounts under $100,000. For accounts between $100,000 and $1,000,000, we charge 1% per annum. Accounts in excess of $1,000,000 are discounted on a sliding scale to the 1% depending on account size.

7 Financial Planning Fees the minimum financial planning fee is $1500. Fees are based on complexity of the plan. Securities Commissions securities commissions vary by product. Insurance and Annuity Commissions insurance and annuity commissions vary by product. Could anyone besides me benefit from your recommendations? Conflicts of interest are inherent in most, if not all, business relationships. The key, in our opinion, is to disclose these relationships to you beforehand and also to allow our ethics to drive our professional judgment and not the conflict of interest. We identify three major areas of potential conflict: Our broker-dealer relationship with Raymond James Financial Services. Mark Aldridge is a licensed broker and principal with Raymond James. He is also registered as an Investment Adviser Representative (IAR) with the firm. Raymond James is one of the largest, independent, U.S. financial services firms. The firm has earned the enviable reputation for being a conservatively managed company offering its clients a full range of services while consistently putting their interests first. All fees and commissions paid by a client are split between Mark Aldridge and Raymond James. Commission based products in general commission schedules for investment and insurance products vary widely depending the type and complexity of the product. Our goal is to provide the products and services that best serve our client. Today less than 15% of our revenue is derived from commission based products (as compared to fees). Where appropriate, we will use a commission based product where a fee based is not available or is inappropriate. Outside professionals many of our clients are referred to us from outside advisors and likewise, we often refer clients to outside professionals. We do not pay referral fees nor do we receive any referral fees from outside advisors. Have you ever been publicly disciplined for any unlawful or unethical behaviors in your professional career? No. We always strive to place our client s interest first. We invite you to check our background through FINRA ( and the CFP Board of Standards ( The CFP Board also has other suggested websites for background checks on their website.

8 Can I have it writing? Yes. We provide copies of our fee based arrangements to all clients. We also suggest retaining this document which gives a broad outline of our services. Investing involves risk. You can lose your principal. There is no assurance any strategy will be successful. Tax and legal services are not provided through Raymond James Financial Services, Inc. Other Disclosures: 1. Diversification and asset allocation do no assure a profit or protect against a loss. 2. Advisory fees are in addition to the internal expenses charged by mutual funds and other investment company securities. To the extent that clients intend to hold these securities, the internal expenses should be included when evaluating the costs of a fee-based account. Clients should periodically re-evaluate whether the use of an asset-based fee continues to be appropriate in servicing their needs. A list of additional considerations, as well as the fee schedule, is available in the firm's Form ADV Part II as well as the client agreement.