Frequently Asked Questions
We believe that our firm has distinguished itself in four significant areas:
Our Core Values
At the base of our core values are two underlying themes. They are that we do what is in our client's best interest all the time and that we provide world-class service to our clients.
Behind our research effort is a commitment to intellectual honesty and to staying within our area of competency. We believe our clients' long-term interests are best served by making decisions based on careful research, rather than pursuing what is temporarily popular or superficially appealing.
Our Attention to Detail
While some say don't sweat the small stuff, we believe our attention to detail is what sets us apart from other firms.
Our Ability to Listen
Our clients include wealthy individuals, families, foundations, retirement plans and institutions. We believe strong client relationships are born out of understanding our client's needs. We feel the best way to make sure we know our client's goals is to listen to them. Our ultimate success is not based around any product, but rather on our relationships. We believe relationships are strengthened through communication, and an important part of communication is listening.
We typically meet in-person from one to three times per year with our clients who live in the Sacramento area, based upon each client's preference. For clients who live outside of the area, we suggest regular in-person meetings be held on a mutually agreed upon basis.
We complete a detailed analysis of our client's portfolio when we meet in-person. But at other times throughout the year we are reviewing the portfolio and may mail you a copy of the analysis we complete so that you have a copy for your review and records.
Portfolio management fees vary depending upon the complexity of the situation. All client meetings, teleconferences, and portfolio review and analysis are included in the fee.
We take a holistic view toward our clients' financial situation. We regularly communicate with the attorneys, CPAs, and other financial professionals who serve our clientele. Investments are just one component of a comprehensive financial plan. We also engage in risk management (insurance), retirement planning, and estate planning. We like to view ourselves as the "navigator" of our clients' financial team.
In the world of finance, "independence" means we are not beholden to any one manager, fund, or corporation. We have the freedom to choose appropriate money managers, taking into account their performance, style and fee structure and matching it with our clients' needs and goals. When we invest your money in a specific manager, it is because of the quality of the investment, not because of corporate dictum. In effect, there are no conflicts of interest that are present with many firms.
First and foremost, all fees and costs should be transparent, and easy to understand. A plan's various providers should be asked on an annual basis to provide a complete written summary of their fees and charges, along with a clear explanation of who is paying those fees. While precise industry benchmarks for such fees are a little difficult to come by, comparative data are available and your investment professional should assist you in evaluating those fees. The most difficult fees to quantify are often asset fees or investment related fees because they are not billed and usually do not appear as deductions on statements. Demanding complete, clear disclosure from all vendors is critical. ERISA is very clear that plan sponsors have an obligation to plan participants to manage fees and keep them at reasonable levels.
The legal and regulatory communities today are unsettled on this question. In this day and age where the 401(k) plan is the dominate retirement plan for many businesses, that proposition is a bit scary. Regardless of how the matter is settled, it is clear that employers are going to be held to a high standard in evaluating whether they do a good job of educating their employees about the importance of saving for retirement and the importance of prudent long-term investment management. It seems that the days of merely setting up a 401(k) plan and allowing it to operate itself may be over.
You may want to consider offering a Consumer Driven Health Plan with greater incentives to your employees at an employer savings of 25% to 50% per year in medical premiums. These plans are usually used in conjunction with Health Savings Accounts (HSAs) or employer-funded Health Reimbursement Accounts (HRAs). But a full review of a plan would be needed to determine whether this would be the right course of action for you.
One of the best options available for tax savings is a Health Savings Account (HSA). An HSA allows the employee to put pre-tax dollars into an account that can then be used to pay for medical expenses. Over the course of an employee's career, the amount will grow and could conceivably be over $200,000, depending on the duration of time spent in the plan and the medical expenses incurred while covered under the plan.
Employers should consider implementing a Cafeteria Plan which would allow employees to pay for items like orthodontia, LASIK eye surgery, medical out-of-pocket expenses, dental and vision expenses, and dependent daycare expenses all with pre-tax dollars. The average tax savings to an employee is anywhere from 20% to 43%.
Dental coverage is the second most requested benefit by employees. Dental coverage costs no more than 10% of the cost of medical coverage, and annual premium increases have been much smaller than medical increases, usually in the single digit area. Employees view dental as a benefit that they will actually use and receive some type of value for the coverage. Surprisingly, only 45% of employers offer dental coverage so it can be a good way to attract and retain employees.
Insurance Analysis and Estate Planning
There are no uniform amounts of insurance coverage needed. Life insurance companies often time recommend 8 to 10 times your annual income of coverage. We believe that instead of asking a product provider how much of their product they think you should have, it is in your best interest to complete a careful evaluation and determine your needs and sources of income you will have when the coverage is needed.
The most common mistake we see is that people wait too long to plan. It is very typical for people to wait until they are 60 years old to want to see if they can retire in 5 years at age 65.
That is true, but even doing some basic planning at younger ages will provide you with a least some direction or confirmation that you are heading in the right direction.
It is never too late. We find that many times new clients who have not done any planning often times are already on the right path or need to make only slight changes to their portfolio or desired retirement age to have a comfortable retirement.