Questions To Ask…When Choosing a Financial Planner

To help you evaluate which financial services provider is best suited to your needs, the Certified Financial Planner (CFP®) Board of Standards developed 10 of the following questions. Wall Street Journal writer, Jason Zweig, wrote about 19 questions to ask. I’ve combined them here along with my answers.      (Sources noted at the end.)

What experience do you have? What are your qualifications?

Since 2006, I’ve helped clients build wealth and achieve what’s important to them through planning and management of their investments.  Avea Financial Planning, LLC is a Registered Investment Advisory firm (RIA) in the state of Washington, established in 2017.  In 2011 I earned the distinction of the professional designation, Certified Financial Planner™ Pro (CFP®) which is recognized as the highest standard in personal financial planning with expertise in the areas of taxes, insurance, estate planning and retirement.  This is only achieved after obtaining a bachelor’s degree and specialized training in financial planning, passing a 2-day examination, completing annual ethics training, and having 6000 hours of professional work experience.  Continuing education is required to retain the designation.

Can you tell me about your conflicts of interest, verbally and in writing?

Yes, there are conflicts in any engagement.  It is my job as a fiduciary to be fair and disclose any that I might identify. One conflict is that I might get paid more for managing more of your assets. That is one reason I have capped my annual fee at $7,500 for 2020.

Are you always a fiduciary and will you state that in writing?  

Yes. Fiduciaries are required to act in the best interests of their clients when providing financial advice — even if those interests are in conflict with their own. It's a legal and ethical distinction that holds financial planners to the highest standard of care. Broker-dealers, stockbrokers and insurance agents are only required to fulfill a suitability obligation and are not held to a fiduciary standard.

What types of clients do you typically work with?

I focus my work in Pasco, Kennewick and Richland, better known as the Tri-Cities, in Southeastern Washington State. I also serve the surrounding communities of Benton and Franklin counties, Yakima, North Franklin county, the Palouse, Walla Walla and Eastern Oregon.

However, I use Zoom video conference software to meet virtually with clients from around the globe. Distance does not need to be a deal-breaker for our relationship.

I focus my work with women in STEM and education careers and Hanford Site pre-retirees to help them through life’s transitions like career change, retirement, widowhood, divorce or sending a kid to college.

My clients are often women, and if married, joined by their spouses, who are in their 50s, 60s and 70s, in pre-retirement or retirement. I specialize in pre-retirees, recently divorced or widowed women and college-bound families. Many of my clients are dual income families with professional jobs related to the Hanford Nuclear Site or education, with household income in the range of $125,000-$250,000+ and a net worth of approximately $1,000,000 - $5,000,000.

We work alot with employees associated with the Hanford cleanup mission, vitrification plant and the Department of Energy National Labs:

  • Department of Energy Richland WA (DOE-RL) 
  • Pacific Northwest National Laboratory (PNNL) and the United States Department of Energy National Laboratories and Technology Centers
  • Bechtel National, Inc. (BNI)
  • Washington River Protection Solutions LLC (WRPS)
  • Mission Support Alliance (MSA)
  • CH2M HILL Plateau Remediation Company (CHPRC)
  • HPM Corporation (HPMC)
  • Wastren Advantage, Inc. (WAI)
  • Aecom Management Services
  • Fluor Federal Services
  • Atkins Nuclear Secured
  • Leidos Integrated Technology
  • Parsons Government Services
  • Hanford Mission Integration Solutions
What services do you offer?

I offer short-term or ongoing comprehensive planning with or without investment management.  I advise on taxes, estates, retirement, budgeting, debt, insurance, college, career and more.

What is your approach to financial planning?

First, I get to know you, where you are today, your values and what important to you. We’ll develop your personal goals.  I’ll collect a lot of information and documents then spend time evaluating and clarifying this information. Next, I’ll make recommendations and prioritized action items.  Over time, we work on completing the recommendations, check in with each other and monitor progress.

We offer different levels of service,

  • Portfolio Management with Ongoing Comprehensive Financial Planning 
  • Six-Month Comprehensive Financial Planning
  • Power Session
  • Portfolio Management Only

For Portfolio Management with Ongoing Comprehensive Financial Planning clients, we meet 3 times in the beginning then approximately every other month for the first year. In subsequent years we meet approximately 3 - 4 times a year.  For those not seeking an ongoing engagement, there is a Six-Month Comprehensive Financial Planning program, which has 3 meetings to begin and then monthly meetings for 6 months.

How much do you typically charge?

I will propose a program and fee based on the scope of the work and your investment management needs. We reserve the right to quote a fee that is higher if the planning situation necessitates it.

A typical comprehensive planning engagement is based upon a minimum of 10-25 hours of time for either the six-month or ongoing program.

There is a $500 fee to start.

Then for Portfolio Management with On-Going Comprehensive Financial Planning, the annual fee ranges from $4,500 to a maximum fee of $7,500 annually depending on asset level and complexity, billed quarterly.  Asset management is included in that fee.  I believe that it does not require much more effort or cost to manage $2,000,000 vs $750,000 so I have capped the fee as a result. We meet 6-9 times the first year, then about 3 thereafter.

For those not needing ongoing planning, the Six-Month Comprehensive Financial Planning Program costs $3,500 in addition to the $500 fee to start. We meet 6-9 times.

To address your most pressing needs, I offer a Power Session, a working meeting, for two hours typically over two sessions.  A written report with notes and implementation priorities will be provided to you after the meeting and the fee is $1000 (2020).

Portfolio Management, if not combined with financial planning, is 1.2% annually or less.

How will I pay for services?

I believe in complete transparency when it comes to fees.  When a client engages Avea Financial Planning, we complete our client agreement and it states the services and fees.  Avea Financial Planning is paid a fixed fee for creating your personalized plan and for any assets managed. There will be a fee tied to the balance of assets when they are brought over or on a certain date, usually Nov 30th.  From that balance, we will determine a fixed annual fee that will be divided by 4 and paid quarterly. Clients typically pay by check, ACH or direct debit from managed investment accounts.  The fixed fee will be adjusted for complicating factors, if there is a large deposit or withdrawal during the year, or for increases in the cost of living.

This arrangement is unique to Avea, so if this is unclear, please ask. (See current ADV Part 2 for details.)

What is your investment philosophy?

I believe in a globally diversified, disciplined, low-cost investment approach designed to capture, not beat, market returns over a long period of time.

Do you believe you can beat the market?

No. The cards are stacked against small investors who think they can beat the market.  We aim to get what the market gives and control what we can in other areas of our life like the portfolio allocation, spending, debt, risks and income.

How often do you trade?

We trade to add or withdraw money from an account and on an infrequent basis to rebalance.

Do you believe in tactical analysis or market timing? 

Marketing timing, attempted by an emotional, irrational human being? No, I do not believe in that.  However, in recent years, tactical, rules-based strategies emphasizing different factors like momentum or value, have been getting easier to implement. I find this strategy compelling not only for the possibility of higher returns through full market cycles (however, one can never predict future returns), the strategy also appears to reduce risk and minimize drawdowns which I think is worth considering for a portion of a portfolio.

Who manages your money?

I manage my household’s money.  I’ve been an account holder primarily at Vanguard since I started investing because of their low expense ratios and broad diversification.  My client’s accounts are held at TD Ameritrade and managed either by myself or a third-party manager, First Ascent, where we deploy elegantly simple, low-cost, globally diversified portfolios.

Will you be the only person working with me?

Yes, I am currently a solo practitioner. As the leader of your family’s financial life, a key distinguishing part of my service is the coordination of your existing team of professionals to make sure no stone is left unturned and important items got completed.  When needed, I will recommend professionals qualified to assist you in areas such as real estate, law or accounting.

Could anyone besides me benefit from your recommendations?  Does anybody else ever pay you to advise me and, if so, do you earn more to recommend certain products or services?  Do you pay referral fees to generate new clients?  Do you earn fees for referring clients to specialists like estate attorneys or insurance agents? Do you earn fees as adviser to a private fund or other investments that you may recommend to clients?  Do you participate in any sales contests or award programs creating incentives to favor particular vendors?   

All no.

Have you ever been publicly disciplined for any unlawful or unethical actions in your professional career?

I maintain a clear record, void of any disciplinary actions.  You can check the background of any individual (Angela Furubotten-LaRosee, CRD#: 5967349) or firm (Avea Financial Planning, LLC, CRD#: 288702) by typing in the name on this website - https://brokercheck.finra.org.  Or call BrokerCheck Help Line (800) 289-9999.

Can I have it in writing?

Absolutely.  In fact, I insist.  Prior to any engagement, it a requirement that both my clients and I sign a client agreement that outlines the services to be provided along with the fees and timeline.  Furthermore, I provide all prospective clients with my most recent Form ADV Part II, which is my client disclosure document filed with Washington State.  This is a complete description of my services, fee schedule, & background.  My ADV is available online at www.AveaFP.com and is updated yearly.

Sources:

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