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. I maintain professional relationships within groups such as the XY Planning Network, Fee-Only Network and NAPFA.

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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 benefit of a flat fee structure is it is more fair, transparent and more aligned with how we normally purchase things. 

What services do you offer?

My service centers around Portfolio Management with Ongoing Comprehensive Financial Planning.  I advise on retirement, taxes, investment, estates, budgeting, debt, insurance, college, career and more.

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 typically not held to a fiduciary standard even though they are providing you advice. Not all financial advice is created equal. You deserve fiduciary advice. This is your money and your life you are talking about. Here is my written fiduciary oath.

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.

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 one primary service, Portfolio Management with Ongoing Comprehensive Financial Planning. 

For Portfolio Management with Ongoing Comprehensive Financial Planning clients, we meet 3 times right at the beginning to develop the plan then approximately every four months. In subsequent years we meet approximately 3 times a year usually in February, May and October.

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.

I use Zoom video conference software to meet virtually with clients who do not live locally. Distance does not need to be a deal-breaker for our relationship.

I consider myself a specialist financial planner for retiring or already retired folks, especially PNNL employees (Pacific Northwest National Laboratory) who are about 1-2 years from retirement.  We help them through the first big transition, RETIREMENT, and other transitions like philanthropy, widowhood, inheritance, or divorce.

My clients are diverse; married or solo, in their 50s and 60s, in pre-retirement or retirement. Many of my working clients are dual income families with professional jobs at Pacific Northwest National Laboratory (PNNL), the Hanford Nuclear Site or area school districts with household income in the range of $175,000-$500,000 and a net worth of approximately $2,000,000 - $6,000,000.

How will I pay for services?

When a client engages Avea Financial Planning, we complete our client agreement and it states the services and fees.

Avea Financial Planning is paid an annual flat fee for creating your personalized plan and for any assets managed. 

Clients typically pay by direct debit from accounts managed by Avea Financial Planning, LLC.  The flat fee may be adjusted for complicating factors and there may be an occasional cost of living increase of a minimum of 2%.  (See current ADV Part 2 Brochure for details.)

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, asset location, taxes, spending, debt, risks, income and our own behavior.

How often do you trade?

We trade to add or withdraw money, for periodic rebalancing or to harvest gains or losses.

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, 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 may minimize risk or 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 (which is becoming a part of Schwab) 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. A distinguishing part of my service is the coordination of my team of experts in investments, tax, law, and insurance to make sure no stone is left unturned and important items get addressed. 

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.orgClick here to see current info. Or call BrokerCheck Help Line (800) 289-9999.

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How much do you typically charge?

$2,460 each quarter for an annual fee of $9,840. There is a minimum fee $500 to $1,000 to start.

This includes:

Values and goals conversation
Retirement planning and projections
Pension and Social Security optimization
Tax-efficient retirement distribution planning
Portfolio management
Annual individual tax return preparation
Strategic tax planning & projections
Estate planning document and beneficiary review
Insurance & benefits review

I will propose a program and a flat fee based on the scope of the work and your investment management needs. We reserve the right to quote a fee that is higher than our base flat fee if the planning situation necessitates it or assets under management are more than $3,000,000.

A typical annual planning engagement is based upon 20-25 hours of time. We meet 6-9 times the first year, then about 3 thereafter.

Please see current  ADV Part 2 Brochure for fees.

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 at the bottom of every webpage at www.AveaFP.com and is updated yearly. You may also find it here.

Sources:

The 19 Questions To Ask Your Financial Advisor

Ten Questions to Ask Your Financial Advisor