Why did you transition to a new firm?
To improve client outcomes.
- Changing custodians, or where assets are held, has been an improvement for clients. We have received very positive feedback on the new client experience from Fidelity’s website to access account information.
- More influence in the client experience. Utilizing electronic signatures for simple client paperwork has been a huge win for clients (and us!).
- Access to new and innovative tax-sensitive investment options.
- Remove all conflicts of interest and be a full fiduciary. We are a fiduciary for every account and every decision – no exceptions!
What will change with the investments?
In the short term, your only change with your investments will likely be where your assets are held. In early 2022, I have plans to introduce some new investment strategies that were not available at RBC.
We have made very few changes to existing long-term investments for clients that have transitioned with us to Fidelity. Clients have been able to seamlessly transfer their investments from other custodians to Fidelity. The transfer process, both to and from, Fidelity is simple and easy for us to manage for your benefit. Transfers can be done ‘in-kind’ meaning that your investments, and your cost basis, will transfer.
What do you need from me to transfer accounts?
We need a few key pieces of information such as date of birth, Social Security number, and your current RBC account numbers. For almost all account transfers, we can now offer a secure digital process to allow you to request to safely transfer your assets, in-kind.
What is this ‘custom index’ that I have heard about?
We are really excited about our partnership with O’Shaughnessy Asset Management (OSAM) to offer Custom Indexing as I believe that this technology is going to be the next big evolution in my industry. Custom Indexing is a new technology that offers tax benefits and highly personalized portfolios at a low cost.
Our clients’ needs and beliefs are personal and we finally have the technology that allows us to build a low-cost, and broadly diversified, portfolio that is tied directly to their financial plan.
One of the most common problems we solve for is around Tax Optimization. This strategy scans the portfolio for tax loss harvesting opportunities at a regular frequency. If a security drops below their cost basis (trading at a loss) it may be sold, and a replacement stock that is correlated, but not ‘substantially identical’, is purchased. This allows our clients to capture the gains of the chosen index while harvesting losses that can be used to offset capital gains at tax time.
Another example of how personal Tax Optimization is for our clients is around recognizing gains or losses. This Custom Index can be optimized to leverage different tax strategies clients are trying to express such as mitigating the risks associated with concentrated positions in a tax neutral way or expressing a conviction about a specific company or industry. We can now do all of this in a systematic and low-cost process.
About a third of our clients utilize a Custom Index to align their portfolio with their beliefs. These decisions are highly personal and the breadth of options on this platform allows us to accommodate a wide variety of client preferences and priorities. The system is highly personalized and allows us to tilt towards some, and to screen out from others.
There is a somewhat wide range in the cost to utilize the strategy but generally we see total investment costs from 0.20% to 0.45% depending on a number of factors.
Minimum account size is $250,000.
Why don’t you have a minimum account size?
We do not do any marketing or advertising or optimizing google search results. Maybe this will change in the future but for now all of our new relationships are referrals from existing clients and a few close relationships with accountants and attorneys. We are a boutique financial planning firm with highly customizable investment portfolios and we recognize we are not the right fit for every affluent household.
Taking on a new relationship is a big investment for us and we want to make sure we manage our growth in a systematic manner so we can continue to serve our existing relationships. We are selective in who we can work with and having aligned values and communication styles is more important than account size.
Our typical household relationship has $1,000,000 in investable assets but we have a wide variance.
Do you have access to banking or lending options?
Yes!
We now have the ability to shop the street for the best lending products and will receive NO commissions or fees for this service. Instead of being limited to one bank, we now have conflict-free access to many of the leading lending arrangements and can state unequivocally that our advice is in your best interest and that we receive no fees/compensation for any banking or lending solution you need.
Do you have an office?
Not yet and no plan to open a permanent office any time soon.
We have all been working remotely effectively for the past two years and it seems to be working for us for now. We are very open to opening an office, or utilizing one of the shared workspaces, at some point but for now we really have not heard from anyone who is missing meeting in a downtown office.
How can a boutique firm offer a better user experience?
Adding, changing, or upgrading software at a broker-dealer is complex and expensive. The solutions for the big firms need to be designed for the entire workforce and not necessarily the most forward-looking or savvy clients or employees.
We have access to the same financial technology providers as the largest banks and investment firms. We can pick and choose the best solutions and quickly and seamlessly integrate into our process. We are committed to consistently investing in technology to improve our user experience and make it more secure for you.
From an investment perspective we have yet to find an investment we want to use that that we do not have access to. We fundamentally reject the idea that you need to have an account with a certain institution to have access to the best deals or alternative investments.