FINANCIAL PLANNING SERVICES
Promenade Wealth will work with you to design a portfolio appropriate for your goals and risk tolerance. It will then be monitored and rebalanced utilizing a tolerance bands methodology designed to capture potential return by selling high and buying low
We will work with you to evaluate your assets, liabilities, expenses, future income, goals and savings, and then complete an analysis to determine the strategy that results in the highest probability of you successfully retiring in the lifestyle you desire
We can help you plan financially for the expenses involved in educating your children, both in terms of understanding what it will take to achieve your goal, and choosing between the various tax advantaged ways to do so
Using a forward-looking tax strategy we can help you minimize your tax expenses and maximize what you have to invest. This can include planning for Roth conversions, strategic charitable giving, deferring income into tax advantaged retirement accounts, and tax-loss harvesting
An analysis of available benefits through an employer with subsequent advice on benefit selection based on your individual goals and family needs. This can include various types of insurance, Flex Spending accounts, Employee Stock Purchase plans, Restricted Stock Awards, and Options
We can help you better understand how your assets are distributed at death and work with your estate planning attorney to achieve your estate planning goals. Beneficiary designation review, asset titling and ensuring documents reflect your desires for control and distribution of your wealth
We can perform an analysis of current insurance policies such as life, disability, and long term care, identify potential gaps and help you obtain appropriate coverage that will provide an adequate transfer of risk, giving you peace of mind that you and your family are protected
Helping you decide when and how to file for social security is a critical part of the retirement planning process. Advice is tailored to your circumstances, marital status, and can involve a complex analysis weighing longevity, income needs, and whether you intend to work in retirement
HOW TO CHOOSE A FINANCIAL ADVISOR
Financial planning is critical to your financial future. Learn about a prospective financial advisor’s business practices and advising strategy. Choosing an advisor can affect the rest of your life and shouldn’t be entered into lightly. That’s why it’s not enough that I simply describe the services I offer at Promenade Wealth. I want this page to be a resource for you as you shop for an advisor at any firm. Here is the list of essential questions, why they matter, and my answers to them.
What formal financial education do you have?
Why Ask?
Anyone can call themselves a “Financial Advisor” - even a mortgage broker with no training in Financial Planning. I suggest you ensure that the person advising you is, at a minimum, a CERTIFIED FINANCIAL PLANNER™ or a Chartered Financial Consultant (ChFC®). These designations demonstrate a proven educational foundation to effectively offer financial planning and advice.
Anita's Answer:
I passed the comprehensive CFP® examination in 2009 and have been working in an advisory capacity since 2006. I started my solo advisory practice in 2018. For my complete work and education history, please see my form ADV 2B here.
Do you operate under a fiduciary standard?
Why Ask?
A fiduciary must put the client’s interests above their own. Many financial firm employees offer guidance to clients that result in the sale of securities, or products such as insurance contracts, annuities, or loaded funds. The employee selling these products might make more commission placing one product over another, or they could be incentivized to sell more of a certain product to meet internal sales targets necessary to their success or job retention. While such potential conflicts must now be disclosed during transactions, it is still suggested that a client ask as many questions about the recommendations they get as they need to feel confident that their best interests are being served and that their choices are fully informed.
Anita's Answer:
Promenade Wealth operates in a fiduciary capacity in all aspects of our investment advisory relationship with you, which we believe will provide you with peace of mind. If you need a product we don’t provide, such as insurance, we will advise you on what’s appropriate and let you choose where and how to purchase it, keeping the advice objective. We have trusted resources and referrals, with no fee bounty or cross-referral agreements. We charge transparent fees and disclose them clearly.
How are you compensated?
Why Ask?
I believe that it is important to know how the advisor you're working with gets paid. Is it via a salary, standard fee structure, or via commission from products they sell? Such knowledge can help you assess the services and advice you receive. For instance, will the advisor be paid regardless of how much time they spend with you helping with your financial inquiry? Or will they only be compensated if you purchase a security or product they are recommending?
Anita's Answer:
Promenade Wealth operates strictly on a tiered fee basis for ongoing planning services, receiving a percentage of the assets being managed:
Advisory Fees for Assets Under Management:
0.9% up to $1 million
0.6% for $1-2 million
0.4% over $2 million
For clients without investable assets, or who choose to self-direct their investment strategy, we offer financial planning and advice on an hourly basis at $300 per hour.
Please refer to our ADV 2A for a full description of our fees and business practices.
What are your basic investing philosophies and investment criteria?
Why Ask?
Check-in with your own expectations here. Are you looking for someone to do traditional stock picking? Or a passive/indexing approach to investing? Do you want to find an advisor who specializes in a tailored strategy such as market timing or covered calls? State these objectives during a preliminary conversation to ensure congruence between you and your advisor's core investment values and beliefs. You should understand the potential advisor’s answers, and they should be in plain English.
Anita's Answer:
Promenade Wealth offers model portfolios made up of mutual funds offered by Dimensional Fund Advisors (Dimensional Fund Advisors LP is an investment advisor registered with the SEC and is a Global Asset Management firm) Dimensional's investment approach is grounded in economic theory and backed by decades of empirical research. Such research has shown that securities offering higher expected returns share certain characteristics, which are referred to as dimensions. To be considered a dimension, these characteristics must be sensible, persistent over time, pervasive across markets, and cost-effective to capture.
We work with you to assess your personal risk profile, which involves both your risk tolerance and risk capacity to choose the appropriate model portfolio, tailored to either taxable or tax-deferred accounts. We also offer portfolios that have a Sustainable Investing approach for clients who want their investments to reflect their values around reducing their carbon footprint.
Portfolios can be designed and managed around existing/legacy positions should you need to hold them due to embedded capital gains.
Consider the investment objectives, risks, charges, and expenses of Dimensional funds carefully before investing. For this and other information about Dimensional funds, please read the prospectus carefully before investing. Prospectuses are available by calling Dimensional Fund Advisors collect at (512) 306‐7400 or at us.dimensional.com
Please explain your process of how you manage, monitor and rebalance my portfolio?
Why Ask?
Many large firms have these processes automated by computers – with inherent pros and cons. Is investment selection subjective based on the advisor choosing investments he believes are “winners”? Are model portfolios being utilized, and if so, why? Is the advisor rebalancing using a typical time-based approach? Does the advisor actively offer tax-loss harvesting for taxable accounts - a valuable strategy that some advisors avoid altogether.
Anita's Answer:
Promenade Wealth has a disciplined approach to asset management that reflects an asset allocation “Buy and Hold” strategy and a “Tolerance Bands” approach to rebalancing. Asset class weightings are checked regularly to determine if a tolerance band has been surpassed. This approach aims to capture potential returns over time through the process of selling high and buying low.
Promenade Wealth also practices tax loss harvesting - the process of staying invested but taking capital losses during drawdowns, where appropriate. This can offset capital gains taxes for current and future years to come, creating the potential for higher after-tax returns.
Do you offer financial planning services and are there separate fees for this?
Why Ask?
Some advisors claim to offer comprehensive financial planning services but then call you a few times a year to discuss your portfolio’s performance and little else beyond that. Additionally, many wealth management firms will charge you a percentage to create, manage and monitor your portfolio – but then want to charge you a whole extra set of fees to provide planning unrelated to investment management. This can include crucial services such as creating a Retirement Income Goal Plan for you.
Anita's Answer:
At Promenade Wealth - We will work on creating a written financial plan for you annually - because planning is a process, not a one-time event. We believe that without a comprehensive financial planning approach – investment advice is being offered in a vacuum. Your success in meeting your financial goals has as much to do with your behavior, and cash flow choices as it does with the investments you own (perhaps even more!) We can provide advice in any area where money and your life intersect, developing a plan that incorporates the 6 Key Areas of Financial Planning: Cash Flow Management, Investments, Retirement, Tax, Insurance, and Estate planning. We can work together with your CPA and your Estate Planning Attorney (in fact, we actively encourage this!) – at no additional cost to you - resulting in added value.
How many clients are you currently working with?
Why Ask?
Promenade Wealth believes this question is rarely asked of a potential advisor. It is important because it will give you a better idea of the level of service and attention you will be receiving (or the attention the advisor is even capable of providing given time constraints). Many advisors, especially those who work for large national brokerage companies, are assigned/choose to work with 150-400 families, managing anywhere from $75-$300 million in assets. Many cope with the workload by hiring support staff. How personalized will your service be? Will you always be working with the lead advisor – or will your accounts be assigned, or your questions answered by a junior associate? Will you be considered a small or insignificant client compared to the rest of that advisor's book? Can you pick up the phone and speak directly to your advisor or will you get the receptionist and hope for a return call?
Anita's Answer:
Promenade Wealth plans to cap taking on new clients once we are working with approximately 50 families. We do not believe that we can be effective in offering the personalized, diligent, and proactive service clients deserve by growing beyond this. We outsource our back-office support, compliance, and administration so that more time can be spent working directly with clients. When you call Promenade Wealth, you will be speaking with and working directly with me, Anita, and my intention is to stay in solo practice with what the industry would consider a “small book of clients”. My motives for maintaining a small solo practice is the joy and satisfaction of seeing my clients succeed financially – not remuneration or growth.
How many more years do you intend to serve as a financial advisor?
Why Ask?
This is another question rarely asked, and with over a 1/3 of current financial advisors within 10 years of their own retirement, ask yourself this – Do you want your advisor to still be working with you when the impacts of their advice begin to be felt? Put another way - do you want to work with someone who knows they won’t face the consequences of poor or sloppy advice because they’ll be comfortably retired by then?
Anita's Answer:
I am at least twenty years from my own retirement goal date and I have a succession plan to transfer my practice to another competent advisor at that time, or should something unforeseen occur beforehand.