Do I need a Financial Planner? Do I need someone to manage my investments?
Maybe not. Some people are able to do these things on their own. You have to ask yourself 3 big questions, and if you can't answer yes to all of them, I would suggest you should utilize a financial planner.
Do you have the time? Given that, because yours will be the only case you are working on, you will be far less efficient than an experienced advisor who has gone beyond the 10,000 hours of work in the field needed for mastery. (see "Outliers" by Malcolm Gladwell https://www.sparknotes.com/lit/outliers/summary/)
Do you have the skill, the training, to evaluate the thousands of options before you? To keep up to date on the laws and regulations? To utilize the available software?
Do you have the interest to stay current for decades and the temperament to remain dispassionate and logical, to forego the input of an outsider who has no emotional attachment to whether you were right or wrong in the past?
What can I expect from our first meeting?
No slides. No sales pitch.
Consider your complimentary, no-fee first meeting as our “financial first date” (without the awkwardness, we hope). Financial planning is a trust-based, collaborative relationship, and our initial meeting helps determine whether we are a good fit to work together. We will learn more about you, your family, and your financial goals, ask questions, and, most importantly, listen closely to determine what is most important to you. At this point, if you are considering us for a “second date” or even a long-term relationship, we’ll discuss what the process will look like if you decide to move forward working together.
We've found that asking just these simple questions makes a great foundation for our first conversation:
- What’s happening in your life that has led us to have this exploratory conversation?
- Can you tell me about you and your family, and what you want more of in life?
- What questions do you have for me?
Can I work with you if I live in another state?
Yes! We work with clients all over the United States. So far, we have been honored to serve families from Alaska, California, Oregon, and Washington State to Texas, Illinois, New England, New York, Delaware, Pennsylvania, Maryland, DC, Virginia, North Carolina, and Florida. We are based in Northern Virginia and occasionally meet in person, but the great majority of our work is completed virtually.
What is a fiduciary?
A fiduciary is legally required to place the interests of the client ahead of their own. In the financial advice industry, only Registered Investment Advisors are always legally required to be fiduciaries. Your Best Path Financial Planning is a Registered Investment Advisory firm, and we are your fiduciary at all times.
What does Fee-Only mean? What about Fee-based? How do you make money?
Fee-only means no commissions. Our only source of income is fees agreed to by our clients.
Fee-based is a term made up by commissioned salespeople to sow confusion - and it worked! Because it sounds like Fee-only, lots of people come into our first meeting asking if I am Fee-based. But Fee-based does NOT mean that their income is “based” only on fees their clients pay. Fee-based advisors make money from fees AND commissions on products they sell AND often get compensated by third parties such as mutual fund companies and other parties that they are intermediaries for, AND their firm may receive other income that they use to incentivize their advisors with sales contests to favor certain products. These multiple sources of income from people other than the client create massive conflicts of interest and are almost always hidden from the client.
At Your Best Path, we collect two types of fees, and clients pay us one or the other, never both. Option 1: for clients who delegate asset management to us, we charge a percentage of assets managed, commonly called an AUM fee. Option 2: a fee for service on the number of hours we work on your plan, just like a lawyer, CPA, or consultant would charge.
Are all CFP® practitioners fiduciaries?
Sadly, no, not all the time. The CFP board requires that members act as your fiduciary “when giving financial advice.” That means that when acting in a sales capacity, a CFP who is not part of a Registered Investment Advisory firm (like Your Best Path, LLC) may ignore your best interests when acting as a salesperson and is not legally required to disclose their conflicts of interest. Since we are fee-only and never sell any products, we are free to be your fiduciary at all times without exception.
Why is working with Your Best Path different from working with other Financial Planners or "Wealth Managers?"
First of all, I hate the self-important fake title "Wealth Manager." It's meant to convey a sense of exclusivity that strokes the client's ego and the pride that they can afford to pay a lot for someone to watch their money. Many of my clients are wealthy, but I find that they recognize that making it big requires 3 things: hard work, great colleagues, and luck. A big office and other trappings are irrelevant to our working effectiveness and your financial outcomes.
The human element in finance is actually the difference-maker. The depth of our relationship will determine how accurately we can align your money to support your ideal life.
We know you didn’t come to a financial planning website because you needed a few laughs. However, most of my clients tell me that our interactions are actually enjoyable. I am very serious in my planning, but I am just a person who, like you, likes to have fun and enjoy the warmth of personal connection. I truly like my clients and can go from having a serious planning conversation to sharing a beverage and trading stories afterward. If you’re looking for the stereotypical financial advisors you see with suits on TV Commercials or in Washingtonian Magazine, I'm probably not the best fit for you.
Can you give us a preliminary analysis before we decide if we want to hire you?
I have heard several variations of this question. Unfortunately, it’s not something we can do because it would violate our fiduciary standard, specifically, the duty of care. Just like when you meet your physician for the first time, she won’t be giving you a prescription until after your initial history and physical are complete and the tests are all in. It’s the same with financial planners. We must complete an intake interview, understand your concerns, and look over your tax return, statements, and other documents you’ve provided. We might need to do some calculations and some further research before we can formulate our advice. Each client’s financial situation is unique, just like your doctor’s patients.
We have taken an oath to be diligent in Financial Planning. The CFP® Board describes the process, in part, with this diagram. Clearly, I cannot normally provide advice without completing steps 1-4. The lone exception to this requirement is my Financial Checkup offering which is only for clients whose need is limited to a single scope item such as investment strategy, debt management, college savings, etc.
How do Your Best Path's fees compare with other firms?
Our fees are very competitive with other firms in our area. We aim to offer exemplary service by being fully comprehensive and more values-oriented than our competitors. Because we are small and operate virtually, we have minimal overhead and do not have to charge you to pay for our office space or office staff.
Some advisors only work with people who have more than $1 million to invest, do you have a minimum portfolio size like that?
No, we don’t. Anyone can work with us regardless of the amount of money they have. We’ll help you figure out if our fees provide good value to you.
In general, we don't recommend paid asset management for families with less than $250,000 for us to manage, but we are happy to serve those clients with financial planning at our hourly rate, which includes detailed investment recommendations that they implement at their custodian (such as Vanguard, Fidelity, or Schwab.)
What if I have a large amount of wealth but it’s in real estate, equity in the company where I work, or something that isn’t a typical investment portfolio?
For clients with high net worth or non-liquid investments, we may be able to offer a negotiated pricing accommodation, so please contact us.