We are fee-only advisors. This means we are only paid by our clients (and never receive compensation/commissions from any outside company) and are therefore able to recommend only those solutions that we believe help our clients. We believe that if an advisor is paid by someone other than their client, this creates a potentially large conflict of interest.

Clients obtain value in a variety of ways, but they can all be boiled down to three areas:

1. Peace of Mind – Our clients gain clarity around their current and anticipated level of financial security. They know where they stand (financially), and what changes will propel them forward. We have the proper tools to give clients answers to complex questions without relying upon "rules of dumb".

2. Wealth Building – Clients can generally build wealth faster in three ways:

• Minimizing fees – For example, very similar investment/insurance vehicles are available at very different costs. One of our jobs is to ensure that clients get the most appropriate vehicle at the lowest cost.
• Maximizing portfolio returns – This does not mean beating the market. It does, however, mean that we help clients obtain the returns they deserve. We do this by minimizing investment fees, maximizing tax-efficiency, regularly rebalancing, maintaining diversification, and stopping clients from making mistakes. Avoiding buying into market tops and/or selling at market bottoms can have a far more positive impact on life-time realized investment returns than anything else. In September of 2016, Vanguard Funds research* concluded that advisors who use an approach that addresses the areas mentioned above "can add about 3% in net returns" for their clients on average each year. However, in our experience this potential value comes in spurts and not each year.
• Financial planning / tax-planning strategies - This may include Roth Conversions that build wealth or Social Security collection strategies that result in collecting more than you would have otherwise. We feel this is where the most quantifiable value is provided to clients. Like investing, tax planning opportunities do not present themselves consistently. Instead, they appear intermittently over the years based upon client circumstances and changes in tax law. This is why we feel on-going financial and tax planning is so vital.

3. Accountability – Having an advisor is much like having a personal trainer. We hold our clients accountable to their goals, we educate our clients on matters relevant to them, we encourage our clients to take action, and at times, we stop them from making mistakes.

* Putting a value on your value: Quantifying Vanguard Advisor's Alpha by Kinniry, Jaconetti, DiJoseph, Zibering, and Bennyhoff (Sept 2016)

The most important aspect of an investment philosophy is having one that you can stick with. It is easy to stick with one that is well-defined, disciplined, and uses common sense. An investment philosophy should never be based upon ever changing market outlooks. While markets change constantly, good advice rarely does. Our philosophy is driven by the following key beliefs:

• We believe that markets work. All known information (and varying degrees of irrational investor emotion) is already reflected in prices. As new information becomes known, security prices instantly adjust. While this creates volatility, it also means that markets are working as they incorporate new information into prices. Once you accept that markets work, then you can accept that there is nothing you know (or anyone else knows) that the markets don't already know. Then, you can take a long-term view and tune out the daily noise.
• We focus our clients' attention on controllable factors that matter (e.g., risk control) and away from uncontrollable distractions (e.g., direction of interest rates).
• We remain focused on strategies that have high odds of successful outcomes; no long shots.
• We understand that global diversification is key to managing risk and participating in global growth.
• We realize investment costs must be kept low; this will keep your returns higher.
• We know risk and return are directly related. There is no free lunch.
• We know that the "perfect" portfolio, fund, strategy, guru, or investment manager does not exist. Investors should give up this elusive quest for perfection.

 As a result of sticking to an investment philosophy, we feel our clients should end up with far better realized lifetime returns than most investors who have no disciplined strategy. Becoming crystal clear about what you believe and what type of investor you are will allow you to sit back and enjoy life without the constant frustration, worry, anxiety, or questioning felt by those without a strong investment philosophy.  

The best way to learn more about our investment philosophy is to request a copy of our free audio download titled, Investment Success.

Does your current advisor:

• Listen to you, your ideas, and goals?
• Try to talk you into buying/investing in things you don’t feel comfortable with?
• Understand taxes, review your taxes, or prepare your tax returns?
• Tell you exactly how much you are paying – both to the firm and for the investments themselves?
• Intimidate or talk down to you?
• Explain things clearly?
• Act solely in your best interests?
• Encourage and support you in achieving your annual financial goals?
• Calculate your investment performance, and how that performance compares to relevant benchmarks?

Should you switch?
If you don’t feel like you have a supportive professional advisor, it is easy to make a change. It is your money and financial life, and you should never feel intimidated talking to your current advisor – even if this means saying goodbye.

We believe everyone deserves an unbiased (fee-only, fiduciary) advisor who has high standards, takes a straightforward and collaborative approach, and clearly discloses fees. It would be our pleasure to assist you.

What is involved in a switch?
Once you have interviewed and selected a new advisor, in most cases after completing some paperwork, your accounts will automatically move (intact and tax-free) from your current firm to your new firm.  Your existing firm cannot stop this process, and this does not require you to call your current advisor, if you are uncomfortable.

Once you schedule your initial conference, we will mail you a package containing the following items:

• A letter listing the items to bring to our meeting (such as investment statements, pension estimates, and tax returns)
• Some forms to complete asking about your income, expenses, liabilities, and real estate
• Directions to our office

Simply bring the requested items to our meeting. However, we realize that, like most people, your financial life probably isn't in perfect order already. Therefore, if you can't find everything requested, or if you don't complete the forms, that is okay. Simply bring what you have. We will sort through it, and after our meeting, we will develop a final list of items we still need.

The initial conference meeting generally lasts about an hour and a half.

Available and Responsive – We are available to you by phone, email, and in person. We check email and voicemail when we are not in the office and will do our best to respond to you within hours, regardless of the request.

A close working relationship - We are confident that throughout the years or decades we are working together, you will be able to say that you have found a personal financial advisor who cares about you and your family, and who is fully committed to the realization of your financial goals.

Attention to detail – We hate mistakes and avoid them at all costs by paying attention to detail and checking and re-checking everything. In the rare event we make a mistake, we take immediate responsibility and correct it to the best of our ability.

Clear reasoning for our recommendations – We believe that our recommendations must be clearly explained and carefully considered by clients. We help you understand the advice we offer by taking our time, and we provide you with supporting educational materials such as our audio seminar series, as well as other practical financial tools exclusively for our clients.

Honesty - We promise to tell you the plain unvarnished truth, even if it creates discomfort in the short-term. We will also be honest when we don't know the answer to a question you ask. We will say, "I don't know, but I'll find out" and then get back to you with the answer.

Holistic – Before we make a recommendation, we will consider its consequences on your entire financial plan. We will take the time to understand your goals as well as your taxes, investments, insurance, and estate and retirement needs.

Confidential - We treat your financial and personal information as strictly confidential according to our Privacy Notice. 

Professional – We will treat you with respect, professionalism, and honesty. We maintain a nonjudgmental attitude toward the goals and information presented to us.

Transparent - We will fully describe our method of compensation and any potential conflicts of interest which will (or reasonably may) compromise the impartiality or independence of our advice. 

According to the 2017 Planning Profession Fee Survey conducted by Inside Information, the median annual fee for a client with a portfolio value between $500,000 and $1 million is 1.00%.

At Mallard, the fee for our Investment Management program on a portfolio of $1 million is 0.75%, or $7,500/year.

Our full-service Wealth Management program fee is 0.75%, plus a flat annual retainer fee. For example, if the retainer fee were $3,000/year, then the total fee on a portfolio of $1 million would be $10,500 ($7,500+$3,000). This equates to 1.05% of investable assets. This is not only a very competitive fee, but we include comprehensive services with this program including tax preparation (if desired), tax planning, and estate organization planning.

A Registered Investment Advisor is registered and regulated (but not endorsed) by either the Securities and Exchange Commission or a state's securities agency. A registered investment advisor must adhere to a fiduciary standard of care. This standard requires the advisor to act and serve a client's best interests with the intent to eliminate, or at least to expose, all potential conflicts of interest.

Not everyone in the financial services industry is held to a fiduciary standard. For example, Broker-Dealers(BD) are held to a lower "suitability" standard. Broker-Dealers include many big name firms, but may also include small local firms as well. Broker-Dealers are not "investment advisors" (as defined under the Act) because their investment advice is considered "solely incidental" to the sale of products. Therefore, they are not subject to the same fiduciary standards as investment advisors when recommending investments to clients. They are merely required to make recommendations that are "suitable" for their clients. Unfortunately, things get really confusing because it is possible for certain salespeople to be "dually registered" and at times sell products under a "suitability" standard, and at other times provide "fiduciary" investment advice. We believe if someone is a true "advisor", they should always act as a fiduciary to their clients.

Most professionals — doctors, lawyers, even hairdressers – have to meet strict requirements before they can practice, but almost anyone can call themselves a "financial advisor" - even if they are primarily an insurance salesperson, tax-preparer, stock broker, or attorney. In fact, Cerulli Associates, a leading industry research firm, revealed that only 38% of those calling themselves financial planners actually had financial advisor focused practices! Therefore, it is very important to determine what the advisor actually does (as opposed to what they call themselves). 

Also, the terminology is confusing. For example, the term "fee-based" can confuse clients into believing they are working for a fee-only advisor. A fee-based advisor, however, earns fees and commissions. We are fee-only, and therefore, never receive commissions or other compensation from anyone other than our clients.

Finally, and very importantly, advisors provide a wide variety of services, yet pricing is generally in a narrow range. Therefore, it is important to know exactly what services are being provided for the fee. Fees may be similar across firms, but the depth and breadth of services rarely are similar.

DOES THIS SOUND FAMILIAR?

• You go to a broker for investment advice,
• an insurance agent to buy insurance,
• an accountant for tax preparation,
• an attorney for estate planning, and
• a financial planner for a retirement plan.

You end up with several pieces of your financial life in place, but each was developed independently by a different person at a different time in your life. You don't need to be sold another puzzle piece. Instead, we help clients put the puzzle pieces together. Most people need a general practitioner, not a team of specialists or salespeople. This means your advisor should understand your taxes, investments, insurance, and estate and retirement needs.

Fees for a stand-alone financial plan start as low as $3,000, but may be higher depending upon the complexity involved. Generally, most plans cost between $3,800-$5,300.

For more details regarding our stand-alone plan, see our Comprehensive Financial Plan page.

Paul Baumbach and Bill were partners here at Mallard Advisors for years. Paul launched Mallard Financial Partners in 2014 as a separate firm.