Frequently Asked Questions
Here are some of our most frequently asked by our prospective clients. If you need more information or have any follow-up questions, please don't hesitate to contact us. We're always here to help!
1. What are your qualifications and credentials?
We are CERTIFIED FINANCIAL PLANNER™ professionals, individually holding bachelor's degrees in English and International Business. Manny has also earned a master's degree in Financial Planning. Together, we bring over five decades of collective experience in financial planning and wealth management.
2. Are you a fiduciary?
Yes, as fiduciaries, we are obligated to act in your best interests at all times.
3. How do you get compensated?
We work on a fee-only basis, which means we only get compensated through the fees our clients pay and not through commissions from selling products. In most cases our fee is calculated based on the liquid assets that we manage for you in your brokerage. See our Firm Brochure for more details.
4. What services do you offer?
We offer comprehensive financial planning & coaching, including retirement planning, investment management, estate planning, and tax strategies.
5. What is your investment philosophy?
Our investment philosophy is based on long-term, value-driven investment strategies designed to meet your specific financial goals. There are many ways one can invest for their future, however we believe that it doesn’t need to be rocket science. We love designing elegantly simple and effective portfolios.
6. Who is your typical client?
Our typical clients are individuals and families who are looking to build wealth over time and need guidance on complex financial issues. Our clients have reached their “ceiling of complexity” as DIY investors and are now ready to delegate investment management to professionals.
7. Can you provide references from existing clients?
Yes, we can provide references from current clients who have similar financial situations to yours.
8. How will our relationship work?
We will have regular meetings (monthly, quarterly) to review your financial plan, and you can reach out to us anytime if you have questions or changes in your financial situation.
9. What is your approach to financial planning?
We adopt a holistic, goals-driven approach to financial planning, taking into account all aspects of your life to create a comprehensive financial plan that aligns with your values and adapts to your evolving needs.
10. What type of investments do you typically recommend?
We recommend a broadly diversified portfolio that aligns with your risk tolerance and financial goals. Our portfolios typically include publicly traded ETFs, Mutual funds, stocks, and bonds. In complex cases we will use highly-customizable SMAs.
11. How will you choose investments for me?
We select investments based on an analysis of your goals, time horizon, and risk tolerance, using thorough research and industry-leading tools.
12. How often do you review the investment portfolio?
We review portfolios quarterly and make adjustments as needed based on economic conditions and your changing financial goals.
13. What happens if I have a financial emergency?
If you have a financial emergency, you can contact us directly, and we can discuss how to adjust your financial plan to accommodate your needs. Every situation is unique, but you will have our support so that you don't have to go through it alone. If your situation requires a distribution from your portfolio we will walk you through the rebalancing options and explain what if any taxes you can anticipate.
14. Do you have experience with tax issues?
Yes, we are knowledgeable about strategies to optimize a portfolio's management to reduce any tax consequences. We believe that the best overall tax outcomes occur when we can work collaboratively with your tax professional. And if you don’t already have one, we’ll get you setup with one.
15. How do you handle conflicts of interest?
As fee-only planners, we minimize conflicts of interest by not accepting any commissions for recommending specific products. None of the investments we pick for you pay us commissions. We do not sell life or disability insurance products.
16. What personal finance software do you use?
We use MoneyGuidePro, Orion Advisor, Morningstar, and Quicken to name a few. We believe in leveraging the best technology available to help us to make comprehensive and tailored recommendations.
17. How do you help clients with debt management?
We believe in proactive debt management strategies that prioritize high-interest debts while maintaining enough liquidity for your needs. Sometimes this means coaching clients to become comfortable with having some amount “good" debt like a mortgage or student loans.
18. How can you help me save for a large purchase?
We will create a savings strategy that factors in your time horizon and risk tolerance to help you save for a home, car, or other large purchases.
19. Can you assist with estate planning?
Yes, we collaborate well with estate planning attorneys to ensure your assets are distributed according to your wishes and that your family's needs are taken care of. We also suggest strategies to reduce taxation of any generational wealth transfers that you can discuss with your estate planning attorney.
20. What are your strategies for retirement planning?
We develop personalized retirement strategies that take into account your expected retirement age, lifestyle, and sources of income. We also consider what your 'second act' could entail, recognizing that retirement involves more than just ensuring you don’t run out of money.
21. How do you measure success in a client's portfolio?
Success is measured by how well your portfolio is performing in relation to your income goals. Clients receive a customized investor policy statement which specifically names the benchmark indexes we will use to measure a portfolio's performance.
22. What is the most common financial mistake clients make?
A common mistake is not investing early due to fear of market volatility. We educate our clients to become comfortable with and to expect some volatility. We also emphasize the benefits of long-term investing, diversification, compounding, and the importance of a customized and systematic savings program.
23. How do you stay current with financial laws, regulations, and industry best practices?
We stay updated on industry trends and regulations by regularly attending seminars, completing continuing education courses for our CFP certification, and reading industry journals and other relevant publications.
24. What if I want to change my financial goals?
Your financial plan is flexible, and we can adjust it as your life changes and new goals emerge. Seldom do plans ever go exactly as planned. However, we know that the financial planning process gives clients confidence that they'll be able to handle whatever's up next.
25. How will I receive updates from you?
You will receive regular communication via phone calls, emails, newsletters, and our face-to-face or virtual meetings. Additionally, you can access your financial data through your online client portal 24/7.
26. What are your fees and are there any additional fees?
(This question was submitted by a prospective client seeking to have less than $1,000,000 professionally managed)
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Bottomline: There are three tiers of fees to keep in mind.
1. Our Management Fee: For managed portfolios under $1,000,000, we charge an annual fee of 1.25%. This fee covers unlimited meetings, unlimited financial plan updates, and ongoing professional asset management. Our management services include a customized strategy, implementation, and rebalancing.
Please note that the 1.25% annual fee does not cover additional fees charged by Charles Schwab, our client asset custodian. The fee will be deducted directly from your brokerage account every quarter. To calculate the quarterly fee, we use the account value on the last day of the quarter, multiply it by 0.003125 (our annual fee divided by 4), and the resulting number is the fee for the upcoming quarter. Fees are prorated for any partial quarters.
2. Trading Fees: Schwab is paid anywhere between $0-74.95 per trade to buy or sell a fund. We pay very close attention to the trading fees because there are many funds that offer similar results that won't require any trading fees. When investing in a hypothetical new portfolio an investor can anticipate to pay around $34 in transaction fees per rebalance.
Charles Schwab will charge for trading and other services, such as their lending products (we rarely use these). These fees are standard for using their platform and are separate from our advisory fee. In a typical portfolio we may have 10-12 ETFs or funds. So to invest in a hypothetical new portfolio an investor can anticipate to pay around $34 in transaction fees per rebalance. This is an annual expense that occurs when we rebalance your portfolio or if we need to do an off-cycle cash distribution.
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Hypothetical Portfolio trading costs are as follows:
Mutual Funds: 4 trades x $8.50 = $34.00
ETFs: 5 trades (close to $0) = $0
Money Market: 1 trade x $0 = $0
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Schwab offers a variety of services. The above is an example for what you can expect in our work together. Fees for options and margin accounts have not been included in the above example. All fees are available to view on the Schwab pricing page.
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3. Mutual Fund & ETF Expense Ratios: Each fund in your portfolio will also have an expense ratio fee. Below is an expense ratio calculation. This fee is well worth the research, maintenance, and broad diversification many of these funds achieve.
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ETFs and mutual funds charge investment fees through an expense ratio, which is an annual fee expressed as a percentage of the fund's average assets, covering management, administrative, and other operating costs. While ETFs typically have lower expense ratios due to their passive management style, mutual funds, especially actively managed ones, may have higher fees due to the more hands-on investment strategy.
Here’s an example of how the expense ratio works. Let’s say that our tailored strategy recommends a $20,000 investment in the Vanguard FTSE Social Index Fund (VFTAX). Here’s how Vanguard's fee for this fund is calculated.
Assume VFTAX has an expense ratio of 0.14%.
To calculate the annual fee:
Convert the expense ratio to a decimal: 0.14% = 0.0014.
Multiply the investment amount by the expense ratio: $20,000 * 0.0014 = $28.
Example: On a $20,000 investment in VFTAX, the annual fee would be $28.
27. How do you help reduce my tax liability?
Managing tax liability is an integral part of our financial planning process. We focus on tax-efficient investment strategies, such as:
Utilizing tax-advantaged accounts: (e.g., IRAs, 401(k)s). Saving in tax-advantaged accounts is important because it allows your investments to grow tax-deferred or tax-free, maximizing your long-term savings and reducing your overall tax burden.
Implementing tax-loss harvesting to offset gains: Tax-loss harvesting is a strategy where you sell investments at a loss to offset taxable gains, reducing your overall tax liability.
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Timing sales of trades: Considering the tax implications of all investment decisions, including the timing of sales and distributions. Long-term capital gains are profits from the sale of assets held for more than a year and are taxed at lower rates, while short-term capital gains are profits from the sale of assets held for a year or less and are taxed as ordinary income.
Customizing a charitable giving strategy: In some cases we prioritize qualified charitable distributions from an IRA as a strategy to meet required minimum distributions. We also use any highly appreciated shares in taxable accounts and donate shares in-kind which prevent a realization of a capital gain for the client and the qualified 501(c)3 organization. The client can then itemize a portion of the gift as a charitable deduction on their Schedule A.
Close collaboration with you tax advisor: We find that when we have an intentional coordinated approach with your tax preparer leads to best outcomes.
28. What is your preference for using low-cost diversified funds vs. higher priced funds?
We prefer using low-cost, diversified funds, as much as possible, (such as index funds and ETFs) because they offer broad market exposure with minimal fees, which can significantly enhance long-term returns. However, there may be instances where higher-priced funds are appropriate if they offer unique advantages or align with specific investment strategies. Our goal is to balance cost and performance to best meet your financial objectives.
29. Would you be able to help with financial decisions outside of investments?
Absolutely! Our approach is holistic, and we are to support you with a wide range of financial decisions, including insurance recommendations, estate planning, retirement planning, and more. We aim to ensure all aspects of your financial life are well-coordinated and aligned with your overall goals. We like to say, if a topic touches any aspect of your life related to money it’s absolutely something we can discuss.
We want to hear from you.
177 Post Street, Suite 800
San Francisco, CA 94108
(415) 781-6300
(415) 781-6301