Unlike many financial advisors, we don't require our clients to invest their assets with us. But many of our financial planning clients choose to do so. They appreciate our simple, low cost, risk managed approach to investing. And they like that we take care of everything for them, from tax planning, to rebalancing, to structuring retirement plan distributions. And when the markets get crazy (which they do from time to time) - its nice to have a professional hand on the tiller.
We have seen investment portfolios with hundreds of stocks and bonds and proprietary engineered products which no one can understand. We like SIMPLE.
We can achieve incredibly well diversified portfolios by using no more than 10 to 12 investment holdings. So why make it any more complicated than that?
We also notice that managers who trade in and out of stocks don't do as well as those who simply buy and hold based on an index. Simpler and cheaper is better.
Because we keep things simple, we can charge lower fees for our services than most of our competitors. Better portfolios - lower cost. What's not to like?
The real value in having an advisor manage your investment portfolio for you is not to be found in the selection of investments. The true value is found in the financial planning advice. If you are paying an advisor 1% or more to annually to manage your portfolio, and he or she is not providing comprehensive financial planning advice - you need to find an advisor who does!
Jim Kinney, CFP and Founder, Financial Pathways
We see investment management firms which charge as much as 1.5% of assets, yet seem to do very little for their clients. We see big national firms that include some financial planning - but your advisor is barely out of college (and its your third advisor in as many years!)
At Financial Pathways, a very reasonable investment management fee covers more than just setting up, monitoring, and rebalancing a portfolio. Your investment management fee INCLUDES ALL ONGOING FINANCIAL PLANNING SERVICES. A financial plan is at the heart of nearly all our client relationships.
We are there with you every step of the way to help with questions about tax, housing decisions, retirement income planning, estate issues - every aspect of your financial life. Now that is real value for your money!
We do it all - so that you can focus on what is really important.
We do the research, create investment models, help you choose the model which best supports your plan. We buy the investments, monitor performance, and rebalance when necessary to make sure the allocations don't stray too far from the plan.
We handle tax planning, distribution strategies, and create simple, readable reports on a monthly basis to measure performance.
Our client accounts at TD Ameritrade link back into the clients financial plan - so we can always see where we stand compared to the plan.
Let us sweat the details, so you don't have to!
When you are young and saving for the distant future, you can throw all of your money in your 401k's stock index fund offering and pretty much ignore it. The ups and downs of the market shouldn't concern you when you won't need your money for 20 years!
However, market shocks can wreak havok on the financial plans of older investors. If you have planned out your future assuming you have a certain sum of money, and suddenly you only half as much as you thought due to a market downturn - well that can be devastating.
The key to managing risk is and always has been diversification, or DON'T PUT ALL YOUR EGGS IN ONE BASKET. And that has not changed. What has changed are the vastly improved tools fee only investment advisors now have available to help diversify their client's portfolio .
We would love to show you how sound diversification strategies can reduce risk - without eliminating your ability to earn good investment returns.
Financial planning has changed the face of investment advice. Investment management should be just one part of a well choreographed financial plan. Your financial planner shouldn't be selling you investments. He should be working with you as a partner, helping to manage investment risk and return, minimize taxes, plan distributions, consult on insurance, consult on major purchases, and discuss estate plans. Modern investment management is just one part of a comprehensive financial plan. This short video by Dimensional funds illustrates how investment advice has changed with the growth of financial planning.
Clients who invest with us will have their own account at TD Ameritrade (or Charles Schwab) with full online and direct 800 number access.
As part of your financial planning process, we will agree with you on investment strategy. We then work within your account to implement that plan. You will receive monthly communications such as statements and performance reporting independently from both TD Ameritrade and Financial Pathways. We keep you up to date with periodic reviews during which we can look at performance, review strategy, update your financial plan, and discuss your overall financial situation.
For our clients in retirement, we will manage distribution and tax strategies according to the recommendations outlined in the financial plan, so you can focus on the more important things in life.
Past performance is not predictive of future results. What worked in the past will not necessarily work in the future. Diversification does not work equally well under all market conditions, and while designed to limit risk of loss, does not eliminate risk of loss. Investments can lose money.