How Blue Water Operates / What To Expect
How are you different from my current broker?
A broker typically takes a commission for trades and transactions and is also paid ongoing management fees from assets in mutual funds and especially insurance products. As an advisory firm we are paid on a fee-only basis, so we’re not tempted by commissions, trips, or bonuses from the fund and insurance companies. Since we are primarily paid a fee based on your (AUM) assets under management, we are very interested in your investment returns.
How do you plan to invest my money?
We have a comprehensive process of determining your level of risk, time frame and investment knowledge. We have an overriding concern for not losing capital you have already accumulated. Based on a series of interviews and open discussions we will make recommendations on an appropriate strategy for investing your money.
Why should I trust you? I have heard the same old line from brokers for years.
Think about how the investment process works, and how people get paid. Think about whether your current advisors are held to a fiduciary standard. If you like who you’re with, that’s fine. We are not in the business of breaking relationships. If you are comfortable with your broker or advisor and believe they are serving your best interests, then you should stay with them.
But, if you are curious, let us do a free risk assessment of your existing portfolio. We can give you an unbiased, in-depth report of the actual holdings within your portfolio (even breaking mutual funds down to their individual asset level utilizing some of the most advanced computer systems available) and the corresponding risk level. And every smart business owner wants to reduce their costs and risk levels.
What do I get with BWCA?
Direct one-on-one access to the people responsible for the investment choices in your portfolio, bi-monthly newsletter, blog, regularly scheduled meetings to discuss your particular investments and invitation only bi-monthly market reviews to discuss the market and economy and how it is affecting your portfolio. In addition we offer expertise in estate planning, succession, and full financial planning if you would like.
What if all I want is advice?
We are well qualified to provide financial, generalized estate, generalized tax, trust, investment and special financial situation planning advice. Although the actual preparation of taxes, wills, and trusts are left to the appropriate professionals at CPA or law firms, we have a good working knowledge of what things should look like. In a situation where a substantial amount of time will be consumed performing a detailed analysis, an agreed upon hourly rate will be approved before work has begun.
How do we, as clients, hold you accountable?
Several ways, including; 1) Participating in regularly scheduled client meetings and asking questions until you are satisfied, 2) Reading the newsletter and comparing its stated opinions to the actual investments made in your particular portfolio, and 3)Comparing your actual returns to objective performance measures (like the S&P 500 index) over an appropriate time interval, to confirm you are moving in the right direction.
How many clients do you work with?
A reasonable expectation is that a single RIA professional can maintain a client base of 80-120 households, with some staff support. We currently have one client contact professionals and 73 client households.
Can you help me with tax issues?
We are not accountants and do not provide specific tax advice to our clients. As financial advisors and trained financial planners, however, we constantly deal with complex tax issues, situations, and challenges. We can help you process possible tax implications of decisions and direct you to the appropriate person to address specific solutions and prepare documents.
How do you plan to save me money?
A good advisor can save you money in a variety of ways, including but not limited to; 1) Preventing you from taking undue risks with your assets (it is a common misunderstanding that one should take as much risk as you can tolerate – we approach your situation by first determining how much risk is necessary to reach your goals, and then evaluating your risk tolerance in that light– and planning accordingly), 2) By helping our clients lay out a detailed preservation plan for their estate we are often able to help them eventually avoid costly mistakes, and 3) By consciously mapping out your investment strategy and eliminating unnecessarily high cost products, and stream lining your portfolio we can often see actual cost reductions in running a portfolio over time.
When do you become my advisor?
The advisory relationship actually begins when an advisory contract is signed and executed and funds are placed into your accounts.
How do we measure what my broker does against what you can do? And what does it cost … really?
The public’s inability to measure the costs of brokered financial products was one of the themes of Tom Gardner’s (Motley Fool) 2010 testimony before the US Senate calling for greater transparency in this industry. We recently tried to calculate the actual cost of a large national mutual fund and found three different answers from three reliable sources - and we do this for a living. Our fees and costs are agreed upon in advance, typically as a percentage of assets under management, and as a bonus, are tax deductable on Line 23 (Other Expenses) of your Schedule A Itemized Deductions form.
My situation is unique. How do I know you will understand me?
With over a half century of combined financial advising between us here at Blue Water, there are few situations we have not encountered or read about. But on the off chance that yours could be a first for us, if necessary we would seek advice from other professionals.