WE ARE A FIDUCIARY

What is a Fiduciary?

A fiduciary is an investment advisor who is required by law to always act in the best interest of their client. Unlike financial advisors at brokerage firms or banks, a fiduciary is required to place client interests first. Under the fiduciary standard, an investment advisor must provide advice and investment recommendations that they view as the absolute best for the client.

What is NOT a Fiduciary?

Broker dealer advisors, investment advisors, wealth managers, and financial advisors are some terms for investment professionals who are not fiduciaries. While a fiduciary can be any of those things, if someone is a fiduciary, they will make a point to distinguish themselves.

Advisors are not required to act in their client’s best interest. In fact, they have a hierarchical commitment to their employer before their client. The hierarchy of duty is so skewed that it requires advisors to use higher cost fund classes; as long as it benefits the employer and remains a suitable investment.

Fiduciary Regulations in the News

In June 2019, the SEC published new "Best Interest Regulations” (Reg BI) that are set to replace the current Suitability Standard. Firms need to be in compliance with new regulations by June 30th, 2020. At The Financial Planning Company we don’t think the Best Interest Regulations (Reg BI) go nearly far enough to protect retail investors.

Under Reg BI advisors are only required to act in a client’s best interest at the time of sale. Advisors are permitted to have conflicts of interest as long as they’re disclosed. Lastly, an advisor can waive their fiduciary obligations with a signed disclosure form. No fiduciary regulation will be satisfactory until legislation closes the escape clauses lobbyists fight to protect. In 2018, financial service firms alone spent nearly $1 billion on lobbyists.

FEE-ONLY FEE STRUCTURE

What is a Fee-Only Advisor?

Fee only advisors can't accept payments from any party that is not our client.

This includes, fund providers, brokerages, and third-parties of any kind. if you are not a client, then we can’t accept any type of payment. A fee-only fee structure is a pillar of any high integrity investment firm.

What is NOT a Fee-Only Advisor?

The majority of financial advisors are paid a management fee PLUS a commission from fund companies. In this situation an advisor may be tempted to use a certain fund simply because it pays a higher annual commission.

If you are curious if your mutual fund has unnecessary advisor commissions, known as a 12b-1 fees, visit Morningstar.com and type the desired ticker in the top left. Select your desired fund and press the price tab to see a fee breakout.

12b-1 fees are commissions paid directly to advisors on top of their management fee; they are used to incentivize advisors and should be avoided! If you see front-load or deferred-load fees on the fee breakout, think Gordon Gecko. These arbitrary fees were popular in the 1980’s but are now seen as exuberant and completely unnecessary.

EVIDENCE BASED & NOBEL PRIZE WINNING RESEARCH

The Financial Planning Company harnesses the power of low-cost indexing while making the conscious decision to overweight small, profitable, and value companies.

Our investment portfolios are globally diversified and have exposure to large, medium, and small companies. While the majority of client assets are deployed towards U.S. stocks, about one third of stock portfolios are spread among dozens of countries.

Investment portfolios are designed around the research of Eugene Fama, Nobel Prize Winning Laureate. Our portfolios overweight asset classes which have consistently and substantially outperformed the stock market over long periods of time.

This type of investing is typically called factor investing or smart beta investing. We also use a total return investment approach which has a substantially higher expected return when compared to a dividend or income based investment approach. Our fact based investment strategy is designed to let the power of the markets work for us.

As part of portfolio management process we provide:

· Tax Efficient Asset Placement · Quarterly Portfolio Rebalancing

· Minimal Turnover and Trading · Tax Loss Harvesting & Tax Conscience Trading

DEDICATED CERTIFIED FINANCIAL PLANNER™

In an ever changing financial planning environment, it is important to have a fiduciary who is aware of and knows how to best navigate changing government rules and tax changes.  The Financial Planning Company scours the financial industry for potential upcoming legislation so that we can best situate our clients years before any change may occur.  For example, file and suspend social security rules were changed in the Fall of 2015. Let our knowledge and proven strategies work for you.  We don't succeed if our clients don't have financial peace of mind.  We want you to experience life to the fullest; let our skills and resources optimize your financial situation.

HERE FOR THE LONG RUN - SMART & YOUTHFUL STAFF

Too often, financial advisors retire or sell their practice right when loyal clients may need them most. This won’t happen at the Royal Oak, Michigan based Financial Planning Company. Our experienced and youthful staff is uniquely driven to help clients achieve a superior financial situation. Our message, strategy, and presence is consistent. We are dedicated to:

1. Be Professional & Put Client Interests First

2. Be Discreet, Upfront, and Honest

3. Protect Client Confidentiality, Privacy, and Data

4. Spread Financial Literacy & Aide the Metro Detroit Community

5. Minimize Fees & Maximize Risk Adjusted Investment Returns

While our principals are steadfast, The Financial Planning Company harnesses the power of technology and continues to innovate in the dynamic fintech environment. We use technology to increase client convenience, communication, and financial understanding.

Talk with a qualified CERTIFIED FINANCIAL PLANNER™ about any questions you might have, or if there are any questions you should be asking. We will match you with an investment fiduciary and you will be on your way to financial clarity, and ultimately financial peace of mind. Ensure that you and your family are on the path to a healthy and sustainable financial future.