The Wall Street Journal gets the Withum Wealth Management Way

The Wall Street Journal published “A Grand Inquisition in 19 Easy Questions in the August 26-27 weekend issue. Noted author and investment columnist Jason Zweig details his list of 19 questions to ask a financial advisor as a way of determining if they will or currently are acting in your best interest. Withum Wealth Management is not a brokerage firm but rather an independent, unbiased RIA (Registered Investment Adviser). Unlike many in our field pretending to put their clients’ interests first, it is our mandate and legal responsibility to do so as a client fiduciary.

Below, we place our answers (in blue) side by side with those the author deems the desired response.

1. Are you always a fiduciary, and will you state that in writing?

ZweigYes

WITHUM WEALTH – Yes    

2. Does anybody else ever pay you to advise me and, if so, do you earn more to recommend certain products or services?  

ZweigNo

WITHUM WEALTH – No

3. Do you participate in any sales contests or award programs creating incentives to favor particular vendors?

ZweigNo

WITHUM WEALTH – No

4. Will you itemize all your fees and expenses in writing?

ZweigYes

WITHUM WEALTH – Yes

5. Are your fees negotiable?

ZweigYes

WITHUM WEALTH – Yes

6. Will you consider charging by the hour or retainer instead of an annual fee based on my assets?

ZweigYes

WITHUM WEALTH – Yes

7. Can you tell me about your conflicts of interest, orally and in writing?

Zweig – Yes, and no advisor should deny having any conflicts.

WITHUM WEALTH – Yes 

8. Do you earn fees as advisors to a private fund or other investments that you may recommend to new clients?

ZweigNo

WITHUM WEALTH – No

9. Do you pay referral fees to generate new clients?

ZweigNo

WITHUM WEALTH – No

10. Do you focus solely on investment management or do you also advise on taxes, estates and retirement, budgeting and debt management, and insurance? 

Zweig – Here the best answer depends on your needs as a client.

WITHUM WEALTH – We offer investment management and financial planning and consulting services.

11. Do you earn fees for referring clients to specialists such as estate attorneys or insurance agents?

Zweig – No

WITHUM WEALTH – No

12. What is your investment philosophy?

Zweig(No response suggested)

WITHUM WEALTH – Construct and maintain a tax efficient, diversified portfolio of liquid investments that aims to meet our client’s investment objectives in a cost-effective manner.

13. Do you believe in technical analysis or market timing?

Zweig – No

WITHUM WEALTH – No

14. Do you believe you can beat the market?

Zweig – No

WITHUM WEALTH – No, we believe our value-add benefits include counseling and constructing efficient portfolios that focus on asset allocation and asset location, not identifying the next hot stock or worrying about how high a tech index can go.

15. How often do you trade?

Zweig – As seldom as possible, ideally once or twice a year at most.

WITHUM WEALTH – Trading creates friction costs but also is required to rebalance a portfolio, take profits and harvest losses. We would view too little or too much as a red flag.

16. How do you report investment performance?

Zweig – After all expenses, compared to an average of highly similar assets that includes dividends or interest income, over the short and long term.

WITHUM WEALTH – When reviewing performance, it should be net of fees and compared to the total return (price change and income generated) for targeted benchmarks.

17. Which professional credentials do you have, and what are their requirements?

Zweig – Among the best are CFA [Chartered Financial Analyst], CPA [Certified Public Accountant] and CFP, which all require rigorous study, continuing education and adherence to high ethical standards. Many other financial certifications are marketing tools masquerading as fancy diplomas on an adviser’s wall.

WITHUM WEALTH – The credentials of our team include multiple CFPs and CFA’s and a CPA.

18. After inflation, taxes and fees, what is a reasonable estimated return on my portfolio over the long term?

Zweig – If I told you anything over 3% to 4% annually, I’d be either naive or deceptive.

WITHUM WEALTH – Estimating future returns (net of inflation, taxes expenses) with exact precision is a nearly impossible task for anyone, especially with respect to near term predictions. Future net returns will be a function of many variables including valuation levels, risk premiums, current and projected levels of interest rates and inflation. We also understand an average return and actual return can be vastly different. We have available planning software that considers various sequence of returns by modeling 1000 iterations of future asset class interactions. Our goal is to meet our client’s objectives in a manner that allows them to stay the course.

19. Who manages your money?

Zweig – I do, and I invest in the same assets I recommend to clients.

WITHUM WEALTH – Our employees’ retirement and personal accounts include the same universe of investments used to construct our clients’ portfolios.  In addition, our compliance officer monitors the activity within employee accounts to help ensure clients’ interests are placed first.

If the answers from your current advisor are not satisfactory to you and are interested in a complimentary portfolio review please do not hesitate to call us at (732) 450 – 0147.

 

 Featured Author: Jim Ferrare

Important Disclosure: Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Withum Wealth Management. [“WWM”] ), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from WWM. Please remember to contact WWM in writing, if there are any changes in your personal/ financial situation or investment objectives for the purpose of reviewing/evaluating/ revising our previous recommendations and/or services. WWM is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. A copy of the WWM current written disclosure statement discussing our advisory services and fees is available for review upon request.

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