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Blue and Orange Trees in Mountains

FREQUENTLY ASKED QUESTIONS

What is fiduciary and fee-only?

We are a fiduciary 100% of the time, which means we're required to always put your interests ahead of our own 100% of the time. Many advisors are dual-registered, meaning that they are allowed to put on and take off their fiduciary responsibilities as desired. Similarly, we are a fee-only advisor, which means we are only paid by our clients. We don't sell products, get paid commissions, or receive referral fees. Many advisors or financial salespeople work for a brokerage or insurance company and are paid commissions or are "fee-based". We believe that our fee-only, fiduciary structure allows us to have a more objective relationship with our clients because it reduces the possible conflicts of interest.

Why focus on engineers and tech professionals specifically?

I remember when I was first thinking about changing my own career from engineering to financial planning, I would interview other financial planners, most of whom would tell me that engineers make horrible clients because “they ask too many questions”.

This was a huge red flag to me because I like asking and answering questions. I also know that analytical people trust technical aptitude more than placeholders, such as a suit and tie or a fancy car, so I realized that I might be able to help an under served market.

What is a common financial planning challenge unique to engineers and tech professionals you frequently encounter when working with your clients?

One challenge that I often see is risk aversion, which is the tendency to prefer certainty and to avoid possible loss when making decisions. This can lead to several outcomes, but there are two that I see often.

First, it’s not uncommon to have a desire to change their career path or to outright retire, but unfortunately, they stay at their current job because it may be more stable or is perceived to be less risky than making a change. Second, once they do retire, they often significantly under spend what their portfolio can support.

Most financial planners are happy to support this risk aversion because it makes for more profitable clients, but I find fulfillment in helping people maximize their lives and opportunities. As a former engineer myself, I know that many engineers and tech professionals appreciate having another analytical person with them that they trust to talk through possible changes and ultimately make progress towards their goals.

How do the services you offer distinguish your firm from other advisory firms?

I tend to focus more on digging into a client’s goals and values and talking about the “why” of their saving, spending, and career. I enjoy working with analytical people because we often share a certain way of looking at problems and share similar values, such as a desire to spend more time with family rather than maximizing net worth.

When I get into these deeper conversations with clients, they can benefit from working with a financial planner that’s understands the benefits of working as an engineer in the tech industry as well as the challenges and frustrations. I think this leads to better financial planning outcomes. And finally, unlike most financial advisors, I like working with analytical clients and I'm not afraid to dive deep to answer your questions!

What questions do you like to ask to better understand their unique circumstances and determine how you can best help them achieve their goals?

As part of my meetings with prospects, the number one thing I’m evaluating is what they are looking for in an advisor. It’s important that there is an alignment of values, so I’m very clear up front that I strongly believe that we are not investing to reach a specific net worth number or to just continuously grow wealth, but rather to use money as a tool to reach the client’s personal goals and live a simpler, happier, and less stressful life. I also try to understand how much anxiety they have around money and investments, as this will guide how we approach the financial planning process.

 

For people thinking about leaving their current employer, what actions do you recommend they take before resigning and shortly thereafter?

My advice is to always be really clear on the reason you are making the change. Early in our careers, we are often chasing money and opportunity, but at some point, we need to step back and realize that we’re pretty well paid and life is pretty good. Are we taking the next job only because it’s the natural next step in our career? Or are we doing it because the job will be more interesting, more fulfilling, or a better work environment?

We want to be intentional with how we live our lives. At some point, you have to ask yourself if the additional money is going to actually benefit you and your family or if the job is just going to add to your stress and your account balances.

For people approaching retirement age, how do you recommend they prepare to make the transition?

My best advice is to make sure you are retiring to something, rather than from something. The last thing you want to do is wake up after retirement, having lost your sources of purpose, social standing, community, and structure to your day, and wonder if you made the right decision.

I recommend testing out your plans for retirement either via sabbaticals or part-time work first and easing into the next stage of your life. Again, make sure that you are clear on the reason you are making the change. Ideally, you want that decision to be well thought out and intentional, rather than simply the result of what society’s expectations are for you at a certain age.

How do your fees compare to other financial advisors?

We strive to keep our costs low and pass those savings on to you. It is not uncommon to see advisory fees start somewhere between 1.25% and 1.75%. To manage $2M in assets, other firms charge as much as 48% more, and we believe we provide better service.

 

In addition to advisory fees, we also consider cost as a major factor when selecting investments, with overall portfolio expense ratios being as much as 1% lower than you may be recommended elsewhere. We would be happy to compare our pricing with other advisors and discuss the differences with you.

Won't my returns be lower if I pay for investment management?

Possibly, but not necessarily. Vanguard, a company with a great reputation among do-it-yourselfers, put out a paper detailing the value a good financial advisor can provide. Their conclusion: "We believe implementing the Vanguard Advisor’s Alpha framework can add up to, or even exceed, 3% in net returns." There are other studies that show similar benefit.

 

We do a lot of ongoing research to make sure we're at the cutting edge of investment management and financial planning concepts and implement best practices. We do not guarantee a specific level of performance and do not chase returns in hot stocks or day trading. We build portfolios that seek high risk-adjusted return over long-term time horizons.

Can't I just do this myself?

Yes, you can absolutely manage your portfolio yourself and lots of people do without issue. However, many smart and successful people decide to outsource this part of their lives because they find they don’t have the time anymore, don’t have the interest, or money simply stresses them out. A lot of clients appreciate having someone to talk with when important financial decisions such as retirement pop up to make sure they aren't making mistakes or haven't thought of alternative solutions.

 

Hiring a financial planner isn't for everyone. We work with those who have decided that there are parts of their lives they are willing to outsource to a professional in order to simplify their lives.

 

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