Frequently Asked Questions Q 1  How many clients do you serve and what is the size of the average portfolio? Q 2  Do you provide hourly advice? Q 3  How do your services compare with those provided by brokers and other providers? Q 4  How do you compute fees? Q 5  What are your criteria for accepting clients? Q 6 ® What is a CFP®practitioner (Ted Kutscher)? Q 7 ® What is a CFA®(Scott Rhodes)? Q 8  What is NAPFA? Q 9   How often do you review clients' portfolios and do you provide a comprehensive report? Q 10   What services do you provide in-house? Q 11   What services do you provide through professional relationships? Q 12   What is the significance of "fee only" financial planning? Q 13   What is "Comprehensive Financial Planning"? Q 14   What is your relationship with Kutscher Hereford Bertram Burkart PLLC? Q 15   What is an "Investment Policy" and why is it so important? Q 1  How many clients do you serve and what is the size of the average portfolio? A We have approximately 90 clients whose investment assets range from about $500,000 to $90 million. Of these, about 90% are individuals and 10% are trusts. Individuals range in age from their early 30s to their 90s. Q 2  Do you provide hourly advice? A Our commitment is to provide the highest level of comprehensive financial counseling. We are convinced this works best when the relationship is long-term. We typically do not provide "one-time" reviews (although we receive requests for this frequently) because the time and effort involved in developing a temporary understanding of a new client's financial terrain detracts from our ability to focus on our long-standing clients. Q 3  How do your services compare with those provided by brokers and other providers? A Please see Services Comparison Chart. Q 4  How do you compute fees? A Our fees are determined by the size of each client's investment portfolio (which encompasses all assets other than residential properties, personal use items such as cars and business assets). Special arrangements are typical for employee stock options and concentrations in a particular investment. We typically do not charge an hourly fee because we believe fee-for-time contracts detract from our focus on long-standing clients. Typically, our services are cost-effective for clients whose investment assets exceed $1 million. Q 5  What are your criteria for accepting clients? A Given our objective of providing personalized guidance with a relatively small, close knit professional staff, we selectively add clients who can benefit from our services and have a high likelihood of developing a long-term relationship with us. Q 6 ® What is a CFP® practitioner (Ted Kutscher)? A® The CFP® certification is a financial planning credential. Financial planners generally offer advice concerning estate planning, investment allocation, taxes, retirement planning, risk management, and insurance. Requirements -- The CFP® certification is awarded exclusively by the Certified Financial Planners Board of Standards. In order to use the designation, the CFP Board equires the following three E's of its candidates: Education: The Board of Standards requires that certain academic courses be fulfilled before one can sit for the CFP® exam. Examination: The actual CFP® exam is given over a two-day period and covers numerous topics within the financial-planning field. Unlike the CPA exam, a candidate must pass all portions of the test in one sitting before the CFP® certification will be given. Ethics: Like most other professional organizations, the CFP Board requires its members to abide by a stringent code of ethics and professional standards. Certified Financial Planner Board of Standards, Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and federally registered CFP (with flame design) in the U.S., which it awards to individuals who successfully complete initial and ongoing certification requirements. Q 7 ® What is a CFA® (Scott Rhodes)? A® The Chartered Financial Analyst® (CFA®) designation is often thought of as the pinnacle credential in the investment management field because of the mastery of financial principles that the successful CFA candidate must demonstrate. The CFA® credential may be found among portfolio managers, stock analysts, investment consultants, and a wide variety of others within the finance and banking industries. The CFA® is a difficult professional designation to obtain because of the high failure rate of the examinations and the period of years necessary to pass them. The CFA® designation is awarded exclusively by the CFA Institute. The successful candidate must satisfy an experience requirement and pass a rigorous battery of tests covering a variety of investment areas. Studied topics include accounting, finance, statistics, and economics and specific skills tested include asset valuation and portfolio management. As with most other professional designations, charter holders are required to adhere to and annually certify compliance with a code of ethics and professional standards. All charter holders are also required to be members of the CFA Institute as well as a local chapter of the Financial Analysts Federation. Q 8  What is NAPFA? A Founded in 1983 and devoted to the objectivity of fee-only financial advice, the National Association of Personal Financial Advisors is the largest professional association of comprehensive, fee-only financial planners in the United States. The 750+ members and affiliates nation-wide, provide consumers and institutions with comprehensive and objective financial advice on a "fee-only" basis, keeping foremost in mind the best interests of the client-- with neither the advisor nor any related party receiving compensation contingent on the purchase or sale of a financial product. NAPFA members define their role in terms of "The Three Cs" of financial planning: COMPREHENSIVE planning that takes into consideration all of a client's needs and goals, and is regularly reviewed and updated. The highest standards of COMPETENCE. COMPENSATION untainted by receiving any type of fee from vendors of financial products. Q 9  How often do you review clients' portfolios and do you provide a comprehensive report? A The counseling aspect of our work keeps us in touch with most clients throughout the year as we discuss the financial issues that challenge them (i.e. job changes; education spending; home purchases and remodeling; market volatility, etc.). Often, this requires examining their investment portfolio and making adjustments to accommodate near-term needs. Once per year, the client's financial plan is reexamined as a whole, including their cash flows and budgets, projected taxes, balance sheet issues, retirement projections, investment portfolio, estate plan and insurance. This process involves significant client consultation and is summarized in a written report that covers the foregoing issues and provides investment performance statistics, market analysis and recommendations for portfolio reallocation. Occasionally, we will also recommend mid-year portfolio adjustments when circumstances warrant. More frequent trading in portfolio accounts is generally not helpful to long-term client success. Q 10  What services do you provide in-house? A Among the standard services we provide are the following: Balance Sheet Preparation Cash Flow Preparation and Analysis Estimation of Taxes and Tax Planning Investment Goal Determination Investment Policy Determination Asset Allocation Analysis Portfolio Optimization, Rebalancing and Review Retirement Needs Projection Savings Needs Projection Investment Recommendations & Review Investment Advice to Trustees and Fiduciaries (including Retirement Plans) Employee Stock Options Strategies Insurance and Risk Management Analysis and Recommendations (Life, Property, Auto, Health, Long Term Care) College and Educational Finance Planning Budgeting and Spending Analysis Comprehensive Annual Written Report Q 11  What services do you provide through professional relationships? A Our firm provides most financial planning services in-house as part of our all-inclusive services to clients. We are a financial planning firm, not a stock brokerage; all clients must have or establish accounts with a brokerage/custodian where securities are physically held. Our firm provides financial counsel to trustees, but does not serve as trustee; rather, we refer clients to a number of competent trust companies. Our firm provides tax forecasting and planning as part of our services, but we do not prepare income tax returns. Instead, we coordinate with the client's tax preparer to make sure they have the information they need to efficiently prepare the client's return. On occasion, we will refer a client or, with their consent, consult with outside tax counsel at the client's expense regarding specialized tax issues. The financial plans that we prepare for clients summarize their estate planning documents and issues, but our firm also does not provide legal services, including estate planning. Rather, we believe we are attuned to estate planning issues and coordinate with the client's estate planning attorney to discuss issues as they arise. We do not provide bookkeeping or bill paying services, but will coordinate with competent providers. Q 12  What is the significance of "fee only" financial planning? A We do not accept commissions or compensation from any source other than our clients. We are convinced this significantly reduces conflicts of interests. A word of caution and discrimination is appropriate in this regard: so-called "fee based" or "fee off-set" planners may charge both a fee and receive commissions from selling products. We believe that in arrangements other than "fee-only," a conflict of interest can arise which may motivate an individual to favor certain financial products over others or to recommend an inappropriate transaction. Q 13  What is "Comprehensive Financial Planning"? A Comprehensive planning, as we envision and practice it, means committing ourselves to learning and digesting the details and issues of your financial life, or what might be termed your unique "financial DNA," not just the investment selection issues attended to by many planners. These include written projections and analysis, at least once a year, of your: Cash flow Tax situation Savings for education commitments and retirement Spending and budgeting (assessing each year what is a responsible and sustainable amount to use from your investment portfolio) Insurance and risk management Estate plan In addition to planning, we assist in implementing your financial plan. We coordinate with your other professionals, such as lawyers and accountants, as applicable. Q 14  What is your relationship with Kutscher Hereford Bertram Burkart PLLC? A Kutscher Hereford Bertram Burkart PLLC ("KHBB") is a law firm with whom we share office space. Two of our principals, Ted Kutscher and Scott Benner, are lawyers and are part of KHBB. For more information about that firm, see www.khbblaw.com. We believe that the experience of Ted and Scott with estate planning, trust operations, negotiated investment transactions and similar legal matters adds a distinctive complexion to our professional advice and enhances our ability to counsel clients on financial matters. We also believe we are attuned to legal issues and encourage clients to consult with their legal counsel, whether that be KHBB or the many other law firms with whom clients maintain relationships. Q 15  What is an "Investment Policy" and why is it so important? A An "investment policy" describes your expectations about investment performance and how much volatility you are willing to accept in achieving your investment goals. In a sense, your policy embodies long-term guiding principles that, once established, should be retained unless your long-term investment goals change. We anticipate your policy will remain consistent from year to year, unlike your short-term strategic asset allocation and tactical asset allocation that are adapted intermittently in response to your financial needs and market opportunities. Your policy is expressed in terms of your portfolio's ratios of cash equivalents, bonds, and equities (stock and real estate). back to top  © Copyright 2009 - Frederic T. Kutscher Associates, Inc. All Rights Reserved. | Disclaimer