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There are a number of factors to review when choosing a financial advisor.
First, the knowledge, talent and experience of the team are critical. Is there a culture of learning and continuing education in place? There is an "alphabet soup" of credentials floating around. Does your potential advisor have a broadly recognized credential based on rigor and experience?
The longevity of the firm is also a serious consideration. Will your needs and the needs of your family be met in the future? Check that the firms you consider have a succession plan in place.
How is the advisor compensated and what is the firm's fee structure? Ask for the ADV Part II. For example, ours is located on our disclosures page. Compensation at all levels should be transparent.
Does the advisor report to a bank, wirehouse, or just to you? The possibility of proprietary products exists with branches of larger firms. Harbor has been fiercely independent from the beginning and an advocate for our clients at all times.
Last, check for any regulatory actions or complaints against the firm and the specific advisor. The SEC provides a free online searchable database for investors through their Investment Adviser Search service.
Yes, absolutely. We have a number of out-of-state and international clients, and technological advances are making it even easier to communicate effectively. Please contact us if you are interested in learning more.
CFP® stands for Certified Financial Planner™, a certification overseen by the CFP Board. Advisors with the CFP®designation have gained at least three years of work experience in a financial-planning-related position, completed a comprehensive educational program, received an undergraduate degree, passed a two-day, 10-hour examination, and agreed to a code of professional conduct.
Additional information on the requirements needed for the right to use the CFP® certification marks is available on their website.
CFA® stands for Chartered Financial Analyst, a credential overseen by the CFA Institute. CFA charterholders have passed three rigorous six-hour exams and agree to abide by a strict code of ethics and professional standards. They must have an undergraduate degree and at least four years of work experience in an investment decision-making role.
For more information, visit the CFA Institute's investor information page.
We custody our clients' assets at Schwab Institutional (SI), which means SI handles account servicing and securities processing. They also provide independent monthly statements. SI is the largest custodian to independent investment advisors. For a detailed answer on why we continue to choose to work with Schwab, please review our disclosures.
We have been innovators in the wealth management area for 30 years, our young and dynamic staff wield up to the minute planning and investment management techniques. We are the partner of choice in the fast moving area of personal finance. For more information see "Why Harbor?" and then give us a call.
A fiduciary must by law put the needs of the client first. This is a key differentiator between the brokerage world and the wealth management model. A broker is not obligated to choose the best product or to take your goals and needs into account in decision making. Our entire business model was created 30 years ago after the fiduciary model, we excel at putting the needs of our clients above all else, each day every day.
A broker is often compensated by commissions on trades placed in your account, creating an incentive to trade your assets frequently. The fiduciary standard does not apply to brokers and can lead to situations where they will place you into their firm's proprietary products, rather than what is best for you. Harbor’s fee only open architecture means that you are not restricted in your investment options and our fiduciary duty means that we always put your interests first, where they should be.
Harbor is a fee only advisor. This compensation structure avoids all commissions. We charge fees for asset management and financial planning – no additional compensation is received either directly or indirectly. Our fees are very competitive and you will always know what we are charging as we communicate the fees in writing.
Asset Management Fees: We charge a fee based upon the amount of assets that we manage for a given client or at a pre-arranged flat rate. Doing so ensures that we are aligned with the interests of each individual client. Most often this fee is based on a sliding scale, the greater the asset total the lower the percentage fee. Fees are debited from managed accounts on a quarterly basis.
Financial Planning Fees: We charge a flat fee for financial plans based on services and reports that are determined in planning and goal setting meetings with the client. This fee varies based on which services and reports are needed and the complexity of the plan.
We communicate according to your stated preference, generally a combination of in person meetings, phone calls and email. Upon occasion we resort to good old fashioned postal mail.
Charles Schwab will mail (or email) you a monthly statement and you can view your accounts online anytime via a secure log in. In addition, we will send you a quarterly letter and portfolio performance report. If you choose to do financial planning, you will receive the applicable reports annually.
Alpha Redux - How to Add 3% to Your Market Returns Every Year
Providing a good value was a cornerstone of Harbor’s mission and objectives from the beginning. We were successful at offering a better group of services than the brokerage industry and most other financial planners (as we were known then) of the time and have continued to do so. Nevertheless our value is a subject I frequently re-explore. My thought process begins by separating the consulting or planning advisory from the asset management services and then asked what value do we bring?
The creation of a through financial plan is of huge value in that it is a road map tailored to the individual. Knowing where you are going increases your chance of success many times over. While time consuming for both the wealth manager and the client the process is well worth it. The plan also dramatically decreases the possibility for an error or omission that can seriously derail your progress. Examples include gaps in casualty, disability and life insurance coverage, failure to change beneficiaries on your retirement plans after divorce, failure to save for your future obligations, forgotten assets, missed opportunities with tax and cash flow planning, the list goes on. Any or all of these items can be very costly. Guidance and a financial partnership with someone who knows your resources, goals and history is priceless and often keeps an individual or family on track. It is easy to get derailed given the buffeting nature of life events, the role that emotion plays not to mention we are all busy and sometimes make rash decisions. Check lists, reminders, attention to detail and a periodic view all add to the success rate and are reassuring.
On the investments management side a historically notable catalyst for the value introspection was the strong return market of the late 1900’s followed by a sharp correction in the early 2000’s. This led us to examine our performance in both up and down markets (the TAS analysis was created at the time) and also to compare the portfolio returns and risk with passive portfolios (ETF’s and Index funds). This isolates manager selection which in turn helps to determine and track what value we bring to the table with our active management. We have continued to compare our returns to major indexes and continually focus on investor communication. Our returns are quite good when compared to the index returns and we have a good history of taking profits from equity markets at the peak.
Recent studies have indicated that professional management adds an average of 3 percentage points per year in return over portfolios not professionally advised and monitored1.
Vanguard agrees and has recently come out with a report that addresses these subjects with interesting results. According to the study, all in the net benefit a good wealth manager can bring the client is 3% per year in overall return advantage. This assumes the advisor provides inexpensive asset management, financial planning services or wealth management as we call it and successful behaviors coaching.
Not all advisors, financial planners or wealth mangers are created equally, some do not offer wealth management advice, others fees are high, still others have soft compensation in the form of insurance commissions, payments from mutual funds placements and the like. A closer look is warranted. Our considerations for Harbors’ value are:
Peace of mind - Our clients tell us this is at the top of the list. They have a partner they can call on and worry much less because they have a trusted ally.
A plan to refer to - As aforementioned laying out a plan tailored to you and your needs and goals is a huge determinant in your success financially.
Organization - Getting ones affairs in order and in one place is a significant value to the wealth management process. In addition to the plan itself we provide personal financial organizers, act as a repository for documents, historical records and are a virtual clearing house for your other advisors, family members and loved ones.
Measurable economic management of assets - Our portfolios and model allocations are structured for the highest risk adjusted return possible. Choosing low priced strategies drives more to the bottom line returns. We monitor and compare our returns to the major benchmarks striving to always out perform with our manager selection.
We know when to ‘fold ‘em’ - We have experience over 32 years of market cycles, successfully taking profits and exiting the market when necessary as was the case in 1990, 2007 and 2008.
Vanguard’s research into the measurable benefits of working with a competent Wealth Manager resulted in what they call ‘Advisors Alpha’. For a complete breakdown and further explanation please read the Vanguard study in its entirety here.
1Tergesen, Anne. "Your 401(k) plan’s secret weapon". MarketWatch, The Wall Street Journal, May 13, 2014
A recent study by Vanguard, the mutual funds company explored the value in working with a wealth manager and concluded that clients can see as much as a 3% increase in net annual returns when working with a qualified wealth manager. The study shows that this professional partner can generate these increased returns through a framework focused on being an effective behavioral coach, applying an asset location strategy, employing cost-effective investments, maintaining the proper allocation through rebalancing, and implementing a spending strategy. This assumes the advisor provides inexpensive asset management, wealth management consultation and is successful at behaviors coaching.
Yes- We can be of assistance before, during and after the divorce.
We understand that legal and financial assistance is expensive and can be out of reach for many. We have created a regular event where we host professionals from the Legal and Financial community to host a workshop on Divorce. Check our Facebook page for more information on the next event and other helpful links.
Our specialty is finance and how each piece of your financial picture fits together. We have decades of combined experience to ensure you are maximizing the efficiency of your investments, savings, spending and financial decisions. We do not provide any legal advice and will work with your attorney to ensure we are helping them understand what is best for you in your divorce.