Vanguard has shown that it is primarily fees, not asset picking skills, that drive underperformance. Many advisors will point out the importance of low costs, and then charge 1% or more for themselves, which is much too high. (1) For non-business level 401k or 403b plans, our fees range from 0.5% down to 0.25% (see graph to the left or here). And unlike many advisors and brokerages, we are not being paid by anyone "on the back end" to sell you anything that is not in your best interest.
Most people have assets spread across different accounts. They may be 401(k)s, 403(b)s, savings, educational, taxable, or other types of accounts. We can work across all of them. This gives us a holisitic view of your financial situation and allows us to optimize for things like taxes.
Amazingly, it is legal for mutual funds, annuities, and whole life insurance to pay advisors to sell you their products! This is a blatant conflict of interest. These extra fees are then passed along to you by the fund instead of by the advisor. The industry refers to them using the euphemisms "sales charge," "commissions," and "trails," but whatever the term, we believe they are unethical. You are the only one who pays us, and we make sure our billing is clear and understandable.
Many advisors work for national investment firms. We do not. Frequently over the past decade the media has reported cases where the big national firms are pushing investments on clients, via their advisor network, for the financial benefit of the firm. They usually claim a "firewall" exists between the groups, a claim of which we are skeptical. We have no pressure to push sub-par investments and no conflicts of interest, egregious or subtle. We don't work for a big firm. We work for you. Only you.
Simplicity leads to understanding, understanding leads to discipline, and discipline leads to good results. It also makes your life easier, particularly at tax time. The financial industry has gone to great lengths to complicate the process. Most of this complexity is unnecessary and does not lead to better returns. Here in Burlington, Vermont, 300 miles north of the financial bustle of New York City, it's tranquil on the shores of Lake Champlain. This tranquility and simplicity we will reflect in your investment strategy.
As the Japanese proverb says, "It is only in still water that we can see."
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Tired of trying to remember new logins for web-based portals everywhere you turn? We're not going to add more for you. As Microsoft's current CEO says "What is scarce in all of this abundance is human attention." We're going to pay attention to you, not burden you with more software to figure out. We will not redirect you to a website to get answers - you can pick up a phone and call us, or email or text us, and we'll respond. All clients get their advisor's cell phone number. We do not believe in call centers.
To do well for you over a long period of time, we need to understand your situation and think in decades, not months or even years. This is not the prevailing culture in finance. Today, clients of larger firms often will get call center treatment when they have questions, and your advisor won't necessarily stay the same. Additionally, we're not contracted by your employer, so if you change jobs it will not disrupt our client-advisor relationship. At One Day In July, we will be with you over the years.
1. Source: Kitces.com Financial Advisor Fee Comparison July 31 2017 "