Frequently Asked Questions
- A. We like to look at all of a client’s investments—those we’ll manage, and those we won’t (such as current 401(k)s), so we can help coordinate all of it. We begin by breaking down everything a client currently holds and how they’re held—equities, fixed income, cash, taxable versus tax-deferred accounts. As investors and planners, we work with the client to determine what asset allocation will help her best reach her financial goals without excess volatility.
- Then we build a proposed portfolio. Here, we specify which assets should be held in which accounts, giving names and dollar amounts. We can project income and expected returns. We set all this out, in both narrative form and a spreadsheet, and work with the client until we have reached agreement. Then we execute, usually over time.
- As part of this process, we determine what planning issues are involved and dig into those. We also gather information on the original cost of the various investments, so we can do tax projections.
- We communicate with our clients monthly, in whatever manner works best for the client—in person, by phone, by email. We discuss investment results, discuss whether changes are warranted, and try to determine how else we can be helpful. Different clients choose to have different levels of involvement, and we can cater to all of them.
- A. Point View's services are fee only. We charge one percent of assets under management, paid quarterly. We believe that this aligns our interests with yours. We only make more money if you do. This contrasts with the traditional, commission method of doing business. When a stock broker suggests a trade to you, how do you know if it’s really in your best interest, or if he is just trying to generate revenue? At Point View, we have no reason to suggest you make a change unless we truly believe it will benefit you. Often we suggest that no trades be made. We believe that charging a fee, rather than a commission, reflects our belief that we are building relationships with our clients, not merely suggesting transactions. Our minimum fee is $1,250 per quarter, which corresponds to $500,000 under management. A client’s accounts are aggregated to help reach that $500,000.
- For clients interested only in financial planning, we can provide a comprehensive plan, covering everything including specific investment suggestions, for $7,000. If a financial planning client subsequently chooses to use us for ongoing investment management, we apply that fee dollar for dollar against investment management.
A. Financial planning can cover everything from setting a budget; to determining how much to save/invest—and in what sorts of investment vehicle—for retirement, for children’s education, for a major purchase; to estate and philanthropic planning. Your financial planning arises from your own particular situation and needs. We encourage our clients to call us first whenever a financial question arises.
A. At its most basic, financial planning seeks to ensure that your money lasts longer than you do. It’s more than that, of course. It is working with you to determine your financial goals and priorities and then developing workable action steps and investment choices to help you reach those goals—while still allowing you to sleep at night. A financial game plan you cannot live with—because you don’t understand it, because it requires you to make sacrifices you deem unacceptable, or because it involves investing in ways you find nerve-wracking—will not work.
A. Not at all. We prepare a form for your signature to transfer the assets over. We submit that form, plus a recent copy of an account statement, and the back offices of the two firms do the rest. The process typically takes a week or so.
- A. Congress has created certain types of investment accounts with special tax breaks. Most retirement accounts—401(k) plans and traditional IRAs, for example, allow you to deduct contributions from your taxes, defer paying tax on any gains, and only pay taxes when you withdraw the funds in retirement. Roth IRAs promise no tax forever, in exchange for no deduction now.
- In college funding, 529 plans allow you to set aside dollars now for your children’s college education and never pay tax on the earnings.
- All of these tax-favored accounts come with restrictions, either on investment choices, on use of the funds, or both. In the financial planning process, we can help you determine which, if any, best suit your own goals and how to integrate them with the rest of your investments.