A Registered Investment Advisor Introduction and Overview of Services James Lorenzen, CFP®, AIF® Founding Principal www.indfin.com 805.265.5416 800.257.6659 firstname.lastname@example.orgThe Independent Financial Group is a fee-only financial planning practice and a registered investment advisor.This presentation does not contain investment advice and we do not sell products of any description.Pictures of people contained in this presentation, other than the advisor or his family, are merely stockimages obtained to add visual variety to the slides and should not be regarded as clients of the advisor.
Your Financial AdvisorJim Lorenzen, CFP®, AIF® CFP® AIF® B.A. Economics – Emory & Henry College (Virginia) 1967. Worked in commercial & consumer finance (1970-78). Rose to EVP of Universal Guardian Corporation with offices throughout U.S. and Canada. My offices were in Marina del Rey, Ca and Vancouver, B.C. Founded Media Marketing, building an ad agency, direct mail company, and published weekly newspapers in Ventura County, Ca. (1978-84). International speaking and consulting on management and organizational development (1984-2009). Headline speaker at more than 500 conventions and contributor to dozens of business publications. Clients included Hearst Corp., CapCities/ABC, Foster Grant, Hobie Cat, The Los Angeles Daily News, Cox Communications, Union Ice, NCR, and scores of others. Independent financial consulting (1992-present) serving a selected national clientele. Published in The Journal of Compensation & 20 Benefits, The Profit Sharing Council of America’s Insights, numerous Years! newspapers, and interviewed by The Wall Street Journal for SmartMoney magazine and by American Airlines’ Sky Radio heard on more than 19,000 AA flights.
My Financial Evolution andTHE INDEPENDENT FINANCIAL GROUP1991 - Dean Witter1992 - Formed as James Lorenzen & Associates1996 - Name changed to THE INDEPENDENT FINANCIAL GROUP.2003 – Became a registered investment advisor. Began CFP® and AIF® studies.2004 - AIF®.2006 – CFP®2007 - Adopted a fee-only business model, dropping sales model and all securitiesand insurance licenses.2011 – Retained Retirement Plan Advisory Group (RPAG) to provide back-officesupport for corporate retirement plan consulting. RPAG provides services to 350firms in 45 states serving approximately 20,000 plans with $65 billion in assets.
CredentialsCERTIFIED FINANCIAL PLANNER® (CFP ®)Candidates for CFP must meet requirements for work experience, education, and ethics.Candidates must have a bachelor’s degree or higher from an accredited U.S. college or universityand also master a list of nearly 100 topics on integrated financial planning through a CFP Board-Registered program.Course study can take anywhere from 2-3 years, depending on scheduling. Today there are morethan 300 colleges and universities across America offering CFP Board-Registered programs intheir MBA curriculum. Upon graduation, candidates must pass a ten-hour exam, conducted overtwo days. Board exams are scheduled twice each year at selected locations across the U.S. onspecified dates and must be taken at testing sites in person.Accredited Investment Fiduciary® (AIF®)Granted by The Center for Fiduciary Studies in association with the Joseph M. Katz GraduateSchool of Business, University of Pittsburgh. This program addresses the needs of RegisteredInvestment Advisors who provide investment advisory services for trustees of estates,endowments, foundations, and corporate retirement plan sponsors.
The IFG CredoEvery client deserves, and has the right to expect, anobjective and unbiased advisor who is fully aligned with theclient’s goals, possesses a moral compass with strictstandards of accountability, and who takes a straightforward,common sense collaborative approach, putting the client incontrol of a hassle-free process incorporating breakthroughtechnology and unparalleled flexibility… with openness andtransparency.
IFG’s Goalwith EVERY ClientExtraordinary service with no surprises, noexcuses, and no worries, as well asindependent thinking and lasting solutions tohelp clients achieve the security, stability,predictability, and peace of mind they seek.
Typical Questions How much money is enough? How long will my money last? How will inflation impact my planning? How will market volatility affect me? How can I minimize taxes? What are the future implications of my financial decisions?
Four pillars of investment success Its not about Managing risk managing is more investments. important than Its about reaching for achieving higher returns. goals. No one can Monitor control the everything and markets or revise as interest rates, necessary, but you can keeping your control taxes plan current. and costs.
Is ANYONE Really On Your Side?Are the service providers ‘related’? • The investment managerIs there `soft-dollar‘ or other hidden • The asset custodiancompensation ? • The reporting entity • Your financial advisorSometimes fees can be ‘bundled’ tomask WHO is getting paid WHAT.
Comparing Sources of Help Standards DifferSuitability (sales) Standard- Investments need only besuitable to the client’s situation. Higher costs okay if investmentis suitable.Fiduciary Standard – Decisions MUST be in the clients’ BESTINTEREST. Higher cost not okay if lower cost alternativeavailable. Legal standard for Registered Investment Advisors
Questions Your Advisor Should Answer.1. Are you held to a fiduciary standard in all dealings with me and my financial affairs? Will you acknowledge that status in writing? What fiduciary training have you completed? Not everyone is. Some firms are `dually registered’ and may try to avoid this by adopting the fiduciary standard for planning, but not for investment selection. If they’re adopting a ‘suitability’ standard for investment selection, then conflicts can arise. Disclosing conflicts doesn’t make them right. Avoiding them does.
Questions Your Advisor Should Answer.2. Do you disclose all conflicts of interest, both actual and potential, that exist or might exist in my relationship with you? It’s better to AVOID conflicts, rather than merely disclose. Mere disclosure doesn’t make them right. This consultant does not accept ANY 3rd party compensation of any description. IFG compensation comes solely from IFG clients - and compensation is the same regardless of the plan, management, or investments selected.
Questions Your Advisor Should Answer.3. Do you forego any type of commission-based compensation in favor of receiving all compensation via fees that are fully disclosed in dollar terms? IFG best practices: There is no hidden compensation. Clients receive a complete breakdown for each service: Who is getting paid how much and for what services. No secrets.
Questions Your Advisor Should Answer.4. Do you provide full service, comprehensive financial planning services as well as investment advisory services? Many advisors do. Again, ask if they wear their fiduciary hat for planning; but take it off when it comes to investment selection. This could be a ‘red flag’ regarding conflicts. Also, you might beware of someone who claims to be an expert in all areas of financial planning, regardless of the credential. IFG answer: As a CFP®, your advisor facilitates a comprehensive financial planning process in cooperation with your other specialist advisors (CPA, attorney, etc.). IFG does not pay or receive compensation for referrals.
Questions Your Advisor Should Answer.5. If you provide full service, comprehensive financial planning services, are these services performed by individuals who have obtained the CERTIFIED FINANCIAL PLANNER® (CFP®) certification? IFG Answers: Yes. There are about 300 colleges and universities across America offering a Board Registered curriculum in their MBA programs. The curriculum can take anywhere from 2-3 years to complete, depending on scheduling. Upon passing all courses in the curriculum, the candidate is eligible to sit for the 10-hour, 2-day exam given in designated locations across the U.S. on specific dates each year.
Red-Red-Flag IssuesWorth Questioning: Fiduciary Status for Planning Only; not for investment selection. Unwilling to sign a document accepting fiduciary status for all decisions on your account(s). Chosen investment managers work for the same firm as your advisor. Investment managers work for the same firm that provides reporting/custody. “Fee-Based” rather than fee ONLY.
A Seamless Solution Independent Plan Recognized investment manager(s) Independent Custody Independent ReportingOnline ConvenienceYou can even work with me from thecomfort of your home – by phone andonline!IFG currently has clients in New York,Florida, Colorado, and California.
Business Communication Today • shopping • banking • paying bills • planning vacations • booking travel Banks, government agencies, and thousands of organizations do business online every day! IFG has clients in New York, Florida, and Colorado, as well as inInternet Transactions are California.Commonplace!If your local bank offers online Have you used an ATM? Youbanking or bill-paying, your received cash from the machineaccounts are internet accessible in front of you; but the transactionnow! You just may not be taking linking your account was handledadvantage of it! over the internet!
The Planning Process1. Foundation & Vision Where you are Where you want to be When you want to get there How you envision the journey
The Planning Process2. Situation/Needs Analysis – This is a combination of assembling data, a review of your current risk profile.
The Planning Process3. Data Review and Preliminary Action Plan A plan outline and approach is developed for our discussion.
The Planning Process4. An Investment Policy Statement (IPS) is developed for our discussion.
The Planning Process5. Screening and selection of investment and management alternatives is conducted consistent with your risk profile and the agreed-upon strategy in your IPS created in step 4.
The Planning Process6. A Working Action Plan is developed, incorporating the selected investments and managers, consistent with your profile, our analysis and your strategy outlined in the IPS.
Our INDEPENDENT PROCESS Making The Pieces Fit Independent Planning & SelectionIndependent 3rd Your Investment IndependentParty Reporting Policy Statement Management Independent Custodian
YOUR INDEPENDENT FINANCIAL GROUP IFG Client The Advisor 3rd Party Mgrs Due-Diligence Client Back OfficeCustodian & Funds & Research Reporting Administration
Management Value Reveals Itself on the DownsideDespite a 20% underperformance in the `up’ years, better ‘downside’ protection can result insuperior returns. This purely hypothetical example illustrates how important attention to thedownside can be, especially in turbulent markets. INCREASING PERFORMANCE BY MANAGING RISK “Beating the Market” may not be necessary if you can limit. downside risk Amount Invested: $100,000 Up Cap> 80% Dn Cap> 70% Market Portfolio A Portfolio Portfolio Return Year Return (Market) B Return B Difference 1 20% $120,000 16% $116,000 -$4,000 2 -20% $96,000 -14% $99,760 $3,760 3 20% $115,200 16% $115,722 $522 4 -20% $92,160 -14% $99,521 $7,361 5 20% $110,592 16% $115,444 $4,852 6 -20% $88,474 -14% $99,282 $10,808 7 20% $106,168 16% $115,167 $8,998 8 20% $127,402 16% $133,593 $6,192 9 -20% $101,922 -14% $114,890 $12,969 10 20% $122,306 16% $133,273 $10,967 2.12% 2.91% $10,967 Information presented in this example is purely hypothetical , provided to illustrate a mathematical concept, and not meant to represent any investment return or outcome and should not be construed as investment advice which is provided only to IFG clients on an individual basis and only upon completion of a written plan.
Your Plan: Your “Rock” in the StormDuring fair weather, no one worries. When the storms begin to rage – whenthere’s chaos all around you - that’s when you look for the one thing thatdoesn’t move to find your way because that fixed point helps you reach yourultimate destination.Your plan is your guiding light…. Your blueprint… your Constitution.
Your Plan Belongs to You! Powered by PIE Technologies, this state-of-the-art planning platform was voted #1 for the third year in a row in Financial Planning magazine’s annual survey of advisors across the U.S. The survey included advisors in independent boutiques, regional, and major national firms. Secure Online Access 24/7/365 Full access to update, conduct ‘what-if’ scenarios and experiment with assumptions. Print it out or Download to your own computer!Data on investment pricing, interest rates, inflation assumptions, market volatility,even college costs, are continually updated dynamically, helping keep your plancurrent at all times!
After The Plan…Implementation is as Easy as 1-2-3. 1- Adopting a custodian – Best practices: Your custodian should be independent of your advisor and the managers. Most IFG clients use Pershing Securities, owned by Bank of New York-Mellon (BNY was founded by Alexander Hamilton). The asset-transfer process is handled directly between your institution and Pershing. I will provide the paperwork you need and guide you through the process. Pershing will handle the transfer for you. 1 Your investment assets will be in your account(s) in your name. IFG never takes custody and never has access to your assets. IFG is completely independent of Pershing, Bank of New York-Mellon, and all other service providers. IFG receives NO compensation from any third- party service provider, directly or indirectly.
The Implementation Process Step 2 is actually part of Step #1. When Pershing receives custody of assets, the investment options, 2 models, or managers you’ve chosen are automatically assigned. Note: All active managers and/or investment options are independent of IFG and Pershing. All institutional managers and other service providers work for fully-disclosed fees only – no sales charges, no commissions, and no surrender charges. Active managers go through TWO independent levels of due-diligence and ongoing oversight and review.
Types of Investments Typical Portfolios Include*: • Stocks (U.S. and International) • Bonds (Treasury, municipal, corporate bonds) ------------------------------------------ • Exchange-Traded Funds (ETFs) • No-Load Index Funds* Your individual portfolio composition and allocation will depend upon the resultsof our collaborative planning process.
The Implementation ProcessStep 3 is Orientation! It’s easier than you think!You will have 24/7/365 access to sophisticated independentreporting for all managers on all holdings, activity, performanceand tax issues. You’ll also have 24/7/365 access to a robustplanning platform powered by PIE Technologies.3
After Investments are In-Place In- You will receive quarterly market updates, commentaries, and ongoing management oversight from two independent sources: - You will have 24/7/365 access to objective 3rd party reporting independent from IFG and the managers they cover. And, of course, your own private client advisor: - THE INDEPENDENT FINANCIAL GROUP Jim Lorenzen, CFP ®, AIF® Plus: Jim is available email or phone! Call 805.265.5416, Ext. 1
Fee Structure Financial planning and investment advisory fees are earned separately and charged as outlined below. IFG does not receive commissions or third party incentives of any description, directly or indirectly.1. The Initial Planning Process Planning fees can vary depending on the nature and scope of the plan. Basic investment planning covers the six-step planning process, including data- collection , risk assessment, goal-setting, asset allocation, investment and management screening, search and selection, plan implementation, and set- up orientation. Advanced Wealth Management planning include insurance, tax, estate, and other planning as appropriate.2. Investment Advisory Fees This is an asset-based annual fee deducted on a quarterly schedule by the custodian on a fully-disclosed basis. IFG’s advisory fee covers investment/management oversight , ongoing plan and investment reviews, plan updates, and client communications including the IFG Clients Only e- letter. Advisory fees begin at 0.95% on the first $500,000 with the percentage declining as assets increase. IFG’s ADV form is available upon request.
Review:Four pillars of investment success Its not about Managing risk managing is more investments. important than Its about reaching for achieving higher returns. goals. No one can Monitor control the everything and markets or revise as interest rates, necessary, but you can keeping your control taxes plan current. and costs.
A Registered Investment Advisor Doing it the right way. • No product sales or commissions • Cost controlJim Lorenzen, CFP®, AIF® • Conflict-freeFounding Principal • Fiduciary status • Qualified & credentialedwww.indfin.com • Experienced805.265.5416 email@example.comThe Independent Financial Group is a fee-only financial planning practice and a registered investmentadvisor. This presentation does not contain investment advice and we do not sell products of anydescription. Pictures of people contained in this presentation, other than the advisor or his family, aremerely stock images obtained to add visual variety to the slides and should not be regarded as clientsof the advisor.