We welcome the opportunity to speak with prospective clients who are financially established and interested in building a long-term relationship. We intentionally limit the number of client relationships we take on to be able to focus on close, personal relationships.
While we have no set minimum portfolio size, we generally can provide a very cost-effective advisory service for clients whose investment portfolio is at least $2,000,000.
Complementing our role as your fiduciary advisor, we are a “fee-only” firm. This means you are our sole source of compensation, with no outside conflicts of interest. We operate with transparency and simplicity. Clients pay Arbor Wealth Advisors an annual flat retainer fee, determined after our initial discovery meeting and based upon the complexity of your financial situation. Our annual fees generally range from $8,000 to $25,000 depending on your specific financial circumstances.
The shift in paying for financial and investment advice from transaction-based commission compensation to asset-based fees (i.e. 1% of your portfolio value) has been very good for the investor. Removing the incentive for advisors to churn client accounts is definitely a step in the right direction. However, the common logic that the value of an investor’s portfolio ought to determine the investor’s fees seems, in our opinion, to not be in the client’s best interests. The bottom line is that it does not cost significantly more to manage $10,000,000 than $1,000,000. Why, then, should clients pay significantly more to receive essentially the same services?
Arbor Wealth Advisors firmly believes an annual flat fixed fee is a more appropriate compensation method and more closely aligns your interests with that of a fiduciary advisor. We will, in the right situation, tell you to pay off your mortgage, to leave a 401(k) with your former company, to use a CD at your local bank or to not take a lump sum of your pension because it is in your best interest; whereas a firm with asset-based fees would be financially incentivized and motivated to have you move the money under their management. Perhaps, in those cases, moving the money under our management is the best solution but our annual flat fixed fee allows us to remove an inherent conflict of interest and to sit on the same side of the table as you.
We generally meet with our clients two to three times per year to discuss their financial goals, review any changes in their lives, and assess their investment portfolio. We closely monitor their portfolio allocation and will contact clients when the portfolio becomes out of balance. In addition, we encourage regular communication via phone and email.
No, our investment portfolios are tailored to the specific unique goals and circumstances of each client. That said, we limit the number of investment vehicles we use to a select few. Additionally, we also “eat our own cooking” and only use those investments which we also use in client portfolios because we truly believe they are best-of-breed products and not because they generate any compensation for us.
No, we believe that individual stock picking is an exercise in futility. We compare it to a sporting event, where we should expect the favorites to predictably win but NOT predictably beat the point spread. We firmly believe that the prices of publicly traded stocks and bonds are determined by the expectations of thousands of highly skilled, highly motivated, well informed experts. It is possible to identify well run companies but it is not easy to predict if that company will outperform the price set by the market. Our expectation is that the market is efficient and trying to time the market or pick individual stocks leads to underperformance, not outperformance, by investors.
You may select Fidelity or Schwab to serve as the custodian for the accounts that we manage on your behalf. We receive no compensation from Fidelity or Schwab and use them as a convenience for you and for us. The accounts are always held in your name. You grant us limited power of attorney to execute transactions on your behalf. You will have online access to your accounts as well as independent monthly account reports from the custodian.
As noted above, your assets are custodied at Fidelity or Schwab and not with Arbor Wealth Advisors. We have limited power of attorney and trading authority on your account, which you grant us when the account is established. However, we will never have direct access to funds in your account except for fee deductions (or, if you wish, you can pay by check).
Estate planning and effective tax management are critical components of your overall financial plan. We do not prepare tax returns or estate documents but have a network of CPA and estate planning professionals to assist as needed. In the event you already have these relationships in place, we work with your attorney and/or accountant to integrate income and estate planning into the Total Wealth Management service we provide.
Absolutely. We review the need for life insurance and annuity solutions as a part of our Total Wealth Management service. We need to make sure that young families are properly insured for income-replacement purposes and might find a need for permanent insurance as a solution to mitigate estate tax exposure. That said, we generally find life insurance and annuity products to be expensive as an investment vehicle but do, in certain circumstances, find them to be appropriate.
While we are not licensed to sell insurance or annuity products, we will work with an outside, nonaffiliated team of insurance experts to examine and evaluate your current policies, make recommendations and provide alternative solutions. By not accepting insurance or annuity commissions, we are strategically aligned to serve in your best interests without the conflict of outside compensation.
Whereas non-fiduciary brokers provide “suitable” advice and are not obligated to serve your best interests, Arbor Wealth Advisors uses a “fiduciary standard” for investment advice. This means that by choice, and by legal requirement, our investment advice and actions must be both suitable and in your best interests.
As a Registered Investment Advisor firm, we serve exclusively as your fiduciary advisor as noted above. In contrast, banks, brokers and insurance agents commingle trading with investment advice. These providers are traders first and advisors second. They are bound only to a “suitability standard” such that their investment advice is not necessarily in your best interest, but rather incentivized by commissions and other conflicts.
With two young sons at home, Aaron will not be leaving or retiring any time soon. He loves what he does and does what he loves. However, if Aaron becomes disabled or gets hit by the proverbial bus, Arbor Wealth Advisors has an agreement in place with Buckingham Asset Management, LLC, an affiliate of BAM Advisor Services, to act as sub-advisor to clients’ portfolios. Your accounts would be handled by experienced professionals with the same fiduciary standard of care, investment philosophy, and True Wealth Management services. At the very least, this would give you time to perform your own due diligence on a replacement advisor though we believe Buckingham Asset Management would be a great long-term fit.
As of December 31, 2016, Arbor Wealth Advisors has more than $296 million of assets under management. As of December 31, 2016, the BAM ALLIANCE has more than 140 independent wealth management firms across the country, representing more than 18,000 investors and more than $27.7 billion of collective assets.