Frequently Asked Questions about CFS and Financial Planning

1. What is Personal Financial Planning?
   
   
2. How Do You Create This Roadmap?
   
   
3. How can I understand and relate to your financial planning services?
   
   
4. Isn't Fee-Only Financial and Investment Planning Only for the Well-to-Do?
   
   
5. What Distinguishes Your Firm from Other Financial Advisors?
   
   
6. If You Don't Sell Products, How Will I Get What I Need?
   
   
7. How Do You Price Your Services?
   
   
8. Do You Pick Stocks, Like a Broker?
   
   
9. Please Describe Your Investment Philosophy and Approach.

1. What is Personal Financial Planning?

Financial planning provides an independent review and assessment of a client's current financial situation, as well as a "roadmap" for the achievement of future goals and objectives. It is a lifelong journey, not a one-time event. The process consists of the following stages:

* establishing the client-advisor relationship
* gathering client data and determining goals and expectations
* analyzing the client's current financial position
* developing and presenting the plan and recommendations
* implementing the plan and recommendations
* monitoring client progress

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2. How Do You Create This Roadmap?

Together, we focus on goals, objectives, priorities and values. These typically encompass both financial and non-financial matters. Building adequate retirement capital, maximizing after-tax wealth transfers to future generations, and funding a charitable legacy are all examples of financial goals you may have. Frequently clients are already well positioned, but may need a fresh approach, professional insight, or an unbiased "second-opinion" to stay on track.

All new engagements begin with data gathering and a review of the client's current financial situation. Depending on the scope of the engagement, specific areas such as cash flow, investments, employee benefits, retirement planning, and insurance are then analyzed in order to design and present appropriate, customized recommendations. My role is akin to that of an airplane pilot: to guide you to your ultimate destination as safely and smoothly as possible.

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3. How can I understand and relate to your financial planning services, as I have not had any experience with Financial Planners?

An often asked question. I position myself like that of a medical doctor. For example, the patient comes into the clinic complaining of fatigue. The doctor examines the patient, and finds out that the patient is under a lot of stress at work, doesn't eat the best diet, doesn't exercise and is having trouble getting a good night's sleep. The doctor recommends a specific exercise program, diet plan, and daily schedule, and provides the patient with printed information to support and clarify these recommendations. The doctor also may provide recommendations to a personal trainer, a nutritionist, or a book, etc. to aid the patient in accomplishing what only the patient can do. The doctor's responsibility is to diagnose the problems and prescribe solutions. It is the patient's responsibility to recognize that there is a problem, make the appointment with the doctor, pay the doctor for their expertise and follow the expert's advice. The doctor can't make the patient follow the recommendations. The next time the patient comes into the doctor's office the doctor will follow-up on the previous recommendations, ask for an update, and once again encourage the patient to do what's in their best interest.

I work with financial planning clients in a very similar fashion. They pay me hourly for my advice. I provide them with the diagnosis and suggested solutions to their concerns. I explain in detail and as appropriate provide written supporting documents on what I recommend and how they should go about fulfilling my recommendations. Like a doctor, I may recommend other professionals for them to see for more specific advice. It is their responsibility to follow through. If appropriate, at each of our meetings I schedule the follow-up meeting, very much like many dentists offices do. Or I may leave it up to the clients to contact me in the future for additional advice and services. The clients know that certain things on their Action Plan are to be completed by the time we meet again. They also know that if they have any questions while they are going through the implementation process they can call or email me.

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4. Isn't Fee-Only Financial and Investment Planning Only for the Well-to-Do?

Absolutely not. Independent, objective and unbiased financial and investment advice benefits people of all means and walks of life. Those with modest portfolios and networth's' often derive the greatest relative benefit from professional advisory services. If you are thinking, "I can't afford to do this," usually you can't afford not to.

It is CFS's mission to extend the tremendous benefits of the fee-only approach to a broader cross-section of clients. CFS has recently be selected to join forces with the Garrett Planning Network, Inc., an association of fee-only advisors providing "as needed" financial advice, to advance this objective. Please visit www.garrettplanningnetwork.com for additional information.

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5. What Distinguishes Your Firm from Other Financial Advisors?

First and foremost, CFS is a pure fee-only firm, meaning that all compensation is received directly from the client. Referral fees and commissions are not accepted, allowing CFS to avoid product bias and conflicts of interest. Furthermore, CFS is fully independent, with no ties whatsoever to brokerages, mutual funds, insurance companies, or other product sponsors. Counsel and services provided are grounded in objectivity and stewardship, and recommendations are based solely on what is best for the client.

Another distinguishing feature is the fiduciary nature of the CFS-client relationship. I firmly believe the financial advisor-client relationship requires the advisor to always work in the client's best interest, and I pledge to do so for every client. In my view, written attestation of the fiduciary duty to each client should be a minimum requirement for doing business as a financial advisor.

Finally, CFS works with clients desiring only a one-time consultation or review, as well as those preferring an ongoing, comprehensive advisory relationship. While each client is encouraged to schedule periodic updates and consider a long-term advisory relationship, those preferring only an initial assessment, or infrequent reviews, are certainly welcomed.

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6. If You Don't Sell Products, How Will I Get What I Need?

While CFS does not "sell" products, specific recommendations and suggestions for appropriate financial vehicles are provided. Wherever possible, no-load, cost-effective alternatives are utilized. If additional insurance or legal services are required, I can assist with locating reputable resources, and with implementation of any recommendations.

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7. How Do You Price Your Services?

CFS's fees are very competitive with other fee-only firms (the average hourly rate nationwide exceeds $150, per Kiplingers' magazine). Moreover, the fee schedule provides truly exceptional value compared to the "all-in" costs (3-6% up-front sales charges, deferred and trailing commissions, 12b-1 fees, etc.) charged by commission-and fee-based brokers/advisors.

Fees for financial and investment planning should be viewed as a long-term investment, not a short-term expense expected to pay for itself right away. While this often occurs, it is not the intent of the planning process. For most folks, achievement of financial security is a marathon, not a sprint, and the cost of professional, unbiased advice should be viewed in that context. Simply stated, fees should not be an issue. If you have any questions regarding fees, please contact me.

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8. Do You Pick Stocks, Like a Broker?

CFS generally does not offer recommendations on individual stocks or bonds. However, if a client owns individual securities, I will analyze them in the context of the overall portfolio, and offer suggestions for improvement and diversification, if appropriate. Specific investment recommendations are generally focused on no-load mutual funds and the alternatives available to the client in his or her company-sponsored savings and retirement plans. The fiduciary philosophies, cost-effectiveness, tax-efficiency and historical performance of successful investment managers are key factors in determining specific recommendations.

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9. Please Describe Your Investment Philosophy and Approach

My approach is to analyze client objectives, risk tolerance, need for income/liquidity, and other special considerations, to customize a portfolio framework that provides structure and discipline for the selection of individual investments. "Time in the market" is emphasized over "timing the market." Enhanced and consistent long-term returns are sought, while managing overall portfolio volatility and risk. Periodic adjustments and rebalancing are advisable to keep the portfolio in line with target allocations, and/or to capitalize on short-term "opportunities."

Emphasis is placed on the construction of diversified portfolios that allow each client to sleep at night, regardless of market conditions. The turmoil experienced during 2000-2002, bears witness to the wisdom of owning various asset classes, market sectors and investment "styles." No one can consistently and accurately predict market moves and sector rotations.

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