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We seek to have clear communication between us and every client on the services that we are providing and the fees that you will pay for such services. Each time that we deduct our Wealth Management Program fees from your account, you will receive an invoice disclosing the amount of the fee and how it is calculated. We do not bill our fees in advance of providing services. We do not try to “lock you in” to our firm through surrender charges or deferred sales charges. You may terminate our services at any time. We do not impose any termination fees other than paying our agreed upon fees for services provided prior to termination.
We seek to avoid conflicts in how we are paid. We do not accept sales commissions of any sort. Fees paid to us by clients represent our only compensation. Our compensation does not depend on the investments that we use or recommend. The exchange-traded funds and mutual funds that we use for client portfolios tend to have among the lowest expense ratios in the industry.
We believe in our clients having direct access to our Chief Executive Officer. Lawrence Chin, CFP® personally manages all client relationships and client portfolios. If you call us, you will not speak to an assistant or a staff member. Lawrence strives to address promptly all client questions or issues.
Financial Planning Philosophy
We define financial success as “managing one’s limited financial resources in an efficient manner to further one’s personal goals and values.” In order to be financially successful, one must (1) have clear goals, (2) be well organized, (3) be emotionally disciplined, (4) be accountable to targets and metrics, and (5) execute consistently. Often, the key to success is executing simple actions consistently (e.g., saving x% of your income).
We can prepare financial projections to help us make decisions, but the future is not predictable. Focus on the things that we can control (e.g., managing cash flow, being tax efficient, keeping investment expenses low) and be ready to make course corrections in response to unexpected future events.
The performance of the investment portfolio as a whole is the key performance metric in meeting the portfolio’s investment objectives. The performance of individual securities or funds within the portfolio is not as important as the aggregate performance of the entire portfolio.
The asset allocation of the portfolio has more impact on long-term returns than the selection of particular securities or funds within the portfolio.
Company and issuer specific investment risks can be reduced significantly through portfolio diversification.
Picking individual securities or portfolio managers in an attempt to “beat the market” is highly unlikely to increase long-term investment returns on a risk adjusted basis when taking into consideration the related investment costs and income tax impacts to the investor. We favor passively managed investment funds, such as index funds.
Investment expenses and investment related income taxes are two factors that can be managed in order to enhance long-term after-tax investment returns. For client portfolios, we use investment funds with relatively low expenses and high tax efficiency. We practice tax efficient placement of investments in taxable vs. tax-deferred accounts. For clients in high income tax brackets, we consider the use of tax-exempt bond funds.