For answers to some of our most frequently asked questions click on one of the links below. If your particular questions is not answered please feel free to send us a message or give us a call. We are happy to help!
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Yes! We do provide a free initial consultation. We call this the Retirement Inventory. This is your chance to rigorously examine your present investment and financial position. It will help you to clarify your goals and objectives and identify appropriate strategies to reach your goals. During this meeting you will find that one of your biggest problems is one of two things:
1- You don’t even know what your real problems are.
The first step in improving your portfolio and increasing your ability to create real wealth is to diagnose the true nature of your current position. This can only be done by asking the “right” questions. What are the right questions? Taken as a whole, they are the questions that few financial planning processes answer, and they lay at the very heart of building better investment solutions to reach your goals.
2- You don’t know what you don’t know.
Most of these questions will deal with issues you have never directly addressed or, worse yet, didn’t even know existed. Each question has been specifically developed to help you focus on the dangers and opportunities for growth and improvement in your present investment experience.
Our initial consultation will help you to begin to see what the real underlying problems are and quantify them so that you can begin to solve them.
Most investors do not know what their problems are or how much they could cost them. After this meeting, you will have achieved excellent insight into both areas. Just remember all growth starts with the truth. During this meeting we will be able to gather the necessary information to prepare for you 5 very important reports titled, The Portfolio MRI, The Cost Analysis, Getting Income Report, Holdings Report, and The Overlap Report.
The purpose of these reports is to help you know some very important information about your retirement assets such as:
- Your true total expenses charged each year on your portfolio and how to lower them.
- Your portfolio performance to determine if your account is doing better or worse than comparative benchmarks.
- The standard deviation or “risk” of your current mix and how to lower your risk.
- The overlap and style drift of your current stock holdings to help you learn what your current asset categories REALLY look like (what your diversification really is).
- The Getting Income Report shows you how much income you can pull from your current portfolio and compares that to what kind of income you could pull if you made any changes or improvements that may be identified during our analysis.
So, here’s how to start.
We are “fee-only,” that means we are not fee-based or commission-based.
A fee-only Registered Investment Advisor (RIA) means the RIA has a fiduciary obligation to their clients. That means they have to put their clients interests first above their own. This is important because someone who is fee-based or commission-based does not have that same fiduciary obligation. This also means the RIA is transparent. They don’t get any kick back from any company for using any particular investment. The only compensation we get is what we charge and there is nothing more than that.
Our fee is based on money under management. The higher your account value, the lower the rate. It appears directly on your statement and in some cases tax deductible, click here to learn more.
We’re happy to provide you an apple to apples comparison of the fees you’re paying (or the proposed fees you’ll pay another financial advisor) and our fees. Our fees are simple to understand and reasonable. Most importantly, we believe in FULL DISCLOSURE – so we never hide or bury our fees like other brokers or “financial advisors” who are commission-based or “fee-based” (not Fee-Only!).
IRS code Section 212 states that investment advisors and financial planning fees incurred may be deductible as miscellaneous itemized expenses to the extent that they exceed 2% of your adjusted gross income. Other miscellaneous itemized deductions which fall into the same category are fees paid for a safe deposit box, estate planning fees, tax preparation fees, attorney and legal fees, and more. So the short answer is fees paid for wealth advisory services may be deductible and we encourage our clients to ask their accountant or CPA about the deductibility of fees.
When it comes to investing there are both disclosed fees and undisclosed fees. Disclosed fees are those that are required by law to be reported. Undisclosed fees are those that are not required to be reported by law. To understand what these undisclosed fees are you must understand what active management it.
Active management is the attempt of either an individual or a money manager to try and out-perform the stock market rates of return by actively trading individual stocks and/or engaging in market timing – predicting when to be invested (in the market) or not be invested (out of the market.)
In order for active management to beat the market they must perform better than their comparative benchmark. For example a large cap mutual fund would be compared to the S&P 500 index. Because they are attempting to beat the index they are going to incur some additional fees in their attempt. And so they must beat their benchmark while including fees, taxes, trading costs, etc.
Active management creates an undisclosed fee to investors called transaction costs and bid/ask spreads. There have been many studies done to show investors what this active trading costs investors. On average this active trading costs investors an additional 1.44% per year. This in addition to the management expense ratio (MER). The MER typically includes management fees, 12b-1 fees, and other expenses deducted from assets or charged to all investors accounts (U.S. Securities and Exchange Commission 2000.) The average MER for mutual funds is 1.45% per year, which together with an average trading cost of 1.44%, renders a total average annual fund cost of 2.89% per year for the average active mutual fund.
Ken French of Dartmouth’s Tuck School of Business estimates that investors collectively spent $102 billion per year in trying to achieve above-market rates of return. Unfortunately this active trading does not produce better returns.
We do not use actively managed funds. To find out if you are using actively managed funds and what those funds may be costing you please click here.
1 Virginia Tech University and Boston College “Scale Effects in Mutual Fund Performance.” The role of Trading Cost” examined 1,706 U.S. stock funds from 1995 to 2005. Another study by Edelen, Evans, and Kadlec (2009), in a survey of 1,758 U.S. equity funds, found that trading costs were 144 bps.
2 Morningstar Principia dated 12/31/09 and DFA Return Software dated 12/31/2009
3 Barras, Laurent, Scailet, wermers, and Russ, “False Discoveries in Mutual Fund Performance: Measuring Luck in Estimated Alphas” (May 2008). Robert H. Smith School Research Paper No. RHS 06-043 Available at SSRN: http://ssm.com/abstract=869748
No, we cannot take your money!
Your portfolio will be custodied at Charles Schwab Institutional. Schwab has implemented safeguards to protect you and your financial assets. Only you have authorization to pull or transfer money out of your account. Any money leaving your account will only be sent directly to your address of record and in your name. They will only let you change your address with written consent. The institutional services team will verify your signature to the one they have on file. We cannot take possession of cash or securities in any form at any time.
Charles Schwab is a member of the Securities Investor Protection Corporation (SIPC), the assets you have custodied are insured by SIPC up to $500,000 for each separate account including up to $1,000,000 in cash.
Such insurance DOES NOT protect your investment principal from market fluctuation or volatility; however it does provide an amount of protection in the event of your custodian going out of business.
Schwab maintains physical, electronic, and procedural safeguards that comply with federal standards to guard your nonpublic personal information. To learn more about their security measures and the measures you need to take, please click the Privacy link on the Schwab websites.
Stonecreek Wealth Advisors, Inc. is a Utah Registered Investment Advisor firm. We are committed to safeguarding the confidential information of our clients because mutual trust is essential to the advisor-client relationship. Personal privacy is of our utmost importance to our clients. The following is our policy that describes how we treat your personal information. We welcome any comments or concerns.
Information We Collect From You
We collect non-public information from you, our client, to assist us in giving you appropriate investment advice. We collect non-public information about you from the following sources:
- Information we receive from you on customer information/suitability forms, custody firm applications, clearing firm documents, annuity applications, or other forms, such as your name, address, date, and location of birth, marital status, gender, social security number, medical information, beneficiary information, investment goals, etc.
- Information about your transactions with us or others such as investment amounts and types, deposit histories, tax information, accounting information, etc.
Third Parties With Whom We May Share Information
We do not disclose non-public information about our clients or former clients to anyone except as otherwise permitted by law. For example:
- We may provide non-public information that we collect to nonaffiliated persons or entities involved in the underwriting, processing and servicing of securities products and services requested by you either directly with Stonecreek Wealth Advisors, Inc. or as received on your behalf from our network of Investment Adviser Representatives. We will not provide this information to any other nonaffiliated third parties unless we have a written agreement that requires such third party to protect the confidentiality of this information.
- We may have to provide the above described non-public information that we collect to authorized persons or entities to comply with subpoena or summons by federal, state or local authorities and to respond to judicial process or regulatory authorities having jurisdiction over our Firm for examination, compliance or other purposes as required by law.
Confidentiality and Security of Your Non-Public Personal Information
We take all reasonable steps to assure the privacy of client information. For example:
- We restrict access to non-public personal information about you to only those persons who need to know about that information in the normal course of processing advisory related products and services for you.
- We maintain physical, electronic, and procedural safeguards that comply with state and federal standards to guard your non-public personal information.
- If we become aware that an item of personal information may be materially inaccurate, we will make a reasonable effort to re-verify its accuracy and correct any error as appropriate.
Google’s advertising requirements can be summed up by Google’s Advertising Principles. They are put in place to provide a positive experience for users. https://support.google.com/adwordspolicy/answer/1316548?hl=en
Users can set preferences for how Google advertises to you using the Google Ad Settings page. Alternatively, you can opt out by visiting the Network Advertising initiative opt out page or permanently using the Google Analytics Opt Out Browser add on.
When it comes to the collection of personal information from children under 13, the Children’s Online Privacy Protection Act (COPPA) puts parents in control. The Federal Trade Commission, the nation’s consumer protection agency, enforces the COPPA Rule, which spells out what operators of websites and online services must do to protect children’s privacy and safety online.
The Fair Information Practices Principles form the backbone of privacy law in the United States and the concepts they include have played a significant role in the development of data protection laws around the globe. Understanding the Fair Information Practice Principles and how they should be implemented is critical to comply with the various privacy laws that protect personal information.
The CAN-SPAM Act is a law that sets the rules for commercial email, establishes requirements for commercial messages, gives recipients the right to have emails stopped from being sent to them, and spells out tough penalties for violations.
If at any time you would like to unsubscribe from receiving future emails, you can email us at
Draper, UT 84020
Do you guarantee returns?
No. We absolutely do not guarantee returns whatsoever. Rather we put together solid and focused financial and retirement plans for our clients designed to help them achieve their goals. We cannot predict the future nor guarantee returns in any form.
Do you have a customer satisfaction policy:
Yes! Since we are fee-only there are never any commissions paid. Our clients are just as valuable the second year as they are the first year. Our clients are free to move their accounts at any time without penalty. We have a six point service commitment.
1. Our clients are the most important people in our business, whether they are visiting in person, by mail, or by phone. They will receive a timely response to all inquiries or contacts by their advisor, not an assistant who does not know you and your situation.
2- We will provide regular coaching with you. This allows us to keep you current and continually learning.
3- Our clients are not an interruption of our work…they are the purpose of it. We are not doing them a favor handling their inquiries….they are doing us a favor by giving us an opportunity to earn their business.
4- We hold in the strictest confidence all business and personal information pertaining to your affairs.
5- If you are displeased with any element of our service, we encourage the courtesy of notification so that we may do everything possible to resolve the issue and improve service in the future.
6- If all of your expectations are met and you are satisfied with our service, we hope you will introduce us to others whom you feel could benefit from our services (i.e. friends, family, co-workers, etc.)
There have been different estimates for what the fees are.
The fees are subtracted right out of the savings in your account, and there is no requirement to notify you about them: when you get your quarterly 401(k) statement in the mail, you will find no line-item expense labeled “fees.” The bulk of these fees are for investment services. In chapter 13 of Mark Lund’s book, The Effective Investor, he talks more about this topic.
If you want to learn more about how fees might be affecting your 401(k) watch the above video on YouTube.com from Bloomberg TV.
Fees can determine whether your nest egg looks like an ostrich’s or a sparrow’s. Here are two examples.
First example: Over a 20- or 30-year period, these fees can really affect the compounding of your assets. The Department of Labor offers an example: if you have $25,000 right now in your 401(k) and just let it sit there, and your investment returns average 7% across the next 35 years with 0.5% annual fees, you will end up with $227,000 in 2042. But if those annual fees are set at 1.5%, you will end up with only $163,000 in 2042. A 1% difference in fees and expenses would leave you with 28% less money for retirement. Wow. Please note that the 7% return used in this example is for illustrative purposes only and is not indicative of any particular investment; your results will vary.
Is it possible for any investor or money manager to consistently forecast the economy or the market? Those who attempt to forecast the economy in attempts to do better at investing are referred to as active investors or active money managers.
The greatest challenge for any active investor or money manager is the extreme difficulty in forecasting the economy or accurately predicting the market’s direction in advance. This makes it hard for them to anticipate bear and bull markets. In fact, The New York Times said that Wall Street has failed to predict a single recession in the last 30 years.
Looking back on the forecasts made for the markets at the beginning of 2008, many of them turned out to be quite optimistic. At the end of 2007, News Day gathered market predictions from “eight major Wall Street Securities firms” and found an average price target for the S&P 500 by year-end 2008 of 1,653, representing a 12% increase over 2007. And at the beginning of 2008, USA Today similarly surveyed nine Wall Street investment strategists. They were a little less optimistic, expecting an average price target for the S&P 500 for the year of 1606, only an 8.6% increase. Of course, we now know that the S&P 500 Index declined by 37% in 2008.
If Wall Street experts can’t even predict recessions or the direction of the market, it is questionable how active managers can successfully pick individual stocks, in bear markets or bull markets, especially since a stock’s performance is often very sensitive to economic and market conditions.
Standard and Poor’s has been measuring the performance of active managers against their index counterparts for several years now. Their May 2009 Indices Versus Active Funds Study specifically focuses on the bear market of 2008 and concludes that “the belief that bear markets favor active management is a myth.”