NOTE: Unless otherwise indicated, this Q&A pertains to clients who hire us for wealth management services vs. those who hire us only for financial planning or consulting services.
Q: With what types of clients do you work?
A: We work with individuals, families, and institutions who seek professional wealth management and financial planning services. Our clients range from ordinary individuals and families to those with specific wealth management needs. For example, if a family is considering the sales of a business, we can help with the pre and post sale wealth management planning and portfolio management. Busy entrepreneurs and professionals who understand the benefits of having a financial plan and enlisting skilled professionals to manage their investment portfolios are another example of clients we help. Surviving spouses and recently divorced individuals who need help managing proceeds from estates or a divorce are also among the types of clients we serve. Finally, we can manage trusts created through estates and charitable foundations.
Q: Do you have a minimum account size?
A: We have a minimum annual fee of $2,500 per household, therefore our full-service investment management clients’ investable assets should be somewhere around $250,000. For special circumstances, we reserve the right to waive or lower our $2,500 minimum annual fee. Some clients may prefer to hire us on an hourly basis or for comprehensive financial planning services instead of hiring us for wealth management services.
Q: How do you work and who holds my assets?
A: We work through a Limited Power of Attorney (LPOA) that allows us to interact with an independent entity on your behalf to execute trades and manage your account. PNW Asset Management does not directly hold your securities or cash, and we highly recommend that you DO NOT permit any wealth manager to both manage and to custody (hold/safekeep) your assets. For your protection, your assets are custodied with Charles Schwab & Co., Inc. Schwab is a qualified custodian and a publicly traded financial services holding company headquartered in San Francisco, California. Schwab custodies hundreds of billions in assets for clients and advisers’ clients. Furthermore, Schwab provides you with separate, independent reporting of all balances and securities transactions.
Q: Will you customize a financial plan and portfolio exclusively for me?
A: Yes! PNW Asset Management provides most wealth management client with a custom financial plan. It’s called your Cashflow Fingerprint®. That custom plan becomes the basis of how your investment portfolio is managed. Most client portfolios are a product of our very personal, financial planning process. We create a mix of stock and bond asset class investments for your portfolio, and we rebalance your portfolio to make sure the allocations stay in balance with your financial plan. As your life situation changes, we revise your financial plan and may recommend adjustments to your portfolio so that your investment dollars are appropriately allocated.
Q: What is your investment philosophy and management style?
A: At the core of our philosophy is the belief that creating, growing, and keeping wealth is simple. Investors are rewarded for maintaining a consistent and disciplined long term strategy based on time-tested Asset Class wealth management techniques. We do not pick stocks or actively trade your portfolio or try to time the market.
Q: What types of investment vehicles do you normally use?
A: We believe all of our clients can benefit from low-cost, asset class mutual funds and Exchange Traded Funds (ETF) to achieve broad diversification and attractive risk-adjusted returns. Keeping investment costs low and transparency high is a great combination for investing success provided one has a long term horizon.
Q: How will you keep me involved in decisions affecting my portfolio and investment goals?
A: Our management system features consistent interaction with each client. As events transpire, we keep you fully apprised of the performance of your investment portfolio. We meet with you regularly to update your personal financial plan (your Cashflow Fingerprint®) and to make sure your plan is consistent with your financial objectives and risk profile. You receive quarterly reports detailing your portfolio holdings, asset allocation, and performance summary. We are available for discussions with your tax adviser. Quarterly statements are provided by the custodian of your account, along with transaction confirmations on purchases and sales. Of course, we are available before, during, and after business hours – by telephone and email – to discuss any questions or concerns you might have, and we’d love for you to stop by our office, 2211 Elliott Ave. Ste. 200, Seattle, WA 98121, during business hours as well.
Q: How will I have access to the money I’ll need from my account?
A: If you need stable monthly income, we can set up periodic distributions into your personal checking account. Checks can also be mailed or funds wired as needs arise. Information about your account is provided as a matter of course and in several ways. As a PNW Asset Management client, your account includes a Schwab custodian account, and Schwab will provide information concerning your account. Schwab provides account access through the Internet as well. This is an immediate and convenient way to keep fully apprised of the most current status of your account and to help you plan for tax reporting.
Q: How are you compensated for your services?
A: PNW Asset Management is an independent, fee-only investment management firm. In this capacity, we provide our clients a fee-only fiduciary relationship. Our compensation depends on the value of your assets. Our fees are based on account size, starting at a maximum of 1% per year (billed monthly) of the assets under management. We do NOT earn commissions on your transactions nor do we accept direct payments from brokers or any other vendors. We wish to help our clients, and we have no hidden agenda.
Q: What do you mean when you say, “Invest in Wealth?”
A: We believe it’s necessary for clients to invest some time and intellectual capital toward understanding elements that can help them reach and sustain financial independence. Having a grasp on what we do and why we do it significantly increases the chances for a favorable investing outcome.
Q: Do you get paid by the publishers of that book you link to in the footer?
A: Absolutely not. We believe The Investment Answer is an outstanding and quick read, but we do not benefit monetarily, in any way, from suggesting you read the book. The Investment Answer is a great way to quickly become familiar with asset class investing, and anyone who reads it will be better educated about passive versus active investment management practices.