FREQUENTLY ASKED QUESTIONS
KATHERINE L. BROWN, FINANCIAL ADVISOR
"The stakes are so high in investing that you should consider fee-only planners. They'll give you a fixed price up front for their services, regardless of the product they recommend. You won't have to worry about conflict of interest."
- Clark Howard
What is a fiduciary and why should I consider working with one?
A fiduciary is someone who must put their clients' interests above their own and has a legal responsibility to always act in the best interest of their clients before themselves. Fee only investment advisors do not accept commissions on sales of products, which clears the lines of upholding a fiduciary standard. As a result there are very few conflicts of interest and advice tends to be more comprehensive.
How do I know you are in good standing with the community?
Katherine is a member of Peninsula Woman's Network, Junior League of Hampton Roads, a registered member of the National Association of Personal Financial Advisors (NAPFA), a member of the Society of Certified Senior Advisors, and a Lifetime Member of the Stanford University Alumni Association. She has also been five star recommended Advisor through the Paladin Registry. Potential clients are welcome to contact any of these organizations or chapter members for current ethical standing.
Do you meet in the evenings or weekends?
We meet clients for appointments only during normal business hours. Appointment times are M-F 7:00 a.m.- 2:00 p.m. by appointment.
How much on average does it cost to work with your firm?
All fees are outlined in the ADV Part II disclosure. The fees are based on which service or services you feel that you need.
Financial Planning is generally a fixed fee that is charged to have the firm work with you though a constantly evolving financial plan. The rate is calculated based on a combination of hours anticipated and the amount of assets involved. Annual fixed retainer rates are generally a set dollar amount and usually average between $3,000 and $15,000 per year, available in quarterly or monthly payments, depending on the complexity of the planning and time needed. The rate is generally calculated based on the client's liquid net worth or amount or investable assets. This usually covers having a written Financial Plan, the option of housing your account(s) with the firm, and having your Financial Advisor available throughout the entire year.
Investment Management costs a maximum of 1% per year with a $3,000 per year minimum fee. This may be lower than 1% depending on the amount of assets that you decide to put under professional management.
Hourly Service is given at a rate of $250 per hour for individuals who do not wish to or need to engage in either of two contracts listed above and do not need a long term ongoing advisor relationship. Financial planning and investment advice done by the hour is calculated based on the complexity and time needed to complete a written plan and/or give advice during meetings. Families and individuals are clients until the completion of the visit(s) or until a project is successfully concluded.
What geographical area do you serve?
The firm is licensed only in the state of Virginia. All initial consultations in Hampton Roads must be made at the office in Newport News, VA. Clients who live or move outside of Virginia are eligible on a case by case basis through the di-minimus rule if they agree to correspondence through technological communication.
Is the initial consultation free?
The initial consultation can be free upon request if the client wants a general idea of how we can help them & how we work.
How much time do you have for your existing clients?
The firm is committed to keeping our client load small and will never take on more clients than service, appointment times, and/or calls will allow. Investment Advisory and Financial Planning clients have unlimited access to the firm by phone, email or appointment. Hourly engagements end when you leave the office or upon completion of the project at which point "client" status is over.
Do you help people with IRAs or lump sum rollovers?
Yes. The firm can open an IRA for a client through its custodian or through a fund company of the client's choosing. It may be a ROTH IRA, SEP IRA, rollover IRA, contributory Traditional IRA, or SIMPLE IRA. The investments that you receive from a company when you terminate employment can be put into a Rollover IRA if the expenses and interests of the clients warrant a change. The Department of Labor has recently passed legislation to make sure that consumers are not moving from low cost qualified plans at employers to higher cost arrangements without adequate justification.
What is a no-load fund?
A no-load fund is a mutual fund or insurance product that does not have a sales charge associated with it. A loaded fund typically has an "A" "B" or "C" associated with the fund name. The sales charge may be upfront or deferred. Some fees may be as high as 5% per purchase. A no-load fund has 0% for the sales charge and typically has lower fund expenses as well. Often this is expressed as an "F" share or no letter listed after it at all. See your fund prospectus for more details.
Do you help people with Real Estate Investment property?
The firm will help you build a firm foundation for any investment in real estate you may already own or wish to purchase in the future. It does not sell real estate, but will work diligently with a team of realtors, loan agents, attorneys, and tax advisors to help bring a sound plan and different options together to include with your Comprehensive Financial Plan.
Do you help with college savings plans?
Yes. We can help you estimate college costs in the future, choose between many different options, and manage any investments for college. We currently have a special program dedicated to assessing financial aid estimates and tax savings strategies when applying to college. An investment plan may include a 529 plan, a Virginia 529 plan, tax-free muni mutual funds, college savings plans, an educational IRA, or other type of account. The Virginia CollegeAmerica 529 plan is through American Funds and through the state with the inVest plan. Many people do not know there is no-load flexible investment option available through American Funds through the 529-F share or through the state's inVest program.
If I am in the military can you still help me with retirement planning?
Many of our clients are military personnel. We help plan for retirement by using pension calculations, household expenses, cost of living increases, spousal benefits, and current investment savings to paint a picture of and estimate what needs to be done to plan for retirement.
What strategy do you use for investment management?
The investment management strategy is outlined in the ADV Part II under "disclosures". We use a fundamental approach with detailed asset allocation as opposed to "timing" the market.
Will you try to sell me mutual funds or life insurance?
No. The firm is a fee-only firm, which means that it is committed to not selling any products that would generate a commission. If your comprehensive plan recommends that you purchase insurance, loaded annuities, or any other commission generating product, we will work with any agent or company that you choose.
Can you help me with annuities or variable universal life insurance?
Yes. We will work with your current agent if you have one, or help you find a no-load or low cost insurance product on your own. Many people do not realize that there are annuities and life insurance products available that do not have time constraints on their money. If you need the investments in these products professionally managed on an ongoing basis, or just need help choosing one, we can help.
Can you come to my house?
We do not travel to homes unless the client is elderly or disabled.