How do I select a financial advisor?

Please visit the guide to selecting a financial advisor  under the Resources tab on our website for a list of tough questions to ask a potential financial advisor to determine if he or she would be a good fit to work with.

Can you describe Barnstone Advisors Financial Planning Process?

We follow a 5 step financial planning process that starts with a discovery meeting where we learn about your specific situation and identify your goals and objectives for your successful growth and allocation of your resources. Next, we develop an asset allocation plan that is tailored toward meeting these goals. We then formulate a financial plan and/or Investment Policy Statement (IPS), which will serve as the blueprint for our process together. Finally, we implement the policy and build your individualized portfolio and will continue to monitor and supervise your situation and adjust as needed.

Who can benefit most from your services?

Our services and our client relationship management process are targeted towards those individuals who recognize the value of taking a holistic approach towards the management of their wealth. Investment performance is but one “leg of the stool” along with proper risk management, tax planning, estate management and careful considerations of many uses that impact our lives and our finances.

What is your fee structure?

Barnstone charges a fee based on assets under management. We may, at our discretion, credit a portion of the ongoing asset-based fee if the client is charged an upfront financial planning fee and remains a client. Fees are standard, in line with the current fee schedule, but are negotiable, and therefore, may be changed depending on the characteristics of the case. These characteristics include, but are not limited to: the type of client account, the complexity of the case, the amount of initial and ongoing service which may be required, and the probability of future additional contributions.

Why is “fee-only” compensation so important?

It is our belief that a financial advisor who has a financial stake in the course of action that he/she recommends to a client faces an inherent conflict of interest and cannot be considered objective and unbiased. Barnstone Advisors is not a seller of any financial products. We receive no referral fees from third parties, no upfront, back-end, or 12b-1 (mutual fund marketing) fees, no insurance or annuity commissions, no award trips, or any other material or significant incentives. The only compensation we receive comes directly from clients for the services we provide.

What is the Fiduciary Oath?

The advisor shall exercise his/her best efforts to act in good faith and in the best interests of the client. The advisor shall provide written disclosure to the client prior to the engagement of the advisor, and thereafter throughout the term of the engagement, of any conflicts of interest, which will or reasonably may compromise the impartiality or independence of the advisor. The advisor, or any part in which the advisor has a financial interest, does not receive any compensation or other remuneration that is contingent on any client’s purchase or sale of a financial product. The advisor does not receive a fee or other compensation from another party based on the referral of a client or the client’s business.

How do you select investments for a client?

Before recommending any investment for a client, we consider the current economic conditions, the outlook for the specific asset class, the total expenses, and the fit for the individual client given his or her objectives and tolerance for risk. As fiduciaries for our clients, we seek to obtain the most appropriate investment vehicles to meet your objectives.

How do you price your financial planning services?

The fees for financial planning services are based on the actual time involved in researching and analyzing your current situation and providing specific recommendations and implementation assistance, if needed. A financial plan’s cost will vary from client to client based on the specific needs and complexity of the situation.

What type of investments do you use?

We primarily use no-load mutual funds, some individual stocks, bonds, Exchange Traded Funds (ETFs) and various alternatives that are appropriate with a client’s objectives, risk tolerance and time horizon.

How often do you review my portfolio?

Your portfolio is reviewed at least quarterly to make sure it is in line with the designed allocation. We will also review your portfolio when you deposit or withdraw cash, if we deem an allocation change necessary, or if an investment in your portfolio no longer meets our criteria.

How will I know if I’m on track to reach my goals?

As your advisor, we are here to help you accomplish your goals. We provide quarterly reports and planning updates that are designed to show you where you stand on the road to meeting your goals. We also meeting with each client at least annually to review your progress and discuss your objectives moving forward.

How do I get started with Barnstone?

Please contact our office and we send you some initial interview questions to get ourselves better acquainted with your specific situation and how we can help.

Tough Questions To Ask

What is your educational background?

What are your financial planning credentials/designations and affiliations?

How long have you been offering financial planning services?

Do you have clients who might be willing to speak with me about your services?

Will you provide me with references from other professionals?

Have you ever been cited by a professional or regulatory governing body for disciplinary reasons?

Describe your financial planning work experience or attach your resume.

How many clients do you work with?

Are you currently engaged in any other business, either as a sole proprietor, partner, officer, employee, trustee, agent or otherwise?

Will you or an associate of yours work with me?

Will you sign the Fiduciary Oath below?

Do you have a business continuity plan?

How is your firm compensated and how is your compensation calculated?

If the commissions exceed the fee, is the balance credited to me?

Do you have an agreement describing your compensation and services that will be provided in advance of the engagement?

Do you have a minimum fee?

If you earn commissions, approximately what percentage of your firm’s commission income comes from?

Does any member of your firm act as a general partner, participate in, or receive compensation from investments you may recommend to me?

Do you receive referral fees from attorneys, accountants, insurance professionals, mortgage brokers, or others?

Do you receive on-going income from any of the mutual funds that you recommend in the form of “12(b)1” fees, “trailing” commissions, or other continuing payouts?

Are there financial incentives for you to recommend certain financial products?

Do you offer advice on: (check all that apply)

  • Goal setting
  • Cash management & budgeting
  • Tax planning
  • Investment review & planning
  • Estate planning
  • Insurance needs in the area of life, disability, long-term care, health and property/casualty
  • Education funding
  • Retirement planning
  • Other

Do you provide a comprehensive written analysis of my financial situation and recommendations?

Does your financial planning service include recommendations for specific investments or investment products?

Do you offer assistance with implementation with the plan?

Do you offer continuous, on-going advice regarding my financial affairs, including advice on non-investment related financial issues?

Do you take custody of, or have access to my assets?

If you were to provide me on-going investment advisory services, do you require “discretionary” trading authority over my investment accounts?

What regulatory body are you (or your firm) registered with?

How We Differ from Registered Representatives

Some think Registered Representatives are similar to RIAs, but:

  • They are usually compensated by commissions on product transactions.
  • Typically not held to a fiduciary standard when making a recommendation, but rather held to a “suitability standard”.
  • Suitability standards say they can recommend certain securities or investments if they believe they are suitable for a particular investor – but they are not required to put your best interest first.

So, which option is right for you?

Some questions you should ask yourself:

  • What am I looking for – assistance with buying/selling individual securities, investment advice, or both?
  • How do I want to pay my financial professional? Fees? Commissions?
  • Do I want to take a longer-term, holistic approach to the management of my investments or make it more transaction oriented?
  • How important is it that my financial professional have a fiduciary responsibility to put my interests first?