- How long has TMG been in business?
- How is TMG different from other
financial advisors?
- What is a fee-only financial advisor?
- Will TMG hold my assets directly?
- Will I be required to move my assets to another custodian (such as Charles Schwab and Co.)?
- Why do you invest in mutual funds rather than stocks?
- How does TMG select mutual funds?
- How often do you review my portfolio?
- How often do I meet with TMG to discuss my financial situation?
- I prefer to manage my own investments. Can I engage TMG solely for other financial planning services?
- Will you consult me before making trades?
- I am comfortable investing in U.S. companies, but am less comfortable investing in international markets. Do you normally recommend international exposure?
- Why would I hire TMG when I can purchase mutual funds on my own?
- Do you work with our accountant?
- Is TMG accepting new clients? If so, what is your minimum?
- Do you accept clients who live outside the Washington DC metro area?
- Are references available?
- Can I select a TMG professional to work with?
- How do I know TMG is going to be around for me in the long term?
- How does TMG ensure privacy and confidentiality?
- How do I engage TMG’s
wealth management services?
- I would like to hire a financial planner but I don’t meet your minimums, can you refer me to someone?
Former Chairman Lynn
Hopewell founded the Monitor Group in 1981.
As fee-only financial advisors we are compensated by fees charged as a percentage of
invested assets. TMG provides all other financial planning services (including
retirement planning, estate planning and tax planning) at no additional
charge. This type of cost structure assures our dedication to preserving
assets and protecting your overall financial health, rather than focusing on
selling products. Our investment philosophy is based on Nobel Prize-winning
economic and finance theory. Our long standing, proven investment track
record is a result of sticking to those principles, even when short-term
market events prompt other investment advisors to abandon their beliefs.
Our objective is to ensure your long-term financial success. Nearly 200
satisfied clients can attest to this marked difference.
Fee-only financial
advisors are compensated only by their clients. By avoiding the conflicts of
interest, fee-only wealth management firms such as TMG stand out in the crowd of otherwise
conflicted financial professionals. A 2003 industry survey indicated less than
20 percent of advisory firms operate as fee-only financial advisors. Why? Probably
because over 80 percent of advisory firms could not survive without selling
financial products! Why else would a firm permit the inherent conflict between
giving objective advice and selling products to continue if they could do
otherwise?
No. TMG
is not a custodian. We direct the custodians who hold your assets. You must
authorize all actions we take in your portfolio. This could be in advance, such
as the authority to place trades within your account, or as a change is needed,
such as changing your IRA beneficiary. Our limited authority over your assets
extends to monitoring and managing your portfolio so you don’t have to. We
never have possession of your assets.
You may
be required to change custodians. After extensive research on the topic, at
this point we find Charles Schwab & Co has best served our clients. We continue
to review our relationship with Schwab. Should we find one or more other
custodians able to provide a better combination of service, convenience and
cost, we would use them.
We choose to buy
mutual funds for our clients for several key reasons:
-
For the same
level of total return, the mutual funds we select provide lower
volatility (or risk) than individual equities or bonds. This is a
critical component of long-term financial success.
-
There are no
sales charges on the mutual funds we select—commonly called
“no-load” funds.
-
The mutual
funds we select have very low internal management costs. Even
though these costs may seem small, they add up over time and will
eventually diminish returns.
-
The mutual funds we select exhibit specific
investment “behavior.” Thus, they react differently under various
market and economic conditions. Consistent non-correlated
investment behavior is critical to engineering an efficient
portfolio.
TMG has a disciplined screening process combining objective data with our
investment committee’s expertise. Our investment committee meets several times
during the year to review the results of our screening and determine whether to
retain, delete or add investments.
We prepare and deliver to you a formal written review and accompanying report of your portfolio twice a year. However, a
variety of events may also trigger an internal review, and possibly a
rebalancing, of your portfolio. They are:
-
Cash flows –
when you deposit or withdraw money, we will determine the best
course of action to most closely align your asset allocation with
the target while seeking to minimize transaction costs.
-
Portfolio
reviews – we take a look at your asset allocation before meeting
with you to assure it is properly balanced.
-
Change in client situation – if a life event
or change in objectives necessitates an alteration to your
investment design, we will implement the necessary changes.
We
usually meet with clients twice a year, either in person or via phone. All
meetings result in a detailed set of internal notes allowing us to better
serve you in the future. Your entire history is available to us
electronically and is reviewed prior to meeting with you.
Yes. We provide comprehensive financial planning for a fee ranging from $5,000
to $15,000. Interestingly, very few individuals have availed themselves of this
very limited service. This is because TMG is a comprehensive wealth management
firm. We provide a wide range of services, including comprehensive planning,
for one inclusive asset-based fee.
No, for
several very important reasons. First, as seasoned investment advisors, we have years of training and
professional expertise at implementing, monitoring and managing portfolios. We
do this day in and day out. With all due respect, you do not. There is very
little you could tell us about the how, what, when and why of trading using our
advanced systems.
Second, our investment philosophy and practices make use of the tenets of
modern portfolio theory. If we deviate from our investment criteria, we
stray from the efficiency inherent in a properly designed portfolio.
Finally, you hire us to monitor your assets so you don’t have to. Our
relationship with clients must include discretionary authority in your
portfolio, which eliminates the need for you to authorize the trades we
place, (click here to read our explanation of
discretionary
money management).
Some
investors may feel like they are “missing out on the fun” of trading
themselves. We consider trading, as one small part of an overall investment
plan, to be an enormous responsibility. Investing has a significant impact
on your long-term financial future. As such, we don’t consider it an
activity that should be conducted for “fun.” If you find you can’t part
with your trading hobby for personal reasons, we will encourage you to keep
a small account “for fun” while you leave the rest of your assets to be
managed by experts.
We use international investments in developed countries (known as the G-7
nations) because it reduces the volatility of your portfolio. This may seem
counterintuitive to someone who is concerned about international markets.
However, international market behavior is often not highly correlated to
domestic market behavior. The net result is a volatility/risk reduction for
your portfolio. We understand markets abroad can be volatile, which is why we
maintain a diversified holding of several international markets. We are also
careful to tailor your exposure according to your overall risk tolerance. If
you are a conservative investor, your portfolio design will have a smaller
international holding.
There are several reasons you should consider TMG:
-
You can
purchase mutual funds on your own, but without TMG’s continuous
monitoring and management, how will you know when to buy or sell?
-
Most of the
mutual funds we purchase for our clients are institutional class
funds that cannot be purchased by you, a retail investor. Your
trading and administrative costs will be considerably less if you
purchase them through us, sometimes less than half the retail cost.
-
TMG has a
detailed, ongoing screening process that helps us determine the best
mutual funds in each class. Because we monitor these funds closely
to make sure they continue to pass our screens, our clients are
assured they have the best funds from each asset class in their
portfolio. You could try to mimic a TMG portfolio on your own, but
the time required and research cost to do so would be prohibitive.
We will coordinate with your accountant to provide helpful reports as they
prepare your taxes. We will also consult with them on tax preparation matters
if there are issues unclear to you or us.
Yes, we are accepting new clients who have investable assets of more than $1
million.
Yes. We make attempts to visit them on occasion when we are traveling in their
area. Otherwise, we schedule regular teleconferences to review their finances.
All clients, and out-of-towners especially, are encouraged to sign up for our
online “Client Corner” which will allow them to receive reports online. This
also facilitates phone meetings so we can refer to the same materials, (click
here to visit our
Client Corner).
Yes, once
we have met with you for our “getting acquainted” meeting we can provide you
with a few client references.
We try to match our clients’ personalities with those of our professionals
during our first few meetings. If you are not comfortable with our assessment
you are welcome to make a request to work with a particular professional. Since
TMG works as a team on your portfolio, there will be several staff members
involved in each client’s account. Ultimately, your main point of contact can
be someone of your choosing, provided the professional you choose is qualified
to handle your account.
TMG’s team approach ensures more than one person is responsible for and to you. Several professionals have access to and know your client information. We keep a detailed database of every conversation, meeting, and correspondence we have had with our clients and these notes are circulated among the TMG professionals. This ensures if anything were to happen to one of our staff, the rest of the team would be able to service you with the same high standards of professionalism.
TMG has also invested a great deal of time into creating a long-term strategic plan. This includes growing the firm to a size that can sustain itself in the years to come. We call it our “100-year firm” approach because this plan ensures the longevity of TMG through whatever conditions we may face over the years.
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We recognize privacy is as high a priority as wealth preservation for many of
our clients. TMG has strict internal confidentiality policies, while we also
abide by the various fiduciary standards of our profession. We have implemented
a number of technological safeguards to ensure none of our clients’ data can be
compromised.
Once we have met with you, you simply sign our engagement agreement, which
begins our professional relationship. Either you or TMG can terminate this
relationship at any time.
TMG has several sources
that can help you. We may be able to refer you to a qualified firm.
Alternatively, TMG has created a public service website to provide help to
consumers who are looking for financial advisors:
www.FindAPlanner.org. There you will find a list of questions you should
ask prospective financial planners, along with explanations of the preferable answers to
these questions. We have also posted an important article that describes the
layout of the wealth management world to help you navigate your way as you
search for a planner.
www.FindAPlanner.org features links to the Financial Planning Association’s
interactive web engine called “Planner Search,” allowing you to find planners in
your area.
