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- disciplinedIQ Foundation Principal 3 -
Advisor and Account Flexibility
The third foundation principal of disciplinedIQ refers to the advisor relationship and account structure that is flexible enough to provide for the first two foundation principals.
Regarding advisor flexibility, we recognize that our clients’ expectation of our role and responsibility in the management of their affairs is ever changing. While our clients do not expect us to know what will happen in the future, there is a greater desire and expectation from our clients to be more flexible in dealing with those risks that can be reasonably assessed, even if it might vary from traditional investment philosophy.
disciplinedIQ in some ways is a significant departure from traditional investment philosophy; however, in those same ways it is an alignment with the advice that investors have always expected (yet rarely received) from investment advisors. We are proud to say that we have the independence, ability, and the willingness to provide this level of management for our clients.
As a basic introduction to account flexibility, the disciplinedIQ philosophy is based on a fee-based asset management approach which avoids the use of sales commissions based on product sales. Instead, asset-based fees are charged, thus putting more weight on the advisor's ongoing management of the account and investment plan of the client. This "pay as you go" arrangement aligns client objectives and advisor objectives versus the client paying up front for services that they hope will be performed by the advisor in the future. This arrangement also provides for the flexible account allowing for a more dynamic portfolio as investment performance or economic conditions change.
The following are some additional benefits of flexible account fee-based management with Waypoint Wealth Management versus traditional commission-based management:
- Highly selective investment selection and monitoring criteria are used to determine needed portfolio adjustments. If an investment option no longer meets these selective criteria, it is replaced with a more suitable investment option without commission charges. As you can tell, this focuses on current performance, not just how an investment performed many years ago.
- Broader availability of investment options including institutional and no-load share class mutual funds and exchange-traded funds (ETFs).
- No pressure to buy or sell investments for commission purposes. The advisor can make recommendations based solely on what the advisor and client feel is most appropriate for the client and situation.
- No proprietary funds or a “recommended” list that the advisor's broker/dealer "encourages" the advisor to use.
- Needed investment manager changes are executed without hesitation. In commission-based accounts needed changes are often delayed or ignored to either avoid commission discussion or because there is no suitable replacement available within the investment company that the client is committed to.
- Investment advisors are held to higher standards by regulators, thus causing them to use more due diligence and care in the management of their clients’ investment plans.
- And most important, clients and advisors have the same goal - the achievement of the client's objectives.
At Waypoint Wealth Management we understand the fiduciary responsibility and corresponding complexities of fee-based arrangements. Similarly, we have the appropriate investment platforms available to us through LPL Financial, our broker/dealer, to appropriately manage the investment side of disciplinedIQ or any other fee-based arrangement our clients prefer. (Obviously, we can also support those clients who prefer traditional brokerage arrangements or where these arrangements are more appropriate due to the client's situation or objective.)
In summary, the combination of the three foundation principals of disciplinedIQ make this investment philosophy the sensible blend of disciplined investment due diligence, forward thinking macroeconomic analysis, and account flexibility. All of these combine in a concerted effort to achieve the client's investment goals.
For a better understanding of how this strategy can be implemented, please contact us today for an appointment. We feel you will find that your time spent exploring disciplinedIQ with us will be well worth your time.
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