Q: Do I need an advisor?
A: The honest answer: We don't know if you need an advisor, and if you do, Broadhurst may or may not be the right advisor for you. Determining whether we are a good fit takes place during a 60-to-90-minute Discovery Meeting. This discovery process enables us to limit our practice to 50 clients for whom we can provide substantial value.
We look forward to exploring your financial goals with you to determine whether we are the right firm to help you in achieving those goals. If not, we will direct you to someone who might be better suited to help you.
Q: What is a Discovery Meeting?
A: In a discovery meeting, we ask you a series of questions about your goals and values, key relationships, service needs and preferences, assets and liabilities, and interests to make sure that we completely understand what you would like to accomplish and how we might best serve you. We also gladly answer your questions. Answers to many common questions can be found in our Form ADV
Q: What happens after the Discovery Meeting?
A: We take the portfolio information that you've provided, as well as the answers to our questions regarding your goals, values and objectives, and develop unique recommendations for you. We then schedule a meeting in which we walk you through your plan step-by-step and share the investment strategies that our team of experts has recommended specifically for you. Your plan will be designed to maximize the probability of achieving your goals.
Q: Is there a cost for the Discovery Meeting?
A: There is no cost for the first or second meeting as we get to know each other. However, if you require our advice or very specific recommendations on topics of immediate concern, we may tell you that an advisory fee is required before those services are provided.
Q: What separates you from other financial advisors?
A: Broadhurst stands apart based on not only our experience and expertise but also as a fee-only fiduciary providing comprehensive wealth management. What's more, Broadhurst is among a select number of firms providing access to low-cost, highly regarded Dimensional Funds Advisors (DFA) funds. We only work with clients for whom we can make a substantial impact and limit our practice to 50 clients. Finally, NAPFA, CFP and CFA credentials are very unique, substantial designations and well regarded evidence of our committment to best practices.
Q: What is a fee-only financial advisor?
A: Fee-only advisors are registered investment advisors with a fiduciary responsibility to act in their clients' best interest. Additionally, they do not accept any compensation based on product sales. Fee-only advisors are generally seen as providing more comprehensive advice, and having fewer inherent conflicts of interest, than brokers.
Q: What does being a fiduciary mean?
A: In short, a fiduciary is a party who is sworn to act in the best interests of his or her clients. Fiduciaries must avoid or clearly disclose any conflict of interest and must place clients' goals ahead of even their own business goals. A doctor, lawyer and CPA are all examples of fiduciaries. Broadhurst Financial Advisors is a fiduciary. Most stockbrokers at the big-name firms are NOT fiduciaries and only abide by a much lesser"suitability" standard.
Q: How do you add value to my situation?
A: Our job is to help you make smart decisions with your money. We often find that we can add the most value by preventing clients from making costly mistakes. One of the best ways to avoid those mistakes is to have a long-term plan in place. In addition, we add value for clients by finding tax deductions, lowering your investment costs, using institutional assets that are superior to retail assets and helping you avoid commission-based products sold by brokers. We help clients to "right-size" their insurance costs (although we do not sell insurance), and we devise smart, tax-effective estate planning and gifting strategies.
Q: Are my assets insured?
A: Client assets are insured for fraud and theft up to $1 billion. However, asset values may fluctuate as the markets fluctuate; there is no guaranteed return or return of capital when one invests in securities such as mutual funds.
Q: What is your required investment minimum?
A: For clients needing comprehensive wealth management, including investment consulting and advanced planning, our minimum is $1 million of investable assets. For clients only needing investment management and do not need comprehensive wealth management, there is a $100,000 minimum through our fee-only partner Index Funds Advisors
Q: What fee do you charge?
A: We do not accept commissions from products we recommend.
Our annual wealth management average fee is 1%. Your actual fee depends upon assets under management. Our fee schedule starts at 1.25% and decreases to 0.5% as your asset levels increase. Fees are billed quarterly in advance and are refundable if you cease to be a client. Quarterly minimum fees are $2500.
For clients not needing the comprehensive financial planning aspects of wealth management, investment management only may be offered through our relationship with Index Funds Advisors
. At IFA, we help clients with at least $100,000 invest in a risk-appropriate, globally diversified, tax-efficient portfolio of low-cost DFA funds.
Q: What is your investment approach?
A: We believe in passive asset-class exposure, which is similar to index investing. We use low-cost, highly regarded institutional funds from DFA that are only available through select advisors.DFA funds have a strong performance record and are more tax efficient than retail index funds. We use DFA funds to build a risk-appropriate, globally diversified, tax-efficient portfolio for each client. We do not believe in stock picking, market timing, or active management. We strongly oppose and avoid expensive mutual funds and hedge funds.
Q: Will you pick stocks and bonds for me?
A: No, security selection such as picking stocks, is not a wise investment strategy. We help clients to invest in a risk-appropriate, globally diversified, tax-efficient portfolio of low-cost passive and index funds.
Q: How much input do clients get into how you manage their money?
A: As much as they like. Together, we evaluate your capacity for taking risk in a quantitative and qualitative fashion. Before investing the first penny of your money, we agree on an asset allocation and portfolio design. After your money is invested, we rebalance your portfolio as needed to bring it back in line with your target asset allocation.
Q: How do I transfer my assets to you firm from another advisor?
A: Assets are typically transferred from custodian to custodian directly. You accomplish this by simply opening a new account with our custodian Shareholders Service Group / Pershing and signing asset transfer forms that will move your assets. Cash assets can simply be deposited by check or wire transfer into your brokerage account.
Q: Where will my assets be held?
A: Broadhurst's primary custodian is Pershing LLC, a division of the Bank of New York/Mellon and the largest clearing firm in the United States. We are also able to custody assets through our fee-only partner at Charles Schwab Institutional, Fidelity Institutional, and TD Ameritrade Institutional.
Q: How often do you meet with clients?
A: Typically four times in the first year. In subsequent years, we may continue to meet quarterly or less frequently, as the client prefers. In some years, we meet with clients very frequently, as they are going through a major transition, such as retirement, marriage, divorce or death of a family member.