FAQ

QUESTIONS & ANSWERS

Here are some frequently asked questions that may help you determine if our services meet your needs.

What is trueNorth Financial Services, LLC?
We are a Fee-Only financial planning and investment management firm. trueNorth is a registered investment advisor with the Securities Division of the Washington State Department of Financial Institutions.

What is Fee-Only financial planning?
Fee-only planning means the fees we receive for financial planning come directly from our clients. We do not sell any insurance or investment products and do not receive any commissions or accept any referral fees. With respect to you the client, the Fee-Only financial advisor wears a single hat, that of the trusted advisor without the motivation or incentive of selling any other products.

What other forms of compensation are there in the financial planning profession?
The primary alternatives to Fee-Only compensation are commission based compensation and 12b-1 fee compensation. In both of these models, you will be sold investment products for which you will pay some combination of upfront or back-end sales charges and ongoing fees. In both of these models the “advisor” is paid by either the investment company or the insurance company that offers the products you buy. With respect to you the client, commissioned and 12b-1 fee advisors wear two hats, that of advisor and a product sales representative.

Why should I prefer Fee-Only financial planning over the alternatives?
There can be an inherent conflict-of-interest in the commission and 12b-1 fee compensation models that is not present in the Fee-Only model. Specifically, in the commission and 12b-1 fee models the investment advisor stands to gain monetarily if you follow his or her advice. On the other hand, the Fee-Only model fosters objectivity on the part of the advisor because he or she will have no financial incentive to recommend an investment to you except a desire to counsel you wisely.

What does it mean to be a CFP® professional?
A CERTIFIED FINANCIAL PLANNER™ professional is someone who has demonstrated the commitment and obtained the experience to use the CFP® mark. A CFP® certificant has had to demonstrate academic coverage of more than 100 integrated financial planning topics, passed rigorous examination requirements, satisfied work experience requirements, and agreed to the CFP Board of Standard’s Code of Ethics. In addition, a CFP® certificant is required to obtain a minimum of 30 hours of continuing education every 2 years.

What is a Registered Investment Advisor?
An investment advisor is a fiduciary that puts the client’s interest first and deals fairly and honestly with them.
A Registered Investment Advisor is a financial planning firm that has registered with either the state or the SEC. Firms who do not manage or have discretionary authority over client’s funds in excess of $25,000,000 are not subject to SEC registration and are required to register with the appropriate agency responsible in the individual states in which they do business.
Washington State law (RCW 21.20.040) requires any person engaged in the business of Financial Planning to register as an Investment Advisor.

What is a financial plan?
A financial plan is an in-depth review of your financial situation that takes into account your personal goals and objectives. It examines your current status, income, spending patterns and needs, risk management needs, retirement hopes, estate planning and family situation. These are then translated into strategies and tactics with recommendations that should assist you to achieve your goals and objectives.

What are some of the benefits of undertaking a financial planning process?
• Develop an understanding your current financial situation and providing a framework for making financial decisions.
• Assistance in making adjustments to income and expenses necessary to meet your personal objectives.
• Develop an understanding of what size of nest egg is required to meet your retirement objectives.
• Review of your investment portfolio and recommended adjustments.
• Determine how to plan for major expenses like college funding.
• Review of potential risk exposures and insurance coverage needs.
• Recommendations as to the need for new or revised estate documents and strategies for improving distribution of an estate.

How much money do I need to benefit from the financial planning process?
There is no minimum or maximum level at which financial planning would not provide benefits. We do not require that you have a specified minimum net worth or place assets under our management before we will work with you. We only require that you commit to a fee that reflects the amount of time it will take us to understand your personal situation thoroughly enough to give you objective and appropriate advice.

How much does a financial plan cost?
See the Section titled Our Fee Structure on this website.

Do you offer investment management?
Yes, trueNorth Financial Services, LLC is a registered investment advisor. We supervise and manage client portfolios consisting of mutual funds, stocks, bonds, cash, and other financial products. We work with each client to develop an investment strategy that gives him or her the best chance to achieve their specific goals.

What are the benefits of investment management?
• Professional asset management.
• Risk assessment and investment time horizon analysis.
• Objective investment selection without sales commission bias.
• Ongoing investment supervision.
• Annual rebalancing of managed assets.
• Annual performance reporting.
• Distribution planning.
• Capital gains and loss reports provided to accountants.

What is the most important element of portfolio construction?
Asset allocation is key to successful portfolio construction—even more important than fund selection. By constructing a diversified portfolio, one in which not all the assets rise and fall simultaneously, we can reduce the roller coaster effect that has become so commonplace with many portfolios. Our approach to investing is simple: we construct asset allocation targets that are specific to our clients risk tolerances and investment time horizons; we utilize no-load mutual funds with reasonable expense ratios, stocks, bonds, REITs, and other investment vehicles as appropriate; and we invest for the long-term.

What should I look for in choosing the right financial planner for me?
Choosing the right financial planner is one of the most important decisions you will make in your financial life. That being said, we believe there are a few simple filters you can apply to your selection process to help you filter out unqualified sales representatives and put you in touch with competent, ethical, professionals who are willing to put your interests first.

First, start by finding a CERTIFIED FINANCIAL PLANNER™ professional, a CFP®. Certified professionals have to meet rigorous testing and work experience requirements, as well as ongoing continuing educational and ethics requirements. This will give you confidence that when you are working with a CFP® certificant, you are working with an experienced, ethical professional.

Second, no matter what type of financial planner you choose to work with, it is important to understand exactly how they are compensated. We believe that the best approach is to work with “Fee-Only” financial planners. Fee-Only planners charge for their services on either a retainer basis or by an hourly fee. They do NOT accept any commissions or referral fees. This approach helps maintain a planner’s objectivity when it comes to analyzing and recommending solutions for their clients.

Third, find a planner with whom you can communicate easily and one you feel you can trust. Most financial planners offer a complimentary initial meeting. Use this meeting to discuss what you are looking for, to understand the planner’s services and approach to planning, and finally to evaluate how well you believe you will be able to communicate with that planner.

Hopefully, by utilizing this simple 3 step filtering process, you can find a qualified financial planner, who is willing to put your best interests first, is someone with good communication skills, and is someone you can trust.