Category: Planning

What is a good advisor?

“A good advisor is both coach and quarterback, on-demand psychologist and personal friend, historian and futurist.

We are simultaneously the person in our client’s lives who gives them permission to enjoy the fruits of their labor, and the stern discipline they sometimes need when the fear or greed of the moment begins to take hold.

We have to remain detached and business-like when it comes to their money, but personally invested and emotionally supportive when it comes to the challenges and triumphs of their lives.

It’s a tricky thing, playing all these roles in our clients lives, but it’s this combination of skills, training and instinct that makes the value proposition of a true and capable fiduciary advisor incalculable – literally priceless.” – Josh Brown

Key Changes to the Oregon 529 Plan!

Oregon recently changed plan administrators on its direct-sold 529 college savings plan, and also enacted a series of meaningful changes to plan investments options that will impact how existing assets are invested. What you think you own may no longer be true. Read our synopsis of the important changes here:

NFT on Oregon 529 changes

Our Fees and Why They Matter

Investment costs matter, because high product fees, especially over extended horizons, have a massive, insidious impact on ultimate portfolio values. For our typical client, the negative impact of choosing high-fee advice and/or high-fee products would be in the tens of thousands of dollars.

Which is why we are uniquely transparent about our fees.

In a relationship with an adviser, clients pay for the advice and the implementation of that advice. Generally those total costs are around 2% or more.

Below is a chart of the all-in fees paid to financial advisors of all stripes, via Michael Kitces. The red square indicates where our fees lie on the spectrum.

But don’t just take our word for it. Via our reporting platform, Orion, here is our average fee rate, inclusive of investment instrument costs, benchmarked against investment advisers like us (read: not stockbrokers) using that platform. Again, our all-in costs are marked with the red square:

So, as you can see, the all-in average cost of working with North Forty Two & Co. is far, far lower than the universe at large, and substantially lower than the typical Registered Investment Adviser.

Leaving more money in our clients’ pockets. As we have for the past two decades.

If you are considering working with us, ask your current adviser to provide this information. You deserve to know it, but our industry fights to the death not to reveal it. To their benefit and, more importantly, to the detriment of their clients.

Incentives Matter

One of the main tenets in economics is that incentives matter.

Wholesalers give incentives to retailers to sell stuff. Principals give agents incentives to sell stuff. These incentives create behaviors, which are often undesirable.

Our business model is depicted on the left. We are principals who work directly with clients without agents, and we receive no compensation from third-parties in any way in constructing and managing client portfolios. This is in contrast to the more common business practice depicted on the right, which is rife with the potential for financial conflicts of interest (by nature, it is also a more expensive relationship).

Our only incentive is to provide top-caliber service in stewardship of our clients’ assets, so that they remain lifelong clients and refer us enthusiastically to their friends and colleagues.

Fee-Only versus Fee-Based Chart

Equifax data breach – actions to consider to protect your personal information

Below is a letter we shared late last week with clients in response to the massive data breach at Equifax.

Please note specific guidance may change due to more recent developments (for example, under pressure from attorneys general, Equifax will not prevent those inquiring about their status to waive their right to legal action, and they are no longer charging for a credit freeze).