How We Help You Reach Your Goals
Our singular focus is on helping you to achieve your goals. Warren Financial is a boutique private client services firm which provides numerous services for individuals, small/medium businesses, and executives. Most Services are provided at no charge in an environment focused around investment management. We form a T-E-A-M with you to ensure your assets are growing, protected, available, and structured for maximum return on investment with minimum risk.
- Joining our family means getting to know you
- Understanding your Goals and Needs
- Assessing Risk
- Customizing Solutions for You
- Implementing Your Plan
- Managing Your Plan
Joining Our Family means Getting to Know You
You are unique in every way. So how can a cookie cutter financial plan help you reach your goals? It can't. Our clients each have a customized, unique strategy that implements their personal plan.
We never sell any financial product for commission. We intend to remain unbiased in our financial advice and we don't believe that advisors who sell on commission can honestly be unbiased.
Many advisors deceive their sales prospects by telling them they only charge 1% of assets under management. However, they also get commissions on various products they sell to those same clients. Mutual funds that charge 5.75% sales load upfront. Funds that have back-end sales fees. REITs that are non-public and illiquid but provide the salesman with 8% commission. And worst of all, annuities that generate 10-15% sales commissions for the advisor and lock the client in for 10-12 years with back-end redemption charges. All products like these are not in the clients best interest – these sales are in the advisors best interest. Therefore, we have taken the high-road, the more difficult approach of fees which are fully disclosed up-front, but allow us to remain completely unbiased and firmly on the same team as our clients.
We promise to never sell any product on commission!
We want to get to know you, your interests, your goals, your dreams. When you join our family we start with you.
Understanding Your Goals and Needs
- You run a Family Office and are looking for the next great advisor with a unique perspective.
- You've been diligently saving for your retirement for years. Now it's getting close and you might like some help.
- You have investments with many advisors and many individual investments that you are managing - but this is a major time sink. So you are looking for a quarterback to run the plays, to oversee your investments. You are looking to graduate from being the quarterback yourself to playing the role of "owner", observing your investments from your luxury sky box and hoisting the superbowl trophy in the parade!
- You want to provide for your children or grandchildren's college.
- You've always been an active investor and you're just looking for some professional help
- Your hedge fund investment just blew up and you need help fast.
- You've always invested in real estate, but you're concerned the best days may be in the past.
- Your taxes are killing you.
These are just a few of the many reasons people seek out WFS. Our job is to understand your reason!
Usually, investors have many goals at the same time. Part of our job is to help you make sense of your financial life. We help you get organized. Many times this leads to creating several investment pools, each with a different strategy and goal in mind.
Think in terms of buckets or asset pools. Here are some common divisions that people like to use to guide their thinking and to segment their risk tolerance.
Then each asset bucket may have a different allocation of stocks, bonds, etc.
For example:
- Growth: mostly stocks in bull market
- Income: mostly bonds in declining interest rate environment
- Discretionary Spending: mostly cash, money markets and CDs
- Inflation Protection: mostly gold and hard commodities
- Heirs and Charity: mostly mutual funds via appreciated stock contributions
Assessing & Managing Risk
The reason we ask all our clients about their risk tolerance is that we want to make sure you are comfortable with the amount of fluctuation in your portfolio.
To determine your expected annual return, you need to know your risk tolerance. WFS breaks down the markets into 5 categories of risk and reward. Find your risk category in the chart below (pick A, B, C, D, or E).
In the above graph, there are five groups. Each group represents a sample portfolio, A through E. Each individual bar within a group represents one year of sample performance.
The above five portfolios are depicted showing their annual percentage return over five successive years. If all of your investments were invested under one of these strategies, which strategy would you prefer? A is very conservative. Portfolio E is maximum risk with potential maximum reward.
Our target growth for your portfolio is based on your choice of portfolio type from the chart. Note that it's perfectly OK to choose different risk tolerances for different people and/or different groupings of money. For example, retirement money might be a C+ whereas your grandchild's college fund might be a D+.
Below is a table indicating the approximate expected returns for our various risk portfolios A, B, C, D, E. Naturally, WFS will take steps to protect you in down years, and these numbers only serve as possibilities and examples, not guarantees.
How does choosing a risk tolerance affect your account management?
We always consider your risk tolerance when selecting assets for your portfolio. This is not a simple job. It doesn't mean simply that a B style portfolio would never have a single stock or mutual fund which might be volatile. Nor does it mean that a risky E style portfolio would never contain a conservative bond. When you select a particular style it means that we make efforts to manipulate the relative mix of individual investments to achieve your style and return objectives. The risk profile you pick applies to the overall portfolio, not to the individual investments within the portfolio.
So, if you increase your risk tolerance, the relative mix of individual investments in your portfolio may change toward more aggressive investments. This may cause greater fluctuations in your monthly statement account balances, but in the 5-10 year long run, you will probably make greater investment profits.
If you decrease your risk tolerance, the relative mix of individual investments in your portfolio may change toward more conservative investments. This may cause less fluctuations in your monthly statement account balances, but in the 5-10 year long run, you will probably make less investment profits.
Tactical Asset Allocation
Warren Financial does not manage risk by simply diversifying your assets across various asset types then sit back or occasionally rebalance.
We employ a strategy known as Tactical Asset Allocation. This is an active management strategy. The goal is to sell assets that have become expensive and shift asset toward areas that are cheaper and have better growth potential.
The classical example is to shift between bonds and stocks. Historically, the correlation between bonds and stocks is reasonably low. So, when stocks become expensive, we can shift assets away from stocks and into cheaper bonds. When bonds become expensive, we can shift assets away from bonds and into stocks.
However, there are many more asset classes than just stocks and bonds. Sometimes, commodities are cheap and look like they may appreciate in value. Sometimes, the US dollar is expensive and looks like it may fall relative to other world currencies. Sometimes gold looks cheap relative to the US dollar. Sometimes, oil gets too expensive.
Warren Financial manages risk by actively moving assets away from over-valued expensive assets classes and into under-appreciated less expensive assets classes.
For most investors, this means that we are NOT the advisor who tells you to just "sit tight and wait out the stock correction". We actively move assets out of the way, into safe-harbor during major market downturns.
Warren Financial is like Dudly Do-Right coming to save the damsel in distress who has been tied to the railroad track by the evil villain. WFS takes ACTION. We MOVE assets out of the way of the coming train wreck. This doesn't mean we trade every day. However, we carefully watch medium to longer term trends and work hard to stay away from train wrecks - so your portfolio doesn't get wrecked, like in 2008.
Customizing a Solution for You
We will sit down with you and work out a customized plan for your financial life. One that makes you comfortable. One that will help you reach your goals.
Naturally, we will give you a nice level of diversification as well. However, since we are managing the account in an on-going basis, we can starve underperforming sectors such as real estate and shift assets into over-performing sectors such as consumer staples, agriculture, energy, and energy services. When we feel that today's over-performing sectors are topping, we can shift assets away toward tomorrow's best sectors. We won't get overly concentrated, however, we also won't let assets waste away in poorly performing areas just to achieve diversification.
Yes, we can create and manage ANY strategy, no matter how complex. However, we never push customers into areas or strategies they are uncomfortable with. Our approach is to make sure you achieve your goals with a strategy that uniquely fits you.
Implementing Your Plan
Now, we roll up our sleeves and go to work. Once you authorize the paperwork, it's our job to get the ball rolling.
Rest assured, we've seen it all. We've helped hundreds of investors to get started on their financial plan.
There's no account that we can't straighten out. We'll help you turn things around and make sure your plan starts moving in the right direction, ... right away!
Managing Your Plan
This is where Warren Financial is different from 90% of advisors.
A commission based advisor will probably start you on the right track. However, once he or she implements the plan for you and collects the commission, there is no incentive to modify your plan as your goals change, or as market forces change.
The last bear market is a prime example of market forces requiring a change to your financial plan.
However, most advisors told their clients to just sit tight. And even though they saw the train rolling down the tracks directly at their client, they either didn't know what to do about it, or didn't care. And the train rolled right over those portfolios and wrecked them. Many portfolios lost 50% to 75% of their value.
Those portfolios are not just money. They represent dreams. Dreams of retirement. Dreams of going to college. Dreams of helping out an aging parent.
We don't sell on commission. We only charge our clients an annual fee based on the amount of assets we manage for them. So our incentive is to help YOUR portfolio grow, not to sit and watch it get run over by a train.
We manage our client's portfolios daily. Obviously, we don't trade daily. But we are always turning over rocks looking for the best ways for our customers to reach their goals.
We will zig and zag for our clients as market forces dictate and as your goals and needs change over the years.
We meet with our clients on a regular basis. Some like to sit down, face to face and review things each quarter year. Others each six months. Whatever the frequency, it's a good idea to make sure you are still on track. When was the last time you sat down with your financial advisor? Can't remember? That's likely because he sold you commission based products and in order to feed his family has moved on. He may not even remember you. I'm sure he helped you get started, but where has he been since?
Isn't it time you get a plan that reflects your personalized needs and goals?
Isn't it time you get a manager that cares and gets compensated based on how well your plan is working for you?
That's what we do. Let us get started working for you today.