Frequently Asked Questions

At Shorepine Wealth Management I take a “holistic” view on the relationship with my clients. This works in two distinct ways. First, by integrating your financial planning, your investment management and your ongoing advisory council I can fully support you on all things financial that you may come across. From mortgage and home buying advice to debt management to saving for college, once you become a client I will work with you on any questions, concerns or issues that arise. For example, we council our clients on their company 401k options even though we don’t specifically manage or are compensated for managing those assets.

Secondly, by integrating your entire wealth picture into one plan, we are better able to ensure your invetments fit within the confines of your risk tolerances and unique circumstances. For example, if you own income producing real estate outside of your investment portfolio I will adjust your holdings accordingly. That means each client at Shorepine Wealth Management has a portfolio that is unique to them.

There are two general standards of conduct that investment advisors (or advisers) work under in today’s marketplace. They are, the fiduciary standard and the suitability standard.

The Suitability Standard

Any “advisor” that works at a broker-dealer or brokerage house (these are the big name institutions in the industry you know well) is subject to the rules and regulations of FINRA, amongst other regulatory organizations. According to FINRA, broker-dealers (and the “advisors” that work for them) have to fulfill what is known as a suitability obligation. This is commonly defined as making recommendations that are consistent with the best interest of their customers. However, digging deeper, this standard actually only requires that the “advisor” must reasonably believe that their recommendations are suitable for the client in terms of their unique circumstances, financial needs and objectives. The “suitability advisor” is deemed loyal to (and serves) the broker-dealer they work for and not necessarily their clients. These advisors are usually paid commissions for their recommendations and thus, conflicts of interests are prevalent.

The Fiduciary Standard

Alternatively, Investment Advisers that are regulated by their state securities regulators or the SEC are bound by the Fiduciary Standard. This standard requires that the adviser put their client’s interests above their own, according to the Investment Advisers Act of 1940. The Act is very specific in its terms and stipulates that the adviser must act in a duty of loyalty and care TO THE CLIENT, not themselves or their firm.

It’s best explained with an example.

Let’s assume you are working with an investment advisor that is paid commissions, along with their ongoing advisory fee, and recommends that you buy one of two mutual funds that are very similar in terms of the type of investments they employ and their past performance. The only large difference between the two funds is the cost to you, the client.

Fund A is an “in-house” product for which the advisor will earn a large commission.

Fund B is an outside product for which the advisor will earn a much smaller commission.

Your advisor recommends that you buy Fund A. Both funds are pretty much the same but this advisor can legally place you in Fund A with zero repercussions even though Fund A will obviously cost you more to buy and own. Because the investment recommendation was deemed “suitable” for you by the advisor (the same person earning the larger commission!) nothing illegal has occurred. Most people never even realize when this has happened to them. Clearly, the advice in this case was in the advisor’s best interest, not the client’s. Using the suitability standard, the advisor can defend his or her recommendation.

On the other hand, the fee-only fiduciary advisor isn’t likely to recommend any investment unless it really is the very best choice for you. There’s no profit motivation in suggesting any specific investment vehicle (i.e.:fund) over another. The only motivation is to grow the client’s account in a manner that best suits their unique circumstances.

Isn’t that the way it should be?

One of the aspects about working with an independent Registered Investment Advisor like Shorepine Wealth Management is the fact that we never actually have custodial control over your money. When you begin a fiduciary relationship with me we will have you hire a third party custodian that holds your assets on your behalf. TD Ameritrade, Schwab and Fidelity are examples of some of the larger custodians in existence. You will enter a relationship with the custodian; they will hold your assets (stocks, bonds, cash, etc…) and Shorepine Wealth Management will have trading authority on your account through a limited power of attorney. I can see your assets, I can trade on your behalf in a discretionary manner and I can send money from your account to you (via the mail or your bank). However, I can never change your address of record or your linked banking information. You need to make those types of changes with the custodian directly. It’s safer and frankly, better for all.

Put another way, I NEVER actually touch your money.

If you are working with or looking to work with an advisor that wants to custody your assets themselves I would suggest you research more on this. Or call me! I’ll inform you for free to help protect you.

I like to say that our initial “minimum” is that a prospective client be humble, grateful, dedicated to their financial success and generally a nice person. (Everyone has bad days!)

We do have a minimum fee of $2500 a year, which equates to a little over $200,000.00 in investible assets at our current fee schedule. We can waive this under certain circumstances.

Fees for my service are calculated as a percentage of assets under management. The annual fee for my service starts at 1.2% of assets under management. Our fees decrease as the asset level increases.

We are a “fee-only” financial advisory firm. This means that we do not sell any financial products or receive any commissions, or back-end sales charges. The only compensation we receive is the fee stated above. This removes the conflicts of interest that exist in other wealth management models. My only incentive is to grow your account.

If you want to read more about some of the conflicts of interest that exist at the broker-dealer firms please read my blog post by clicking here.

Each client is different with differing needs, objectives and risk tolerances. So each account will vary by those factors. That being said, I employ a CORE Equity strategy (US large cap stocks) surrounded by low cost ETF’s for most of my clients. Clients with fewer assets will likely receive an ETF-only portfolio, to save on costs. All of our strategies employ an “opportunistic rebalancing” strategy and have a focus on reducing costs and taxes wherever possible. We also employ tax loss harvesting to help reduce taxes when we can. Honestly, there is so much to how we do this you should just call us at this point. You’ve come this far already!

We are a “fee-only” financial advisory firm. This means that we do not sell any financial products or receive any commissions, or back-end sales charges. The only compensation we receive is the fee stated above. This removes the conflicts of interest that exist in other wealth management models. My only incentive is to grow your account.

If you want to read more about some of the conflicts of interest that exist at the broker-dealer firms please read my blog post by clicking here.

Absolutely! I have clients in many different states. I am always happy to travel to your locale for meetings. As well, with technology today we can stay in touch and sign documents online easily.

After you sign my investment management agreement and become a client we will sign documents to establish your new accounts at the custodian and transfer the assets. Shorepine Wealth Management and your custodian will do all of the legwork to make this happen. All of your assets that move over will move over “in-kind”. This means that we will try to not sell any positions nor incur any tax consequences whilst the assets are transitioning to our management. Once the assets are received we will analyze your portfolio and work in consultation with you to transition the account to your unique target portfolio. We always try to incorporate current positions where appropriate and are likely to implement changes over time to help minimize any tax consequences to your portfolio.

I know! The two things that can sometimes be most detrimental to your portfolio results are taxes and costs. If I can do a good job of minimizing those, your portfolio will have a higher probability of success. That is why I am here.

The first step is to get in touch by emailing me or through my contact page. Of course you can always call me. We will have an initial consultation either on the phone or in my offices. There is no cost to this initial meeting.

Our goal will be to determine if working together makes sense for the both of us.

If the answer is yes we will likely meet again to discuss a course of action for your portfolio and any other outstanding financial issues you may have.

I look forward to meeting you!