JULY 2024 - What Do I Get?

The tale of two trips: My husband and I have recently been on two quick trips—one to Florida with my daughter’s family and one to Jamaica for a mission trip. We flew both times. The contrast between the two flights was noteworthy!  The first budget airline allowed only a ‘personal item’ (which is an undersized carry-on bag) while the other airline offered 2 checked bags for free. (We packed those free bags with goodies for the mission staff!) Snacks varied as well and seating preference also improved with the 2nd airline.

“What’s included in the price?” is a common and necessary question these days. From booking an airplane ticket to buying a car or even going to a buffet, it is important to know what you are getting for the price. Will I have to pay extra for luggage or will I get 2 bags free?

At Faith Investment Services we think it is important to help you understand what you are going to get when you have accounts with us. Most clients (understandably) want to know how we get paid and what it is going to cost to work with us. Rarely though do clients ask what they are getting as a result. I’d like to share with you some details about both—the cost and the benefits.

The cost to work with us as your financial adviser:

• Because we customize our recommendations based on what each person or household needs, it is hard to say in the first meeting how much it will cost to work with us. Some investment strategies have a “pay as you go” model—or fee-based as it is called. Other investments might pay us a commission (which may or may not come out of the investment funds.) Other times, there is no cost to an investment and no cost is passed on the client. We have some clients who have various accounts and have different cost structures for each. We are not reluctant to share those details with a client, but we may not know at the outset what is best for them and thus what we are going to recommend.
• When a recommendation is made, we will transparently discuss with you what it will cost.
• No one (unless having their taxes prepared by us) ever writes a check directly to Faith Investment Services. Our consultations and follow up meetings are never billed to a client. It is always “free” to talk to us!
• We do ask folks to complete a basic financial questionnaire prior to meeting with us the first time. This is the “ticket” to having an appointment with us and it accomplishes a couple of things: 1) it helps us know you are ready for a conversation and 2) it allows us to get a big-picture look at your situation. Then, when you come in, we can talk to you not sit and gather data.

Why would we offer commission products to clients? TV commercials suggest that ‘fee only’ advisers obviously work in a client’s best interest because they get paid more when the client’s accounts grow. While the relationship between account growing and fee growing is accurate, it doesn’t paint the whole picture. What if the client desires guaranteed income that a fee-based account can’t offer? What if the client is more conservative and doesn’t want to be in a fee-based market account? What if there is a more  appropriate investment product for a client’s needs?

Look inside for the benefits of working with our firm—you’ll like the difference!

Read this article—even if you are already our client!  We want you to know the depth of our relationship with you. If you haven’t started a conversation with us yet, here is what you can expect if you choose to work with us:

1) A dedicated, accessible adviser: We are local to many of our clients. If not local, we seek to be accessible in other ways—video call, phone, text, email. We visit out of town clients when we are able as we travel throughout the country. We have also intentionally hired staff who are able to answer questions, help with details, and keep you connected.

2) A real person answering the phone: You will not have to “press 1” with our firm. During office hours, we have a live person to answer and help you with your requests.

3) A financial plan that continually adapts to your life:  We want to know about your life events. We can help you adjust and respond to changing needs. We care about what you are going through and dealing with the “numbers” shouldn’t add more burden when life is tough.

4)  A wholistic plan: We help you steward your money in a variety of ways. Whether it is tax planning, income planning for retirement, estate planning,  disability or long-term care planning, charitable giving solutions, college planning, etc.—we will consider these details and present you with options.  We will find out what you want to have happen and help you answer the questions you don’t currently know to ask.

5) Regular reviews and open contact: We are committed to communicating with  our clients regularly. We send this newsletter and emails and other pieces of information we think would be helpful to you. We send annual review cards to encourage you to schedule a video or in-person visit. We send birthday cards! We are happy to meet with you as often as needed, by appointment. We pray for you when we hear of needs in your life.

6) Connections with trusted referrals: If you need to meet with an attorney, accountant, or other expert, we can refer you to firms we have a working relationship with. We can’t endorse a professional but we can point out someone who might be a good fit.

7) A listening ear: We take the relationship part of “our relationship with you” pretty seriously. We are honored that our clients trust us with the details of their lives and we confidentially listen, advise, and pray.

8) A professional monitoring your accounts: The education and experience with which we approach your portfolio is backed by licenses, coursework, and continuing education. We also utilize professional money managers whose full-time job is to adjust to market conditions and analyze portfolios for improvement.

9) We have experience in areas where you may not: We “retire with” clients about 3 times a week. We have walked with people through the impact on your financial life through marriage, divorce, and death. We know the questions to ask to uncover financial vulnerabilities. We know tax strategies that you maybe haven’t needed to know before.

10) We answer your questions in a “no-obligation” and “there is no stupid question” sort of way:   We are serious about “no obligation.” We only work with those who want to work with us! It’s ok to start a conversation with us, ask whatever questions come to mind, and decide later whether you want to work with us. No obligation.  We also want to be the place where you can ask questions without being worried about judgment. Anything that is bothering you is important enough to be asked. No “stupid questions!”

11) We help you organize your money! There are different tax rules and estate considerations for different types of money. We can help you organize what you have and better utilize each type of account.

I read some startling statistics about aging and its effect on financial decision making. The information was sobering and it occurred to me that everyone needs to hear this—those who are themselves aging, those who have aging parents, and those who care for aging individuals.

George Korniotis and Alok Kumar, authors of the study Do Older Investors Make Better Investment Decisions?, found that “older investors are less effective in applying their investment knowledge and exhibit worse investment skill, especially if they are less educated, earn lower income and belong to minority racial/ethnic groups.” The authors also found that the stocks such investors own tend to lag the market by ever-increasing amounts as they grow older.

Wealthmanagement.com cites Fink, Howe, & Huston’s study Old Age and the Decline in Financial Literacy, which found that “while financial literacy scores decline by about 1 percentage point each year after age 60, confidence in financial decision-making abilities does not decline with age. Thus, the authors concluded that increasing confidence and reduced abilities explain poor investment (and credit) choices by older investors—age is positively related to financial overconfidence. And overconfidence can be a deadly sin when it comes to investing. Adding to the problem is the tendency for older people to reject    evidence of  declining cognitive abilities.”

How can you maintain financial acuity as you age? While not comprehensive, here are some helpful tips:

• Seek input. When we think things in our own head and don’t “vet” those thoughts with trusted friends, family, or advisers, we can veer off course. This is true in finances and many other areas of life. God intends for us to be in community.
• Bring your adult children or trusted friend into your financial conversations. This must be well thought out, of course, but we have seen an increase in the 2nd and 3rd generation being involved in client appointments and see the benefits of doing so.
• Don’t make hasty decisions. If there is pressure to do something, take a step back.
• Make sure your adviser has a trusted contact person to ask about your overall health, mental acuity, etc.  Knowing who you trust helps us.

It can be difficult to know when to spend and when to pull back. This is compounded by all of the advertising and peer pressure that fills our lives. We may spend money on the “noisy things” that clamor for our attention and end up not having enough money to do the things that really matter.

We help our clients weigh their options in view of what is most important to them. You ‘can’ buy a new vehicle but it may prevent you from taking the bucket-list trip you’ve been yearning for. You ‘could’ retire early, but it may tighten the belt in your household for years to come. You ‘can”...but you may not…  Each household’s trade off is different, of course, but we all have trade offs. Even the most wealthy (who can buy the car AND take the trip) still needs to decide if those choices are better or more important for them than leaving money to their heirs,  giving charitably, and so on. As long as you have money, you have choices.

If you are struggling to check off your bucket list, please consider having a conversation with us. We are not emotionally involved with your money, we are unbiased observers, and we have years of experience helping people navigate these important decisions.

The Power of Tears

We have had the privilege to walk with several clients recently who have lost loved ones. We share stories and laughs and solemn conversations—and we share tears. Often people will apologize for crying but we sincerely believe there is power and healing in those tears. They are a normal part of grief. If you are walking through some life decisions alone because you’re “a mess” and can’t talk about it, we would be honored to come alongside and help. Call us today!

All investments involve risk. Some investments may also be insurance products and contain certain insurance features, which could include guarantees against the loss of principal. The guarantees associated with such investments are subject to the financial strength of the issuing insurer and the specific terms and restrictions of the applicable policy or contract. The insurance features do not guarantee that the investment will not fluctuate in value.