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Unless you’re doing it yourself, you are paying for it. If you own mutual funds, you’re paying a fund manager as part of your fund’s expense ratios. If your financial advisor is a broker, they received a commission for whatever they sold you. If they sold you a mutual fund, they either got a commission or a portion of the fund’s 12b-1 fees, which you also pay as part of your share price. If you bought an annuity, the person who sold it to you was paid a commission of as much as 12% by the company. Plus, that company most likely invests your money in mutual funds and they receive a share of some of the fund’s expenses as well.
A fee-only planner or investment advisor does not receive any commissions for product sales. They are required by law to demonstrate that the clients’ best interest is always placed ahead of their own. In our opinion, this is the only reasonable approach to advice and management. Pay the people who work for you directly.
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More importantly, do you understand the consequences of not understanding the details of your investments?
High annual fees or expense ratios in annuities or mutual funds can make a big difference in your returns over time. Make sure you understand all the things you’re paying for every year in your investment accounts. Investment portfolios managed by Crow Financial come with no hidden fees or charges. Clients pay a quarterly management fee, which is a small (0.5% or less) percentage of the market value of the assets under management. Clients also pay trade commission when a stock is bought or sold, but neither Crow Financial or any of its employees receive a portion of that. Make sure you understand how your advisor is paid, and what you’re paying for, every year. If you’re not sure, or can’t figure it out, ask. If you still don’t get an answer, call us at or toll free for a no charge, no obligation consultation. Do I have to “ride out” a bad market? The short answer is, “no.” Crow Financial has the tools and discipline to get out of stocks and out of the market when things are bad, provided the clients understand the tax consequences. Do we have to sell when our indicators tell us to? No again. Our processes are flexible such that any account can “opt out” of a trading program at any time. When we think the markets are weak, we don’t buy new stocks and are content to hold cash. In protracted bear markets, we’ll look for alternatives that provide positive returns in a negative market without directly shorting a stock. A lot of folks who call themselves financial advisors and planners don’t have a lot of original thoughts when it comes to your investments. They’ll have you fill out a risk tolerance questionnaire and based on those results and your age they’ll recommend an insurance or annuity product or some mutual fund allocation. The simple truth is, their recommendations aren’t theirs. They come from some computer model at the “home office,” and they have a lot more to do with your age than anything else. Do you honestly believe everyone your age has basically the same investment management needs? They do. In fact, if you choose not to take their recommendations, they may ask you to sign a form saying you won’t sue them if something goes wrong.
In my opinion, this is absurd. People are different and so are their goals. Putting every client in one of five risk profiles and rebalancing every so often, regardless of what the market is doing? Really? Plus, if you’ve been in a situation like this, think about it…when things go bad, does your advisor take responsibility or do they blame the fund managers their company has chosen? I think you can do better. How about someone who listens to you, knows your concerns and acts, and reacts accordingly? How about Crow Financial? Call us. The conversation is free and there’s never any obligation or high-pressure sales pitches. I promise. Does your financial advisor even know who you are? How many times have you talked with them? In addition to quarterly performance summaries, we try and meet with our clients, face-to-face, at least once a year whenever possible.
Do they only call when they want to sell you something? Crow Financial Advisors do not represent or sell any products or insurance companies. Our clients pay us to manage their portfolios…period. How do they make that decision? Not every client has the same investment goals or management needs. The decision made by Crow Financial Advisor are tailored to each clients’ specific desires. Does your advisor act in your best interest or do what they’re told by the company they work for? Again, answering the question, “how do they get paid?” goes a long way. If you pay your advisor directly, they work for you. If they receive a commission, they work for themselves or for the company whose products they’re selling. If your broker receives a commission every time he or she makes a buy or sale, you have to take a hard look at what they’re doing and make sure it makes sense for you. In a fee-only, managed account, there is no incentive to make unnecessary trades, or “churn” the account, because we don’t get any portion of the trade commission. Doing nothing is the worst thing you can do. It is the financial equivalent of “buy and hold” and it exposes you to maximum risk when it comes to your investments. If you’re not keeping an eye on your investment portfolios and reviewing them at least annually, you’re essentially sticking your head in the sand and hoping nothing goes wrong.
“Hope” is not an investment strategy, unless you’re into lotteries. Listen to the spot again and then call or email and request a FREE copy of “Stock Market Myth Busters.” This short article exposes a lot of wrong-headed ideas when it comes to investing and explains very clearly what we do different, and why. Bonds are safer than stocks…aren’t they? You might be surprised. There’s a reason some bonds pay 2% and others pay 8%. And, there are reasons why some bonds cost more or less than their face value. Just like in stocks, higher risk equals higher potential for higher reward, and higher potential for loss. Are government bonds safer than corporate bonds? Some are and some aren’t. Do you know the difference? We do.
Just because you’re in bonds doesn’t mean you’re not at any risk. Do you even know what to look for? We do, and before we make any recommendations on your investments we make sure you understand those risks too. Maturity, duration, discount, premium, quality, and call features are just some of the many terms you need to understand before you load up on bonds thinking you’re taking all the risk out of investing. Are bond funds safer than individual bonds? What causes their share prices and yields to change over time? Again, all things you should know before making a commitment to a bond investment with your precious savings. We’d love to help. Call us with questions. The conversation is free and there’s never a high-pressure sales pitch or any obligation. NEWSFLASH! The future is uncertain. Is this really news? If not, is it worth making a decision that locks up all your hard-earned savings for the rest of your life? We don’t think so, and we don’t rely on fear or intimidation to convince folks to make an investment decision and put money in our pockets. Nothing regarding your finances is so important that it has to be decided right now, and no company that wants your business can’t extend a deadline even 24 hours if they really want to work with you.
Working “with” you is the key. Nobody has a crystal ball. We pride ourselves on finding investment solutions with maximum flexibility. We don’t put our clients in proprietary products or investments with early-withdrawal penalties unless that’s exactly what’s appropriate for them. Yes, we can sell all those things too, but we seldom find them the best solution for the clients’ specific needs. You deserve to be treated like an individual, not a contract or policy number. If you’re worried about the future, call us. Together we’ll work out an investment plan for you that can relieve some of your fears. The conversation is free and there’s no obligation, and there’s never a high-pressure sales pitch. Savings accounts and short-term CDs pay you almost nothing, while the bank that’s holding your cash is in turn loaning most of your cash out at much higher rates. The Federal Reserve has promised to keep rates low through 2014. They don’t have a choice. If rates start to climb, our government won’t be able to afford the interest on our debt. That means it’s going to be a long time before savings accounts and CDs even pay well enough to keep up with inflation.
There are other options, but they involve increasing risk to achieve higher returns. This is true for every investment so don’t let anyone convince you otherwise. Even annuities which promise to go up when the markets are up and not fall when markets fall have escape clauses in their fine print. They’re not going to lose money on your contract…in fact, they’re going to make more than they promise you’ll make. If you’re tired of your bank paying you nothing while they’re loaning out your money and making money doing it, call us. We might be able to come up with a better strategy for your money while maintaining an acceptable level of risk. The only initial investment required of you is a little time. The conversation is free, there’s no obligation and there’s never any high-pressure sales pitch. Originally this spot was mis-titled “benchwarmers,” which I actually liked because it described a lot of investment professionals I know. Mutual fund managers don’t know who you are and they don’t care. Financial advisors and planners who outsource your investments to a mutual fund company or separate account manager are putting you in the same situation. Those managers don’t know, or care, who you are or what your particular needs might be. The term benchwarmers describes them pretty well because they never really get in the game.
A mutual fund share, unit investment trust share, or separately managed account portfolio is a basket of stocks, bonds and other securities managed to achieve some goal, but your investment goals are never considered. There are funds that mirror or try to outperform any index you can think of, and there are others that try to do the exact opposite of the same indices. A lot of advisors have you answer a risk-tolerance questionnaire, assign you to one of five risk classes, and you’re off. The assumption is that your needs are “close enough” to a pre-defined asset allocation. OK…so it’s not one-size-fits-all, but given the tens of thousands of investments out there, you get shoved into one of five options? Really? Put us in the game for you, or start by calling. The conversation is free and there’s no obligation, and no high-pressure sales pitch. No load doesn’t necessarily mean no fees. Mutual fund companies are not benevolent organizations. They have managers that have to get paid, and they get paid by the shareholders, and oftentimes funds report their performance before those fees and expenses are figured in, but that’s a whole different commercial.
Most funds have multiple share classes with different fee and commission schedules, and the same fund might have different expense and commission arrangements with every brokerage platform on which they’re available. There are ways to find out, but they’re not easy to find, and that’s intentional. Do you think an advisor who’s charging you 1% a year to manage your money wants you to find out he also got a commission when you bought the fund, and that you’re paying the fund company 2% a year to manage your money? Would you? Crow Financial is different. We do use funds, especially in smaller accounts where diversification is impossible, but we always look for funds we can buy and sell for no commission and we shop for those with the lowest fees and expenses that provide the best performance over time. Don’t feel bad if this is confusing. Call us. Set up an appointment and bring in your account statements. The conversation is free and there is no obligation to purchase or change anything unless you decide a customized, Crow Financial portfolio is right for you. Then, we make the transition process as painless as possible. |
Tom Crow, President of Crow Financial AdvisorsYou'll hear Tom's radio spots on the local radio station. He is a respected wealth management expert in the Southwest, a member of Kingdom Advisors, a talented musician and singer, a mediocre golfer, and an all around great guy. Archives
October 2023
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8210 Louisiana Blvd NE, Suite B
Albuquerque, NM 87113
Phone 505.243.2281 | Email info@crowfa.com
Crow Financial Advisors is an independent Registered Investment Advisory firm and acts as an investment manager for individuals and institutions.
This communication is for informal purposes only and nothing herein should be construed as a solicitation, recommendation or offer
to buy or sell any securities or products, and does not constitute legal, tax or investment advice.
Crow Financial Advisors may only transact business in a state if it is first registered or excluded or exempt from registration.
Please contact us if you have questions about our ability to work with you.
This communication is for informal purposes only and nothing herein should be construed as a solicitation, recommendation or offer
to buy or sell any securities or products, and does not constitute legal, tax or investment advice.
Crow Financial Advisors may only transact business in a state if it is first registered or excluded or exempt from registration.
Please contact us if you have questions about our ability to work with you.