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Financial Planning

We work with you to build a financial plan that includes all of your major goals, financial and non-financial.

Portfolio Management

We’ll help take the allocation prescribed in your financial plan and purchase the securities required to put that investment plan into action.

Financial Advisory

Our Integrated Financial Advisory provides support beyond Portfolio Management in a number of ways.

The Cornerstones of Sensible Service

We do not accept any payments of any kind from any product or service provider. Specifically, that means:

  • No loads or 12(b)1 fees from mutual fund companies
  • No “soft dollar” services from broker-dealers
  • No commissions from variable annuity or equity indexed annuity manufacturers
  • No commissions from life insurers

As a result, we have no incentive to recommend a mutual fund, a broker-dealer, an annuity or an insurance policy because of how much we will earn for recommending it.

You can be confident when we recommend a product or service to you that we believe:

  • You will derive a net benefit from it
  • It represents the best value for you

We believe that every service we provide should be valuable for you and should produce a fair return for us.

For example, we do not use the financial plan as a “loss leader,” giving it away and hoping to make up our plan delivery costs with extra profits on insurance or investments. We don’t believe it’s fair to ask investment management clients to pay higher fees every year to cover the costs of their “free” plan (or other clients’ “free” plans).

Our investment management services are also priced fairly. We focus our efforts on the activities the evidence indicates are most valuable to you – identifying and implementing the most appropriate asset allocation, and periodically reporting performance and rebalancing your portfolio.

We believe that you can evaluate a service if you know what it delivers and how much it will cost. We make every effort to make our services transparent, and our pricing crystal clear.

We believe that our fair pricing can save you money.

We can help you avoid common, but expensive, financial mistakes.

It’s easy to make financial errors. People are busy. Financial products are complicated. Financial product salespeople may not always put your interest first. As a result, we find that many of our clients face one or more of the following issues:

  • Too much company stock;
  • Expensive products whose costs wipe out promised benefits (most variable annuities, certain 529 plans);
  • Unused employer 401(k) contributions;
  • Unused tax-advantaged college savings opportunities.

We base our recommendations on quantitative analysis and peer-reviewed economic research. Rules of thumb are a poor substitute for careful analysis.

We don’t have opinions on the direction of security prices – the evidence suggests that they are unpredictable.

We recognize that no one knows exactly how security returns behave – this keeps our forecasts of how much your portfolio will grow appropriately conservative. The asset allocation model approach we use moderates the impact of extreme historical investment returns (both high and low) on our forecasts and allocations.

We recognize that financial planning requires dynamic programming – a sophisticated mathematical technique for solving problems over time. Our financial planning software, ESPlanner, uses this technique to produce a more accurate financial plan.

Sensible Financial® accepts fiduciary responsibility – we invite and honor your trust. We place your interest first, ahead of our own. We have designed our business model and compensation structure to be consistent with our responsibility. No compensation structure can be conflict free. We believe that our structure minimizes conflict, and we highlight situations where significant conflict is most likely to occur.

Sensible Financial offers for your consideration two additional statements about fiduciary responsibility:

  • “A financial advisor held to a fiduciary standard occupies a position of special trust and confidence when working with a client. As a fiduciary, the financial advisor is required to act with undivided loyalty to the client. This includes disclosure of how the financial advisor is to be compensated and any corresponding conflicts of interest.” (NAPFA’s working statement from its ‘Focus on Fiduciary Initiative’)
  • “Given its fiduciary status, an RIA must follow the ‘trust’ standard—the highest known in law—which requires it to place the interests of its clients ahead of its own and fulfill critical fiduciary duties such as exposing all conflicts of interest which might tempt the RIA, to render disinterested investment advice, ‘utmost good faith,’ ‘full and fair disclosure of all material facts’ and ‘reasonable care to avoid misleading clients’ as the Supreme Court set forth in its S.E.C. v. Capital Gains Research Bureau, Inc. opinion. Under the fiduciary trust standard, an RIA must provide its ‘best advice’ to its clients.
  • A non-fiduciary broker/dealer and its registered reps follow the ‘suitability’ standard under NASD regulations. This standard doesn’t require a registered rep to place the interests of its clients ahead of its own. Under the non-fiduciary suitability standard, a registered rep need provide only ‘suitable’ advice to its clients—even if it knows that the advice is not the best advice. For example, a registered rep that recommends an S&P 500 index mutual fund with a 5% load and high annual expenses when it knows of an equivalent index fund with a similar track record that is no-load and has low annual expenses ordinarily wouldn’t be liable to its customer for such a recommendation. It is more likely that an RIA would be liable for engaging in such investment conduct because of its fiduciary status.” (Drawn from “The Fiduciary Duties of a Registered Investment Adviser” by W. Scott Simon, J.D., CFP®, AIFA® in OBSERVATIONS, ComplianceMAX Financial’s Monthly Investment Advisers Newsletter, May 2006)