Focus On What You Control

Too many people concentrate on money issues that are out of their control. Market returns, government regulations, taxes, the Federal Reserve, etc. What will benefit us now and our long term finances is if we focus on those areas that we can control. Here are four areas we can impact today.

1. Have a Financial Plan in Place

As you move along in life your written financial plan will act as a GPS leading you towards your life and financial goals. What is important to you? How do you envision your life in 5, 10, 30 years? What will be my legacy? We help clients determine their needs, wants, and dreams to give their life and finances purpose.  Life can be random and we can’t plan for everything but, like a GPS, Peterson Wealth Advisory can advise alternate routes to achieve your unique financial goals.

2. Savings

The amount or percentage you save each month, year and decade will have a greater impact on your future financial lifestyle than returns. We provide advice on maximizing 401(k) and IRA contributions, ensure a sufficient emergency fund, adding to joint accounts and evaluating all personal assets.

3. Asset Allocation

Risk and return in an investment portfolio are largely determined by how you slice your investment pie. Too much in any one area can severely harm your portfolio and or limit your long-term returns. We implement, manage and monitor client portfolios with one eye on potential losses and the other on long-term gains.

  

4. Investment Costs

Would you like to save 90% or more on a car or any other purchase? That level of cost savings can be realized when you buy low cost index funds. Many of the exchange-traded funds (ETFs) we use have expenses of 0.10%. Compare this to active managers:

·       1.12% average cost in 2012

·       High turn over and trading costs

·       Only 24% of active managers beat the index over the past 10 years

Taxes are another cost we help clients limit. We like index funds that have little to no capital gains. When possible, we allocate specific types of funds across different accounts to take advantage of any beneficial tax treatment.

Greatness of Independence

Independent Financial Advisor: an advisor who works independently for their clients rather than for a broker, bank or insurance company; a person who gives impartial advice on financial matters, who is not connected with any financial institution.

When I meet with people about their finances I hear about the company and "advisor" they currently use or have in the past. After hearing their stories and look over their investment statements I am reminded how great it is for my client's that they work with an independent financial planning firm.

There are many unfortunate stories of people being pushed into unnecessary and expensive financial products not in the client's best interests. I realize there is a lack of trust by the public towards financial professionals in general and I am aware of the industries short comings. I want you to know there are other options available where you can receive personalized financial advice that is in their best interest.

Flexibility: As an independent Registered Investment Advisor my firm is able to evaluate, use and provide a vast array of services from multiple providers to meet the clients unique needs. We can provide advice on your 401k without having to switch providers; use a college savings plan from Vanguard to take advantage of their low costs versus the less desirable home state option; create individualized financial plans with the industry leading software company Money Guide Pro; custody assets with a low cost institution. The other option is to go to a broker like Edward Jones or Merrill Lynch to receive cookie cutter advice and hear a sales pitch on the their list of in-house products.

Not Selling Products: Being bombarded with sales pitches on annuities, life insurance, proprietary mutual funds, structured notes, and other products with high costs are detrimental to achieving your long term financial lifestyle. There have been many times where I show someone they are paying a lot more in fees than they realized. Many times an investor will pay 3% to 4% in combined annual expenses to a broker, advisor, and mutual fund. Sometimes the person is also paying up front commissions for certain mutual funds and broker engineered products. This lines their pockets with double revenue and no requirement to disclose the additional costs.

At Peterson Wealth Advisory we look at the clients entire financial picture including business ownership, real estate, insurance and investments, etc. and weigh the pros and cons of each towards meeting their goals. If it makes sense and helps the client achieve their goals we will advise the person to keep the asset even if we are not compensated. 

When it comes to compensation we are fee-only. Fee-only means we charge an hourly rate or a percentage of assets under management and we do not receive commissions or kickbacks. We are paid directly by our clients. This helps eliminate conflicts of interests and makes our costs transparent. Our clients receive complete financial advice from a Certified Financial Planner®, invest in low cost index funds, and custody assets at a low cost institution all for less than 2% a year.

These are just some of the ways clients benefit from working with an independent Registered Investment Advisor firm. Contact Christopher G. Peterson, CFP® for more information on achieving your goals and receiving independent financial advice in your best interests.

5 Key Benefits of Independent Registered Investment Advisors

1. Tailored advice based on your goals. Many RIAs believe that their independence is key to offering advice that's based on what’s best for you.
2. You know what you're paying for. Typically, fees are based on a percentage of assets managed.
3. Advice for your complex needs. A rich diversity of specialization among RIAs means you can likely find the type of advice you need.
4. A different kind of relationship. RIAs typically form close relationships with their clients and have a strong sense of accountability.
5. You know where your money's held. RIAs typically use independent custodians—such as large brokerage firms—to hold clients' assets and provide related services.