How much on average does it cost to work with your firm?
All fees are outlined in the ADV Part II under the disclosures tab. The fees are based on which service or services you feel that you need.
Financial Planning is generally a fixed fee that is charged to have the firm work with you though a constantly evolving financial plan. The rate is calculated based on a combination of hours anticipated and the amount of assets involved. Annual fixed retainer rates are generally a set dollar amount and usually average between $1,500 and $5,000 annually depending on the complexity of the planning and time needed. This usually covers having a written Financial Plan, the option of housing your account(s) with the firm, and having your Financial Advisor available throughout the entire year.
Asset Management starts at 1% per year, billed quarterly, with a $500 per year minimum fee. The fee may be lower than 1% depending on the amount of assets that you decide to put under professional management.
Hourly Service is given at a rate of $150 per hour for individuals who do not wish to or need to engage in either of two contracts listed above.
Special projects that require more than 4 hours may be discounted, depending on complexity.
What geographical area do you serve?
The firm is licensed only in the state of Virginia. All initial consultations in Hampton Roads must be made at the office in Chesapeake, VA. Clients who live or move outside of Virginia are eligible on a case by case basis through the di-minimus rule if they agree to correspondence through technological communication.
Is the initial consultation free?The initial consultation is free if the client wants a general idea of how we can help them and how we work. Financial planning can be very personal, so it’s mandatory that you feel comfortable with your advisor. Your advisor is also taking this opportunity to ascertain the level or complexity of your needs and whether it is a good fit for their particular practice.
How much time do you have for your existing clients?
The firm is committed to keeping our client load small and will never take on more clients than service, appointment times, and calls will allow. The initial fact finding, planning, and implementation take the most time so we limited how many new clients are accepted at any one time. Current clients and their needs will always be a priority before considering adding additional new clients. Current clients have access via email or cell phone at all times.
Do you meet in the evenings or weekends?
Generally we schedule meetings during office hours, but on occasion will meet in the evening or weekends with current clients if necessary. Initial consultations are always during business hours.
Are you available to clients only during business hours?
No, clients are given a cell phone number to be used at any time they need to speak with us. Sometimes issues or crisis don’t come up during business hours. E-mail is also available and is answered promptly. This is also one of the benefits of having a personal financial advisor, we care!
Can you come to my house?
We do not routinely meet at client homes or offices, although a home visit is part of the planning process to identify any risk issues that may not be apparent. We will work with current clients when circumstances dictate a home visit is warranted.
Can you help manage my 401K?
Yes, we do manage 401K’s for clients, and we also work as an investment advisor to employees of company sponsored 401K plans, where the sponsor pays our fee to work with their employees on setting up asset allocations and education.
Do you help people with IRAs or lump sum rollovers?
Yes. The firm can open an IRA for a client through its custodian or through a fund company of the client’s choosing. It may be a ROTH IRA, SEP IRA, rollover IRA, contributory Traditional IRA, or SIMPLE IRA. The investments that you receive from a company when you terminate employment are usually sent to a Rollover IRA. Investments are chosen within the IRA as well.
What types of investments do you use?
Honeycutt Financial utilizes stocks, bonds, mutual funds, and exchange traded funds when designing a portfolio. Securities that lack transparency are not used.
Do you help with college savings plans?
Yes. We can help you estimate college costs in the future, choose between many different options, and manage any investments for college. A plan may include a 529 plan, a Virginia 529 plan, tax-free muni mutual funds, college savings plans, an educational IRA, or other type of account. Virginia has two types of plans, VEST which is an age based plan utilizing Vanguard funds, and the College America plan by American Funds, which would utilize no load American funds because we are a Fee Only firm.
If I am in the military can you still help me with retirement planning?
Many of our clients are military personnel. We help plan for retirement by using pension calculations, household expenses, cost of living increases, spousal benefits, and current investment savings to paint a picture of and estimate what needs to be done to plan for retirement. The goal is to maximize your benefits and incorporate them into your overall plan.
What strategy do you use for investment management?
The investment management strategy is outlined in the ADV Part II under “disclosures”. We use a fundamental approach with detailed asset allocation as opposed to “timing” the market. We will also incorporate a tactical allocation at times or strategic allocation based on current market conditions and the projected need for liquidity in 1 to 5 years.
There are no set “Model Portfolio’s”. Portfolios are designed individually for each client based on their risk tolerance, goals, and liquidity needs.
Will you try to sell me mutual funds or life insurance?
No. The firm is a fee-only firm, paid by the client to work only for the client. Should your comprehensive plan recommend that you purchase insurance, annuities, or any other commission generating product, we will work with any agent or company that you choose, or we can source no load products.
Can you help me with annuities or variable universal life insurance?
Yes. We will work with your current agent if you have one, or help you find a no-load or low cost insurance product on your own. Many people do not realize that there are annuities and life insurance products available that do not have time constraints on their money. If you need the investments in these products professionally managed on an ongoing basis, or just need help choosing one, we can help.
What protection from unscrupulous advisors should I look for?
In the past couple of years this has generated a lot of headlines because of the total lack of integrity of a few financial advisors. Below are some recommendations to protect yourself.
Never write a check directly to your planner for any funds to be deposited to your account. It should be payable to a third-party, arms-length custodian. The only check that should be made out to the planning firm is for services rendered.
Never allow your planner to be a joint owner or beneficiary of your accounts.
Never lend money to your planner.
Never let your planner sign your name to a document.
Never let your planner use his address to receive account statements.
Never let your planner sell you anything that is unavailable from other planners. Proprietary products are seldom any good.
Never let your planner share in the profits.
Never let your planner assign the agreement with you to another planner.
Never sign a contract that cannot be terminated with 30 days notice.
Always look at your statements from an independent custodian.
Never sign a Full agent authorization, this will allow the agent to request money from your account directly to the agent as if it were you doing the transaction. Make sure when you are signing forms that you only sign a Limited agent agreement which will allow your advisor to place trades for your account.