The Four C’s of Financial Planning and the Custody Rule

by Laura Hall, CIMA®, AIF®, Senior Portfolio Manager/Director of Client Services, REDW Stanley Financial Advisors

From Capital Conversations (Winter 2018) – View Newsletter

As a wealth management company affiliated with REDW LLC, one of the largest regional CPA firms in the U.S., REDW Stanley Financial Advisors is able to offer our clients an array of financial planning services.

We assist clients in clarifying their vision, goals and objectives for their financial future. We assess and analyze where they are now, and then develop a written strategic plan with specific action steps that can help our clients achieve these goals and objectives and realize their vision.

In delivering financial planning services to our clients, we follow the Four C’s:

  1. We review the “here and now” and bring Clarity to the client’s resources, goals and objectives.
  2. We bring Creativity to the development of design ideas for all areas under discussion, such as estate, investment, retirement and business planning. These design ideas are filtered through the lenses of taxation and risk management. We do not make recommendations without understanding the impact they may have over all of the planning areas.
  3. We believe in Coordination and close collaboration with our clients’ other financial, legal and tax advisors to avoid gaps in their planning and wealth management efforts. We welcome the opportunity to work with other professionals in our clients’ lives to ensure the best possible outcome. Only by seeing the entire financial picture can we truly help our clients.
  4. Finally, we act as the Catalyst for getting things done. Having a sound financial plan and properly drafted legal documents are important, but it is critical to follow through after those documents are finalized to ensure that clients achieve their wishes, goals and objectives. We can take the lead in making sure that proper execution and implementation of those good ideas happen.

REDW Stanley is unique in that we coordinate both internal and external advice, and we design strategies for our clients that are ideal and unique – not just those solutions that “everyone else is suggesting.” We first seek to understand what our clients want, model the best alternatives, educate the client, and then proactively create their plan. At the client’s request, we also monitor and update their plan. We believe our clients have their best chance of realizing their goals with our help.

We analyze income and estate taxes, business structures, investment alternatives, risk management solutions, lifestyle management, and all areas that affect a client’s financial health. Many advisors only want to work with clients with high incomes and net worth. Although this group is the most targeted by financial sales people, it is also the least well served because of the narrowly focused products sold by advisors who are not trained to utilize the “cross-disciplinary process” that the planning professionals at REDW Stanley use in approaching, addressing and solving client financial needs. We can help clients at all stages of their financial lives with that “cross-disciplinary process.”

To give you some idea of the complexities of financial planning, we have included a Financial Planning Map. At first glance, the “Map” may be overwhelming – but an individual’s financial life may be simple or complex, depending upon a variety of factors. Not everyone at every stage of his or her financial life needs or wants planning. For those whose interest has been piqued by the Map and who wish to learn more about the REDW Stanley planning process, give your Relationship Manager a call.

But do notice, at the very bottom of the Map, a word that forms the basis of all financial planning at REDW Stanley: Fiduciary.

You may be aware of the buzz in the press about the Department of Labor and the Fiduciary rule directed at only retirement accounts that was supposed to go into effect in April 2017. That rule has now been delayed, and when it may be fully implemented is anyone’s guess. In any event, REDW Stanley has been a fiduciary to our clients since the firm’s founding. We have always assumed
the role of fiduciary when tending to all of our client’s needs – not just those that involve retirement plans.

Being a fiduciary to our clients means that REDW Stanley advisors must give clients advice that is in the client’s best interests. We put your interests first, and as we work with you to help you move toward your financial goals, objectives and vision, we recommend strategies that benefit only you. As a fee-only firm, we accept no other payments or income except what our clients pay us for the services we provide to them.

The Custody Rule

As a Registered Investment Advisory (RIA) firm, REDW Stanley’s regulator is the Securities and Exchange Commission (SEC). Last year, the SEC issued guidance for RIAs regarding the Custody Rule. This guidance was in part a reaction to the increase in fraud and identity theft that consumers have experienced. In 2017, 16.7 million consumers experienced fraud or identity theft, surpassing the previous record of 15.4 million victims in 2016.

We take compliance with the SEC seriously, and that guidance affected our ability to transfer dollars on an “as needed basis” at the direction of our clients. As a result, we are no longer able to direct movement of money on behalf of our clients with our custodians, Charles Schwab or T. D. Ameritrade, on an “as needed basis.” Our clients retain the right and the ability to move money via a phone call or a signed form to the appropriate custodian, but it is no longer possible for clients simply to call their Relationship Manager and ask that we transfer dollars per your instructions, as many have done in the past.

Please be aware of your occasional cash needs and allow plenty of time to become accustomed to the new process. As always, if you have questions, call your Relationship Manager. This is an interesting time, with market volatility increasing and taxes due April 17th. If there is something that the professionals at REDW Stanley can do to be helpful to you and your family, please contact your Relationship Manager. We are here to help.

Did you know?

  • Throughout the year, REDW’s Albuquerque and Phoenix offices are both committed to holding seminars on topics that are timely and important to our clients. Accordingly, on February 28th our Albuquerque office is hosting a talk on what the new Tax Cuts and Jobs Act of 2017 may mean for business clients. And on March 1st, our Phoenix office is co-hosting a morning seminar with National Bank of Arizona titled, “Taking the Politics (and Jargon) out of Tax Reform.” For more information or to register for either event, please visit redw.com/events.
  • Since the inception in 1988 of the Morgan Stanley Capital Group International All Country World Index (also known as the MSCI AC World Index), there has only been one year in which all the monthly returns for the year were positive. If you guessed that year to be 2017, Congratulations! You were right. One pundit suggested that, since 2017 was a year with gains in all months, 2018 might bring more volatility in global stocks – evidence that sometimes even pundits make accurate predictions.
  • We appreciate when our clients experience joyous life events. Recently, two couples, both clients, welcomed a new addition to their families. One couple are first-time parents of a boy (who joins four cousins whose parents are also REDW Stanley clients), and the other are grandparents who added a fifth grandchild to the clan.

Copyright 2018 REDW Stanley Financial Advisors, LLC. All Rights Reserved. This publication is intended for general informational purposes only and should not be construed as investment, financial, tax, or legal advice.