• Will we be able to live in retirement in the same fashion as we’re currently living?

    Everyone approaching middle age wants to answer this question. From our perspective, there is a significant difference between merely retiring and planning for a successful retirement. One of the reasons we ask clients for current spending information is to help determine how much annual income, adjusted for inflation, they will require during retirement. Only when that number is calculated do we believe we can begin to determine the asset levels that would help achieve that goal and how those assets should be invested.

  • What is a "diversified portfolio"?

    A diversified portfolio is a portfolio that has been invested across many different asset classes.  One of the several criteria we use in selecting these asset classes is correlation.  Correlation refers to the behavior of each asset type (stock, bond, etc.) in different market situations.  If two assets are highly correlated to one another, they can be expected to respond to market changes in a similar fashion.  If the response is to drop in value, there is no diversification benefit to owning both assets. Instead, identifying assets that do not respond in a mirror fashion helps to protect a portfolio by buffering the downward price movement of certain holdings.  If Stock A, for example, were to drop in price while Stock Z rose on the same economic news, they would be negatively correlated to one another, and Stock X would help by gaining value to counter Stock A's loss.

    In most cases, assets neither react in the exact opposite nor move in lockstep fashion with each other. Typically, one holding will maintain value while another might gain or lose slightly. We believe the objective is to ensure you're acquiring securities that can weather a financial storm better than any individual asset:  "Don't put all your eggs in one basket" applies to the financial markets. When a portfolio includes assets that are not highly correlated with other investments, a portfolio becomes more diversified, and wealth can be better protected from swings in market conditions. 

  • Are my assets safe if I work with an independent adviser?

    Most registered investment advisors are in the business of advising and managing client accounts; they are not in the business of custodying (physically safekeeping) the assets they manage.  The custody of those accounts should be and typically is handled by an independent,  third-party custodian.  Regardless of which mutual fund, ETF, bond, or stock you may own, the accounting, reporting, and housing of the account that owns those assets is maintained by the custodian.  As with your personal checking account, your investment asset accounts generate monthly or quarterly reports identifying the investments, transactions, and balances.  Depending upon the custodian (we use Charles Schwab & Co., Inc., an SEC-registered and FINRA member broker-dealer/custodian), you probably have round-the-clock access via the internet or 24-hour phone support allowing you to verify and confirm any assets in any of your accounts.  

    In addition, Schwab offers "The Schwab Security Guarantee," which provides the following: "Schwab will cover losses in any of your Schwab accounts due to unauthorized activity." The Guarantee doesn't cost clients anything and applies to Schwab accounts managed by independent investment advisors such as S.F. Ehrlich.  

    While advisors may be given access by their clients to trade within these accounts, their ability to unlawfully remove funds is prevented by authorization controls required by the custodian.   Just as you would not leave your car keys in the ignition when you run into the mall, each investor should recognize their responsibility in reviewing their account statements in a timely fashion and should feel free to ask any questions of their advisor if they do not understand what they're looking at. Our mantra: "It's your money." 

  • Can fee-only financial planning actually save me money?

    Clients of a fee-only financial planner know exactly how much they are paying for the advisory services being rendered.

    Since we do not invest client funds into mutual funds with sales fees, an immediate saving for many clients is the amount they may be (unknowingly) paying in commissions. Whether those fees are up-front, deferred, or annual, they may be more costly than retaining a planner. (Utilizing investments such as exchange-traded funds with lower annual expenses than many mutual funds also contributes to annual savings.) Studies1 also demonstrate a diversified portfolio that is rebalanced regularly (a routine practice for most fee-only financial planners)  has the potential to yield higher annual returns over the long run.

    With a fee-only financial planner, the planner’s fiduciary responsibility is to his or her client, not a brokerage or insurance company.

     

     

    1 "Putting a value on your value: Quantifying Vanguard Advisor's Alpha®"; Vanguard Research, August 2022

  • Why choose S.F. Ehrlich?

    As members of the National Association of Personal Financial Advisors (NAPFA), we are bound by a strict code of ethics. Being a member of one of the nation's leading fee-only financial planning associations requires us to abide by stringent continuing education requirements and to work solely for the best interests of our clients.

    As a small local firm, our clients receive individualized and personal service. We address their needs, manage their assets, and help guide them on the pathway towards and through retirement. Typically, our work extends beyond finances, as we help solve many of life's hurdles. (We’ve even helped clients determine if they had the wherewithal to change careers and then supported them while they did it.)

    Our clients are typically busy people who want to simplify their lives. They would rather spend time with their families and careers than try to keep up with the ever-changing world of personal finance. We're available to help you determine where you are on the road to achieving your financial goals. Through frequent contact and regular client newsletters, we strive to provide that support.

    We spend considerable time learning about prospective clients to determine whether they might be a good fit for our firm. We’re looking to work with individuals willing to delegate responsibility, allow others to handle their personal finances, and then be confident and comfortable in doing so.

  • How can we make our first meeting productive?

    Our first meeting is centered on identifying those concerns, goals, or issues which prompted you to contact us. Are you thinking about retirement, educating your children, a career change, or another life-cycle event? Each scenario presents choices and solutions that can be multi-faceted. The goal for the first meeting is to get to know you; when we understand you and where you would like to go, we can better determine whether we would be a good fit to help you get there.

  • What’s next?

    If we fit the description of a fee-only financial planning practice you might like to work with, we invite you to call us at 908 789-1100, or go to the CONTACT US tab and send us an e-mail.