How I Begin Working With Financial Planning Clients: Part 1
By Michael Hathaway, CFP®, CFA®, AIF® Many people ask me, “What would it be like to work together in a financial planning relationship?” I think
By Michael Hathaway, CFP®, CFA®, AIF® Many people ask me, “What would it be like to work together in a financial planning relationship?” I think
Mike joined Epsilon in 2018 after spending most of the previous 20 years working in the corporate finance arena. He enjoys bringing the benefits and lessons learned from his time in corporate finance to Epsilon’s individual and private wealth clients. His deep experience with investments and personal taxes also allows him to help clients develop tax-efficient retirement income and distribution strategies, as well as helping to optimize the tax locations of clients’ accounts during the accumulation and pre-retirement phases.
Mike has a B.S. in Cybernetics from UCLA, and an MBA in Finance from the University of Virginia’s Darden School of Business. He is a CERTIFIED FINANCIAL PLANNER professional, a Chartered Financial AnalystTM, and is a holder of the Accredited Investment Fiduciary designation.
February 22, 2019
The Institute for the Fiduciary Standard’s Real Fiduciary™ Practices describe how conscientious and competent advisors serve clients today. The practices reflect principles that underlie fiduciary law and focus on the three overriding advisory duties of Loyalty, Due Care and Utmost Good Faith. The Institute defines these terms as follows:
Many advisors and brokers talk like a fiduciary, though relatively few act like one. These Real Fiduciary™ Practices provide guidance for advisors. They also help investors distinguish advisors who work for and are paid only by clients—from sales representatives who work for and are paid by firms to distribute products. That is, these practices help separate brokers and advisors who merely talk like a fiduciary from advisors who really act like one.
Real Fiduciary™ Advisors stand apart because they:
ACT WITH DUE CARE
ACT IN UTMOST GOOD FAITH
REAL FIDUCIARY™ PRACTICES BOARD
Christopher W. Cannon, CFA, FirsTrust
Paula H. Hogan, CFP®, CFA, Hogan Financial
Stephen D. Johnson, MBA, CFP®, Johnson Lyman Wealth Advisors
William C. Prewitt, M.S., CFP®, Charleston Financial Advisors
Knut A. Rostad, MBA, Institute for the Fiduciary Standard
Daniel Bernstein, JD, Associate General Counsel to the Real Fiduciary™ Practices Board
Clark M. Blackman II, CFA, CPA/PFS, AIF®, Alpha Wealth Strategies (Emeritus)
NOTE: These practices and their guidance comprise the Real Fiduciary Practices. For additional guidance on the practices see the practices with background endnotes at:
Pete is a full-spectrum financial planner, investment advisor, analyst, investment fiduciary, and retirement plan consultant. Pete earned his BS in Fermentation Science from UCD in 1974 and his MBA from Stanford University in 1980.
Prior to becoming a financial planner he had a thirty-year career as the senior winery and vineyards executive for Robert Mondavi and was an Epsilon client for many years.
His role at Mondavi included extensive planning, budgeting, analytic, business process improvement, and financial responsibilities.
Pete completed the CFP® (Certified Financial Planner) certification process in 2013, earned his Accredited Investment Fiduciary (AIF®) credential from the Center for Fiduciary Studies in 2010, and earned the Retirement Plan Fundamentals Certificate from the American Society of Pension Professionals and Actuaries in 2011.
Dennis is a founding Principal with Epsilon Financial Group, Inc. (EFG). Dennis utilizes his wealth of financial and business experiences to help clients attain their financial goals.
Dennis received his Bachelor of Science degree in Economics from the United States Air Force Academy in 1978.
During his flying years with the USAF, he obtained his MBA with an emphasis on finance. Subsequent to leaving the Air Force, Dennis worked in technical and financial management positions in Silicon Valley while continuing his education at Stanford University.
He left Silicon Valley in 1990 to fulfill his career goal of becoming a financial planner serving individuals and small businesses. In 1992, Dennis attained his Certified Financial Planning (CFP) designation.
In 1995, Dennis and Mark Sievers joined their businesses in a partnership that eventually incorporated as Epsilon Financial Group, Inc. in 2004. Dennis has three sons and two stepchildren.
He and his wife, Glenda, enjoy many outdoor activities as well as the cultural activities offered at nearby cities. They are active in their local church and community organizations. Besides his family, one of his greatest joy’s is helping clients reach their retirement and financial goals.
Mark is a founding Principal of Epsilon Financial Group, Inc. He is a fee-only, independent financial advisor.
For three decades, Mark has been helping individuals and their families realize their investment and financial goals.
Mark is the trusted advisor to a diverse group of individuals and families, including business executives, attorneys, physicians, engineers, professors, retirees, former professional athletes, and many others. His clients are located in the San Francisco Bay Area and across the United States.
He had built his advisory business by combining a sound asset class investing methodology with financial planning and first-class client service.
Name of Firm: Epsilon Financial Group
Source: Institute for the Fiduciary Standard
Topic: Real Fiduciary™ Advisors
Type of Registration: Registered Investment Advisor (SEC or State)
Fiduciary: A fiduciary is an individual or firm occupying a special position of trust and confidence, the highest standard in law. A fiduciary must act in the best interest of the client, without regard to the fiduciary’s financial interest.
Fee-Only: The advisor’s only method of compensation is a fee: Asset-based, fixed, or hourly. Real Fiduciary™ Advisors do not accept any type of commission for the sale of financial products, transactions, or revenue sharing.
Validation: Real Fiduciary™ Advisors validate their fiduciary practices by publishing:
Real Fiduciary™ Advisors agree to:*
Acknowledged By: Epsilon Financial Group
*The Real Fiduciary™ Code of Ethics summarize the Real FiduciaryTM Practices of the Institute for the Fiduciary Standard. Our advisors commit to meet these practices. Email email@example.com. View the Real Fiduciary™ Practices, at: https://thefiduciaryinstitute.org/wp-content/uploads/2019/03/Real-Fiduciary-Practices-2019-02-22.pdf.
Fiduciary eBook – 080120, Fiduciary Common Sense: View PDF
Why do we have a spiral as a symbol in our logo and website?
It comes from a strong historical and mathematical background.
The spiral is often called the Fibonacci Spiral that was developed by Leonardo Bonacci of Pisa, a twelfth-century Italian mathematician, considered by many historians to be the most talented Western mathematician of the Middle Ages.
Fibonacci is remembered for two important contributions to Western mathematics: helping to spread the use of Hindu systems of writing numbers in Europe (e.g. 0,1,2,3,4,5, etc.) in place of Roman numerals (e.g. I, IV, V, VI, IX, etc.), and developing the series of numbers which define the spiral that occurs so very often in nature (the Fibonacci Sequence).
The number series that describes the spiral and its significance was later adopted and further developed by Blaise Pascal, a seventeenth-century French mathematician, who created Pascal’s Triangle and its importance in probability theory.
Within the architecture of the spiral lies the foundation for the Golden Mean, a ratio which has proven to be significant in many natural, biological, and architectural designs.
We have chosen our firm name “Epsilon” because of its use in statistical analysis to indicate how well a mathematical formula explains an analysis. Our objective is to explain as much as possible to our clients, enlisting them as partners in their success, and enabling them to make sound financial decisions.
While each family experiences generational wealth challenges differently, three areas, in particular, require thoughtful consideration and proactive guidance: managing the founder’s transition from wealth accumulation to legacy planning; preparing successor generations to be responsible stewards; and creating a unified vision for the family’s legacy.
We have decades of experience advising multi-generational families at every stage of the wealth lifecycle, from accumulation through protection and into distribution and estate. We are able to share our observations and strategies for overcoming common challenges and creating enduring legacies.
It is human nature to delay thinking about the future. Transitioning from wealth builder to wealth distributor can be difficult, especially for baby boomers whose life expectancy and work ethic are redefining the concept of retirement.
This can manifest, for example, in a tendency to emphasize asset growth over legacy and philanthropic planning. A founder’s inclination to maintain the status quo may also narrow the window of opportunity to expose the next-generation to the principles of responsible wealth management. Additionally, founders who themselves grew up without wealth have difficulty knowing how or when to discuss family values around money and family legacy goals.
In order to achieve their goals as successfully and efficiently as possible, founders must eventually consider the distribution of their wealth. Initial and annual activities can be designed and implemented that will accomplish their goals.
Many parents are uncomfortable discussing wealth and inheritance planning, but failure to do so can create other challenges. Successor generations must be prepared for the challenges and responsibilities that come with inherited wealth, both to assure their personal financial sufficiency and to assume stewardship of the family legacy. Younger family members need to develop sound financial management habits, understand family values and become familiar with the family’s investment, estate and philanthropic strategies. Age-appropriate education and ongoing family conversations are essential.
The most successful intergenerational wealth transfers occur when the family has a unified vision for the legacy they want to preserve. Yet, identifying a common purpose can be a challenging process. Should assets be distributed to heirs, protected for future generations, used to fund philanthropy or some combination?
The answers to these questions are shaped by the objectives of the founders and individual family members. In the ideal case, family values, attitudes and objectives align. In reality, they usually do not.
Healthy family communication is critical. Our advisors have experience facilitating family meetings where differences can be aired and reconciled, and common ground can be discovered, and implementation strategies can be established.
Epsilon Financial Group exists to help our clients make sound financial decisions. Our advisors have experience providing families with the forward-thinking advice and solutions necessary to pave the way for a smooth transfer of family wealth, laying the groundwork for future generations.
Epsilon Financial Group offers expertise and guidance to help a fiduciary fulfill the sacred trust to clients while managing the professional risk arising in their practice.
Your role as a professional fiduciary covers many areas and requires expertise in many fields, including the advanced principles and tools of prudent investing.
You have obligations to beneficiaries, to the court and to yourself. In today’s litigious atmosphere you have significant legal exposure as well. Following established fiduciary standards and methods will help you manage investment risk for clients while reducing your own professional liability.
You are now required to implement an ongoing investment process that is more complex, sophisticated and demanding than under prior law. It is not enough to deliver good investment results. Indeed, the quality of the result may be in the eye of the beholder. You must justify your decisions according to the rules of fiduciary prudence.
This duty extends beyond a knowledge of Modern Portfolio Theory, or portfolio diversification, or investment manager selection. Fiduciary prudence is satisfied by incorporating the legal standards of care into an investment management process. It’s not enough to know the law. You must apply the law through fundamentally sound investment decisions. Balancing these efforts takes knowledge and resources.
The principals of Epsilon Financial Group are investment fiduciary experts and experienced investment advisors. We are uniquely qualified to help you apply the standards of fiduciary care in portfolio design and investment management.
An investment fiduciary manages property for the benefit of another, exercises discretionary authority over assets or controls investments outright, or renders comprehensive and continuous investment advice for a trust or other entity. The sources that define fiduciary responsibility are extensive and include, among other, the probate code, the Uniform Prudent Investor Act, the American Law Institute Restatement Third of the Law on Trusts and Prudent Investor Rule.
Benefits to Your Fiduciary Practice
A comprehensive and objective investment decision making process leads to greater financial organization, empowerment, confidence, fulfillment of duties, better results and ultimately, peace of mind for the fiduciary who uses a prudent process.
We can help you:
We are Independent, Fee-Only Advisors
Just as you want your other professional advisors (accountants, attorneys, physicians, etc.) to advise based on what they know to be best for you rather than what pays the highest commission or fee, Epsilon Financial Group only receives compensation through advice fees our clients pay us directly. We do not use investment tools that pay commissions or other forms of compensation. We do not have any conflicts of interest impacting the advice we give regarding your financial goals and investment management needs. We fully disclose our fees in the initial documentation we prepare and with each subsequent reporting cycle. Only through this form of compensation can you be sure your advisor keeps your best interest at the forefront of all recommendations and decision making.
Epsilon Financial Group provides comprehensive wealth management advisory services to employees, independent contractors, professionals, business owners, retirees, and their families. We help clients organize, plan and manage their wealth to achieve their unique goals. Our solutions are customized to each client’s individual spectrum of financial planning needs.
We provide ongoing financial advice to help clients achieve their goals. Financial decisions impact other aspects of a financial picture. We encourage our clients to communicate with us regarding all of their financial issues to fully integrate solutions with needs.
We work with clients to develop an overall understanding of how the global capital markets operate generally, how financial returns are determined largely by the amount of related risk, and how investors can reap the rewards of investing as long as they are willing and able to accept the risks that go along with investing in the financial markets.
We develop investment portfolios that are tailored to a client’s unique investment time horizon, goals and constraints
We monitor and maintain these portfolios over time to ensure they continue to meet our clients’ unique needs, as they progress through the various life stages.
We work with clients to understand their retirement investments, any pension or retirement plans to which they have vested interests through their employment, and Social Security, as it applies to their personal situations.
With a broad understanding of these retirement cash flows “in”, and in consultation with clients to understand their goals for (and planned expenses in) retirement (cash flows “out”), we help our clients make sound financial decisions in planning for this significant milestone.
We do not prepare tax returns for clients.
Through our professional and continuing education, we remain aware of the significant tax effects on investments and family wealth, and work with clients to implement strategies to optimize after-tax wealth.
We are not attorneys, and we do not prepare estate plans.
Through our professional and continuing education, we remain aware of recent innovations in estate planning techniques, and we work with local attorneys specializing in Estate Law in order to provide coordinated service to our clients.
We are not licensed to sell insurance, and we do not sell insurance or related products.
Through our professional and continuing education, we are able to work with our clients within a comprehensive planning process to identify key areas of risk, and identify representative insurance techniques and products that could serve to manage these risks to levels our clients find acceptable.
We understand that higher education represents an important goal for many individuals and families, and can also have a significant impact on financial resources.
We work with individuals and families who are currently struggling to manage education debt, as a part of their overall financial and wealth picture.
We also work with individuals and families who are planning for future educational activities (usually for their children and grandchildren), and who want to consider the impact on their financial situation of paying for them, and strategies for planning ahead to do so most efficiently.
A significant factor in a family’s long-term wealth and financial health is their ability to save regularly.
We work with clients to understand their monthly cash flows, and to help them develop spending targets and savings strategies that help them achieve their financial goals.
As independent, fee based financial planners we are not limited by particular company products in addressing our client financial needs. Our solutions are based on what makes the most sense for our clients and offers the greatest probability of success.