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Frequently Asked QuestionsQuestions1) What types of clients do you work with? 2) Do you have an account minimum? 3) What services do you provide? 4) What is your investment philosophy? 5) How is Tarheel Advisors compensated for its services? 6) Does Tarheel Advisors have a standard portfolio that they will “park” my money in? 7) Will I be able to participate in the investment decisions? 8) What is the difference between “Non-Discretionary” and “Discretionary” accounts? 9)I have some investments I want to manage on my own. Can I still work with you? 10) If I decide to work with Tarheel Advisors, where will my assets be held? 11) If Tarheel Advisors does not hold my assets, how does it manage my account? 12) Are my assets safe with Tarheel Advisors? 13) How will you communicate with me about my account? 14) Will I have to sell all or part of my current investments to work with you? 15) Will you charge me an extra fee to consult with my estate planning attorney or CPA? 16) Can you help me choose the appropriate investments in my company's 401(k) / Retirement Plan? 17) How can I start working with Tarheel Advisors? 18) What is the difference between a broker and an investment advisor?
Answers1) What types of clients do you work with? Our clients are individuals, families, and small business owners who are looking for help with retirement planning, college funding preparation, or 401(k)/Pension set-up and supervision. These groups span a diverse range of ages, employment backgrounds, and investment objectives. 2) Do you have an account minimum? No, we do not have a strict account minimum policy. That being said, we have found our services provide the most value to those persons with investable assets between $100,000 and $5,000,000. However, the potential for a long-term client relationship is more important than the size of a client's account. 3) What services do you provide? At Tarheel Advisors, LLC it is our objective to provide a truly comprehensive financial planning experience that takes into account our clients’ unique situation and goals. We strive to assist our clients with whatever financial concerns they may have. Whether it is investment management, a child’s education funding, insurance policy review, estate planning, tax preparation assistance, or even home mortgage / liability analysis, we are glad to help, and as necessary, consult with other local licensed professionals on your behalf. 4) What is your investment philosophy? First things first, investment selection cannot take place without first evaluating a client’s unique situation, risk tolerance, time horizon, and goals. After consultation, we will determine an appropriate asset allocation and within that, the most suitable securities to help you reach your goals. By its nature, every client’s portfolio will be different to reflect their unique circumstances. One thing that will not be different is our commitment to continually monitor the selected investments, the Markets, and your situation so as to adjust, as necessary, to reflect the changing conditions. 5) How is Tarheel Advisors compensated for its services? We charge an annual fee based on the percentage of assets we manage. This management fee is quoted as an annual percentage basis, but is calculated and billed quarterly in arrears. For example, a 1% annual fee would amount to .25% on a quarterly. Also, unlike Broker / Dealers, as a Registered Investment Advisory (RIA) firm, Tarheel Advisors, LLC does not accept any additional commissions or other forms of compensation from investment product providers or financial institutions. This transparency helps us avoid any potential conflicts of interest when recommending specific investment products, and also leads to the recommendation of the lowest cost investment securities that are stripped of all sales loads and trails. 6) Does Tarheel Advisors have a standard portfolio that they will “park” my money in? No. We do not believe that is an effective strategy. A pre-conceived portfolio based solely on risk-tolerance cannot possibly account for the many changes that occur in our clients’ lives. Please do not infer from this statement that there is no merit in determining your risk tolerance – there certainly is. But, that is just one small part of the equation to create a properly allocated portfolio. We believe in creating a personalized dynamic portfolio for each client that will incorporate each person’s short-term, long-term, income, and growth needs. 7) Will I be able to participate in the investment decisions? Yes. Because we don’t believe in “parking” clients’ assets in a standard portfolio, we welcome your ongoing input to the investment selection process. For example, you may have a particular moral aversion to certain companies, or perhaps a desire to pursue a more socially-conscious portfolio. Either way, we will incorporate your wishes into the investment plan. On our end, we will select specific investments and explain our rationale and purpose for each one. You will then have the opportunity to approve, modify, or reject any particular recommendation. 8) What is the difference between “Non-Discretionary” and “Discretionary” accounts? “Non-discretionary” means that we must receive your express approval on each and every investment change before we make it. “Discretionary” means that we may make an investment change on your behalf without getting explicit approval in advance -- provided the action is consistent with your overall investment goals. The majority of our clients prefer the “Discretionary” approach. Please note that even with a “Discretionary” account, we will still make an effort to contact the client in advance when it is not a time-sensitive matter. 9) I have some investments I want to manage on my own. Can I still work with you? Yes. Some of our clients choose to invest a portion of their assets based solely on their own intuition. For ease of overall account viewing and tax reporting, we can set up your self-managed account through our platform as an unmanaged or non-discretionary account for a nominal fee. In that self-managed account, we will only be able to execute un-solicited trades, and assist with the preparation of tax and performance reports. 10) If I decide to work with Tarheel Advisors, where will my assets be held? Your assets will normally be held and custodied at Charles Schwab Institutional. On occasion, certain insurance products, etc. may require a different custodian. 11) If Tarheel Advisors does not hold my assets, how does it manage my account? Good question. When your account is established, one of the documents you sign gives Tarheel Advisors a limited power of attorney on your account. This authority allows us to initiate trades among securities within your account, and if you prefer, can also extend to check requests and journal entries on your behalf. 12) Are my assets safe with Tarheel Advisors? Yes, your accounts are afforded protection by the Securities Investor Protection Corporation (“SIPC”), of which Schwab is a member. SIPC protects the securities of its members’ customers up to $500,000 (including $100,000 for claims for cash). Another safeguard for the security of our client’s assets consists of additional “excess SIPC” protection that is provided through Schwab’s policy with underwriters at Lloyd’s of London. Under the policy Schwab has with Lloyd’s, excess SIPC protection for Schwab clients is provided to an aggregate of $600 million of securities and cash for all clients. The combined return to any client from a trustee, SIPC and Lloyd’s is $150 million, including cash of up to $1 million. This additional protection becomes available in the event that SIPC limits are exhausted. However, neither SIPC nor “excess SIPC” protection covers fluctuations in the market value of your securities. 13) How will you communicate with me about my account? It depends on your preference. We use a variety of day-to-day contact methods including: phone, email, text, or fax. As to official account documentation, you will receive at least a quarterly statement from us indicating quarter-end account values and management fee calculations. Additionally, all monthly account statements and tax documents are available via online, e-mail, or standard mail based on your preference. Clients are encouraged to contact us at any time to discuss their investments, ask questions, or make us aware of changes in their life. 14) Will I have to sell all or part of my current investments to work with you? In most cases --No. But, there are likely some significant investment changes we would recommend. However, these changes can often be implemented over time, or can be adapted to fit some of your current holdings. For example, some clients may have significant unrealized investment gains or losses in their current holdings that would need to be managed in a time-appropriate manner. 15) Will you charge me an extra fee to consult with my estate planning attorney or CPA? No, we offer this service as part of our comprehensive annual fee. In fact, we would welcome the opportunity to discuss tax or estate planning ideas with the other professionals that you have engaged. We realize that they may charge you for their time speaking with us, so we will not undertake such consultations without your express permission. 16) Can you help me choose the appropriate investments in my company's 401(k) / Retirement Plan? Yes. We feel that it is very important to incorporate your investment selection with your company’s 401(k) / Retirement Plan into your overall asset allocation so as to prevent security overlap and other unintended deviations.
You can contact us via phone at (336)510-7255 or contact us via e-mail at info@tarheeladvisors.com. Either way, we would recommend starting with a brief 10-15 minute phone call to understand your overall objectives and needs. Assuming we sound like a good match, then we can set up a time for the first face-to-face meeting. 18) What is the difference between a broker and an investment advisor? Basically, it comes down to one major difference. Advisors and brokers are held to two different fiduciary standards. Advisors are legally obligated to act and recommend investments in their client’s best interest; whereas, a broker must only recommend investments based on what is “suitable” for the client. In non-legalese, that means that advisors must act as a prudent person would – choosing the lowest cost investments and putting the client’s interest above their own. A broker in turn may select an investment that is “suitable”, but not necessarily prudent. The investment could be significantly more expensive than a similar security, or may even present a personal conflict of interest that does not have to be disclosed. For more
information on the differences between brokers and advisors, please visit the
following link to a recent Wall Street Journal article on the topic: Most people think that all
financial planners are "certified," but this isn’t true. Anyone can call himself
or herself a "financial planner." The CERTIFIED FINANCIAL PLANNER®
designation is the gold standard in the financial services industry, and only those who have fulfilled the
certification and renewal requirements of the CFP® Board can display the CFP®
certification marks. When selecting a financial planner, you need to feel
confident that the person you choose to help you plan for your future is
competent and ethical. The CFP® certification provides that sense of security by
allowing only those who meet the following requirements the right to use the CFP®
certification marks. Absolutely. The growth of our practice is based almost entirely on referrals generated by our existing clients; for that, we are both honored and thankful.
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