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Brian Fricke's Author Interview with Advantage Media Group
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Frequently Asked Questions
Who is FMC
What is your planning philosophy?
Do you specialize in working with any particular client?
Do you work with clients nationally?
How do you work nationally?
Tell me about your staff
COMMUNICATION
Will you consult me when making trades?
Will I see a list of investments before they are purchased?
Do you work with our accountant?
Can I trade in my investment account with you?
Who will I be working with?
SECURITY/CONFIDENTIALITY
What about Internet protection?
I am worried about privacy and confidentiality. What can I expect from you?
Do you hold my money?
Will I be required to move my assets to another custodian?
What is Limited Discretionary Control?
COSTS AND FEES
How are you compensated?
Are there other costs involved?
How often is my account traded?
How often do you review my investments and my account?
How often will you meet with me?
INVESTMENTS
What is your investment philosophy?
What is your investment selection strategy?
What types of investments do you offer?
Over what period will my money be invested?
REPORTING
How often will I get reports from you?
What do you provide for me at year-end for tax purposes?
THE FIRM
Rich! That’s the answer I would always give my friends in high school when asked what I planned to be after we all graduated high school. Back then, that definition meant being a millionaire. It didn’t bother me in the least that I had absolutely no idea how I would accomplish my dream. Except that I knew, at least for me, college was not the answer.
I guess deep down inside I always knew I would own a business.
To this day I remember my father always telling me “Be the best at whatever you do. If you do that you’ll always be well paid.” I could hardly wait until the day when I could join my father in the family business.
Then the unthinkable happened, my father died. I was 16, he was 42. One week later my mother went from being a “full-time mom” and part-time bookkeeper to a full-time business owner, with all the responsibility that goes with owning and operating a business.
Mom had no choice! There were not sufficient assets that would give her the choice of deciding whether she would continue being “just a mom”. She had to keep the company going to take care of her two boys.
I look back now and realize this is one of the main reasons I do what I do. My mother should have had choices. She should have been able to decide what she wanted to do with her life, without money influencing her decision.
I got my real estate license when I was 18 and started my career in residential real estate sales. I quickly learned that hauling strangers around in my car was not for me. I remember working with an investor who bought and sold rental homes and noticed his profits far exceeded my commissions, while I did the majority of the work. Soon after, I found myself buying and selling over 30 rental properties.
Then a funny thing started to happen. People started approaching me, asking me how to become financially successful. My financial planning future was born.
I interviewed with any and every company in town that said they did financial planning. I was very disappointed and disillusioned to find that these companies fell into two groups. One group were insurance agents, interested only in selling life insurance and the occasional disability policy. The other group only wanted to sell investments. I just knew there had to be something better.
I remember coming home one evening announcing with great enthusiasm to my wife, that I would be starting my own financial planning company the following week. We had $20,000 in the bank, with an understanding that when that money was gone I’d go back and get a “real job”. We also had a three-month-old infant. And my wife had recently quit her well paying job to be a full time mom. This was something we both felt was very important (and still do).
I was on top of the world. I owned my own company! It didn’t matter that there were no clients or income. My wife had absolute trust and confidence in me. It’s because of her I obtained the Certified Financial Planner (CFP) designation. I just knew if I was really good in what I did no one would care whether or not I had any designation. My wife convinced me of the wisdom of obtaining my CFP designation. I love and admire her for having the trust and confidence in allowing me to pursue my dream.
I remember vividly the afternoon we sat down together on our living room sofa to review our finances. This was a pretty quick process. We had no money in the bank, $30,000 of credit card debt, both cars and the house. It’s also, the day she announced we would be having our second child. Clearly time for me to go get “a real job”.
But some how we both knew our circumstances would change for the better and they did. Today we are totally debt free, including our company. We now have two wonderful boys on their way to being outstanding young men.
In the beginning I would work with anyone. This made for long days and time away from my family. As time went on and the company grew I started to realize that it was time for a change and restructured the way we conduct business. Now we serve no more than 100 top clients, who leave the details of their finances to us. Therefore, they are able to do in life what’s important to them.
Along the way, I have found my definition of rich has changed. Now it’s not so much about how much money I have. It is about having the freedom and security to do what I want, when I want, and with whom I want. This, I truly believe, is what our company is all about.
Watching a client walk away from millions of dollars in stock options, knowing they already “have enough”. Willing to create the time to do those things important to them by sacrificing what some would consider significant wealth. Or the corporate executive who takes early retirement. Not because he’s asked to, but because we wants to. So he can pursue other opportunities that are more important to him, like managing the business side of his church or organizing missions throughout the world. Not to mention the couple experiencing the freedom and joy they get from traveling the entire U.S. in their motor home.
None of our clients will show up on some wealthiest in America list. However, I suspect they are truly “richer” than many of this nations wealthiest families.
Back to topWhat is your planning philosophy?
Financial Roadmap
We believe you should have a financial roadmap. It tells you where you are, where you want to be and what’s really important to you. We create and update financial roadmaps for our clients.
Cash-flow
We believe you should focus on total return, not just interest or income. To generate long-term cash-flow you need both growth and income to keep up with inflation. We set up enough funds in liquid and short-term investments to take care of cash needs expected during the next 5 years
Risk
We believe you should only assume the minimum level of risk necessary to accomplish and achieve all your financial goals. We measure your success by your ability to reach and keep your goals and sleep well during turbulent markets.
Taxes and Expenses
The investment future is uncertain and risky. Money saved on taxes and investment expenses are risk-less and provide guaranteed returns. Saving money on unnecessary taxes and investment fees and expenses is a primary focus. Most clients find it costs them no more to hire us because of the money they save in these areas.
Liquidity vs. Investment
Money needed in a 5 year time horizon should not be “invested.” These monies should be put into money market accounts and/or fixed income (CD’s, treasuries, etc.) with maturities equal to or less than the goal’s time horizon. Only money that you don’t expect to “need” for at least 5 years should be invested.
Back to topDo you specialize in working with any particular type of client?
Most clients have several, but rarely all of the following characteristics:
- Already retired, or
- Would like to retire in 5 years or less
- Successful business owner
- Usually age 50+, but not always
- Under the age 50, you probably own a lot of company stock or stock options
- Happily married for several years
- You take pride in the accomplishment of your children and grandchildren
Do you work with clients nationally?
Yes. About 15% of our clients are located outside Florida.
Back to topThrough effective use of the phone, fax and internet we are able to “meet” to review, discuss and present strategies and recommendations. We actually schedule appointments to meet clients telephonically and/or electronically. Finally, many of our out-of-state clients find Florida a very attractive place to visit, especially during the winter.
Back to topThe firm is locally owned by Brian L. Fricke, CFP (our president.) Our staff is an experienced group of financial planning practitioners and support staff. Although the firm makes use of its network of professional contacts and a wide range of economic and data sources, we do not depend on out-of-town experts to make decisions; the customized advice provided to you is based on the expertise of the firm’s professionals.
As discussed below, we work on a team basis. Certified Financial Planning practitioners provide all your recommendations. Hosted on our website under the Your Team are the bios of our team.
Back to topCOMMUNICATIONS
Will you consult when making investment changes or trades?
Not generally. Each client has a specific Investment Game Plan (IGP) that is discussed and approved that directs how their money is to be invested. Occasionally it will be necessary to react quickly to investment or market changes. Wherever possible we will notify you in advance of any planned changes. The custodian will immediately provide trade confirmations and the trades will be reflected on your next monthly statement from the custodian. We are always happy to discuss any changes as soon as practically possible.
Back to topWill I see a list of investments before they are purchased?
Absolutely. We will work together to establish an appropriate asset allocation strategy, then create an Investment Game Plan (IGP) which will include your current investments and how they should be handled. Prior to implementing the game plan, if you like, we will discuss in detail the specific investments we plan to use in order to implement our IGP.
Back to topDo you work with our accountant?
With your permission, we will always work with your other advisors. In fact, we strongly recommend you permit us to work as a team on your behalf. Allowing us to speak to them directly and/or provide data and information, assists in seamless handling of your needs. For those advisors with the appropriate technology, we can provide the advisor web-based access to much of our planning technology.
Back to topI like to have an account that I can do some speculating/trading with from time to time. Can I trade in my investment account with you?
Generally we do not recommend that you trade in your investment accounts. We will, however, be happy to open a trading account for you to make your own investment selections and trades. We can even arrange for this to be conducted online if you like.
Back to topWith whom will I be working with?
You will work directly with Brian Fricke, CFP to develop your overall game plan. We also work on a team basis. Over time you will work with our vice president of investments and vice president of planning. More important, you should know that we have people and systems in place to take care of you and your family, even in the event something should happen to Brian Fricke.
Back to topSECURITY/CONFIDENTIALITY
What about Internet protection?
We have instituted multi-layered protection in our office systems, including complex firewalls, intruder alarms and anti-virus protection.
Back to topWhat can I expect from you regarding my privacy and confidentiality?
You can expect us to be equally concerned. We are obsessive about your confidentiality. We have a privacy policy which is listed on this website, click here to view the policy. In addition, all of our staff members have signed a confidentiality agreement. Our recommended custodian and technology partners are equally committed to maintaining your confidentiality.
Back to topNo. We are registered investment advisors not brokers, we hold no client assets. The only funds we receive from you are our advisory fees. When given limited discretionary authority, we generally establish accounts at major, low-cost investment firms (i.e. Fidelity, Schwab and TD Waterhouse.) We have negotiated institutional pricing for you at these firms.
Back to topWill I Be Required to Move My Accounts to Another Custodian or Broker?
This is not required. We will provide advice on all assets and make recommendations based on your entire portfolio regardless of where assets are held. If you want us to provide periodical performance reports and keep track of tax cost issues, it might be necessary to transfer your accounts, depending on your individual situation.
Back to topWhat is Limited Discretionary Control?
This is the authority you provide our firm regarding your investment account. It authorizes the custodian/broker to accept our instructions regarding purchases and sales within the account. As we receive no commissions from the securities purchased in the account, we have no incentive to “churn” (i.e. trade the account to benefit our firm through receiving increased commissions.) Limited discretion does not allow us to have money dispersed from your account other than to have funds delivered to you at your address of record.
Back to topCOST AND FEES
How are you compensated?
We charge our clients an advisory fee, usually deducted from one of their investment accounts so we do not impact their monthly cash flow. We receive no referral fees. Occasionally we may use an investment that cannot be purchased on a no commission basis. This accounts for less than 5% of our overall revenues and is fully discussed and disclosed prior to being added to your portfolio.
In most cases, it should cost you no more to use our services compared to using most of the popular no-load mutual funds. When you provide us with your current account information we can, if you like, provide a detailed comparison. Most people are shocked to see all the fees and expenses they are paying, but never knew about and find out that they can hire us, usually with out any increased net cost.
We do charge a minimum annual fee of $12,000, billed and collected in quarterly installments of $3,000. An initial deposit to engage our services of $3,000 is usually required. This is applied towards your quarterly fee.
Beginning in 2006 we created a "Friends & Family" program where we can discount fees up to 60% to new clients based on their situation. We created this level of service for people that our clients know that need our expertise but it may not be appropriate to pay our minimum fee.
Money Back Guarantee
We provide all our clients a money back guarantee during the first 12 months of working with us. If, for any reason, you do not feel our relationship is working or that you are not getting your money’s worth, all you have to do is let us know. We’ll provide an immediate and prompt refund of any and all fees paid us to date.
This motivates us to accept only clients who want to establish a long-term relationship with our firm and whom we feel there is a fit.
Back to topAre there other costs involved?
Yes, as with all investment related advice platforms, there are a variety of potential costs; however, as fee-only planners, we sit ‘on the same side of the table’ as our clients. We are diligent in our effort to control all costs and taxes and provide clients with details regarding all the fees and expenses they may incur. These include:
Custodial Costs. These are the fees paid to the securities custodian for holding our clients assets, providing monthly reports and executing trades within our clients’ accounts. We have negotiated low fees with our custodian. For accounts held at the custodian recommended by our firm (Fidelity), we estimate that this cost is less than 1/10th of 1% on an annual basis. These fees, if any, are reflected in the monthly account statement.
Management Fees and Expenses. These are the fees and expenses associated with the management of specific investments. For any particular portfolio, the total cost will be a function of the allocation between bonds and stocks. We estimate that for most of our portfolios, these costs will range from .70% to 1.30%. We will be happy to provide details of this estimate upon request. Returns reported are net of any fees and costs.
We believe that we provide exceptional value relative to the total cost of our services and all related fees and expenses.
How often is my account traded?
We do not generally “trade” your account, however, we do have a carefully constructed investment game plan and play book. Specifically, we employ technical market indicators to help us determine the optimum time to rebalance or reallocate your account. We will also make specific trades for tax purposes and changes in investment strategies.
Back to topHow often do you review my investments and my account?
We formally monitor investment performance on a weekly basis. We review activities in our discretionary accounts on a daily basis and allocations on a quarterly basis.
Back to topHow often will you meet with me?
We will meet with you as often and as necessary as your circumstances dictate. We always want the “here’s what I’m thinking about” questions, not the “guess what I just did” comments. During our first two years of working together, we recommend meeting at least quarterly. In any event, we provide you with quarterly updated net worth reports and semi-annual performance reports.
Back to topINVESTMENTS
What is your investment philosophy?
Diversification
We believe in the strategy of spreading investments over a variety of different asset classes in order to reduce the risk of substantial loss. Ideally, no more of 5% of a portfolio is allocated to any individual stock.
Back to topWhat is your investment selection strategy?
Index Funds
In well documented research and studies, over 85% of professional money managers under perform the market indexes. Therefore, whenever possible, we prefer to use index funds, specifically exchange traded funds (ETF’s), like iShares. Unlike traditional mutual funds with ETFs, we can place stop loss orders as well as other trading strategies not available in traditional mutual funds.
On-going Management
We think your personal strategy should be reviewed regularly to see if you are continuing to move towards the direction of achieving your goals. Our responsibility is to see that you stay on course and do so with a minimum of worry. We define our success as your being able to accomplish your goals with the least amount of risk possible, not based on whether we out performed a market index or benchmark.
Rebalancing
We use technical market indicators (Supply vs. Demand) to determine the optimum point to rebalance your account. We do not specifically rebalance/reallocate on a quarterly or calendar year basis. It’s our intention to rebalance at the optimum time according to the market indicators and directions, not based on an arbitrary calendar
Back to topWhat type of investments do you offer?
Actually, we do not “offer” any investments. We are financial planners, not money managers. However, a significant part of our advice is focused on the design and implementation of your investment game plan.
As fee based planners we are solely focused on the best interests of you, our client, and restrict ourselves to utilizing, whenever possible, investments that have no commissions.
As an independent registered investment advisor, we have a fiduciary responsibility to put your interests before our own. We have access to the entire universe of investment alternatives.
Back to topOver what period will my money be invested?
Money will be invested over your personal time horizon in the investment game plan. Monies expected to be needed in the next 5 years or less will be restricted to investments such as CD’s, money markets and short-term bonds.
Back to topREPORTING
How often will I get reports from you?
Although the custodians/brokerage firms send reports and other information on a monthly basis, we provide quarterly net worth summaries, semi-annual performance reports and updated reports as requested.
Back to topWhat will you give me at year end for tax purposes?
Although the custodian/brokerage firm is the official record keeper, our firm daily downloads complete data all under our discretionary management. We use sophisticated, professional portfolio management software, allowing us to continually monitor your transactions and tax basis. Therefore, we can provide you and/or your tax preparer detailed tax related information (i.e. realized and unrealized short and long term gains, taxable accounting, tax and tax-free income) at any time.
If you have any further questions not covered in this section please contact Nancy Owen at nancy@fmcretire.com or 407-647-7006 or 800-393-1017 for more information.
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