Frequently Asked Questions

Interview with Keith M. Donnell MBA, CFP® President ModernWealthConcepts LLC and Team

Question: What exactly is a financial planner and how is that different from the other financial advisors out there competing for my business?

Answer: Try not to get hung up on titles. I am a Certified Financial Planner Professional. This means that I am certified by the Financial Planning Board of Standards as meeting certain requirements regarding education, experience, competency, and personal back ground.  But that’s not what should be most important to an individual looking to start a long-term successful financial relationship. What is most important is the standard of care I offer my clients as a financial advisor.

I am a fee only financial counselor. I work with my clients as a fiduciary.  Those two sentences simply mean I do not charge sales commissions, sales loads, 12b-1 fees, nor do I use any other compensation scheme that might constitute a conflict of interest between myself and the individual I am advising. As a fiduciary practitioner, I have to place your needs ahead of my own.

In my opinion, as someone seeking financial advice and guidance, you should make it a point to know the standard of care an advisor offers so that you will know whether or not his advice is primarily sales based.  Sales-based advice tends to be biased and selfserving. 

Sales-based advisors are not necessarilly required to operate in your best interest.

 

Question: How would you characterize your services? How do you see yourself in terms of being an advisor?

Answer: That's a great question! I generally work with people who are successful but also, busy. They have a lot of things going on in their lives. It is easy to get lost in the sauce, so to speak.

When I am sitting down with a perspective client, I like to tell them to think of me as a guide, your guide. You tell me where you want to go, what you would like to accomplish with your financial resources both now and in the future. I'll help you get there. Along the way, I'm going to help you save time, build wealth, and sleep comfortably at night. That's my overall goal for you.

 

Question: Why do I need a financial plan? 

Answer: Planning is the process of thinking comprehensively about a desired goal or outcome. The key is to establish our goals and then clarify our priorities.  To be successful, we must consistently focus our attention and financial resources on our highest priority items over time.  A well-thought-out financial plan should be at the core of that process. 

A financial plan can help you in three important ways:

1. identify and prioritize your most important financial goals and objectives

2. decide on a comprehensive course of action that has the highest probability of  success

3. create a written standard that you can use to measure your progress over time

Financial Planning is the process of living our lives by intelligent design rather than chaotic evolution.  It orders our steps in a manner that maximizes the effectiveness of our financial resources over time so that we can accomplish more with less. 

Skilled planning seeks the path that minimizes fees, expenses, taxable events, and risk. It can even help us sleep better at night by giving us the peace of mind that comes from knowing we have a plan in place to accomplish the things in life that are just too important to leave to chance. 

It is important to start planning now rather than later.

 

Question: What types of clients do you typically work with?

Answer: Our primary focus is retirement planning. We work closely with highly-employed individuals and their families located primarily within the greater Philadelphia area who are within about 20 years of retirement. 

Our clients are busy executives, professionals, and some business owners with a host of career, family, and civic commitments. Although they are busy, they are not distracted by the pace of their lives. They know that building wealth for retirement, along with other goals, is critically important. They do not intend to leave their most important financial goals to chance. 

Our clients want to work with an experienced practitioner who understands them and the wealth building process, does not sell investments for a living, and always places their interests first. This frees their minds to focus on other important things in their lives without having to sacrifice their long-term financial security.

Approximately, 70% of our clients are women between the ages of 50 and 70.

 

Question: What makes you different from the multitude of advisors out there? Everyone wants to work with me. They all want my money. Why should I work with you? 

Answer: I too would like to work with you and be your trusted financial advisor so, in that sense, we are quite alike.  However, let’s talk about what I have to offer you that is different. After spending more than 30 years in the financial services industry; eight years at a major brokerage firm, 12 years at a global private bank, three years at one of the largest pure investment management firms in the world, and now 10 years as an independent financial practitioner, I can honestly say that I have built a model that, I believe, is better designed to meet your needs. Let me explain.

I practice as a fiduciary which means I am committed to placing your needs ahead of my own. Only a small percentage of the financial services industry actually operates that way. This industry is loaded with conflicts of interest.  At the core of those conflicts is a self-serving, compensation model that pays financial advisors to sell investments. Some investments pay the advisor more money than others. That is a huge conflict of interest.  In many cases, that basic conflict will cost you more money over time than you may realize. It may be the difference between you achieving your financial goals and not.

I have completely removed that core conflict from my practice by operating as a fee-based advisor.  By limiting my compensation to the agreed upon fee, I am free of the sales pressure that permeates the financial services industry. It allows me to focus 100% of my time and effort on finding a solution to the issues you are trying to work through and not crafting a “sales pitch” that is designed to make you buy something. Our clients find that fact most comforting.

 

Question: What is your approach to working with people who come to you for help?

Answer: Accurate, relevant, and actionable information allows our clients to make smart financial decisions over time which, is the key to building sustainable wealth. Therefore, our job, as practitioners, is to refine raw information and data into unbiased financial advice and guidance that is both actionable and relevant to the needs and goals of our clients.

Since every client is different, our approach is to first understand the unique complexity of an individual client's life situation. We ask a lot of questions and listen carefully to the answers. Oftentimes, the things unsaid are more revealing than the spoken word. This is especially important in areas like risk management and also in establishing goals, objectives, and priorities.

Once we understand the unique complexity of our client as an individual, our engagement will generally prove successful over time.

 

Question: What is so special about the information you provide?  Isn't that information available online for free?

Answer: Information has become something of a commodity these days.  In fact, financial advice is all over the place. That is a good thing, I guess. Maybe that is a problem as well.

We view information potentially as a useful tool if it is accurate and relevant. Information alone however, is not enough. If information is going to be useful, it has to be contextualized and formulated into a detailed plan that will help our clients achieve a long-term goal like building sufficient wealth for retirement.

Giving someone information alone, then, telling them to use it to create and execute an effective long-term investment plan, is like delivering lumber, nails, and a book on home building to a vacant lot and then expecting the average person to build a house. Some people can do that, but most people cannot.

Most people need skilled and experienced help in the form of planning, counseling, and coaching in some form to achieve their long-term financial goals. 

 

Question: You refer to yourself a "Fee-Only Advisor". What exactly does that mean? How does that help me?

Answer: Compensation is at the core of professional relationships. How a professional is compensated generally determines their priorities. Commissions, sales loads, and hidden fee arrangements of any kind creates conflicts i.e.... hidden agendas. Our compensation is based on the fee-for-service model. Our proposed fee is quoted in writing, in advance of every engagement and agreed to by the client.  There are no "under-the-table extras". This benefits our clients in three important ways:

1. it minimizes conflicts of interest which saves our clients money over time

2. it promotes transparency which helps our clients to better understand their investments and finances in general 

3. it forms the basis for a trusting relationship with our clients because they know we have no hidden agendas 

This creates "peace-of-mind" for our clients.

 

Question: What about investing? You talk a lot about financial planning but what about investments? Can I invest my money through you or should I look elsewhere for that?

Answer: Financial planning ends at asset allocation which is where investing begins.  We have a carefully tailored investment process designed to help you build wealth over time. We rely on a carefully controlled exposure to global financial markets over time to help you achieve your investment objectives. We do not rely on my ability to guess what’s going to happen next. We are not market timers.

In my 30 plus years of experience I have never met the person who can consistently time the markets, myself included. I have only met those who have tried and failed. Since I fully understand this fact, I will never try to sell you on that illusion. I know that markets go up and down and I understand why that happens and how that will affect my client’s financial goals. That is a fact that I keep firmly in mind as I recommend investments for our client's portfolios.   

 

Question: What about the safety of my assets? Will my money be on deposit with you?

Answer: Your assets are not on deposit with Modern Wealth Concepts (MWC).  We are not a custodian and as such do not take custody of our client’s assets.  If you should choose to appoint us as your investment advisor you are free to choose your own custodian. You may select anyone you wish however, our preferred custodian is TD Ameritrade.  

With your signed authorization, TD Ameritrade will allow MWC to view your account within their platform and place trades directly into your account.  TD Ameritrade will also provide us the information we need to provide you with quarterly performance reporting and deduct our agreed upon quarterly management fee.  MWC will not however, be authorized to withdraw or transfer your money.  Your authorization can be rescinded by you at any time, directly with TD Ameritrade, without notice to MWC.   

As your custodian, TD Ameritrade will provide you with independent confirmations of all trading activity and monthly account statements. You may deposit or withdraw funds at your discretion directly with TD Ameritrade.  You may terminate your agreement with MWC and or TD Ameritrade at your discretion.  

TD Ameritrade does not compensate Modern Wealth Concepts for using them as our preferred custodian

 

Question: You are an independent advisor correct? What do I lose by working with your vs. the big brokerage firms, the banks, the insurance companies? What would I have to give up by working with you? Are you more risky?

Answer: Yes, I am an independent financial advisor. 

Wall Street, if you will, has worked very hard at creating the belief that they place their client’s interests ahead of their own.  If that’s true why then do they so vigorously fight against any regulations that would actually require them to do so?  The answer is, it’s all an illusion. Look carefully at the headlines of the past 20 years.  You will see the same names over and over again involved in scandal after scandal.  These are the same firms advertising themselves as your ‘trusted financial advisors’. They agree to pay fine after fine with no admission of guilt. On and on it goes.  Their transgressions are committed against all of us if not as individuals, then collectively through our pension plans, endowments, 401(k) s, college savings plans, etc.

Look at the so-called "Great Recession" of 2008 - 2009. How did it happen? Who created it? Who profited from it?  Who is still resisting regulations requiring them to place the client’s interest first?

Their basic business models are out-dated. It was acceptable, more or less, years ago when there was limited access to information and closed trading systems. Now however, through the internet and a growing number of no-load mutual funds, exchange-traded funds, low commission brokers, and independent, fee-based advisors like myself, there is a credible, alternative model emerging. That’s why I named my firm ModernWealthConcepts.  I want to bring a modern approach to providing financial services that is not based on commissions, sales loads, or hidden agendas. You pay us for our quality financial advice and guidance not our investment products. Our model is not riskier for you. It’s actually less risky. The only thing you are giving up by working with us is the illusion created by Wall Street.

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