Frequently Asked Questions
- What type of investment professional are you? What are your credentials?
There are several types of investment professionals available to you, and the quantity of terms to describe them can be overwhelming. The Financial Industry Regulatory Authority (FINRA) can help you better understand what type of professional we are, and what types are available for you.
Rymer Wealth Management is a Registered Investment Advisor under the Investment Advisers Act of 1940. We are held to a strict fiduciary standard to always act in the best interests of each client, and to disclose any and all potential conflicts of interest to our clients.
- How can I check your background, or the background of other financial advisors?
- What is your minimum account size?
Typically, our minimum investment account size is $300,000. We sometimes accept smaller investment accounts but they will incur our minimum annual fee of $2,100.
- Are you a Fee Only advisor?
Yes, our only form of compensation is the fees we receive from our clients. We do not participate in any revenue sharing programs with other investment companies or brokers, and we do not receive any commissions or referral fees.
- How is Rymer Wealth Management different from other investment professionals?
From the beginning, we have focused on providing our clients with: (1) simplicity, (2) independence from other financial-related companies, (3) fee only services, and (4) quality investment management.
- Who is a typical client of RWM?
While we serve more than one type of client, we choose to work only with clients who understand and appreciate our views and beliefs on active and passive investment management.
Our clients include affluent retirees, company executives, entrepreneurs and business owners, and other entities such as company retirement plans.
- Is there a cost to terminate the advisory agreement for any reason?
No. The investment advisory agreement, which includes our financial planning service, allows either party to terminate the agreement at any time, for any reason, at no cost.
- Will you have discretion over my investment accounts?
Yes. We require, as part of our advisory agreement, that you give RWM a limited power of attorney over your investment assets under management with us. This limited power of attorney allows us to manage your assets within the guidelines of your mutually executed Investment Policy Statement.
We encourage our clients to take an active role in understanding our purpose and the objectives of their Investment Policy Statement and comprehensive financial plan. However, as part of our financial life planning principles, we also encourage clients to live quality and meaningful lives and let us manage your financial plans.
- How often will you make trades and changes to my account?
Minimal trading and investment costs are a primary component in our philosophy of passive investment management. RWM will typically only rebalance your investment account(s) annually. Other trades and changes may be executed in consideration of any adverse circumstances of the client or the markets.
- Who will hold my securities? Will RWM have any access to my money?
Each client's investment account will be held in custody by Scottrade. RWM and its employees will have no access to the cash and securities in your account(s) beyond its limited trading authority.
- What trading and investment costs will my account incur in addition to your management fee?
In addition to our management fee, which is no more than 0.70% of assets per year for passive management, your account will be charged the standard trading commission for Scottrade of $7 per trade. Since your account will never hold more than 12 securities, which may be rebalanced annually, your commissions will generally be less than $100 per year after the initial implementation of your Investment Policy Statement.
The only other cost you will incur, in addition to our management fee and your trading commissions, is the expense ratio of the exchange-traded funds (ETFs) in which you are invested. The average expense ratio on the ETFs used by RWM are 0.14% per year.
As a client of RWM, you will never pay more than 1.00% per year on your assets under management in our passive management program. In fact, often our clients pay much less than 1.00%.
For our Alternative Investments program, clients pay a 2% management fee of assets under management, plus a 20% performance fee on investment profits. The performance fee is paid quarterly.
- Will I be able to access my account?
Yes, you will be able to access your account anytime you would like via the Internet.
- How will I pay for your management fee??
You investment advisory fee (or management fee) will be deducted from your investment account at the end of your quarter. If you engage our services in the middle of a calendar quarter, your advisory fee will be pro-rated and deducted at the end of the current calendar quarter.
RWM will provide you with an invoice when each quarterly fee is deducted from your account.
- How much are the advisory fees?
Our advisory service includes passive and active management. For our passive management program, we charge 0.70% of assets under management per year for the first $1 million. We charge 0.35% per year for assets over $1 million. There is a minimum annual advisory fee of $2,100, which implies a minimum account size of $300,000.
For our alternative investments program, we charge a 2% management fee and a 20% performance fee.
- Why are your fees so much lower than the fees of most other advisors?
Sticking to our principles of low-cost passive investment management and independence, we can charge an advisory fee much less than the average 1.00% per year. We are able to do this because we do not incur the costs of active and proprietary research and software tools to try to outperform the markets. It is our firm belief that this is a futile effort.
We strive to reduce our clients' fees as much as possible without compromising the quality of our advisory offering. We focus on a low overhead and our firm does not fall prey to extravagance.
- Why should I pay your firm to passively manage my assets when I can simply go out an buy a mutual fund?
We would suggest that, if you can answer “yes” to ALL of the following questions, you really don’t need us. (1) Are you willing to learn how to manage your investments? While this does not require obtaining a Ph.D. in economics from an Ivy League university, it will necessitate a serious long-term commitment. (2) Do you have the time to manage your portfolio? While passive management does not require tracking the stock market daily, it does require staying on top of your portfolio and making adjustments when conditions warrant. (3) Will you enjoy managing your own portfolio? People prefer to do the things they enjoy. They tend to avoid things they donâ€™t enjoy. How do you feel about this? We are passionate about using low cost passive investment management strategies to serve our clients. (4) Can you manage your emotions? Successful investing has more to do with managing one’s emotions than it does in managing a portfolio. How did you feel about your investments when the stock market crashed recently? We take a stoic view of investment management and we remained fully invested and totally committed to our principles during the worst market performance since the Depression. If, on the other hand, you answered “no” to any of these questions, you would benefit from working with our firm.
How would you feel if you knew that “average” is actually much better what most investors experience? Most investors earn returns that are considerably below the results of the broad, unmanaged market. The reason is that these investors use strategies (e.g. market timing, stock picking, leverage, etc) that consistently result in underperformance. Considerable academic research indicates a low cost, well-diversified passively managed portfolio results in better long term results than an actively managed portfolio.
- What's an Investment Policy Statement?
An Investment Policy Statement (IPS) is a document which summarizes the important aspects of investing your assets. The IPS addresses such aspects as your risk tolerance, investment philosophy and investment goals. It will also reflect the specific strategy we will use to manage your assets.
- How is Rymer Wealth Management different from other investment professionals?
From the beginning, we have focused on providing our clients with: (1) simplicity, (2) independence from other financial-related companies, (3) fee only services, and (4) quality active and passive investment management advisory services.