METHODS.

A Client Relationship - What to Expect
Far too many people focus attention on specific investment ideas or discreet financial acts. There is more to money than money®. Financial growth is not achieved by unrelated acts. People should understand and manage their resources relative to their comprehensive goals. Resource Advisory Services builds relationships to keep attention on the “big picture.”

The many potential financial instruments and techniques are like the maintenance performed in the lower levels of a ship. At best a tax maneuver can make things work a little better, like lubricating the steering mechanism. Real progress comes from building wealth through disciplined investment contributions and debt payments. Even investment performance that correctly balances risks and rewards is only prudent. The investment return’s impact is limited by the amount of resources allocated to investments.

Net Worth Statements we maintain communicate comprehensive results for our clients. Progress or lack of progress is obvious. Enjoying wealth is closely related to clearly understanding these changes relative to the desired lifestyles. Even if we are far from goals, measuring and planning progress improve our enjoyment of the wealth we have.

Getting Started
Practically all new clients want to understand a few specific issues. Many are referred by people we know. This website facilitates knowing more about us than we know about you at a first meeting. We want to learn whether the issues and chemistry are right for us to improve your life. A phone conversation or email exchange helps us prepare for a first appointment.

Retirement, inheritance, and changing jobs are common reasons for initial meetings. There have been people who simply wanted to bring their financial information into better order. A few aging clients were most interested in us keeping affairs documented for survivors’ ease. One couple wanted to understand the impact of a second home on their financial strength and risk. Some clients contacted us because of excess liquidity.

Our primary job is to clarify complex information with carefully considered professional opinions.

Generally, the issues cannot be adequately addressed in isolation. There is more to money than money®. We need comprehensive understanding of the lifestyle that produced the current situation. Personal attitudes are connected to money. We write about our understanding of the situations in a document we call the Recommendations Report.

The Recommendations Report
These documents are usually between ten to thirty pages. After we understand the issues that prompted the need for a financial advisor, we can quote a fee for the report and begin work. Guidelines for these fees are based on family income and net worth discussed on the "Compensation" page of this website.

The Situation and Scope Section addresses a question. How do lifestyle preferences and income potential affect financial issues? It discusses reasons our new client wants our opinions and advice. Writing forces us to be logical. This section documents our understanding of our new client and sets goals for the report. We always encourage and welcome corrections.

The Net Worth Statement Section follows, to explore available resources for addressing the issues. In the metaphor of a ship - How big and efficient is the engine? We separate assets into those held for liquidity, investments and lifestyle. Liquid assets are the reserves that make financial life run smoothly. Investment assets are set aside for future use, in retirement or unexpected events. Personal assets indicate our clients’ lifestyles with things like the home, cars, art, or hobby equipment.

The tricky judgment involves understanding when allocations are reasonable and when they are problematic. This aspect of money is more than selling a financial instrument.

Allocations among the three major sections of assets are important. If a couple in their 50s has more than 50% of their assets allocated to their lifestyle, we should be building the investments section to support the lifestyle later. If the same age couple has 75% of assets allocated to investments, we may be able to say they have achieved financial independence. A very high allocation to investments implies a low allocation to lifestyle and liquidity. This generally implies a low cost of living and adequate investments.

Happiness with an inexpensive lifestyle is a tremendous resource. I am surprised how many times I have found financial independence when people were still concerned about their futures. Once they understood the balance between their wealth and needs, their enjoyment of wealth improved. These have been some of my most enjoyable relationships.

The percentage of total assets supported by debt is important. Think of debts this way. If a family has no debt, the assets support themselves versus part being supported by debt. For young families, the ratio is usually high and tied to a home mortgage. Assets allocated to investments are usually low relative to lifestyle assets.

Resource Advisory Services’ job is to give clear and frank professional opinions of our new client’s financial situation, taking into account reasons they occurred. We adapt our language to be understandable for our expected readers. If the logic is not clear for both the husband and wife of a client couple, we want to keep working until it is.

The Recommendations
Sometimes we find reasonably good financial structures. Sometimes we find troubling issues. Clients are paying us for written professional opinions, backed by logic they can study privately and understand. We explain the steps we will use if asked to help manage their financial affairs. It is not unusual to propose transformations over one to three years. We want our clients to experience changes without the personal shock of an immediate turnover.

Our client should recognize whether we know them clearly. The report can take many directions. Regardless of the complexity, our recommendations should be consistent with our logic from the beginning of the report.

Ongoing Relationships
With the main goals of the report covered we describe an ongoing relationship we envision. This is a discussion of expected activities, timetables and fees. In putting our clients’ interests first, we have told some that the cost of an ongoing relationship is not warranted, because the report itself should solve their issues. In most cases, clients have needed our continued assistance and felt it is worth the cost.

This is where we help our clients “drive their ships” with Quarterly Reports. At three month intervals we bring the Net Worth Statement up to date, with written discussions of events and plans. The recent year of Net Worth Statements are arrayed to make progress obvious. For very long term relationships, we periodically summarize ten years or more of progress. This feedback is an important discipline in building wealth.

Our reports become financial diaries. We document reasons for decisions. Estate planning discussions can be clear. When net worth is growing, we know the progress. When it does not meet expectations, we find reasons and forthrightly recommend remedies. This discipline is important for both building and the feeling of security that improves enjoyment.