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Eric Cumley, CFP®

Why Independent?
Now more than ever, informed investors are choosing to work with Registered Investment Advisory firms like Olympic. A Registered Investment Advisory firm typically serves higher net worth investors who are not inclined to pursue a do-it-yourself approach. Here are some common questions about Registered Investment Advisors--and the answers you need to know:

What's the difference between a Registered Investment Advisor and a brokerage firm?

Registered Investment Advisory firms like Olympic function in the role of a fiduciary. This means the firm's primary legal duty is to act solely in the best interests of its clients. This duty also requires full and fair disclosure of all facts considered material to the client's investment decisions, especially those related to fees. For example, if two investment products offer a similar risk and return profile--but one costs less than the other--the Registered Investment Advisor practitioner (fiduciary) is legally obligated to recommend the lower cost option. By contrast, there is no legal requirement for non-fiduciary advisors to do this.

In fact, many (if not most) investment advisors working for banks and brokerage firms are actually salespeople, defined by regulators as registered representatives.  Unlike a fiduciary, registered reps operate according to what is known as the suitability standard. Under suitability rules, the primary legal duty is to the advisor's employer, not necessarily to the client. This is a less stringent legal standard than the one imposed on a fiduciary like Olympic. You can learn more about the Registered Investment Advisory difference by visiting FindYourIndependentAdvisor.

Also, click
here for further guidance on choosing a financial professional from the Washington State Dept. of Financial Institutions.

How might my experience with a Registered Investment Advisor be different?
The primary goal of a Registered Investment Advisor is to recommend financial solutions that are as closely-aligned to a client's needs and priorities as possible. This means a Registered Investment Advisor practitioner must engage in ongoing in-depth interactions with their clients. Over time, this tends to involve more frequent communication and produce a deeper level of trust.

How much do Registered Investment Advisors charge for their services?
While compensation structures can differ from one Registered Investment Advisory firm to another, many charge on an annual percentage-fee basis (this is true of Olympic.) For established Registered Investment Advisory firms with experienced staff, total costs for management/advisory fees are often 1% to 2% per year of assets under care.

At Olympic, a portion of the client's fee covers professional portfolio management, performance measurement, portfolio accounting & billing, statement delivery, online account access, and transaction costs charged by the custodian.

The balance of the fee compensates Olympic for investment research & recommendations, ongoing account monitoring, periodic reviews, retirement income planning, processing deposits and withdrawals, collaboration with tax and legal providers, and many other administrative/financial support services.

Percentage fee-based pricing is fast becoming the arrangement of choice among well-informed investors; it's transparent and easy to understand. Fee-based pricing gives the Registered Investment Advisory firm a powerful incentive to protect and grow its clients' assets. When clients succeed, the advisor succeeds--in that order. A portion of the fees may also be tax-deductible; certain rules apply.

Olympic's fee schedule is disclosed in Form ADV. N
avigate to the 'Forms & Disclosures' tab above.

Finally, where would my investments be held?
Most Registered Investment Advisors use institutional custodians to hold and safeguard their client's investment securities. These custodians also provide essential services such as effecting trades and preparing monthly account statements. At Olympic, custody services are provided by Charles Schwab & Co, Inc.
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 DISCLOSURE
Olympic Wealth Management LLC is registered as an investment advisor with the State of Washington and may not transact business or dispense investment advice in states where it and its representatives are not appropriately registered, excluded, or exempted from registration.

Individualized responses to inquiries/persons that involve securities transactions or personalized investment advice for compensation will not be made without registration or exemption. Information presented here is general in nature, and does not constitute investment advice or the solicitation for purchase or sale of any product or service.

This communication is strictly intended for individuals residing in the state(s) of AZ, CA, MT, OK and WA. No offers may be made or accepted from any resident outside the specific states referenced.
 


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