Why is Summit fee-only?
Why is Summit fee-only?
Trust can only be established once our clients are convinced that our recommendations are always made with their best interest in mind. By accepting commissions, we believe an advisor seriously jeopardizes this trust and creates the appearance of bias.
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How long has Summit been in business?
Summit Capital Advisors began as a small sole proprietorship in 1992 and transitioned to a Limited Liability Company (parent company: Summit Financial Services LLC) in January 1996.
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What types of investment strategies do you offer?
Summit Capital Advisors offer a variety of investment strategies, with new opportunities being diligently pursued in order to meet the developing and evolving needs of our clients. For further information, please contact Jim Suits, CFP®, AAMS®, CDFA™ at Summit Capital Advisors.
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What are your fees for these investment strategies?
The fees are dependent upon the amount of assets that are allocated to each strategy, as well as the amount of assets that you are asking Summit to manage. Generally, depending upon the fee schedule, annual fees range from one-half percent for large amounts of monies up to one and three-quarter percent for smaller accounts. However, to get a better idea of what your actual costs will be, it is best to discuss this in a meeting with one of the firm’s Advisors.
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How does Summit select Mutual Funds and/or outside (private) portfolio managers?
We look for portfolio managers who have established excellent track records over the long-term resulting in consistent results within a particular investment style.
Summit invests with a manager, not the actual mutual fund or management company. Therefore, should a manager leave a specific fund or management company, it’s not unusual for us to follow that manager. Summit stands out from our competitors in the selection of portfolio managers.
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Does Summit select stocks for its clients’ portfolios?
Summit is a financial planning and investment management firm. As such we focus on sophisticated financial planning and estate strategies and picking world-class stock pickers (managers) to insure clients receive the absolute best in every area of their financial affairs. However, on occasion we will select stocks for portfolios.
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Does Summit utilize separate account managers?
Absolutely, when it’s in the client’s best interest to do so. Our access to some of the premier investment management firms in the world enable our separate account managers the ability to design and manage individual equity or fixed income portfolios in a tax-efficient manner. Our goal is meeting your goals.
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Can I keep my assets where they are and make the changes myself?
No. Typically, clients do not facilitate changes to the portfolio quickly enough. Furthermore, it is impossible for us to report on your portfolio without direct downloads from each custodian. Instead, we currently house all of our securities accounts at TD Ameritrade.
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How often is my account traded?
Accounts that are managed utilizing mutual funds are typically rebalanced at least twice a year. Due to market circumstances, portfolios may change during the rest of the year. For instance: should large declines in certain funds or in various share lots occur, we may sell part or all of a fund to take a tax loss, investing the proceeds in a similar fund, providing better tax-managed results of your portfolio. We may adjust to a changing investment environment, although the asset allocation tends to self-correct over time. We may periodically add a new fund if we believe it can benefit a client. Another major reason for a change would be if a portfolio manager leaves a fund.
As to stocks, changes are made throughout the year, predicated on company specific news, earning reports, general market conditions, industry trends and other relevant considerations.
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How often will you review my account?
Generally, we review each account on a monthly basis at a minimum. If circumstances warrant, such as market irregularities or a specific client need surfaces, we will review accounts immediately. All accounts are “scanned” during the month to ensure everything is in order such as trades posting, incoming cash and securities received, address changes, etc.
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Why do you review investment accounts so often?
The answer is simple and speaks to our commitment to you. We’re always watching for news on our mutual funds and/or stocks, including those in which we’d like to invest. When major events occur that historically affect the economic climate, we review your portfolio. As we continuously rebalance accounts, we continuously examine portfolios. We believe that providing service with integrity means practicing due diligence…even when no one else is watching.
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As one of your investment management clients, how often would you meet with me?
During the first year for investment management clients, we will probably want to meet with you at least quarterly to explain and review your first few account statement reports. After these initial meetings we will generally give you the option to meet as you desire. In addition, we will request that you come in for a comprehensive review periodically as we jointly decide, but not less than annually.
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How often will I be updated on my portfolio?
In addition to our quarterly meetings, TD Ameritrade will issue a monthly statement listing your securities, their current values and gains and losses in both percentage and dollars as of month-end.
Furthermore, as securities trades are executed, you will receive a confirmation statement with full details of each buy or sell.
You may also view all of your accounts through the client area of Summit’s secure website. The client area provides you with information regarding your investment positions, stock and mutual fund quotes, and account balances to name a few.
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Will you consult me when making trades?
Our practice is to consult our clients prior to making initial investments. We discuss our different investment strategies and what you should expect as a result of these strategies. This information is also shared in writing within the client’s investment management contract. How we plan to invest from a strategic standpoint will be discussed with you as we report to you throughout the year. However, we will not discuss each and every trade with you. All of our accounts are discretionary. You may, of course, call us to discuss any moves we are anticipating or have made.
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Can you define ‘Discretion’ as it applies to our business relationship?
Discretion means having the ability to trade on your account on your behalf without your express permission for each individual transaction. This does not mean that Summit has custody of your money. Custody means having possession of your funds. TD Ameritrade maintains custody. Discretion simply means that we are able to make trades on your behalf.
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Do I have to stay with your service for any length of time?
While we would prefer to keep you as a client forever, you are under no obligation to do so. Our contracts clearly disclose that clients may terminate service at any time. Many of our competitors require you to wait until the end of the month, the quarter or even the end of the year. Summit Capital Advisors make no such demands, allowing you to terminate your contract at the end of any given day, with only the requirement of payment for any fees owed through the date of termination.
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With regard to tax reporting, what do you provide me with at year-end to prepare my taxes?
Generally before the end of each January, TD Ameritrade will mail each client information concerning all securities trades made during the calendar year. This is contingent on the client providing us with the cost basis information if they transferred a fund and/or stock that Summit did not purchase for them. With regard to any distribution from mutual funds, TD Ameritrade provides this information via a comprehensive form 1099 at year-end. This is generally provided to the clients on January 31st of each year.
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How often will you meet with me for your financial planning services?
We generally meet with a new financial planning client four to eight times during the first year, depending on their needs. During this first year, there is usually a great deal of work that needs to be completed, requiring extensive communication concerning various issues, resulting in several meetings. We must have an excellent handle on your financial situation in order to provide you with the best advice possible. After the first year, we generally meet a minimum of once or twice a year. Between meetings, wherever possible, we try to discuss specific changes over the phone so that we can efficiently respond to your needs. We will also provide comprehensive updates on your financial situation. These updates could include a balance sheet, tax projections, cash flow analysis, and reviews of any other issues requiring our mutual attention.
(e.g.: if you were near retirement or in retirement, we would want to create a comprehensive retirement projection to make sure that you are on track at least once per year. Also: if you are already retired, we will be discussing with you any minimum distributions from IRAs or retirement plans that you need to be taking on an annual basis.)
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How do you charge for your financial planning services?
Again, we are fee-only. We do not receive any commissions whatsoever. The financial planning fee that we charge is for 365 days of service. The fee is based on the complexity of your situation and dependent upon the amount of investment assets you have with Summit. In all cases, the fee is fully disclosed before the client incurs any charges.
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Will you provide me with a fee estimate and a written proposal for your Financial Planning services?
Yes. After meeting with one or more of our Advisors, you will be provided with a proposal that details exactly what we will be doing for you step by step with a comprehensive calculation of the first years’ fee.
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Is there a fee for the second year for Financial Planning services?
Generally, there is no fee for the second year of financial planning services when Summit manages over $300,000 for a client. However, each client has specific needs and desires. Normally, financial planning services are included as part of the asset management fee. That is: only one fee is charged for all financial planning and investment management services. When Summit manages less than $300,000 for a client, special arrangements can be negotiated.
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If I sign up for Summit’s Financial Planning services what will occur?
The process for financial planning involves extensive data gathering of all your financial information. First, we will request that you complete one or more of our comprehensive data gathering questionnaires as well as provide us with all of your financial information. We may send out individual questionnaires to insurance companies for current statements for all of your insurance policies and annuities. We will prepare authorization letters from you to each of your other professional advisors prior to us contacting them to allow them to provide information we need. We may talk to your employer’s human resources personnel, your accountant, attorney, insurance agents, bankers, and stockbrokers, if necessary. Once we have all of this information we will begin preparing financial statements. The financial statements include a balance sheet, an income tax projection, as well as a cash flow analysis. We will also provide you with support pages to determine how we made up the balance sheet and other statements. We will then have a data verification meeting to make sure that we have all relative information. From there we will develop other projections, such as college funding, estate death tax, and retirement calculations, IRA distribution analysis, and survivor projections. When this is complete, we will then begin reviewing your overall situation as well as the issues you need to have addressed in each area. The areas that we will cover will include basic finance issues such as refinancing your mortgage or other debt, analyzing your liquidity, and discussing any cash flow and or savings issues that you may have. We will spend time discussing how to reduce your income taxes, and funding your children’s education in a tax efficient manner if applicable. We will review all your existing estate documents, as well as suggest alternative ways to plan your estate. We will also analyze exactly how much life insurance, if any, is needed and review all your different insurance coverage in-depth. We will discuss with you an overall investment strategy to meet your goals. If you are near or in retirement, we will spend a great deal of time discussing those issues including distribution strategies from your retirement plans.
Once we provide you with financial recommendations, and at your request, we will then assist you with the implementation of those recommendations.
In the implementation process, some of the value-added services that Summit provides, which most firms do not, is that we will talk with your employer’s human resources personnel, your accountants, actuaries, attorneys, bankers and insurance agents to ensure that everyone is on the same page. For example, we often see clients who have complicated will and trust documents, but the titling of their assets and beneficiary designations are incorrect so that their estate would not flow properly. Therefore, if major changes are needed we will discuss this with the client’s attorney, and if necessary meet with the client and their attorney to review these strategies. The same applies for income taxes, in that we will provide any information that we are aware of in advance of tax preparation time to the client’s accountant so that they will have all the necessary information to prepare clients’ taxes. We will also coordinate with the clients’ various insurance agents to ensure that the client has the proper coverage. When it concerns banking, we will provide the bank with updated financial statements to facilitate any lending and/or refinancing on behalf of the client. Also, if a client is missing an advisor, we will suggest one that has been pre-screened by us. In short, Summit will assist in implementation of its recommendations wherever possible.
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What if I have a large position in one stock? How will Summit assist me in this situation?
This is actually a common occurrence due to employers awarding large stock options. Summit has developed various strategies to defer your taxes and diversify your investments. These strategies include:
The team at Summit Capital Advisors will assist you in every aspect of establishing and implementing the appropriate strategy that best fulfills your needs.
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What makes Summit Capital Advisors different from other financial advisory or brokerage firms?
By now you’ve already discovered for yourself a number of ways Summit Capital Advisors have differentiated ourselves from so many other firms. First, Summit provides advice on all aspects of a client’s finances while at the same time assisting them with the implementation of their recommendations. Summit’s service initiatives are designed to be unparalleled. No detail of a client’s finances is overlooked. Reviews of employment contracts, real estate leases, wills, trust agreements, stock option agreements, auto insurance, non-qualified deferred compensation agreements, private investments, hedge funds, buy-sell agreements, retirement plan documents, business tax returns, U.S. savings bonds are routine at Summit. Interaction with the clients other advisors, such as actuaries, accountants, attorneys, bankers, insurance agents, and employee benefits specialists to ensure that everyone is working on behalf of the client is an everyday occurrence. Brokerage firms don’t supply this type of service while other financial advisory firms only offer a few generic services, such as college funding, retirement, retirement calculations, insurance reviews, estate tax calculations, and perhaps income tax planning. Summit offers these services in a very detailed manner in addition to all of the services mentioned above.
From an investment standpoint, most advisory firms offer one service: asset allocation with mutual funds. Some of these advisory firms are compensated by commissions in addition to fees. Other firms sell clients “Class C” shares and receive a constant 1.0% of assets regardless of asset size. This can be a very expensive option for clients with more than $1,000,000 in assets. Summit, by contract, offers a number of investment strategies in addition to asset allocation including a number of stock management programs.
Brokerage firms offer many of the same investment offerings as Summit. However, the investment trading costs are frequently at twice the price and without the broker having any understanding of their client’s overall objectives.
