Pettinga Financial Advisors

Fact Finding Sheets
FAQ

Frequently Asked Questions

What is financial planning?
Why use a financial planner?
What is involved in a financial planning relationship?
What are the major areas of financial planning?
When is the best time to plan?
What about other professionals?
What about my employer's retirement plan?
Can you help me with my company stock options?
What about taxes?
Is implementation help provided?
What does an initial meeting involve?
Do you have a minimum fee?
How are fees determined?
Why use professional investment management?
How are investments selected?
How am I kept informed?
What makes you different than other advisors?
Why should I work with you?
Who are your clients?

WHAT IS FINANCIAL PLANNING?

Financial planning is a process that begins with a snapshot of your current situation and the identification of specific goals. Typical goals include buying a house, funding for children's college education, managing risk, reducing tax liability, retirement planning and estate planning. Possible obstacles to these goals are identified and strategies are developed to improve the chances of meeting the goals.

All areas of your financial picture are carefully reviewed. Recommendations are implemented as necessary to improve your situation so that your goals may be realized.

WHY USE A FINANCIAL PLANNER?

A financial planner assists you in putting your financial affairs in order. A professional who understands the various aspects of your finances can help you navigate the issues and find the optimum solutions more easily. As part of the process, goals are identified so that appropriate action is taken in order to achieve the objectives. In the end, the most important benefit of financial planning is peace of mind.

WHAT IS INVOLVED IN A FINANCIAL PLANNING RELATIONSHIP?

We strive to know our clients personally. The better we know them, the more value we can add. Frequent communication between our clients and us leads to better results for the clients. Once we enter into a relationship, we help clients set realistic, measurable goals, identify obstacles that prevent them from reaching those goals, and review all aspects of financial planning to overcome the obstacles.

Clients can expect attention to detail, prompt response to letters, calls and emails, clear reasoning for our recommendations, diligent execution of the tasks at hand, confidentiality of information, and honesty in all matters. This brings peace of mind knowing you are not alone.

WHAT ARE THE MAJOR AREAS OF FINANCIAL PLANNING?

The major areas in a financial planning relationship include setting goals and objectives, identifying issues or problems that may affect the achievement of the goals, creating a net worth statement, developing an income tax strategy, reviewing insurance policies, reviewing current and proposed investments, planning for educational funding, planning for retirement, reviewing estate plans and finally, specific recommendations for action.

WHEN IS THE BEST TIME TO PLAN?

It is neither too early nor too late to begin planning. Every client's situation has been improved by implementing a financial plan - no matter what age. The degree of success varies according to each individual's circumstances. The most important step is the first one - acknowledging that there is room for improvement.

WHAT ABOUT OTHER PROFESSIONALS?

A planner is adept at orchestrating the many facets of personal finance. In this role, we often work in conjunction with other professionals, including attorneys, accountants, insurance agents, and trust officers. Our relationship may identify the need for consultations with outside sources. If additional services are required, recommendations are provided.

WHAT ABOUT MY EMPLOYER'S RETIREMENT PLAN?

Too many people take employer-sponsored retirement plans for granted. Often, they do not hold the most appropriate investments for future growth. Contributions to the plan need to be maximized. Changing jobs complicates matters with regard to transferring plan proceeds. Getting sound advice in this important area is crucial to a successful retirement.

CAN YOU HELP ME WITH MY COMPANY STOCK OPTIONS?

Incentive Stock Options (ISOs) and Nonqualified options (NQs) can often be confusing. The issues include questions about when to exercise, when to sell the stock, and what to do with the proceeds.

The decision to exercise options hinges on the current stock price and the company's growth prospects. A deliberate exercise program should be set up to reduce some of the emotion tied to owning company stock. Alternative Minimum Tax (AMT) issues must be addressed when ISOs are exercised. Selling too many ISOs in one year can result in a disqualifying disposition, thereby reverting an ISO to NQ status.

Selling company stock often depends upon current cash needs and your tax bracket, both now and in the future. Investment of the proceeds is sometimes governed by the near-term exercise of additional options in the future. Pettinga Financial has provided many clients with specific programs that help optimize the exercise and sale of company stock options.

WHAT ABOUT TAXES?

Financial planning and investment management must include a solid tax strategy. Professional preparation of your tax return ensures financial continuity. Tax preparation also serves as an annual review so that life changes are continually incorporated into your financial plan. We work closely with your accountant to make certain you are in the best tax position possible.

IS IMPLEMENTATION HELP PROVIDED?

Comprehensive relationships provide ongoing support and reminders when action is needed because implementation of financial planning recommendations is crucial to the success of a financial plan. Frequent client contact is the hallmark of our financial planning relationships.

Clients for whom we prepare a financial plan, but whose money we do not manage on an ongoing basis, are responsible for implementing the recommendations in their plan at their own discretion.

WHAT DOES AN INITIAL MEETING INVOLVE?

The initial meeting provides an opportunity to ask questions and explore how financial planning and investment management will help your particular situation.

We realize that talking about money is difficult, especially considering that we are raised with money attitudes that may need to be modified to help us plan for a successful future. Your personal information is held in the strictest of confidence.

There is no obligation to commit to a relationship at the initial meeting. We work to your schedule, but time is of the essence with money.

DO YOU HAVE A MINIMUM FEE?

Although we would like to work with clients of all income and net worth levels, our expertise lies with individuals, couples, and small businesses that have over $200,000 of investable assets (including retirement plans). We do not, however, have a minimum fee.

HOW ARE FEES DETERMINED?

A written agreement will specify the services to be provided and the fee before the work is performed. Costs vary according to the work involved.

The value of the work in terms of tax savings and improved investment performance is often many times greater than the cost, offering a tremendous return on investment. Retaining a financial planner buys peace of mind, providing clients with what they deserve most - a good night's sleep.

WHY USE PROFESSIONAL INVESTMENT MANAGEMENT?

An investment manager keeps apprised of the news that can affect your investments. Your holdings are reviewed on an ongoing basis and adjusted as necessary. Both regular and retirement account investments can be coordinated, and periodic performance reports are provided. Investment objectives are clearly defined, and a customized asset allocation program is created to ensure a clear understanding of your investment goals and limitations. You always retain asset custody.

HOW ARE INVESTMENTS SELECTED?

Fundamental analysis is used to select investments for client portfolios. However, before investments are selected, an Asset Allocation is prepared for each investment management client that provides the guidelines for each account. Trades are generally placed electronically directly to the brokerage firm or the mutual fund company.

HOW AM I KEPT INFORMED?

Brokerage firms and mutual fund companies provide portfolio reports directly. Additionally, clients receive an integrated quarterly reporting of account performance.

Accounts may also be viewed on-line through the custodian of your account.

Portfolio change recommendations are made as conditions warrant. The trades must be approved by the client before they are executed unless other arrangements are made.

WHAT MAKES YOU DIFFERENT THAN OTHER ADVISORS?

We are fee-only advisors. Our advice is not guided by our desire to make a commission, since we do not accept them.

WHY SHOULD I WORK WITH YOU?

We are a fee-only firm offering objective advice.
We provide comprehensive integrated planning.
We provide investment management and reporting.
You can obtain on-line account access to your portfolio.
We help you with your estate planning, which is too easy to put off.
We have a collaborative team of professionals eager to serve you.

WHO ARE YOUR CLIENTS?

Individuals
Couples
Executives
Small business owners
Institutions
Retirement Plans
Clients of all ages (Clients from 25 to 95, Children of Clients, Parents of Clients)