Dunncreek Advisors LLC -- FAQs
1. What is a Dunncreek? Follow this LINK.
2. What is a fiduciary?
The important thing to know is that about 2 out of 100 “financial advisors” hold the Accredited Investment Fiduciary designation. It requires me as the advisor take legal responsibility for putting my client’s interests first at all times. Many big firms don’t even ALLOW the financial advisors to act as a fiduciary because they don’t want the liability. So somebody working for a brokerage firm, mutual fund company or insurance company may not be a fiduciary. You should always ask to see a statement of fiduciary duty in writing.
Those people who don’t work as fiduciaries work under what is called a suitability standard that requires that they only present products that are suitable to the client. They present the product and ask the client whether the client wants to proceed or not. And legally the client is responsible for the choice, because they were presented with an opportunity and they chose to proceed. Legally the client is responsible for the investment choice. I’ve never liked that. I’m much happier under the fiduciary standard.
Since my firm is fee-only, I only have one boss – my client. Nobody else pays me. Nobody sets a sales quota. Nobody has a quarterly product focus or anything to muddy up the conversation. I work for my client. I’m paid by my client and I’m rewarded for helping my clients reach their next financial goals. And I LOVE it that way.
3. What’s the difference between fee-only and fee-based?
- Fee-Based = some services are paid for via fees and other services are paid for via commissions and product related fees. All of this should be disclosed, but it still has the potential to create a conflict of interest between the advisors' incentive to sell a product and the client's best interest.
- Fee-Only = the only compensation is from fees paid by the client. I only have one boss – my clients. Nobody else pays me. Nobody sets a sales quota. I’m paid by my client for helping them move toward their financial goals. When they do better, I do better. And I LOVE it that way.
4. What does comprehensive financial planning mean?
At Dunncreek Advisors, a comprehensive financial plan is comprehensive in two ways:
- It provides consulting services and follow up for one year so your plan is not just "presented" to you, it's implemented and working for you.
- We address SIX areas of your financial life:
- Cash flow and budgets -- Where does your money go now?
- Risk Management -- Do you have plans or insurance in place to protect you from the likely risks you face?
- Investment Planning -- Are your investments working hard enough to get you to your financial goals on time?
- Retirement Planning -- Are you on track to retire when you want to in the way you want to? Are you positioned to successfully transition from accumulation of wealth to distribution of wealth as you retire? Are you sure that you will not outlive your money?
- Tax Planning – Are you paying too much in taxes? Can we structure your financial plan to reduce your tax burden during your retirement years? Can we transfer wealth to the next generation with minimum taxes?
- Estate Planning – What is the financial legacy you wish to leave when you are gone? What legal instruments do you need in place to assure your wishes are carried out, efficiently and effectively?
NOTE: While designed to provide accurate information on the subjects covered, they are not intended to provide specific legal, tax, or other professional advice. For a comprehensive review or specific personal assistance, always consult with an appropriate professional. Dunncreek Advisors does not provide legal or tax advice.
5. What does Farm Legacy and Business Transition Planning mean?
Our work with clients is particularly focused on the process of building a financial legacy and passing it on to the next generation successfully. This is harder than it sounds and many people fail. We are dedicated to fighting the two biggest reasons legacy transfers fail:
Most families fail to properly prepare at all and are surprised when the time comes for a transfer. We are committed to helping more families begin the legacy planning process.
Other legacy transfers fail because the “legacy plan” was actually a “product” sold to the family. We create truly thoughtful plans focused on each family’s goals without any product bias.
We are excited to give clients advice free from the conflicts of interest common to many financial professionals. We have NO sales quotas or marketing incentives to muddy the water. We receive ALL our compensation from clients only.
As fiduciaries, we are obliged to keep our clients’ interests first at all times. Throughout our careers, this has been our personal preference. Now it is the only way we do business.
If you would like to build a financial game plan based on solid values and work with advisors who strive to uphold the best traditions of American agricultural life, call us.
6. Can you help me with investments?
Yes, Dunncreek Advisors can help you buy or sell securities and can manage all the typical investments you might own. And, since we are NOT paid on sales commission, you know that our recommendations about investment products are based on your financial goals and NOT sales quotas.
7. Can you help me with a retirement income plan?
We specialize in creating retirement income plans designed so that our clients will not outlive their money.
8. Can you advise me on my 401(k) at my work?
Yes, as fee-only advisors we can help you with any financial issue or investment account, no matter where it is. We often advise clients on their work retirement plans. It’s an important part of the retirement income plan for most people.
9. Can you help me get my 401(k) out of my old job?
We help many clients with old retirement accounts from prior jobs. It’s very common that accounts like this get forgotten as your career unfolds. It’s a great idea to gather those up into one self-directed IRA that’s under your control, not part of a retirement plan at a company you worked at 7 years ago.
10. What products do you offer?
We do not sell products. We are experience in all aspects of the financial service industry and can advise you on products like:
- life insurance
- health insurance
- disability insurance
- Long-term health care insurance
- property-casualty insurance
- workers comp insurance
- business continuation insurance
- fixed annuities
- variable annuities
- Mutual funds
- Exchange Trade funds
- Closed end funds
- Common Stocks
- Corporate bonds
- Tax-free bonds;
- Certificates of deposit; and
- Any other publicly traded financial instrument.
11. Do I have to come downtown?
We are happy to meet you at any convenient location. We have a great location in the First Bank Building in Saint Paul, at 701 Fourth Avenue South in Minneapolis as well as the Neu-DeRaad Tax and Accounting office in Waseca, Minn. We also make house calls.
12. What should I bring to the first meeting?
Our first meeting will be focused on getting to know each other and understanding your financial goals. Bring anything along you think will help you explain your situation.
The following are some suggestions of things that will be helpful if you ask us to prepare a comprehensive financial plan for you:
To help you prepare for our meeting, consider the following questions:
- What significant career changes do you or your significant other expect to make between today and retirement?
- What significant purchases do you plan to make in the next five years?
- Are you expecting to help anyone with college education expenses? And what does that look like in percentages or total dollar terms?
- When do you plan to retire, year and month?
You may find it helpful to bring the following references for our conversation:
- Tax return
- Pension/401(k) statement from employer
- All life insurance and disability insurance policies
- Latest statements for existing investments:
- trust companies,
- mutual fund companies,
- annuity contracts,
- other direct investments and
- Budget of personal and living expenses – you have a couple options here:
- A chart of income categories and expense categories over the last year with monthly average
- Bank statements from last 3-6 months showing total average deposits and total average withdrawals.
- Latest mortgage and other loan statements
- Latest will, power of attorney
13. How much does a fee-only advisor cost?
It depends on your situation and the services you need.
- Our hourly consulting rate is $200 per hour.
- For investment management services, we act as our clients fiduciary and pro-actively manage investment accounts to reach client goals. The typical charge for this is 1% of the assets under our care with a $500 per quarter minimum.
- Comprehensive financial planning will vary depending on the complexity of your situation. (See details.)
- Some plans will be completed in a few hours of hourly consulting.
- Many plans are completed for $1,000 - $2,000
- More complex plans will cost more.
14. What's the difference between the Fiduciary Standard and the Suitability Standard and why would I care?
A fiduciary advisor must place his or her interests below that of the client. The advisor has a duty of loyalty and care, and simply means that the advisor must act in the best interest of his or her client.
A suitability obligation, is defined as recommendations that are consistent with the best interests of the underlying customer. The advisors is expected to reasonably believe that any recommendations made are suitable for clients, in terms of the client's financial needs, objectives and unique circumstances. A key distinction in terms of loyalty is also important, in that a “suitability” advisor's duty is to her employer, not necessarily the client served.
The Reason to Care
You should always understand for whom you advisor is working. Are they expected to serve the interests of their employer, or do they act in the best interest of the client. I believe that a fiduciary financial advisor is better positioned to have fewer conflicts of interest and serve the clients’ interests more effectively.
See more at this link.
15. What licenses do you have?
I am registered as an investment advisor representative of AdvisorNet Wealth Management, an SEC registered investment advisor. See the firm’s disclosure document here. See my individual disclosure document here.
I hold the Accredited Investment Fiduciary (AIF) designation from the FI360 organization.
16. What can I expect when I become a Dunncreek client?
Our client service model is shown here.
For every client we work through the following process:
- Identify and prioritize objectives.
- Gather information on your current situation.
- Analyze your situation and alternative options.
- Propose recommendations
- Implement recommendations
- 6-month check point review (as needed)
- Year-End Review
17. Do I have to have to buy a financial plan to work with you?
You can buy as many services or as few as you like. And remember the first meeting is always free.
18. Do you have a minimum fee?
There is a $500 minimum for hourly consulting.
Our minimum quarterly fee for on-going advisory services is $500 per quarter.