FAQs

The generally accepted 7-step financial planning process is as follows:

Step 1: Learn the client’s background information and financial circumstances.

Step 2: Identify client’s specific financial planning goals and objectives.

Step 3: Analyze the data that has been gathered in relation to the goals and objectives

Step 4: Develop a written plan and recommendations

Step 5: Present the plan

Step 6: Implementation

Step 7: Ongoing monitoring

Our one-time fee-only planning reviews encompass steps 1-5.  Clients may elect to engage us over time to cover steps 6 & 7 under a separate agreement if they choose.  See also - Client Services.

Yes.  While many financial planners present a document as a financial plan, in addition to our written summary, analysis, and recommendations, all FPH clients receive access to eMoney, an online platform that enables them to centralize and organize all aspects of their financial lives.  The platform is free for all clients.

Additionally, all ongoing financial planning clients have access to our their own portal to Advyzon - a financial platform that integrates with Charles Schwab to provide performance reporting, secure statement delivery, and unique portfolio management insights. Our own proprietary retirement spending and retirement saving software, Nest Egg Guru, is available to all clients as well. We also offer a unique service that helps clients expeditiously and inexpensively get their estate planning documents drafted and implemented.

For more details, visit our Client Services page.

YES.  Trade discretion is necessary to avoid giving one client preference over another in trade execution.  However, since we are financial planning-centric, we want our clients to be educated and engaged in the planning process.  As such, we generally do not made investment purchases or sales in your account(s) without discussing the recommendations with you first.  This approach also necessarily means that all client portfolios are uniquely customized/personalized. 

An important element of comprehensive financial planning is the recognition that each individual and family is different. With respect to portfolio construction, every clients investment mix is different and we want our clients to be educated about and engaged in the investment planning process.  That said there are common principles that we apply.  These include recognizing that tax efficiency and minimizing total expenses important elements of investment planning. We also believe all investment recommendations should be rooted in academic/empirical research.  On this score, we are proponents of Random Walk Theory and the Efficient Markets Hypothesis.  In terms of the types of investments, we generally prefer CDs and treasuries for the fixed income portion of clients’ portfolios over bond mutual funds.  For the equity portion of client portfolios we frequently use index funds/ETFs.  We also have a direct indexing strategy for investing in rising dividend stocks.  We consistently avoid products with high internal expenses and/or opaque commissions.  We also eschew all forms of market timing. 

To get to know us better, please see the videos on our "ABOUT" page.

The SEC's approval of spot price Bitcoin ETFs signaled regulatory acceptance of Bitcoin as a legitimate asset and made it easly accessible to millions of American consumers.  While we do not proactively include Bitcoin in client portfolios, we believe it is important to raise awareness of its potential role in client portfolios. We defer to clients' wishes as to whether it should be included or not.  We are less sanguine on other cryptocurrencies (including Ethereum) as it is not clear that any have achieved significant network effects.

The short answer is rarely.  This is a subject on which we are extremely well read. In fact, we have published three journal papers on annuities (two on variable annuities with living benefit riders and one on single premium immediate annuities).  To summarize our position, while we acknowledge that there are situations in which annuities and annuitization may make sense, we find that the products are often more complex than they are marketed to be, and the number of client situations in which they are optimal is relatively small.  We have traditionally entirely avoided fixed index annuities.  

All readers should be aware that twe are an advice-only shop.  While investment and portfolio managent guidance is definitely and important element of the advice we give, we do not sell any products and we do not hold brokerage or insurance sales licenses.

Our asset-based pricing model follows a tiered structure that begins at 75 basis points (.75%) on the first $500,000 of household assets under management and declines to a flat 10 basis points (.1%) on combined household portfolio values under management above $5,000,000.  [NOTE:  A “Household” represents all investment accounts residing at the same address.]

Accounts are billed quarterly in advance.  The billing relationship may be terminated at any time.  Termination prior to the quarter will result in a refund that is pro-rated from the termination date to the end of the quarterly billing cycle. 

Billing is only calculated based on the assets directly under our management.  While we provide guidance and recommendations on all investments in the client’s portfolio, responsibility for implementing recommendations and managing/monitoring held away assets, rests solely with the consumer.
 

Yes.  Financial Planning Hawaii is registered with and regulated by the Securities Exchange Commission under the Investment Advisers Act of 1940.  All financial planners whose service models include advice pertaining to investment management and securities are specifically regulated under the Investment Advisers Act of 1940.   This is explicitly spelled out in Securities Exchange Commission issued Interpretive Release IA-1092 The Applicability of the Advisers Act to Financial Planners. 

In terms of specific regulatory oversight, ALL financial planners who are governed by the Advisers Act are required to registered with the SEC and to provide consumers with a copy of a plain English disclosure brochure (SEC Forms ADV 2A and 2B) that includes the planners service model, compensation structure, education and professional experience, potential conflicts, and regulatory and/or criminal disclosure histories.   These documents are to be provided to prospective clients at or before engaging the planner’s services with updated versions provided at least annually. Consumers may also review the financial planner’s professional and regulatory disclosure history by visiting the SEC Investment Adviser Public Disclosure (SEC IAPD) website at https://adviserinfo.sec.gov/

Yes. All financial planners whose service models include advice pertaining to investment management and securities are held to a fiduciary standard of conduct as described in the Investment Advisers Act of 1940.  This standard includes an obligation to place the client’s interest above those of the financial planner, to disclose potential conflicts of interest and avoid them where possible, and to clearly present all material facts.  We take our fiduciary responsbility extremely seriously.  Our clients' interest come first at all times.  

All readrs should know that we do not sell any products and do not hold any brokerage or insurance sales licenses.  We are an advice-only, fiduciary-always financial planning shop.  For more detailed insight, prospective clients are encourage to read our Services Agreement, our Customer Relationship Summary (SEC Form CRS) and our plain English customer disclosure (SEC Form ADV, Parts 2A & 2B).  The documents may be found at the bottom of our website and on our Pricing page.

Although it is not uncommon to read articles that refer to certain financial planning pricing models as being free from conflicts of interest, in truth the economics of all compensation models present certain unavoidable conflicts of interest. 

With asset-based pricing, the financial planner has an obvious conflict to encourage clients to consolidate as much assets as possible under management and, conversely, to discourage clients from liquidating assets under management for other purposes.  Our tiered pricing model effectively becomes a flat-fee pricing model once assets under management reach $5 million.  The ongoing 10 basis point asset-charge represents our platform cost.

The primary conflict of interest under a fee-only/flat fee pricing model is that the financial planner has an incentive to get complete the planning agreement as expeditiously as possible with no incentive to provide ongoing guidance.  Further, under the flat-fee pricing model there is no direct accountability for investment performance. Since implementation and monitoring of the recommendations is the responsibility of the client.