Frequently Asked Financial Planning Questions

 

DIFFERENCE BETWEEN A FIDUCIARY STANDARDS AND SUITABILITY STANDARDS

Being a fiduciary means that you must ALWAYS act in the absolute benefit of your client regardless of the compensation and without conflict of interest. Under this assignment, one can make specific and exact recommendations and in addition, can act on behalf of their client. Being suitable simply means that you only need prove that your recommendations were appropriate for clients in the similar age, income, and risk tolerances. There is a clear and distinct difference between the two. We are required to act in a fiduciary capacity for our university clients.

DIFFERENCE BETWEEN BUY & HOLD AND DYNAMIC ASSET ALLOCATION/ACTIVE MANAGEMENT

A buy and hold philosophy is ideal when the market conditions are bullish. It is disastrous when they are in a state of volatility and bearish conditions. Dynamic Asset Allocation & Active Management is the state of constant surveillance and due diligence in an attempt to understand and account for risks to a client and their portfolio. Active Management does not translate into high costs, and constant trading of investments. It simply means that the market is under constant and consistent measurement to identify, quantify and understand the risks present at all times. Summit’s systems are designed to be pro-active in our assessment of risk and communication to our clients.

DIFFERENCE BETWEEN PROACTIVE AND REACTIVE ACCOUNT MANAGEMENT

Under this philosophy, a pro-active system will call to attention any issues, suspected conflicts of interest or potential harm that a client could encounter. A reactive approach simply explains what happened and why it happened but does not attempt to adjust or mitigate risk to the client. Summit’s approach has always been proactive in nature and will continue to be so.

DIFFERENCE BETWEEN TECHNICAL AND FUNDAMENTAL ANALYSIS

The technical analysis is an approach to evaluating risk and reward potential using specific data that is oriented to price, volatility and other technical points of interest. A fundamental analysis is designed to evaluate the merits of an investment on the strength of its management; its past performance and other related fundamental points of interest. Summit’s approach is a combination of both types of analysis in an attempt to obtain the best of breed in each asset class.

DIFFERENCE BETWEEN COMMISSION AND FEE FOR SERVICE MODELS

Commission is when a professional is financially awarded for their advice or service up-front and absent of any performance. A Fee for Service model is designed to award a professional as they perform. This model minimizes conflicts of interest and places the client and the professional in unison towards the desired outcome. Summits university model is to provide a Fee for Service, as we believe it is the most transparent and mutually beneficial model for a win-win relationship.

WHAT IS FEE BILLING?

The ability to get professional help in the management of your retirement accounts before you retire and allow the fee for service to be deducted directly from your account.

WHAT DOES NO CONTRACTS, NO COMMITMENTS, AND NO HASSLES MEAN?

This approach allows you, the consumer, to try the service without the requirement of remaining obligated to it for any length of time. It provides for the benefit of getting on-going professional help without the concerns of “Making the right decision at the right time in my life” kind of worry. If you like it, you can continue it, if you don’t…one click of the mouse and you can return everything to the way it was.

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Our systems are designed for early warning and protection from severe storms that would harm your economic condition

In 2007, our systems indicated we leave the markets while others did not and therefore our clients
 did NOT participate in the downturn of 2008-2009

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