FAQ: Our New Independent Status

Why are you making the change?

We felt that with new regulations from the Department of Labor, advances in technology, and our desire to be 100% fiduciaries to our clients, with no conflicts anywhere, that moving to a full Registered Investment Advisory status (RIA) would be the best option for our clients and our practice.

What is the Department of Labor and why are they involved in my retirement accounts?

The DOL issues rules earlier this year about the standard which advisors who help clients with retirement accounts such as IRA’s and Roth IRAs would be held to. National studies have shown that many people were paying excessive fees in their accounts. This reduces the amount of money available to people in retirement. By making ALL advisors who help someone with a retirement account a fiduciary, the fees will now be more transparent to clients and most likely, drop as clients question what services they are receiving for that fee. Our fees are already lower than most industry benchmarks so The Athena Financial Group will have no problem meeting the new DOL standards.

What is a fiduciary?

A fiduciary HAS to do what is in the best interest of the client. Sometimes doing nothing is the best thing for someone to do. In the past, advisors don’t make money if their clients did nothing, or didn’t buy something from the advisor, so advice would often be slanted toward doing something. Now advisors will be held to this higher standard and clients can seek legal recourse if they feel the advisor has not acted in their best interest. The analogy I like to use is: Imagine you hire a consultant to help you choose a car and you know they get a referral fee from the car company you ultimately pick. They do their research and tell you to buy a Ford truck. But unaware to you, Ford gives them a higher referral fee that say GM. That consultant may not have been acting 100% in your best interest because their pocketbook came first instead of your needs. Now, if you went to a Ford dealership, of course they are going to try to sell you a Ford. But you were completely aware of their Ford Bias when you drove up to the dealership. The same will be true now in the financial industry. All conflicts of interest will have to be disclosed, up FRONT. And fees will have to be more transparent.

How does this benefit ME?

Our new RIA will continue to offer the same level of investment advice and planning. In fact, our services will be greatly improved and costs are being reduced. We have negotiated terrific pricing deals with our custodians and technology partners.

How are your fees going to work?

For new clients, we will be charging a fee for the initial plan. For the ongoing service, the fee will be determined by the level of service the client wants. They don’t have to pay for things they don’t want. Our fees will be based on how much assets we are directly managing and debited from your custodial account monthly.

Why did you choose TD Ameritrade Institutional?

TD Ameritrade will be our primary custodian for client assets (We NEVER hold your money directly).They are a leader in the industry, providing custody and clearing services for thousands of RIA’s across the county. In addition, they had the best technology integration available.

Will I be able to still look at my accounts online?

Yes, our main financial planning program will remain the same. We will be switching to even better systems for performance software and in addition, TD Ameritrade will have a very nice website where you can see your accounts and download statements and 1099’s

Okay Diane, this sounds too good to be true. There has to be a catch- what is it?

The only sniggle we have run into is working with small accounts where clients were adding monthly contributions, such as educational accounts or non-profit accounts, or variable annuity accounts. We are working around those hurdles and for most of our clients this will be non-issues. In addition, the industry is developing products to meet the needs of advisors like myself and comply with the new DOL regulations.