South Walton County is one of the nation’s leading areas for new retirees moving in. We wondered how that fact is impacting a “Fee-Only” Investment Advisory Firm like Arbor Wealth Management.
Question: What percentage of your clients are relatively new residents?
Arbor Wealth: About one out of every four or five calls requesting a complimentary portfolio review is from a new permanent resident. We’re located right on Highway 98, near Sandestin’s main entrance, so it’s an easy drive from Rosemary Beach or 30-A, or really any part of South Walton. Our monthly seminars host lots of locals, plus guests from Memphis, Nashville, Atlanta, Birmingham, Baton Rouge, and the Midwestern states.
Question: Are newer residents comfortable working with a local investment advisor?
Arbor Wealth: I think most investors prefer an advisor nearby who is accessible. If you’re a retired physician from Memphis and you’re now down here full time, you want someone with whom you can confer face to face and on short notice, if the need arises.
Question: A relationship with an investment advisor involves trust. Does it take long to build that with a new arrival?
Arbor Wealth: No more than with a new client who is a long-time resident, really.
Question: Are new arrivals familiar with the “Fee-Only” investment advisory model?
Arbor Wealth: Yes. Many are currently working with a “Fee-Only” Firm back home and are actively seeking another “Fee-Only” relationship. “Fee-Only” firms are more common in larger urban areas, so newer residents hailing from larger cities are generally familiar with this advisory model.
Question: How does a “Fee-Only” firm like Arbor Wealth differ from a wirehouse or broker-dealer?
Arbor Wealth: In several ways. One, we don’t sell any products. Two, we don’t accept commissions from any source. We are compensated solely by our clients. Third, we have no proprietary interest in any investment. And lastly, we serve as a fiduciary to our clients. We call it a “conflict-free” investment advisory philosophy. The client never has to worry about whether the advisor is offering a course of action that is good for the advisor, but not necessarily for the client.
Also, we are discretionary asset managers, which means that after we establish the client’s goals and risk tolerance, we simply go to work on their behalf. We actively manage and monitor the portfolio.
Question: What is a fiduciary?
Arbor Wealth: A fiduciary is legally required to act in the best interest of its clients.
Question: How does a new resident become a client?
Arbor Wealth: During our complimentary consultation, we will ask to review recent statements for any accounts that the client would like considered for management. And we always ask for copies of the last two years’ tax returns. We’ll discuss the client’s current financial picture and his/her goals for the near and distant future. And we always consider the tax ramifications of any security purchase or sale before taking action.
Question: How many new clients are interested in income generation?
Arbor Wealth: Many of our soon-to-be-retired or currently retired clients want to get paid from their investments. Generating income with dividends from blue chip stocks and coupon payments from bonds to create periodic, systematic income is one of our long-time specialties.