Answers to some of our frequently asked questions. And some questions that aren’t frequently asked, but should be . . . .
Where did the name “Denouement” come from?
As financial planners, we are keenly interested in the story that every client has.
In literature a denouement is the part of the story where all the strands of the plot are drawn together and matters are explained or resolved.
It’s the “happily ever after” part that we work hard to make sure our clients get to experience.
Okay, but how do you pronounce “Denouement”?
One of our most frequently asked questions!
According to Merriam-Webster it’s dā-ˈnü-ˌmä (sounds like “day-new-ma”), but we’re not particular. You’re just as likely to hear us pronounce it “de-NOW-mint” (like endowment) as any other way.
Basically, pronounce it however you prefer.
Why do your clients work with you?
Our firm is founded on the principle that everyone deserves expert advice at a fair price. But what does that mean to our clients?
Our clients appreciate the fact that we take a strongly evidence-based approach to financial planning and to investing.
We work hard to stay current with the best research available, so that every recommendation we make is backed by the powerful weight of evidence.
Our clients aren’t speculating or taking wild risks, and they care more about achieving their goals than about “beating the market.”
In terms of investments, we emphasize simplicity and keeping expenses low. Vanguard founder Jack Bogle entitled his history of the firm “Stay the Course,” and we think that is great advice. We
Clients also appreciate that we’ve designed our pricing to be as fair as possible.
Many financial advisors charge clients a fee that is based on “assets under management,” or AUM, but we don’t feel comfortable with that approach. We never want to set up a situation where there is even a PERCEPTION that we are not doing what’s entirely in the client’s best interest, and we’ve seen situations where clients received doubtful advice from an advisor because doing the right thing for the client (e.g. paying down a student loan or mortgage, or purchasing a lifetime income annuity for retirement) reduced the fee paid to the advisor.
I’m curious about your approach to investment management: can you describe your investment process?
Absolutely. Our core investment principles are:
- Tailor the asset allocation to your investment goals
- Focus on behavior of the whole portfolio.
- Remain broadly diversified.
- Keep costs low.
- Never take more risk than you should, or less than you need.
- Simplicity is a virtue.
We don’t place our clients into cookie-cutter “model” portfolios. We think it is important that each investor have an investment policy statement which reflects their values, goals, priorities, and needs.
So what’s that look like?
Our investment portfolios generally consist of six to eight low-cost index funds and ETFs. We aim for a weighted average expense ratio of less than 0.18%. And, we put a strong emphasis on portfolio diversification, both across geography and across investment styles.
For clients who are transitioning into retirement, we often include individual Treasury bonds, TIPS, or (less commonly) corporate bonds in the portfolio to help create a predictable income stream.
If none of that makes any sense to you, don’t worry: we read the academic literature so you don’t have to. And if you want more info, head to our Contact Us page: not only will be give you the scoop, perhaps we’ll add a topic to our frequently asked questions!
What is a “fiduciary financial advisor”?
We believe that any profession who offers advice should ALWAYS offer advice that puts the interests of the client above all other interests, and this is what a fiduciary advisor does.
As the CFB Board explains, the “fiduciary standard of conduct should put the interests of the client first, and should include both a duty of care and a duty of loyalty.”
That’s why we insist that our ONLY compensation come from you, the client, directly: no one pays us any commissions at any time for any recommendation we make.
As a fiduciary, our standard is that we always act in the best interest of the client (that’s you).
The vast majority of financial advisors don’t work this way, instead getting paid by commissions from the mutual funds or insurance contracts they sell. As a result, they don’t have to act in your best interest. Instead, they hold themselves to a much lower standard of suitability.
Are “fee-based” and “fee-only” advisors the same?
A fee-only advisor has a fiduciary duty to the client, but a fee-based advisor does not: a fee-based advisor can still earn commissions or kickbacks for steering you into a product that is more profitable for them.
Fee-only advisors don’t do that.
What are your pronouns?
Vincent uses “he/him/his” to refer to himself.
We’re working hard to update all our forms and technology to make it easy for us to let us know which pronouns YOU use to describe yourself. So, if you catch us using a pronoun that makes you feel uncomfortable, please tell us.