Frequently Asked Questions

Working with Verbatim

I don’t live in Georgia. Can you still work with me?

Yes, I can. Though my firm is regulated by Georgia’s Office of the Secretary of State, I am able to work with people who live anywhere in the United States.

If I work with you, where would my money go? Do I have to move it?

Charles Schwab and Altruist are the financial custodians for my clients’ accounts.

I very much prefer if you utilize one of my custodians, because I cannot provide the quality of service that you deserve without seeing my clients’ accounts at all times. (When they’re at Schwab & Altruist, I can see them at all times). Some clients prefer to transfer their accounts over time, as they get used to working with me. I understand and respect those feelings and am willing and able to accommodate them.

What’s involved in moving my accounts? Is it difficult? Do I have to tell my current advisor?

The total time required of new clients to deal with it is typically minutes. (There are infrequent cases that require more, but those are always due to a new client’s existing financial custodian requiring its own paperwork before transferring accounts.) No, in most cases, there is no need for you to speak with your current advisor.

What security do I have that you won’t steal my money?

This is a great example of a very candid & fair question more people should ask of financial advisors. The security you have is that I cannot steal what I never possess. Clients NEVER send me investment money. (Interesting detail of history: Bernie Madoff’s clients wrote checks to Madoff Securities. He was his own custodian. That’s how he pulled off his scheme.)

The only client money I can direct to my personal account is for fee billing, and Schwab or Altruist must approve my billing requests before I can transfer it from my clients’ accounts. Neither Schwab nor Altruist will allow any request that is not in line with my upfront fee charges, or my regular quarterly billing, or my contract paperwork.

If you’re my advisor, what happens if you die?

In the event of my death, you will have two choices. First, you may become a client of one of the advisors I have in place to take over my business in the instance of my demise. Or, second, you may elect not to have an advisor at all and simply become a retail client of Charles Schwab or another brokerage. In either event, nothing will change with your money. It most often remains the same accounts, and you will retain all access to it as before.

Why a $10,000 annual fee? It’s comparatively low given my wealth, so can I expect it to increase soon after I become a client? When can I expect a change in fees?

My fee is based on the time, energy, and expertise I deliver to a typical client in a typical year. Clients usually require over 20 hours of my time per year. Yes, during some years, certain clients may require more time, and others, less. In either case, that amount of time, multiplied by a wage that I feel is fair for my service and expertise, is how I arrived at $10,000 per year.

Eventually, yes, of course you can expect a fee increase, similar to a cost of living adjustment, but not soon after becoming a client, and certainly not because “you did better so I did better,” and not in a large amount. I view my business very personally, and I take my clients’ best interest seriously, and it is not in a client’s best interest to overpay for advice. You also always maintain the power to say, “Thank you, no,” and to go elsewhere with your business, which is also not lost on me.

Do I have to write you checks for your fee?

No. I charge my fees the same way typical financial advisors do: by deducting it from your investment accounts. If you insist, you may send me checks or wire me money, but few of my clients do that because it’s so much easier to have fees taken from their accounts.

What does the name “Verbatim Financial” mean?

I chose the name Verbatim quite intentionally, because I want my clients to know that I will never use jargon or deceptive language to try to, “sell,” investments or services to them. Clients can always expect me to explain everything we do together clearly, so that they can be assured that they understand their finances, “word for word.”

Who are your ideal clients?

I work best with folks who are friendly, respectful, open to advice, and who do NOT want to handle all of their own financial affairs. These are people who, like me, are happy to pay for professional excellence, but not at any cost. They are people who appreciate integrity, critically thinking, and who want advice, implementation, and maintenance of their financial lives, not sales pitches for products or funds. They also know a little something about investing and have learned that index funds are superior investment choices and want them in their portfolios. Yes, it helps if they have enough income or assets to make my advisory fee a relative and comparative bargain. More often than not, they’re also people who know a little something about the traditional financial services industry, are therefore skeptical of it, and who might think to themselves after meeting me and understanding how I work, “Finally! An advisor who gets it! I’ve been looking for someone like you!” Those are people I love to work with.

What does your typical client look like in terms of age and wealth?

My clients tend to fall into three cohorts: Some are between their upper 30’s and upper 50’s in age, & are in the middle of their careers. Others are preparing for, or just entering retirement, both, “early,” and, “normal,” age retirement. The final group is enjoying retirement. Typically clients have between one million and five million dollars in investment accounts, but some have significantly more. But I am happy to work with younger, or older, or less wealthy, or more wealthy if they have the traits I wrote above, and it makes sense for them financially.

How many clients do you have? How big will your firm get?

Compared to many advisory firms, Verbatim will remain small. My wife is a busy physician who is not in control of her own schedule, and we have a son in grade school for whom I am primary taxi driver, soccer coach, camping buddy, etc. In addition to that, I do not see my clients as “numbers,” but as people who I have a responsibility to serve to the best of my ability. As a result, Verbatim is not continually open to new clients; because of the time and effort required to add a new client, I occasionally impose a waitlist.

At this point, until our son is significantly older and more independent, I do not expect the firm to grow beyond 50 clients.

How often do you communicate with your clients? What can I expect if I become one?

Especially at the beginning of our relationship, in setting up your plan, we will speak frequently and often at length. Once your plan is established and you have authentic peace of mind about it, you will hear from me at least five times per year: on your birthday, and after the end of each quarter. So, on your birthday, and in early April, early July, early October, and early January, at the very least.

An important thing I stress to all clients is: don’t let any unanswered questions or unsettled concerns bother you. Do not let them fester! Call me (or email me). You are paying me to be your advisor, so let me advise (spoiler alert: mind reading is not one of my superpowers).

Are you a fiduciary? Will you sign a Fiduciary Oath?

“Fiduciary,” is a word that, when used by a financial advisor to describe themself, should appear as a red flag in the mind of any prudent person. People who are truly good people, or caring, or generous, never say that they are good, or caring, or generous, because they don’t have to. Their actions speak for themselves. What about people who do describe themselves in glowing terms? I think we all know the answer to that question.

I will not sign a “fiduciary oath” as some advisors do, because that would be silly, patronizing to my clients, and legally pointless. It should be completely clear to someone that the way I conduct my advisory business and the way I charge for my advisory service give me no other incentive than to act in my clients’ individual best interests, which is the definition of a fiduciary. If, after doing their due diligence on both me and Verbatim, it is not clear that I act only in my clients’ best interest, then that someone is not a good fit for my service.

Do you work by the hour? Do you do financial planning for a one-time fee, without becoming full-time advisor?

I do not generally work by the hour. If a client has engaged me for an Unbiased Portfolio Review, and they request additional services, my fee is $450 per hour.

When I have the capacity, I do one-time financial planning projects. Currently, in late 2023, I am accepting some stand alone financial planning engagements, depending on scope.

What was your career path to becoming the financial advisor you are today? When and why did you found Verbatim?

Typically, there are two traditional paths that most people take to becoming a financial advisor. Many folks enter financial services through “the dark side” of the industry: part-time life insurance sales. Others begin by working for a bank or a broker dealer. Some then transition to work for fee-only Registered Investment Advisors. I did part of that, and none of it.

My career began in sales & trading, moved to investment banking, and then to portfolio and fund management. I have seen the belly of the beast. The truth is that once a person has reached the point in their financial careers where they are managing several billion dollars for large companies or institutions, they seldom leave to work with individuals. Even if they become disillusioned with the way the financial services industry works, the money, and the recognition, is just too good. If it hadn’t been for the financial crisis of 2008/2009, I highly doubt that even I would have given it up. But the market, by way of the government’s intervention to prevent financial collapse, had different plans for me. When the US government bailed out the banks in 2009, my hedge fund no longer had a purpose, and I was out of work. In my stubbornness and over reactionary response, I decided to leave my successful career in the finance to open a food business. I thought I could see the future, and that the markets wouldn’t recover for a decade. No one knows better than I how wrong I was about that.

Be that as it may, I built, ran, and sold an Asian food production company, and then took a few years off to be a stay at home dad. As it turns out, I really do love finance, and one of my friends recruited me to join him at a broker dealer to do financial advisory. I had no idea what I was getting myself into. No idea. I thought I was going to be a financial planner and advisor, but it turned out that all I was meant to do was sell high cost insurance and mutual fund products. It took me almost a year to realize that I could not build a practice and serve my clients’ best interests working for a broker dealer. I completed dozens of financial plans for potential clients – the kind of, “free,” financial plans that come with the purchase of a whole life policy or rolling your IRA into the advisor’s firm’s managed funds. To this day I thank God that I never sold one insurance policy or moved any money into a high fee actively managed fund. I didn’t make any money, but I learned how not to do the business, and I learned how good financial services salespeople are.

Luckily for me, a friend of mine whom I’ve known since 1984 runs an RIA the way it ought to be, and he was good enough to let me work with him for several months while I prepared to found Verbatim, which I did in February of 2020.

Do you have any testimonials? Can I check your customer references?

Regulators tend to frown on investment advisors using testimonials. Technically, it is possible to use them, but it is tricky to use them compliantly. As chief compliance officer of my firm, my opinion is that using testimonials is not worth the potential trouble from regulators.

Similar to the idea of an advisor pledging to act as a fiduciary, ask yourself this: has any individual or business anywhere ever posted an unflattering testimonial? The same goes for customer references. Could I supply customer references? In theory, yes, but supplying them is silly. Do you really think you’d hear anything less than effusive praise from any customer of mine to whom I referred you?

In addition, while I feel that I have good relationships with all of my clients, I don’t want them to feel any, “pressure,” to recommend me in a reference situation. I encourage you to do whatever due diligence on me that you feel is necessary. The question below answers how to do that through “official” resources.

Where can I do some research on you? Please point me to someplace, “official,” that isn’t just the Google.

You’ll find me on the SEC’s website HERE. You’ll find Verbatim Financial on the SEC’s website HERE. You can read Verbatim’s latest Form ADV Part 1 HERE and Parts 2A & 2B HERE. You’ll also find my firm Verbatim Financial on Georgia’s regulatory site HERE.

What is my risk in signing on with you?

Good question! As you will read in my contract paperwork, either of us, you or I, can end our relationship at any time. I make every effort not use any investments or recommend any insurance products that have any material penalties or early surrender charges. My quarterly advisory fees are charged in arrears, so in the event either of us severs our relationship, you would only owe up through the day of severance. Therefore, your risk is the time spent, any upfront fee spent, and the advisory fees spent up until you are no longer a client.

Can I review your contract paperwork ahead of time so I know what I’m signing?

Please do. Click HERE to review it (it’s 5 total pages: the 4-page Advisory Agreement plus the 1-page Electronic Delivery Addendum).

Other Important Questions (and their answers)

How, exactly, do you get paid? What are all the ways?

This is the single most important question you can ask a financial advisor. Sadly, very few clients of advisors can answer it correctly of their advisors. Far too few advisors have good answers.

Here’s my answer: from my flat advisory fee, and only from my flat advisory fee. Not a penny from any investments, products, or insurance policies I might recommend you purchase. No matter how much money you have, no matter where I recommend it go, my fee is the same.

How much, in total fees and investment costs, will I pay to work with you?

This is the second-most important question you can ask a financial advisor. Again, it’s one that hardly anyone working with a financial advisor can answer correctly.

Here’s my answer: $10,000 per year in advisory fee, plus approximately 0.05% in investment costs. Those investment costs are average management expenses of the funds I typically use for my clients’ accounts. None of them are paid to me.

So, for a client with $2 Million in investments, total annual fees and costs would be $10,000 (for my advisory fee) plus approximately $1,000 (investment costs), or $11,000 or so total per year.

Does that seem like a lot of money to you? It’s certainly not a small amount. Let’s compare that to the typical financial advisor’s fees of 1%, plus another 1% in investment costs (for high-cost funds that are certain to underperform the index). That’s 2% of $2 Million, or $40,000 per year. And for that, the typical financial advisor does little to no income tax planning, and no substantive financial planning for his clients.

This is why it’s no wonder financial advisors never reveal what the dollar amount of their fees actually is. Instead, they deceive their clients and prospects by speaking only in percentages (purposely ignoring the investment cost information).

It should be no mystery now how financial firms pay for those oak-paneled offices in soaring buildings. This is too often a very dirty business.

Don’t you lack the incentive to grow my investments if your advisory fee is flat (and not a percentage of my investments)?

Percentage-based fees do not create an incentive for advisors to grow their clients’ investments. Markets, not advisors, are what provide investment growth. Advisors have no control over markets. Nor can advisors consistently know what parts of markets will perform best. Crystal balls don’t work. So, why would someone pay so much for an incentive that doesn’t exist? The reason is because they get duped by advisors who lack integrity.

My incentive is to keep my clients happy so that they want to remain my clients. I keep them happy by always acting in their best interests. Given my flat advisory fee, I cannot not act in their best interests. And that is why they stay happy and choose to remain my clients.

What’s your strategy to “beat the market”?

I don’t try to beat the market, because trying to do so is a fool’s errand. My job is to match the returns of broad stock and bond markets as closely as possible. I do that by 1) using funds that closely match broad markets (primarily index funds) and by 2) keeping my clients’ investment costs to the bare minimum. That is the surest, most reliable approach to investment success over the long run.

I can buy index funds myself. Why would I pay you to do that?

You can indeed buy index funds yourself, so you shouldn’t pay me just to do that. My clients pay me to be their financial advisor, not simply their investment manager. Investment management is but a part of being a true advisor. It’s for all the parts together that you would pay me, not for simply choosing your investments.

If you’re “fee-only” and don’t sell insurance products or investments that pay commissions, then aren’t you limiting my options?

In a sense, yes, in the same the way a doctor would limit a diabetic patient’s food options by forbidding high-sugar junk food such as soda, cookies, and cake. Is that patient better off or worse off with such “limited” options? I say better off, much better off. I also say that that patient’s, “good,” options are not, in fact, limited.

I act similarly as an advisor.

With very, very few exceptions (term life insurance and some income-only annuities are two), products that pay the salesperson a commission or other up-front payment are absolutely not in the client’s best interest. They are clearly in the salesperson’s and product provider’s (i.e. life insurance company’s, fund company’s) best interests, and by a lot.

Moreover, today, virtually any product or fund that pays a salesperson a commission (or sales load) is also available in a commission-free (or load-free) version. Commission-free products are far more in the client’s best interest (if advisors using them don’t tack on heavy fees to make up for the lack of commission, which happens a lot). Commission-free products have much lower internal expenses, precisely because there is no commission to pay, therefore the client receives far more, “bang for the buck.” That is why I bias towards commission-free products for clients who want or need insurance protection, for which I charge nothing extra.

All financial advisors have conflicts of interest with their clients. You’re one, so what are yours?

The major conflict of interest problem other financial advisors have is that they are paid some percentage of their clients’ assets, either smaller percentages annually, or large percentages up-front as commissions. Because I am only paid my flat advisory fee, I have none of those conflicts. I am free to advise the client on what is in the client’s best interest, because I don’t get paid more or less for however much a client invests anywhere, wherever a client invests, or whatever a client buys.

My clear conflict of interest is pre-advisory relationship. If you ask me whether I think you should become my client, and I want you to become a client, clearly I stand to benefit financially from having you as a client. As a result, I cannot give you advice on that decision without a big conflict of interest. Once you are my client, however, my only incentive is to do excellent work for you to make you happy so that, candidly, you keep paying me quarter after quarter, year after year, to be your advisor.

So while it’s correct that all financial advisors have conflicts of interest with their clients, unlike almost all other financial advisors’, mine is only pre-relationship.

What’s your “why” as a financial advisor? Why are you one, and what motivates you?

Full disclosure, until I met my wife, I did not have a career related, “why.” I thought I was doing important work, and I took great pride in it – probably too much. But how did I make an impact on people’s lives? I did not. My wife, as a physician, can literally saves people’s lives at the hospital. All I ever did was make money. That was ok while it was happening, but once I stepped away from Wall Street for a while, I realized that I wanted to do more, to help people personally, and I know you can do that as a financial advisor better than many other professions. I also want to do it very well and very fairly to both the customer and to me. That’s exactly what I do at Verbatim.

A big motivation for me is that so much of the financial advisory business is dirty business. I’ve said before that I feel a personal vendetta to take as much money out of the pockets of the financial services industry as possible, and place it back into my clients’ pockets, where it belongs. A sad-but-true quotation by writer Morgan Housel expresses it perfectly: “The business model of the majority of financial services companies relies on exploiting the fears, emotions, and lack of intelligence of customers. The worst part is that the majority of customers will never realize this.”

Partial proof of this is that almost no people who use financial advisors can answer these two questions correctly: How, exactly, does your financial advisor get paid? And how much, in total fees and investment costs, are you paying to work with her or him?

What if I love everything I’ve read here but I just don’t like your haircut? Or, more realistically, I’d like to meet in person & don’t live in Georgia?

I can not work with everyone, and that’s ok, but I want people to be able to get the financial help they need without paying fees that don’t make sense. Thankfully, there are more & more flat fee financial advisors opening up every day. You can find a list of flat fee advisors to interview HERE.