Why Fee-Only?

A Fee-Only advisor is one who is compensated solely by the client, and does not accept compensation of any kind (commissions, rebates, awards, finder’s fees, bonuses, etc.) based on the products that he or she recommends.

A financial advisor who has a financial stake in any course of action that is recommended to a client faces an inherent conflict of interest and cannot be considered objective and unbiased. Many clients are not aware of their advisors’ dependence on selling products, or do not recognize its detrimental impact.

Sierra Wealth Advisors believes that many of the problems that beset Americans today in their financial affairs – including the mismanagement of debt, failure to protect retirement assets and poor allocation of savings and investments – relate directly to the conflicts of interest that pervade the marketplace.

With Sierra Wealth Advisors, you are guaranteed complete disclosure of all fees, prior to your engagement. There is no better way to be confident that your advisor is working in your interest, and solely in your interest.

Why a Fiduciary Oath?

fiduciary (fi·du·cia·ry): noun: one often in a position of authority who obligates himself or herself to act on behalf of another (as in managing money or property) and assumes a duty to act in good faith and with care, candor, and loyalty in fulfilling the obligation.

Source: Merriam-Webster Dictionary of Law, © 1996 Merriam-Webster, Inc.

A fiduciary, by definition, does what is best for the client. This is so important to us (and it should be to you) that we put our fiduciary oath in writing, on the very first page of our Wealth Management Agreement. If you’re not already working with Sierra Wealth Advisors, ask your current advisor for a copy of their fiduciary oath. If they do anything other than provide you with a copy immediately, it’s time for a change.

Why Asset Class Mutual Funds?

“Prediction is very difficult, especially about the future.”

Niels Bohr, Danish physicist and Nobel Laureate (1885 - 1962)

Humor aside, there are two inescapable lessons that all investors should learn:

1) Nobody can accurately predict when or even if a given security, or an entire asset class, is going to go up or down in value.

2) Portfolio design using assets with relatively low correlations mathematically reduces risk for a given level of return.

These lessons embody the Efficient Market Hypothesis and Modern Portfolio Theory, respectively, which have been substantiated by the vast majority of modern portfolio management research.

The Efficient Market Hypothesis holds that securities prices reflect values and information accurately and quickly and therefore a) investors cannot identify superior securities using fundamental information or price patterns and b) it is difficult, if not impossible, to capture returns in excess of market returns without taking greater than market levels of risk.

Modern Portfolio Theory holds that asset allocation is the primary determinant of portfolio performance.  Given two portfolios with the same beginning value and the same average return, the one with the greater risk (measured by variance) will have a lower compound return and thus less ending wealth. Hence, intelligent asset allocation not only can reduce overall portfolio risk but can also increase compound return and ending wealth.

Once you embrace these lessons (and you must in order to be a mature investor), there is no prudent course of action but to design portfolios using no-load, asset class mutual funds because these funds are broadly diversified, accurately represent their respective asset classes, are low-cost and are relatively tax-efficient. Index funds share some of these characteristics, but the goal of index funds is to track an index, which isn’t necessarily representative of an asset class. While index funds may fix the problems inherent with actively managed funds, asset class funds fix the problems inherent with index funds.  In our opinion, anything else would not be in the best interest of our clients.

Sierra Wealth Advisors has established a relationship with a leading provider of asset class mutual funds in order to provide our clients with the very best building blocks for their portfolios. These funds are only available through a limited number of fee-only advisors and Sierra Wealth Advisors is one of the few advisory firms with access to these funds.

These funds are not only where we invest our clients’ money, but where we invest our own money as well.

Why an Investment Policy Statement?

Creating a customized Investment Policy Statement involves identifying a client’s unique goals and constraints, determining an asset allocation policy to achieve the client’s goals while minimizing unnecessary risk, and creating a system and discipline for making investment decisions. Once created, the Investment Policy Statement serves as the foundation for all future investment decisions. If your current advisor hasn't provided you with a customized Investment Policy Statement, you have no way of knowing what their decisions are based on when they make changes to your portfolio. Many advisors lack this disciplined approach and focus largely on return. However, such an undisciplined pursuit of increased return will often result in greater uncompensated portfolio risk and less ending wealth, exactly the opposite of the desired effect. Advisors who focus on return without ensuring an appropriate client-specific level of risk are not acting in the best interest of their clients. You deserve better.

Why Virtual Meetings?

Rather than requiring you to come to our office, Sierra Wealth Advisors specializes in working with you remotely using technologies such as telephone and web conferencing. There are a number of benefits to conducting virtual meetings:

1. •We all lead busy lives. Making your life even busier with unnecessary travel makes no sense at all. Conducting virtual meetings is more respectful of your busy schedule, eliminating driving time to and from appointments.
   

2. •We’re a society on the move (the average American moves a dozen times during their lifetime), and people are especially likely to end up somewhere else after they retire. Conducting virtual meetings allows for a seamless transition if you relocate. In tune with our philosophy of building long-term relationships with our clients, virtual meetings eliminate the need to end a trusted relationship and find a new advisor in your new locale.
   

3. •Talking about financial matters can be stressful enough, even when you’re in a very comfortable environment. Your setting for virtual meetings is the comfort of your own home or office.
   

4. •Your favorite beverage is always close at hand.
   

Conducting virtual meetings is just one more way that Sierra Wealth Advisors focuses on building long-term relationships in which our clients‘ interests come first.