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We’ll be happy to address any questions you have regarding our firm or services. For our Northbrook office, call 847-498-5982. For Naperville, call 630-807-9009.Discover more about us
What is the profile of a typical client at Reason Financial?
Clients include corporate executives, physicians, attorneys, accountants, educators, engineers, scientists, and business owners and nearly 50% have advanced degrees. We also work with a large number of widows who appreciate our consultative approach, rather than the more common sales oriented structure found at many brokerage firms. In addition to traditional families, our practice also includes non-traditional families, as well as single, and widowed individuals.
- Financial Planning clients are generally between the ages of 35 and 65 and are still working.
- Investment Advisory clients are typically between 45 to 85 and have investment portfolios between $400,000 and $8,000,000. About half of these clients are still active in their careers and the other half are enjoying their retirement.
Someone who is obligated to put your interests above their own is a Fiduciary. A doctor is a Fiduciary. A lawyer is a Fiduciary. All Registered Investment Advisors are held to a Fiduciary Standard. since they are governed by the Investment Advisors Act of 1940. Many employees of well known brokerage firms are not Registered Investment Advisors. Instead, they are only held to a Suitability Standard, which means they are not obligated to put your interest ahead of their own. As long as their advice is suitable, they are in compliance. An example of suitable would be when deciding between two investments that are identical in all ways, except one pays the selling advisor twice as much as the other. Both may be suitable for the client, but a Fiduciary must put the client's interest ahead of their own. The SEC has proposed legislation to require all advisors to be held to a Fiduciary Standard, but it has been held up for years based on the resistance by the major brokerage firms. Reason Financial Advisors is subject to the Fiduciary Standard as a Registered Investment Advisor. As a member of the National Association of Personal Financial Advisors (NAPFA) we have also signed a Fiduciary Oath to put our clients' interest ahead of our own. When interviewing a financial advisor, many experts suggest you ask for a copy of the firms ADV Part II which contains important information, such as history of any past violations, qualifications and if they are held to a Fiduciary Standard. We will be happy to furnish you a copy of our most recent ADV Part II at your request or you can click here to download a copy.
Since our firm started in 2004, Reason Financial Advisors has been Fee-Only. There are three compensation methods financial advisors can use in working with their clients:
- Fee-Only Advisors are paid solely by their clients which reduces conflicts of interest and increases transparency. With no commissions, referral fees or 12B-1 fees to cloud their judgment, advice is more objective. Fee-Only advisors have a Fiduciary responsibility and must act in the best interest of their clients.
- Fee-Based Advisors charge their clients a fee to provide investment advice, but they also accept commissions and/or 12B-1 fees. As with commission-only advisors, they can significantly increase their compensation by selling additional products such as annuities, insurance or investments that pay 12B-1 fees. The Financial Planning Association and the CFP Board of Standards have recently started labeling this compensation method as "Commission and Fees" because they believe the term "Fee-Based" is intended to suggest to consumers they are "Fee-Only" which they are not.
- Commission-Only Advisors are compensated if you purchase a product such as a mutual fund, insurance policy or an annuity. As a result, they have an incentive to act in their own best interest, even if it differs from yours.
It's important to trust and feel comfortable with individuals when you select a financial planner because you're sharing the important financial issues of your life. We invite you to schedule a no-cost, no-obligation Initial Interview meeting to learn more about our serves. For our Northbrook office, call (847) 205-9501. For Naperville, call (630) 807-9009. We encourage you to complete the Initial Interview Questionnaire and return it to our office at least two business days prior to our meeting.
Reason Financial Advisors, Inc. offers three distinct levels of service to address the needs of our clients.
- Financial Planning is the process of reviewing your hopes and dreams and creating a roadmap to help you achieve them. The first step is gather your financial information so it can be analyzed. Next we help you identify your financial goals. Once this information is collected and processed, we create a custom plan that addresses cash flow management, asset allocation, investment selection, risk management, income tax planning, employee benefit planning, stock options strategies, retirement planning, estate planning, education planning and business succession planning .
- Investment Advisory Service combines our Financial Planning service with ongoing portfolio management .
- Focused Plans are ideal for clients who have more basic needs. Perhaps it's a second opinion on your investment portfolio, developing a college savings strategy, or determining addressing retirement income needs.
Reason Financial Advisors, Inc. is independently owned and operated and is not affiliated with any brokerage firm, bank, insurance company, mutual fund, legal or accounting firm. We may make referrals to other professional advisors as needed, but no referral fees are paid or received.
Financial Planning is a process that generally addresses all areas of an individual's financial life and helps to create a road map to achieving your financial goals. We do this by a series of appointments to create a written financial plan with specific recommendations that are unique to your needs. Areas that are addressed include cash flow management, asset allocation, investment selection, risk management, income tax planning, employee benefit planning, stock options strategies, retirement planning, education planning, estate planning, and business succession planning.
From the time we receive a completed engagement agreement, the average plan is normally finished in approximately 90 days. Although we can shorten this time frame if requested, most clients prefer to have adequate time between meetings to incorporate planning recommendations as they occur during the planning process.
We generally quote flat fees for Financial Planning and Focused Plans based upon the level and scope of the services performed to complete the engagement. On occasion we will work with a client on an hourly basis. See our current ADV Brochure for our hourly rate. The fee for our Investment Advisory Service is calculated on the amount of assets under management. Our current fee schedule is contained in our ADV Brochure.
For most clients, three or four meetings are usually appropriate. Based on the complexity of a client's financial life, the actual number may differ.
When a financial plan is completed, the engagement ends. Some clients may choose to continue to work with Reason Financial Advisors on an ongoing basis with our Financial Planning or Investment Advisory Service.
Successful investing is more than just skill. It's also about behavior. Many individuals are comfortable managing their own investments when the stock market is performing well. When the market declines, however, many investors find themselves uncertain on how to react and frequently make investment decisions that they later regret. Investment management is the process of hiring a professional to make investment decisions on behalf of a client. By working with an investment professional, portfolio volatility can frequently be reduced.
- Discretionary investment management exists when a client signs a limited power of attorney authorizing a financial advisor to purchase and sell various investments in the client's brokerage account.
- Non-discretionary investment management does not involve a limited power of attorney, therefore the financial advisor provides recommendations to a client for approval prior to each transaction being initiated.
Most of our Investment Advisory accounts are maintained at TD Ameritrade who provides clients with all trade confirmations, monthly brokerage statements and year-end tax reports. All accounts are registered in the client's name and disbursements may only be made with the client's approval. RFA maintains a limited power of attorney to execute trades within the client's account.
Yes, our Financial Planning service includes a review of your portfolio and we provide you with specific written investment recommendations. You choose whether to implement any or all of the recommendations, as well as when to do so.
Of course. For many of our clients, retirement plans make up a major part of their investment portfolio. RFA provides specific recommendations on how to allocate their retirement accounts based on the investments available in their company plans.
Reason Financial Advisors does not charge fees other than what is quoted in our engagement agreement. An Investment Advisory client may be charged fees from their custodian for certain transactions, such as the purchase or sale of various securities. Also, all mutual funds and exchange traded funds (ETF's) have an annual expense that is calculated in the client's investment return.
Financial Planning and Focused Plan clients are each quoted a fee before any service begins which allows them to determine if the cost is in line with their expectations. Our Investment Advisory service is most appropriate for clients with $400,000 or more of investable assets.
- (847) 205-9501 for our Northbrook office, or
- (630) 807-9009 for our Naperville office.