What's it like to work with The Independent Financial Group? Founding Principal Jim Lorenzen talks about how IFG may be different from other wealth management advisory firms.
1. It’s About Time.
THE INDEPENDENT FINANCIAL GROUP
A REGISTERED INVESTMENT ADVISOR
James Lorenzen, CFP®
FOUNDING PRINCIPAL, ACCREDITED INVESTMENT FIDUCIARY®
805.265.5416 · Outside California 800.257.6659
2655 First Street, Suite 250; Simi Valley, California 93065
Email info@indfin.com • Ca. Insurance License 0C00742
Indfin.com · jimsmoneyblog.com
AN INTRODUCTION TO IFG
2. Founding Principal: Jim Lorenzen, CFP®, AIF®
• Fee-Only financial planning and investment advisory services
• Focus: Retirement Planning and Wealth Management
• Registered Investment Advisor – Fiduciary Status
• 22 Years – Clients in Florida, Colorado, and California
• CERTIFIED FINANCIAL PLANNER® - CFP Board of Standards
• ACCREDITED INVESTMENT FIDUCIARY® - Center for Fiduciary Studies, Joseph
M. Katz Graduate School of Business, University of Pittsburgh.
• Professional Speaker and international management consulting - 500
conventions, U.S., Canada, U.K.
• Articles and Interviews – Wall Street Journal’s Smart Money, American
Airlines’ Sky Radio, Journal of Compensation & Benefits, Plan Sponsor’s
Council’s Insights, and more than 25 other national trade publications.
• Prior: Founded, built, sold five businesses. Experience in commercial
finance, publishing, advertising, and management consulting. Served in
U.S. Army, Vietnam, 1969-70.
• Married. Lives in Moorpark, California.
3. What is a CERTIFIED FINANCIAL PLANNER®?
To earn the CFP® certification from the CFP Board, candidates must meet requirements
for education, work experience, and ethics. Candidates must have a bachelor’s degree
or higher from an accredited college or university and also master a list of nearly 100
topics on integrated financial planning through a CFP Board-Registered program,
available through the College of Financial Planning and more than 300 college and
university MBA programs. Topics cover major planning areas, such as:
• General Principles of Finance and Financial
Planning
• Insurance Planning
• Employee Benefits Planning
• Investment and Securities Planning
• State and Federal Income Tax Planning
• Estate, Gift, Charitable,, and Transfer
Tax Planning.
• Asset Protection Planning
• Retirement Planning
• Estate Planning
The time requirement depends heavily on the candidates study schedule – two to
three years is not uncommon. More than 300 colleges and universities offer a CFP
Board-Registered course of study within their graduate MBA programs. Upon
completion, CFP candidates must pass a proctored ten-hour, 2-day, exam, conducted
twice each year on the same dates at specific selected testing locations across the
United States.
4. $307,750
The median wealth of investors who did financial
planning, vs. $122,000 for non-planners.
Source: Annamaria Lusardi of George Washington University and Olivia Mitchell of
Wharton School of Business; CNNMoney.com, May 2013.
Financial Success Isn’t a “Given”.
That’s 60% ($185,750) LESS!
5. The Dirty Little Secret the TV Pundits Won’t Tell You
Investment Success is NOT about picking hot stocks
• It’s not about magic insight
• It’s not about beating “the pros”
• It’s not about timing the markets
• It’s not about being an economic genius
Few people are hurt by their
investments.
They’re hurt by their BEHAVIOR!
It’s about a PLAN….
and the DISCIPLINE to follow it.
6. It’s Not Rocket Science
What We’ve Been Taught:
Three Factors Impacting the Accumulation of Wealth
1. HOW MUCH you invest
2. The RATE OF RETURN you achieve
3. TIME LEFT to invest
What do we KNOW about the RELATIONSHIP of these factors?
If any one is reduced, it creates pressure on the other two factors.
As #3 declines – it the only factor that ONLY goes down - the greater the pressure
on #1 and #2!
The Retirement Trap: When #1 and #3 are severely limited, it
puts extreme pressure on #2: That’s when convincing stories
have impact on the unwary.
7. It’s Not Rocket Science
What We’ve Learned:
The Fourth Factor Impacting the Accumulation of Wealth
4. HOW retirement assets are ARRANGED!
Questions about the future:
• Will prices increase or decrease?
• Will taxes go up or down?
• Are your assets managed for downside risk?
8. Source: DALBAR and Wilshire CooperativeSM. Average equity, bond and asset allocation investor refers to the
average allocation investor as defined by DALBAR. Inflation measured by the average CPI over the 20yr period
ending 12/31/2010. Average institutional investor is represented by Total Fund Public Sponsors per WILCOP.
Average Annual Total Returns :
10 and 20 Years Ending 12/31/2010
The Institutional Process
Institutions Tend to Outperform the Average Investor
Why?
11. Is making the right call 51% of the time enough?
Source: John Bowen, CEG Worldwide
For the 88-Year Period from 1901-1988 Compound Return
Buy-and-Hold Stock Return 9.4%
Perfect Forecasting of All Bull/Bear Markets 15.8%
Correct Forecasting 50% of the Time 6.6%
Correct Forecasting of Bear Markets, 50% Bull Markets 8.7%
Correct Forecasting of 71% of Bear/Bull Markets 9.4%
14. It Begins With a Plan
A Plan is your reference point
When it’s clear and calm,
everyone’s a sailor.
But when the storm rages and
you become disoriented, you
seek the ONE fixed point…
something that DOESN’T MOVE.
Something that points the way
to your destination.
It’s your plan.
15. Who is THE INDEPENDENT FINANCIAL GROUP?
The IFG name does NOT refer to a group of people
organized to sell investment products.
Old Paradigm - Employing firm provided all products
and services in-house to Registered Representatives
charged with generating revenue for the firm.
This model still exists in firms where reps are
required to generate dollars to ‘keep their
desks’ and their paychecks.
This model can create potential conflicts of interest
where the client is concerned.
THE INDEPENDENT FINANCIAL GROUP refers to a
SOLUTION that belongs to YOU!
Custodial Services
Investment Managers
Product Development
(in-house funds & products)
Research &
Due-diligence
Client Reporting
Services
Back Office &
Administration
Registered Representatives
(brokers)
20+ Years ago: Me.
16. THIS is THE INDEPENDENT FINANCIAL GROUP.
IFGClient
Custodian
3rdPartyMgrs
&Funds
Due-Diligence
&Research
Client
Reporting
BackOffice
Administration
TheAdvisor
The New Paradigm
• Unbundled structure
• Independent advisor
• Independent service providers
• Fully-disclosed compensation
• No investment commissions or
‘back-door’ compensation
YOUR independent
financial group
• All members work for the client
• YOU are the CEO
• Advisor acts as personal CFO
• Client is in control
It’s YOUR
INDEPENDENT
FINANCIAL
GROUP
17. It's not about
picking hot
investments.
It's about
achieving
goals.
Managing the
downside is
more important
than reaching
for higher
returns.
No one can
control the
markets or
interest rates,
but you can
control taxes
and costs.
Monitor
everything and
revise as
necessary,
keeping your
plan current.
The IFG Investment Philosophy
Advisor Value:
Arrangement of assets to meet long-
term goals through
• Establishment of a sound plan
• Decision guidelines framed by the plan
• Tax –efficiency
• Risk management
• Cost control
Building unified tax-efficient portfolios
with little turnover and the assets
located in the right tax vehicles – taxable,
tax-deferred or tax-free – and helping
clients to understand just how much
they’ll need to achieve their goals, are all
critical services with benefits that can far
outweigh the fees they pay to actually
achieve their goals.
It’s about time... and the plan.
18. One week One week 45 days 90 days
REGULAR
PROGRESS
MEETINGS
SITUATION
ANALYSIS
MEETING
PLANNING
FRAMEWORK
MEETING
DISCOVERY
MEETING
45-DAY FOLLOW-
UP MEETING
INVESTMENT PLAN
IMPLEMENTATION
Complete
discovery
process
Organization of
account
paperwork
Implementation and
Commitment
Confirmation
Review of progress +
implementation of
advanced plan
Gap Analysis
& planning
commitment
In-Depth
Assessment
Session
CREATE INITIAL
DIAGNOSTIC
PLANNING
PROCESS, PLAN
CREATION & IPS
THE ADVANCED WEALTH
MANAGEMENT PLAN
Diagnostic of
current situation,
with gap analysis
Comprehensive evaluation of the
entire range of financial needs with
our recommendations for moving
forward
Creation of written
investment plan for
implementation
Advanced Wealth
Management
Planning includes
optional estate, tax,
and insurance
planning.
PROFESSIONAL
NETWORK MEETING
THE PROFESSIONAL
NETWORK
Team of specialists applies its expertise
to evaluate all aspects of your financial
situation and devise
appropriate solutions for your review.
Team of carefully selected
professionals, each with a
high level of knowledge and
skill in key legal and financial
areas
IFG Investment Planning and Wealth Management Process
Two to Four weeks
19. 1. Data Collection
2. Situation/Needs Gap Analysis
3. Data Review and Construction of an Action Plan
4. Review/Refinement of Action Plan
5. Plan Implementation
6. Monitoring with Reviews and Revisions
The Six-Step Planning Process conforms to the best practices standards
prescribed by the CERTIFIED FINANCIAL PLANNER® Board of Standards
The Financial Planning and Investment Advisory Process
20. IFG Does NOT Take Custody of Client Assets
Clients control assets in their own accounts with an INDEPENDENT CUSTODIAN.
IFG’s Primary Custodian Service Provider: Pershing,
division of Bank of New York-Mellon
Pershing, owned by BNY-Mellon, is our primary custodian for client accounts*. IFG
receives no compensation from this or any other investment service provider.
Unlike other major banks, The Bank of New York is primarily a provider of global and
domestic custody services, not a retail bank. The Bank is a major force in the mutual
fund processing business and has a long history in the financial services arena.
*The choice of asset custodian for a given client is based on a match between the
custodian’s service capabilities and the individual client’s needs.
IFG receives no compensation or incentives of any description from any investment
service provider IFG’s investment advisory compensation is solely through client fees.
21. Bank of New York-Mellon’s 200-Year History
• The Bank of New York was founded by Alexander Hamilton in 1784
• It is the oldest bank in the United States
• It is one of the oldest banks in the world
• The Bank came into existence before the adoption of the U.S. Constitution
• First loan made to the United States Government -- $200,000 in 1789, during George Washington’s
first administration
• The Bank’s headquarters are located at One Wall Street, New York, NY
• In 1792, The Bank’s stock was the first stock traded on the New York Stock Exchange
• The Bank is one of the largest financial holding companies in the United States
• Global expansion began with an office in London in 1966
• The Bank now has a presence in 33 countries
• BNY is not a retail bank; rather, it provides global custodial services to financial institutions around
the world. Since it had no retail loans, the government used BNY to administer the TARP program
after the credit meltdown.
22. IFG’s Fee Structure
There are two types of fees, each charged separately:
• Planning fees: This is a one-time flat-fee for the creation of your plan, whether a full-
scope financial plan concerning estate issues or, more commonly, a limited scope plan
focusing on a specific area, commonly retirement. Your fee will be quoted in advance
after a no-fee analysis session and will be based on the scope, complexity, and time
required for the plan. A completed plan is a requirement for becoming an IFG advisory
client. Once completed, the plan belongs to you.
• Investment advisory fees: Annual advisory fees are deducted on a quarterly basis by
the asset custodian, based on the level of assets on deposit. All fees and deductions are
fully disclosed in advance and reflected on client reporting.
Upon completion of our initial meeting – this will give each of us an opportunity to learn
more - I’ll be happy to provide you with a complete custom quotation as well as a copy of
IFG’s ADV filing.
Jim Lorenzen, CFP®, AIF®
23. The IFG Credo
Every client deserves, and has the right to expect, an objective and unbiased
advisor who is fully aligned with the client’s goals, possesses a moral compass
with strict standards of accountability, and who takes a straightforward, common
sense collaborative approach, putting the client in control of a hassle-free process
incorporating breakthrough technology and unparalleled flexibility… with openness
and transparency.
Jim Lorenzen, CFP®, AIF®
24. My Goal With Each Client
Extraordinary service with no surprises, no excuses, and no
worries, as well as independent thinking and lasting solutions to
help clients achieve the security, stability, predictability, and peace
of mind they seek.
Jim Lorenzen, CFP®, AIF®
25. Learn More About IFG
Jim Lorenzen, CFP® LinkedIn Profile: http://www.linkedin.com/in/jimlorenzencfp
IFG on Facebook: https://www.facebook.com/IFGAdvisory
IFG Insights: http://tinyurl.com/IFGInsights
Jim’s Blog: http://www.jimsmoneyblog.com
Follow Jim on Twitter: @JimLorenzen
You can email IFG: info@indfin.com; or Call Jim at 805.265.5416
The IFG website: http://www.indfin.com
Interested in becoming an IFG client? You can schedule a brief 15-minute
introductory call at http://tinyurl.com/IFGIntroCall.
26. Legal Stuff
THE INDEPENDENT FINANCIAL GROUP (IFG)
IFG is a Registered Investment Advisor registered with the State of California and does
not provide tax or legal advice. Nothing contained in this presentation should be
construed as investment advice as IFG does not provide investment advice without first
conducting a full financial planning process. IFG currently serves clients in New York,
Florida, Colorado, and California. Viewers of this presentation should not rely or act on
information in this presentation without first consulting with their legal, tax, and/or
financial advisor. Founding Principal Jim Lorenzen is also licensed for insurance as an
independent agent under California license #0C00742. IFG is not affiliated with any third
party investment or service provider.
Jim Lorenzen, CFP®
ACCREDITED INVESTMENT FIDUCIARY ®
27. Jim Lorenzen, CFP®
FOUNDING PRINCIPAL AND ACCREDITED INVESTMENT FIDUCIARY®
THE INDEPENDENT FINANCIAL GROUP
A REGISTERED INVESTMENT ADVISOR
2655 First Street, Suite 250; Simi Valley, California 93065
By Appointment Only
805.265.5416 · 800.257.6659 cfp@indfin.com
indfin.com · jimsmoneyblog.com
Subscribe to IFG Insights!
http://tinyurl.com/IFGInsights
It’s About Time.
Independence
Clarity
Common Sense
Notas do Editor
Go over the Four Pillars.
The key’s to success are:
Managing Taxes and Expenses
Managing Risk
Following your personal financial business plan