As we highlight in our Hierarchy of Financial Needs, your retirement outcome is more likely to be determined by your savings rate than it is to be driven by clever stock picking or crafty asset allocation decisions. The first step in investing, then, is to determine how much you can save. The next step is following a tax efficient waterfall. The last, and probably the easiest, step in investing is buying an appropriate mix of stocks, bonds and others assets.
At Aptus, we believe that financial success, happiness and freedom hinges on spending less money than you make (see Our Cash Flow System Makes Budgeting [Relatively] Cool). A good cash flow plan should help you determine the best balance of spending on important things like education and travel while saving enough for an emergency fund, paying off debt and building up retirement savings. Our recommended cash flow system is a relatively foolproof method of regulating and optimizing spending, but the devil's in the implementation.
Aptus founder Sarah Catherine Gutierrez collaborated on a paper recently published in the Journal of Graduate Medical Education. The title is “What Should I Do With My Student Loans?” The paper provides an excellent overview of the options available to physicians with educational debt.
New doctors getting their first contract out of residency are typically going to have a big, one-time jump in income while also being saddled with a mountain of student loan debt. Their negative net worth makes it hard to hire financial advisors that charge a percent of assets. Their high income makes them targets for less reputable advisors, often selling complex, opaque and expensive permanent life insurance policies. We offer 10 financial recommendations to these new doctors.
Aptus recently provided education, counseling and enrollment assistance for a new 401k plan with around 2,000 eligible employees across several states. Participation in the plan increased more than 30% and savings rates improved meaningfully as well. We were excited to see the positive impact on the plan, but we were most surprised by the lessons learned along the way. We discovered new ways to think about courage, skepticism, trust, shame, leadership, communication, culture, empathy and life.
Interesting article in TheStreet by Ellen Chang on the many reasons to part ways with traditional financial advisors. '"Some advisors are not fully disclosing their inherent conflicts which make it difficult for them to provide truly unbiased advice," said Tim Quillin, a CFA and partner at Aptus Financial, a Little Rock, Ark.-based financial planning firm. TheStreet article: Fire Your Financial Advisor If He Follows Any of These 12 Doctrines
Aptus Partner Tim Quillin wrote a guest column in Arkansas Business on 401(k)s. "If you’re a small-business owner or executive, please go through a formal review of your 401(k) plan. Chances are you can do better. A high-quality 401(k) plan shows employees you care about their long-term future and often provides peace of mind that makes your workforce healthier and more productive. It matters." Arkansas Business column: Your 401(k) Plan Matters
Lindsey Millar, editor of the Arkansas Times, published a thoughtful, well-written story on 401(k) retirement plans. We'd highly recommend it even if we weren't quoted in the piece. Arkansas Times article: You're doing your 401(k) wrong!
After doing plans for over 250 clients, with an average income of $300,000, we can say with confidence that of all the important things we do for clients—from tax planning to investment planning—absolutely nothing is as important or life changing as cash flow planning. One of our greatest challenges at Aptus has been finding a cash flow system that works universally for our clients. And we have it. Read More
Look, we get it. You trust your advisor. You have peace of mind. You don’t want to manage your own money. But $20,000?!? We can work with you on a plan to transition your assets to very low-fee mutual funds that can be extremely easy to self-manage. For a one-time charge of $4,000, we can help you break up with your financial advisor. It will be an educational process and ultimately liberating. You can do it yourself, but you don’t have to do it alone. Read More
Aptus Financial, a provider of fixed-fee financial planning services, applauds today’s initial implementation of the Department of Labor’s new rule requiring financial advisors to act in the best interests of their customers when handling their retirement money. Read More
Another good article on the fiduciary rule. 'Acting as a fiduciary means you're doing what's in the best interest of clients, said Tim Quillin, a partner with Aptus Financial in Little Rock. It's a higher level of accountability than the suitability standard used by brokers, planners and insurance agents who work with retirement accounts. "It's a little sad that we need regulations to define investment advisers as fiduciaries to retirement plans," Quillin said. "That should be fundamental to what our goal is as an investment adviser."' Arkansas Democratic-Gazette Article on Fiduciary Rule
Great article in TheStreet.com about conflicts of interest in front of the pending fiduciary rule. "To avoid this conflict, some firms like Aptus Financial have chosen a different strategy and charge investors by the hour for financial or tax planning and asset management and do not sell any products. 'We are fiduciaries not just in name, but in the truer sense of removing all conflicts of interest from our business and focusing solely on what's best for our clients," said Quillin. "Ultimately, we think this is where the world is headed.'" TheStreet.com Article on DOL Fiduciary Rule
Trust is a funny thing. Place trust too easily and your labeled gullible. Place trust too slowly—or not at all—and your deemed cynical. Given the financial stakes involved in selecting an advisor, we’d err on the side of cynicism. Do your homework and make the advisor earn your trust. Read More
Our overriding investment philosophy at Aptus is “keep it simple.” As we highlight in our Hierarchy of Financial Needs, your retirement outcome is more likely to be determined by your income level and savings rate than it is to be driven by clever stock picking or crafty asset allocation decisions. We encourage our clients to capture broad market returns across a range of asset classes utilizing low-fee index funds. Our asset allocation recommendations are primarily informed by the averages of a host of target-date fund families. Read More
With no standardization, no transparency and no individualized education, people are buying 401(k) lemons and they may never know it. So what can you do? You can ask questions, lots of questions. The truth is that your company—the sponsor of the 401(k)—may be as confused as you are by an industry that thrives on complexity and opacity. You should be aware of these 5 common 401(k) pitfalls and be prepared to ask your company the appropriate questions. Read More
Employees face a bewildering number of choices with their 401(k)s. How much should I contribute? How much can I afford to contribute? Should I pay off student loan debt before participating in a 401(k)? Should I do a Traditional or Roth 401(k)? How should I allocate my funds across stocks and bonds? What specific funds are best for me? We wouldn't expect you to become an expert, but we think it's in your best interests to ask your company about your plan. Question authority. Read More
We have tremendous respect for hard-working, talented portfolio managers and we continually challenge our assumptions, but there are several reasons why we recommend that our clients invest in passively-managed index funds, which simply track a market benchmark like the S&P 500. Most notably, it's just really hard to beat the market after accounting for fees. Over the 15-year period ending Dec. 2016, 92% of large-cap equity, 95% of mid-cap equity, and 93% of small-cap equity managers underperformed their benchmarks. Read More
Many of our financial planning clients are young professionals who seek us out immediately before or after a big jump in income. These young clients are wise and I wish I could get them to talk to my 30-year old self. Read More
Because of the historical focus on product sales and the current focus on asset aggregation, most traditional financial advisors concentrate on investment portfolio construction, asset allocation and securities selection. We think they miss most of what contributes to your overall financial well-being. We believe that financial counseling needs to address a much larger portion of what we think of as the Hierarchy of Financial Needs. Read More