Investing FAQs For Planning Your Financial Future

Asking the right questions will help you grow and protect your assets. It will also help you pick the right advisor to assist you along the way.

 

What does it mean that Rev Capital, LLC, is an RIA?

As an RIA, we are ‘fee only’ advisors. We do not sell products and we do not make commissions. We simply charge an annual fee, typically around 1% of your assets invested with us, though it can be less for larger relationships. We charge a fourth of the fee at the end of each quarter. That is our only fee. We cannot make more money unless we can make your account grow. Of the various types of advisors in the world, the RIA model is by far the most transparent for the client.

 

Where will my money be held?

This is a critical question. This is the question that will keep you away from the Bernie Madoff types. Your money should NOT be held by your financial advisor. Your money should be in a bank or investment custodian, preferably one you’ve heard of. If you meet someone who tells you they hold your money in a pooled account or something like that, don’t walk from the office, RUN.

 

Our clients have their money at Charles Schwab. The accounts are 100% the property of the clients. They simply grant us a limited power of attorney to make trades and collect our fees. Their custodian relationship is directly with Schwab. They get monthly statements from Schwab, they have online access to their accounts through Schwab, etc. We do not hold anyone’s assets in any way. This is what you are looking for, and is the model followed by ethical advisors.

 

Are annuities evil?

Tough question. We think the answer is ‘no’, but they are expensive, so you have to be sure what you are getting is worth to you what you are paying. Like any insurance, you are transferring some degree of risk to an insurance company, and they won’t do that transaction for free, nor should they. Are there other ways to build a portfolio to provide steady income without the cost of the annuity? Absolutely. In fact, we would argue that there are far better ways. But if you can’t sleep at night without some assurances from an insurance company about your nest egg, then an annuity might be right for you. Just know about their big commissions and why certain types of advisors, typically registered reps of broker/dealers, like selling them so much. Of course, we don’t sell them (or anything else) as an RIA, so you won’t be pressured to buy one from us.

 

What is a ‘third party money manager’?

Many/Most advisors put your money with a third party money manager (often called a TAMP or SMA but they hide behind other names too). That means your advisor isn’t actually managing your money as he/she has outsourced that function to someone else. Despite this, those same advisors typically charge an asset management fee even though someone else is doing the actual asset management work. We aren't suggesting this arrangement is inappropriate, but we are disappointed when we meet people who are working with firms that handle investing this way and have all along believed their advisor was actually making the investment decisions.

 

Do you use mutual funds?

Nope. Mutual funds are just another form of third party money managers. A mutual fund is a big pool of money managed by some group of people that you cannot see or talk to. Since they need to get paid too, mutual funds are expensive, even the so called ‘no-load’ funds come with costs that are not disclosed to you on top of the gross expense ratio fees that are disclosed. All of which might be ok if mutual funds consistently outperformed the market, but they don’t. And since you can’t meet the people who run the funds, there is really no way to pick ‘the best’ mutual fund. We think no-load funds are for DIYers. If you are going to hire an investment professional, they should be able to do better.

 

Do you like ETFs?

Yes. Unlike mutual funds, they are unmanaged, so they are very cheap. They also trade during the day (mutual funds only trade after the market closes), which gives far greater trading flexibility. Unlike mutual funds, you don’t buy into a capital gains position when you buy shares of an ETF. And because they blindly track indexes, a good portfolio builder can get precisely the investment and risk allocation they want because ETFs never wander off course like mutual funds often do. 

 

Do you like individual stocks?

Absolutely! In fact, we like them the best of all investment vehicles. Most people would find our typical work day pretty dull, but we love it! We spend most of our time screening and analyzing stocks for our clients’ portfolios. 

 

What sort of reporting can I expect from you?

You will get a monthly statement from Schwab that will detail your holdings, gains/losses, and any fees or income that happened in the prior month. You will have a login to Schwab’s website where you can access your account directly anytime you like. In addition to the tools at Schwab, we maintain a performance reporting portal. It will send you an email every Monday morning telling you how your investments performed the prior week. You can also login to the portal whenever you like and access your actual investment performance. We also do periodic performance reviews. How often is really up to you. We have clients we see every quarter and clients we talk to only once or twice per year. 

 

Do you have an account minimum?

We take it client by client, always asking whether it’s a good fit and can we add value. But generally speaking, yes, we have a $1 million minimum. That minimum does not apply to the children of our clients, however.  We believe it is very beneficial for families to share an advisor across generations.

 

Do you work outside of Georgia?

Yes. We serve clients throughout the United States. With our commitment to technology, we are able to serve clients on their terms anywhere they live. And thanks to living in Atlanta with the busiest airport in the world, no one is really that far away!