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00:00:01
Advisors, Managers and Planners
66 Plays3 months ago
In this episode of the Uncommon Wealth Podcast, co-hosts Phillip Ramsey and Arron Cramer delve into the complexities of portfolio management versus fund management, aiming to simplify these concepts for their listeners. Phillip and Arron discuss how Uncommon Wealth Partners uniquely positions itself in the financial planning industry, offering customized advice that aligns with each client's individual goals and risk tolerance.
The episode begins with Phillip introducing the topic of managing clients' money and the confusion surrounding different financial management terms. Aaron elaborates on the different titles financial professionals use, such as financial advisors, wealth managers, and fund managers, and what those titles signify about their service offerings. Together, they clarify that Uncommon Wealth Partners focuses on personalized financial planning and portfolio management. Phillip and Aaron emphasize the importance of understanding fees associated with financial services and how excessive charges can impact overall investment performance. Their goal is to provide clients with low-fee, high-value services that align with each client’s financial plan.
Key Takeaways:
- Understanding Financial Management Roles: Clear distinction between financial advisors, portfolio managers, and fund managers.
- Importance of Customized Financial Plans: Uncommon Wealth Partners prioritize personalized plans to align with clients' unique goals and risk tolerance.
- Fee Structures in Financial Services: Insight into different fees associated with fund management and the importance of transparent fee structures.
- Risk Tolerance and Portfolio Balance: The significance of balancing investments with different risk profiles to achieve financial goals.
- Client-Centric Approach: Emphasis on building long-term relationships with clients through transparency and personalized service.
Notable Quotes:
- "We do manage people's money. That's what we do here at Uncommon Wealth. We also give people customized plans for them to live their most uncommon life." - Phillip Ramsey
- "Investments are just a tool. Like, it's one tool of many. So with a plan, you really get to hound in." - Arron Cramer
- "Fees are a huge importance. Make sure that you know the fees that you are being charged." - Phillip Ramsey
- "We don't have a crystal globe knowing what's going to happen, so you got to diversify within there to meet and attack all those times and possibilities that could happen in the future." - Arron Cramer
- "We are in the business to get clients for life, and I think that we're doing a good job with that." - Phillip Ramsey
Resources:
- Uncommon Wealth Partners: uncommonwealth.com
Recommended
Transcript
Introduction to Uncommon Wealth Podcast
00:00:00
Speaker
Everyone dreams of living an uncommon life. And the best asset you have to achieve your dreams is you. Welcome to the Uncommon Wealth Podcast. We're going to introduce you to people who are living uncommonly. We're also going to give you some tools and strategies for building wealth and for pursuing an uncommon path that is uniquely right for you.
Meet the Hosts: Philip & Aaron
00:00:27
Speaker
Hello, everyone. You are listening to the Uncommon Wealth podcast, where I'm your host, Philip Ramsey. And I'm Aaron Kramer. Thank you for tuning in. We are talking today and trying to make things simple. We do manage people's money. That's what we do here at Uncommon
Demystifying Financial Management Roles
00:00:41
Speaker
Wealth. We also give people customized plan for them to live their most uncommon life, which is focusing on their gifts and skills and how they get excited. Super fun. I love what I do. But today we're talking about the side where we manage people's money and there's a lot of confusion. Are you an investment manager? Are you a fund manager? Are you portfolio manager? So today we're going to try to simplify it for you and tell you what we do in our philosophy here on Commonwealth. Yeah.
00:01:08
Speaker
You know, this is fun. This was the hardest thing about our industry is people call each other. So many different things. I mean, just last week, someone's like, what, like, what are you like? It's like, oh, like people will call themselves a financial advisor, financial planner, wealth manager. ah And really like we're all kind of the same. We all are in the same line of work, but I think it can show.
The Essence of Financial Planning
00:01:32
Speaker
what what you lead with like you know if you're a wealth man and lead with portfolio management and then planning second like we kind of call ourselves financial planning planners because we lead with planning you know there's so many ways that's a good point is there's a lot of ways and i do think the way that people like introduce themselves is is telling
00:01:54
Speaker
Somebody's like, hey, what do you do? I was like, i run I own a business. That's what I say normally. And they're like, what what? I'm like financial services. Like that's, I don't really know how else to say it, you know? um yeah But I do think there's like people who just like, I only wanna manage people's money. Then another person is like, I just wanna give financial plans. Where we would land, we probably, um we probably tend to like the plans more because then we feel like we can invest your money accordingly. We put a little bit more emphasis on the financial planning to make sure we're all excited about it and we're going to hit the goals that we want to hit.
Investments as Strategic Tools
00:02:28
Speaker
um To me, it's just kind of like the roadmap. I'm trying to map it out together with our clients. And then once we do that, then we could talk about investments.
00:02:36
Speaker
Yeah, I mean investments are just a tool. like It's one tool of many. So with a plan, you really get a hound in. Do you need 10% in the market? Maybe you don't you know for what you have and everything. But like if there's not a financial plan, like we don't know what you need to earn to get to your goals or and all that. So that really helps us draw that out. And because it is a tool, we gotta try to be good at using it. Amen to that.
Understanding Financial Service Fees
00:03:06
Speaker
And I think no matter what, fees are a huge importance before we jump into this. Make sure that you know you the fees that you are not only that you're like giving to your financial advisor, but also like what are the platform fees, what are the investment fees, all the different things and fees. There's a lot of different layers. Maybe there's a third party money manager. Well, they don't do it for free.
00:03:29
Speaker
I'll tell you that. And we've in the past have this thought that, okay, these money managers are going to help us get more return out of the market. And what we found was it wasn't true. And they were, they were also charging a ah lot of money for things that we maybe we could put together ourselves. And so, uh, uncommon wealth has gone through a trajectory of, or a, a plethora of different kind of philosophies. We've landed on this one. Fees are low. And then we do things that are tried and true. Historically, things that are like, this adds up. So let's talk through it. What do we do? How would you say it? How would you simplify it? Aaron, I can't wait to see how you said this. This is like how I think about it. Now, if you're a professional listening to this or have your opinion, you can use it so
Portfolio vs. Fund Managers
00:04:13
Speaker
many different ways. But I look at at us financial advisors. We are a portfolio managers. So especially if you lead with planning, because you might have
00:04:25
Speaker
you know, investment what properties, that's within your portfolio, right? That's a good idea. So like that, you have either a portfolio manager, manager, and then you have fund managers. That's what I want to talk about today. I i feel like there's a big way. yeah And what's what's the difference between the two, right? like All these guys on Wall Street, or they have these like certain designations, why don't you see it so a financial advisor have this designation? Like what I'm thinking about is like a CFA, like certified financial analyst, which is huge exams. like It's like three big exams, really hard test. You typically find those guys,
00:05:05
Speaker
That designation is people working at BlackRock. They're managing what we call a ticker. They're small cap, large cap tickers for the S&P 500 or the Dow Jones or whatever it is. They're managing that fund and that's what you'd call as a fund manager. okay So, but for us as an advisor, well, we don't need to like be to that extent. What we have to do a really good job at is being able to look at that fund manager. Like how well are you doing managing that fund? Where are you positioning things within that fund? Because if it's
00:05:47
Speaker
you know If you're trying to position yourself appropriately among small cap, mid cap, and large cap, but the three fund managers you pick are all over-weighted in AI technology right now, now you don't have a very well-balanced portfolio. right So that's where as a portfolio manager, for us, it's important to make sure we dig into those fund managers, see what they're doing, what are their returns, and what are they charging to? Because you got some of these fund managers, this you know they're charging they're almost charging 1% themselves.
00:06:24
Speaker
Oh, yeah. know That makes a difference. And I was like, what are your returns? Like, are your returns worth what you're doing? I mean, me and Phil can typically sometimes, you know, majority of time make an argument like, no, I weren't that much. That's right. there's Another fund over here, like doing very similar things. And maybe it didn't get the return you got. But after the fund, like expenses and return, yeah it beats you. You know. Yeah. So.
Balancing Portfolios & Risk Management
00:06:51
Speaker
But that's, I mean, that's the big one for us is like, it's really digging into it and making sure you have a well balanced portfolio among the different funds you have within your portfolio. Yeah. Like we would.
00:07:04
Speaker
Prescribed I guess is the right word to those modern portfolio theory that there should be winners There should be losers in every account. You just don't know what and when therefore you have to have a mattering of all these things in your portfolio and If you do have like let's say this is a good example for the portfolio managers Let's say somebody's like well, I've got some CDs in the bank. They're making 5% and Okay, so like, let's go a little bit more aggressive on this side, because when you take the percentage of the total amount, the amount in your, like, let's say the money money that we're managing ends up being 60%. The rest of it might be in CDs, which is very safe. So if you look at the whole portfolio, you're like a 60-40 blend.
00:07:48
Speaker
But when we go to get and put money in, we might we might put it in a way more aggressive portfolio because we know that you have CDs on the other side. yeah So in totality, it's like, okay, we're staying within your wrist tolerance. We're doing a little bit more aggressive over here because we have so much safety over here. So that to me is what what portfolio managers does. And I like the word portfolio manager because it also like deals with people's risk tolerance, risk tolerance and then overarching plan. Can they take that a huge risk? Do they not? Can you see the writing on the wall? The market's been up for the last two years. They're like, Oh yeah, I don't care about risk. Like, but is that true? And Aaron and I have invested in different like softwares to be able to kind of pull that information out for people. And then we just kind of like try to go from that document, like, hey, this is what the portfolio says, because we have real estate, because we have CDs, because we have some bonds over here, we've looked at your 401k account, this is what we think that we can safely say in your risk tolerance, we can manage your money at, and it fits your overall plan.
00:08:55
Speaker
Yeah. Yeah. Cause like, that's the thing, like, you know, people, if you're really big into real estate, you got a lot of real estate, like actual real estate, you own homes and you're renting them out or whatever you're doing, like we probably, on your investment side, probably don't want to like put more of that in there. That's right. Cause you already have plenty of it in there. So let's diversify yourself. Cause like Phillip was saying, you know, We don't, no one has a crystal globe not knowing what's going to happen. So you got to like diversify within there. So it meets and attacks like all those times that possibilities that could happen in the future.
00:09:36
Speaker
right oh So it's really good. at That risk tolerance questionnaire we put out is good. It is fun to do because we have clients that'll be like, no, they'll come back that they're a lot more conservative. And they're like, no, I'm good. Especially when we just went off like a couple of years when we camped off of our like longest bull run ever. They're like, no, I'm good. I'm good. And then we had our correction. And they're like, oh. Dang it. Yeah. And then it's like, man, we talked about it and then it did save us. It was like, I know because it's a good learning moment. It is. It is. Do like if you're working with somebody, if they do a risk questionnaire and you come back way more conservative than you thought you were going to be like really take a moment to think about that because that means more aggressive you are. The flip side hurts a lot more. That's right.
00:10:29
Speaker
So anyway, so that's what we do is more portfolio managing. We would say like fund managers are those ones that get paid a lot of money to just manage tickers for people. What we're trying to do is take a whole totality of information and try to work it down individually for our clients. And that to me is our kind of not uncommon like play, but like we do feel like we do customize plans for our clients and each one of our clients like a snowflake is a little different. And they're all trying to do different things. And so how do we look at each one of our clients? And honestly, it is that we try to look at them as a unique individual trying to achieve different things. And then we look at everything and we call that more portfolio
Engaging with Listeners & Continuous Learning
00:11:12
Speaker
management. So here's my question. If you have any questions or you have any feedback for us, you always know you can call the feedback number. It's 515-446-8158.
00:11:23
Speaker
All right, how are we gonna wrap this baby up, Aaron Kramer? I don't know. I think you did a good job, I guess. Yeah, ask good questions and keep learning. And if you have, you want to challenge us on it, reach out. I'd love to hear it. Yeah, no, that's, and then like, I would say the last thing, again, we do, when we do put together portfolios for people, we do look at fees, which I think is life-giving for people.
Transparency in Advisor Fees
00:11:51
Speaker
And we try to make sure there's no trading costs. We try to do a platform that's super inexpensive. So I'm not gonna say this forever, but it does say like, we try to get this, all of our expenses within the and the ah investments and the things that we put in portfolios under 1%.
00:12:09
Speaker
And i i like I like that number because a lot of advisors like, yeah, I charge 1%. But what they fail to tell you is then they'll get money managers involved and they take 1%. And those money managers are putting in investments that are maybe higher cost, which puts another five basis points on there, 50 basis points. So all in, you're at 2.5%. like fee every year, but the advisor saying, well, I just charged 1%. And honestly, he's correct. He only charges 1%. But when you say, but what's my all in fees? That's where you're going to get some different answers. And Aaron and I are very conscious of that to try to keep fees low for our clients, but not suffer on performance either.
00:12:53
Speaker
yeah um And it does take a unique person to just do the research. Aaron's our guy, man. He he digs in. So I really appreciate Aaron and all the wisdom that you put into that. And so that's what I got. That's that's great. I i want to elaborate a little bit because I like you brought that up. i was like If you're out there and you're working on something, do ask. Me and Phillip have not shot ourselves in the foot, but stumbled because we are so uncommon in the fact of telling people all in fees, here they're all in fees. And when we go up against, we're like competing for a client with another firm. but Well, that's the advisor's fee too.
00:13:29
Speaker
We always like sometimes we get too like in routine. We have to step by like, hold on. Is that the clients? Is that the advisors fee or the all in fee? They're like, well, that's the fee they told us. Like, okay, to put that apples to apples. yeah Here's our fee. And then then it's like, oh, you know, it's like, yeah. that you have, there's your fee, there there's the portfolio, he's telling you there's the average of the tickers, on all how he's telling you to have it balanced, there's that fee. Then is he throwing all the trading costs on your plate or is he eating those costs? Like all of this adds up.
00:14:07
Speaker
So it's very common for advisors not to get into that, because one, it's complicated, it's confusing, but second, they don't want to talk about it. Yeah, they don't know and they don't care how the watch is made. and I would say this, I have a lot of people in this industry, I love them dearly. And every time I tell them how much we charge to manage people's money, first thing out of their mouth, what do they say, Aaron? Oh, you're too cheap. You got to charge more. yeah Welcome to un commonwealth, baby. Anyway, these are a big deal. That's why like Philip said, we do believe in fees being a big deal because like it's a drag on your account. So we don't. I mean, if your account grows, if yeah our clients with us, if your client, if your account grows,
00:14:55
Speaker
We're sitting on the same side of the table as you. So if it falls, we fall. If it grows, we grow. Like, and if we charge too much, it holds it back from growing. That don't help nobody. Yeah. We're in, we're in the business seat at clients for life. And I think that we're doing to stop with that. So, okay. You've been listening on Commonwealth podcast. Thank you for listening. I hope this was informative to you. If you've got any feedback for us again, 5 1 5 4 4 6 8 1 5 8. That's our feedback mom, or we'd love to hear from you by the way. because sometimes it just feels like Aaron and I are talking to each other, which is fine. I like i love it. Yeah, like that too. ah Till next time, thanks for listening and go be in common.
Closing & Call to Action
00:15:34
Speaker
That's all for this episode brought to you by Uncommon Wealth Partners. Be sure to visit uncommonwealth.com to learn more about our services. Don't miss an episode as we introduce you to inspiring people who are actively pursuing an uncommon life.