Pure Financial Advisors Frequently Asked Questions

The old financial services business models generally depend on either sales commissions, asset management fees, hourly fees or flat planning fees to generate revenue to the firm. Each of these revenue models has its own potential for conflict of interest.

Commissions have the highest potential for conflicts. If the advisor does not sell something, he or she doesn't get paid. Also, since commissions vary between products, there may be an incentive to recommend high commission products when they are not appropriate. There is also a financial incentive to replace or change investments to create additional revenue. It is extremely unusual for a commission-based broker to disclose the actual dollar amount of their compensation.

Asset management fees are often the greatest source of revenue for fee-based, fee- only and flat-fee advisors. There may be an incentive to focus on selling asset management services as the end result of the financial planning process. Using the planner to manage assets may not be the most appropriate or cost effective method available, however the financial advisor may be depending on the revenue of the asset management sale.

Hourly fee and flat fee planners depend either solely on planning revenue or they may also receive asset management fees. If they only receive flat or hourly fees, there is a financial incentive to overstate the actual hours required for a service or to inflate a negotiated flat rate. The fee charged to a client is usually negotiated individually and the client value could vary significantly from client to client.

Pure Financial Advisors representatives are salaried employees of Pure Financial Advisors. We avoid conflict of interest for the advisor representatives by paying our representatives to do the best possible job for clients, period. Their compensation structure is determined by the financial planning package chosen by the client, the number of clients served, and a bonus determined by an annual client satisfaction survey. Your advisor representative is never compensated by the sale of a financial investment, insurance product or by asset management fees. Any revenue to Pure Financial Advisors from any source is fully disclosed and actual revenue received from your account is reported to you quarterly in writing.

No. There is, however, more temptation for the advisor to give bad advice in the old models. That does not mean that all advisors will be affected by the temptations created by the conflicts of interest in the old models. In the old models, every advisor and broker must individually determine his or her own values and boundaries. We simply decided to remove the temptations and align all advisor financial and professional motivations to equal those of the client. This also serves to eliminate the emotional stress of the ethical burden placed on the advisor/broker by typical compensation structures.

Yes. Within six months of hire, Pure Financial Advisors representatives must have at least five years of industry experience, a CFP® professional financial planning designation and be an AIF® Accredited Investment Fiduciary. In addition, each advisor is supported and supervised by our team of experienced planning and investment professionals. Each advisor is required to follow our prudent practices and procedures.

Although we do not have minimum client criteria, we do not accept everyone as a client. We want each client to experience exceptional value from our services. If we do not believe that we can provide reasonable value to a potential client, we will not pursue a relationship.

One of the important differences of Pure Financial Advisors is that the financial plan is central to our process. Many of our competitors use a limited form of financial plan as a way of discovering your assets and identifying product sales opportunities. After the opportunities are identified, the actual plan slips into history. For us, the financial plan is our primary service and that is why we have created a plan that is dynamic and changing. The plan is designed to grow and evolve as a representation of you. Your plan is a combination of your assets, liabilities, risk tolerance, goals, objectives, time horizons, and your financial attitudes. You can feel confident when your qualified planner has an accurate and current profile of you. This includes coordinated access to all important financial data and documents, financial motivation to do what's in your best interest, a legal fiduciary liability to do what's in your best interest and the technology to coordinate your financial, tax and legal advisors into a comprehensive financial plan.

A Fiduciary is a person who is responsible for managing the assets of another person and stands in a special relationship of trust, confidence and/or legal responsibility. Our advisor representatives are all Accredited Investment Fiduciaries (AIF®). As a Fiduciary, we have the legal responsibility to follow prudent investor practices as well as serve the client's best interest. The Pure Financial Advisors Client Agreement specifically identifies Pure Financial Advisors as an Investment Fiduciary. We also have designed our operations to reflect prudent practices and procedures as outlined by Fiduciary 360 and CEFEX (Center for Fiduciary Excellence).

No. Commission-based brokers are not generally required to be fiduciaries. They are transaction-based and are not held to a fiduciary standard. Fee-based advisors are considered fiduciaries legally, but many are reluctant to acknowledge their fiduciary status and do not follow generally accepted prudent practices and procedures. Some broker/advisors try to wear two hats, suggesting some activities should be held to a fiduciary standard and some should not. Why would your advisor be reluctant to accept a requirement to serve your best interest?

Our model is retainer-based. Please contact our office for details as they vary depending on your circumstances.

When we were designing the planning packages we realized that many people would not know which package created the greatest value until most of the planning was completed. A bit of a Catch 22. So we divided the process into a logical sequence that insures that you take the path that creates the greatest value to you.

Pure Advisory Asset Management services are fee-based. We charge an annual percentage of the assets we directly manage. This fee is either deducted from the account managed or it can be paid directly by the client. The fee is calculated quarterly and due in advance on the calendar year quarter. Any fees collected will be applied toward your retainer offset calculation in the year received.

If your advisor representative identifies a need for insurance products or suggests that you shop for quotes to increase the value of existing insurance plans, you have options. You can go to the open market for competitive quotes or you can request quotes from Pure Insurance Services. You can also do both. If you choose to implement insurance products through Pure Insurance Services , any commission revenue received will be reported to you and used to offset your planning retainer fees for that year. Revenue received will be used to offset the retainer in the "client year" the revenue is received only.

Pure Financial Advisors is a transparent model. Every penny of revenue generated from you or your accounts from any and every source is fully disclosed and reported to you on your quarterly performance report in writing.

If your advisor representative recommends a product or service that is not available through Pure Financial Advisors, your advisor representative may recommend a source for the product or service. Your advisor representative and Pure Financial Advisors are prohibited from receiving any form of compensation for referrals. Your Pure Advisor Representative will be available to review and offer an opinion regarding transactions or products recommended by an outside source.

If your plan implementation through Pure Financial Advisors generates revenue exceeding your financial planning retainer, your advisor representative may suggest that you upgrade your planning package to one that creates more value and is more cost efficient. If the excess revenue is short term, you can change to any planning package that creates the greatest value to you on any calendar quarter. The maximum retainer fee that will be returned is the amount collected in the client year.

Client years are the twelve-month time periods following a signed client agreement. The client year is used for annual retainer fee offset calculations.

You will have three ways to access account information. You will receive a brokerage statement monthly detailing your account values and transactions. You will receive a quarterly performance report showing your accounts with performance measures. You will also have 24/7 internet access to your secure private client web page to view your account values with access to performance reports that are updated daily.

Although we prefer that you use one of our approved professionals, you can use any professional you choose. You may select one of our affiliates to prepare documents to upload the tax or legal documents to our systems and possibly review them.

Yes. If you do not live near one of our offices we can adapt some of our planning packages to accommodate you. You would be assigned to an advisor representative in the home office. If we open an office in your area, you would have the option to transfer to the local advisor representative. Not all packages will be available to out-of-area clients.

As an established client, you can continue with our services and your existing advisor representative remotely if you move.

No. Our business model is based on providing financial planning and unbiased advice. Your retainer to us is our primary revenue. If using Pure Financial Advisors, Asset Management is an option offered by your advisor; you are under no obligation to invest. You should only invest with us if you and your advisor representative both feel that it is the best option to implement your financial plan.

Your advisor can assist you with this decision. After Stage One you will have enough information to make an intelligent decision. You will want the greatest amount of services for the lowest price. We have developed an analysis tool to help you calculate the best value for your personal situation.

No. We want every client to get the same deal. We work hard to provide an exceptional value to our clients and we help you select the best value possible for your situation.

Yes. You can change planning packages on any calendar quarter. If another package becomes more cost effective for you, simply terminate the existing package and initiate the desired package. You would complete a new client agreement for the desired package and immediately have access to the benefits of the new package. Your advisor will notify you if a different package may become more cost effective.

Yes. If you have reason to believe that you would be better served by another Pure Financial Advisors representative, you are free to change. We understand that not all personality types are compatible. Your primary relationship is with Pure Financial Advisors and we want you to work with a representative that you are completely comfortable with.

Your client agreement and primary relationship is with Pure Financial Advisors. You would be assigned another advisor to service your account. Advisors are salaried employees of Pure Financial Advisors and are prohibited from retaining any client information if they leave. The confidentiality of your information is important to us.

If for any reason you wish to terminate your agreement with Pure Financial Advisors, simply inform us in writing and we will terminate services as of the date we receive your notification. You will be refunded any unused retainer as per your client agreement. We will assist you with the transfer of any assets under management.

Yes. If you have investments such as a company 401k or 457 plan, your Pure Financial Advisors representative can help you manage those assets. This is included in your planning package up to the limits as outlined in your client agreement

We offer a Second Opinion service for a non-client to have us evaluate a financial product or situation. The flat fee for this service is $395. This service requires a client agreement outlining the scope of services to be performed as well as the fiduciary duty of the advisor. This service is not available for complex financial issues requiring more than three hours of estimated advisor time.

Our model is designed for clients who want to be well taken care of for the rest of their life. They want access to the financial service industry's best practices in a trustworthy, comprehensive, coordinated and lasting environment. Our clients expect exceptional value, simplified systems and a quality professional relationship. Our greatest value is to a client who is educated, with conservative to moderate risk tolerance, concerned about the old model compensation structure, values a face to face relationship, tends to be a delegator, and has $200,000.00 to $2,000,000.00 of investable assets.