Q: Is My Money Safe?
A: Brightwood Ventures, LLC does not have custody of your funds. We evaluate and select a primary investment company based on our responsibility to seek ‘best execution’ on behalf of our clients. Our primary relationship is with TD Ameritrade. TD Ameritrade provides brokerage and banking services along with over 350 retail locations in the U.S. TD Ameritrade client accounts are covered under both SIPC and additional supplemental coverage.
Q: What Is a Fee-Only Advisor? Why does it matter?
Brightwood Ventures, LLC operates under a fee-only model. We do not take commissions for selling or recommending products. Such arrangements would create a direct conflict of interest with client needs. We do not sell insurance, annuities or other financial products. We provide financial advice on the merits of using these types of products in order to help you find solutions that are right for your financial needs. In contrast, brokers are not prevented from taking fees for selling products. Also, brokers are not required to disclose their fee arrangements with their clients. (Some do, but I have not found this to be common).
Q: What is the Difference Between a Registered Investment Advisor and a Broker Dealer?
Registered Investment Advisors (RIA) and Broker Dealers are regulated under US and Federal Law. However, RIAs and Broker Dealers have different requirements and regulations. RIAs are required to act as your fiduciary – they must act in your best interest, place your needs ahead of their own, disclose conflicts, and invest your funds in a careful and prudent manner. Brokers are held to a different standard. Brokers are only required to place you in investments that are considered suitable. Suitability requires that investments be consistent with client needs. Brokers are not required to disclose conflicts. For example, brokers may receive commissions or selling fees from investments that they place you in (such as 12b-1 fees paid by mutual funds).
Q: What Services Do You Provide Compared to Brokers or other Advisors?
We provide comprehensive financial planning and wealth management. We are focused on your complete financial picture. We may only manage a portion of your investments, but we build financial plans that consider all of your accounts. In my experience, few brokers are providing financial plans. In addition to investment asset allocation, investment selection and investment management, we also consult with our clients on needs related to income and disability insurance, longevity risk solutions (e.g. annuities), life insurance and additional estate planning issues. Tax planning is a core part of our service. We work with client’s CPA to build effective solutions.