With whom is AL Hewitt Inc. registered? AL Hewitt Inc. (Hewitt) is a Fee-Only Registered Investment Advisor (RIA) registered with the State of California, and can do business in all of the United States.
What is The National Association of Personal Financial Advisors (NAPFA)? The National Association of Personal Financial Advisors, is an organization through which Fee-Only financial planners can further enhance their professional skills, market their services and become part of a collective, influential voice on matters that affect them and their clients. Founded in 1983, NAPFA currently has more than 2,400 members nationwide.
What is a Fee-Only Financial Planner? NAPFA defines a Fee-Only financial planner as one who, in all circumstances, is compensated solely by the client, with neither the advisor nor any related party receiving compensation that is contingent on the purchase or sale of a financial or insurance product. A NAPFA member or affiliate may not receive commissions, rebates, awards, finder’s fees, bonuses or any form of compensation from others as a result of a client’s implementation of the individual’s planning recommendations. Less than one percent of the financial advisors in the United States practice as Fee-Only and have signed the NAPFA fiduciary Oath.
What is the Fiduciary Oath? The advisor shall exercise his/her best efforts to act in good faith and in the best interests of the client. The advisor shall provide written disclosure to the client prior to the engagement of the advisor, and thereafter throughout the term of the engagement, of any conflicts of interest, which will or reasonably may compromise the impartiality or independence of the advisor. The advisor, or any part in which the advisor has a financial interest, does not receive any compensation or other remuneration that is contingent on any client’s purchase or sale of a financial product. The advisor does not receive a fee or other compensation from another party based on the referral of a client or the client’s business.
What is a Certified Financial planner® (CFP)? Certified Financial Planner Board of Standards, Inc. (CFP Board) is a non-profit organization acting in the public interest by fostering professional standards in personal financial planning through its setting and enforcement of the education, examination, experience, ethics and other requirements for CFP® certification. CFP Board awards individuals who successfully complete initial and ongoing certification requirements the right to use of certification marks CERTIFIED FINANCIAL PLANNER™, CFP®.
What does it mean to be a Registered Investment Advisor (RIA)? AL Hewitt Inc. is a state registered advisory firm. All professional investment management companies are required to register with the U.S. Securities and Exchange Commission (SEC) and/or the State(s) in which the firm conducts business activities. That registration is called an ADV, and it is available in two parts. ADV Part I is basic information about the advisory business and ADV Part II explains our services and fees. All Registered Investment Advisors must provide you with form ADV part II; we highly recommend you examine this form prior to doing business with the prospective advisor.
How does a Registered Investment Advisor differ from a brokerage firm, banks, credit unions and insurance companies? Registered Investment Advisors are in the investment management business and are regulated by the Investment Advisors Act of 1940. In contrast, brokerage firms, banks, credit unions and insurance companies are primarily in the financial and insurance product sales and distribution business. As a Registered Investment Advisor under the 1940s Act, we have a higher level of fiduciary responsibility than many financial services firms. We are required by law to work in our client’s best interest at all times. Our compensation is based on a flat annual advisory fee rather than the commission model that is tied to the sale and distribution of financial and insurance products.
What is Comprehensive Financial Planning? Comprehensive Financial Planning is more than the active management of investments. It is more than the creation of a retirement plan and it goes well beyond regular check-ups of a portfolio. Comprehensive financial planning is the act of planning for and prudently addressing life events. It addresses everything: from buying a new car or home, planning for a child’s education, preparing for eventual retirement, or fulfilling lifelong dreams and goals. It goes beyond managing investments. It also addresses life-changing events that can drastically alter your long-term financial security.
How can we contact you? You can call us at 1-800-573-4829 or 661-945-7050 Our fax is 661-945-7572. Our email is firstname.lastname@example.org. Our Website is www.ALHEWITT.com
Can we meet in person before I become a Hewitt client? Yes, we can, however, we’ll need to do so in Palmdale or Camarillo, California. One of the ways we keep our fees low is by minimizing the amount of time spent on sales and marketing. This website provides extensive information on our fees, services, and investment strategies. Additional questions can be answered by phone. With phone, fax, and e-mail it’s easy and fast to set-up new accounts, discuss financial objectives, make changes in accounts, and exchange pertinent financial information on an ongoing basis. Hewitt has clients all over the United States, some of whom we have never met in person, and most have multiple accounts.
Are the investments in my accounts safe? Hewitt does not take custody of your assets. They are held at custodians who are insured by the Securities Investor Protection Corporation. All account assets are held in your name or entities you have created like trusts and retirement plans. Neither Hewitt, nor the custodian firm, nor anyone else can access or distribute funds from the accounts without your permission and knowledge. Of course, your investments can and will fluctuate in value.
How much experience do you have? Hewitt has been providing financial advisory services for over twenty years and have offices in Los Angeles and Ventura counties.
What is the organizational structure of Hewitt? Mr. Alan E. Hewitt, CFP®, EA, AAMS, AWMA and Josette Hewitt, CFP®, EA, AAMS, AWMA are the owners of Hewitt. They are assisted by three licensed investment advisor representatives, a skilled administrative and clerical staff, and outside consultants.
What kind of investment strategies do you employ? We specialize in passive and index investing and primarily use Dimensional Fund Advisor’s passive asset class portfolios, please visit Dimensional Fund’s website at www.dfaus.com.
Do you do tax-loss harvesting? Yes. While tax-loss harvesting generates loss-carry forwards, it resets the cost basis downward in an amount equal to the additional capital gains that will be realized when the positions are liquidated at sometime in the future, resulting in no net tax advantage long-term though it can have some value in special cases.
Does Hewitt receive commissions or any type of payments from brokerage firms, mutual fund companies or insurance? No, Hewitt is a fee-only advisor, and is solely compensated by our clients only. This assures complete objectivity in planning and financial advice.
What is the process for becoming a client of Hewitt? First, we recommend becoming familiar with what Fee-Only financial planning is and setup an initial consultation which may be by phone and/or in person.
Once a client, what comes next? Depending on the type of service, we will oversee the account opening and transfer process, review your current holdings, discuss financial issues relevant to your investments, develop an allocations plan, refine it if necessary, then implement it, sometimes in stages over time, sometimes all at once. We are also available “on-call” for answering financial related questions, handling changes in accounts, and other financial matters.
What reporting will I receive on my accounts? You will receive a detailed computerized analysis of performance, allocations, and other portfolio variables along with narrative comments every ninety days. You will also receive monthly statements from the broker/custodian you choose and cost basis information as requested.
What if my Advisor becomes disabled or dies? We have succession plans in place for a prompt and orderly transition. You will not be forced to liquidate any positions or change your investment strategy. Your account will be taken over immediately by one of our advisor representatives.
Am I involved in the day-to-day portfolio decisions? Each portfolio follows an investment strategy that is decided in advance and is outlined in a written document. You are hiring Hewitt to manage your accounts day-to-day according to this plan. As such, you will not be hassled by calls seeking permission to do routine transactions or other portfolio maintenance. If you have questions about something that occurred in your account, simply contact us by phone or email.
How will I know a trade has occurred in my account? Charles Schwab will notify you by mail or email each time Hewitt makes a trade in your account. All trades are conducted in accordance with your written Investment Policy Statement (IPS). You do not need to contact anyone when you see a trade has been made. Please contact us if you have a question about a transaction.
Do investments differ from Client to Client? We have spent hundreds of hours studying and selecting investments that are used in all portfolios. However, the percentage allocated to each investment may differ from client to client depending on the needs of each client. In addition, taxes may affect which investments are selected for taxable accounts. Some asset classes are not suitable for investors who are in a high tax bracket.
When can I expect my account to be rebalanced? We compare all portfolio allocations to their fixed strategic targets on an ongoing basis. Portfolios are looked at for possible rebalancing when their asset allocation is out of sync with target by a predetermined range. A decision to rebalance will depend on the dollar amount to be reallocated, known expected future contributions or withdraws, and the potential tax consequence in a taxable portfolio.
When are municipal bonds used in a taxable portfolio? Clients that are in a high federal income tax bracket generally should substitute tax-free municipal bonds for taxable bonds in their taxable portfolio. That will result in the highest after-tax income with the least amount of risk. We use either low-cost municipal bond mutual funds depending on the client’s state of residence and the amount to be invested.
Do you publish the past performance of your strategies? As fiduciaries, we adhere to the strictest performance reporting standards. Each client receives a personal quarterly performance report benchmarked to their investment policy. While we do calculate composite performance information on all portfolio strategies, we do not publish this data in the public domain because these composite results have not been verified by an independent third party. Information on past performance for Dimensional Funds can be found at www.dfaus.com.
Is Charles Schwab the only custodian available to Clients? Charles Schwab & Co Inc. is the primary custodian of our entire Clients’ assets, which means they hold securities and cash and facilitate trading activities. Hewitt has selected Charles Schwab as custodian because of their commitment to client service, low trading cost, and a dedication to operational efficiency. Our management fees are kept low because of the operational efficiency created by having only one custodian.
Is Hewitt affiliated with Charles Schwab? No. Hewitt is not affiliated with Charles Schwab, nor are we compensated by that company in any way through fees, commission, or incentives. In the spirit of full disclosure, our firm is supplied necessary software that allows our in-house portfolio management system to work efficiently with Schwab’s back-office operations and trading department.
Do I have to go to a Schwab office to open an account? No. There is no reason to visit a Schwab office or to open Schwab accounts yourself. You will be signing Schwab paperwork that we will send to you. If there is a Schwab office nearby, you may go there to deposit checks rather than mailing money to Schwab. That would reduce the time it takes to put checks into your account.
Will I have Internet access to my account? Yes. Free Internet access is available to Clients through a special Schwab website. The website also is the source for immediate information on account activity and provides you with many reports including year-end tax information.
How often do I receive statements and reports? Charles Schwab sends monthly statements to all clients for all accounts. These statements show account balances, trades, cash flows, and unrealized gains. Statements are available in paper as well as through email. In addition, Hewitt will send a detailed performance report each quarter.
Will I receive reports that will help with tax preparation? At the end of each year, Charles Schwab will send the essential tax forms to each client that has a taxable account. In addition, a realized gain/loss statement is available on-line from Schwab, as well as Hewitt. We suggest that Clients use our realized gain and loss reports because we report sales by tax-lot, which is the most tax efficient accounting method.
Does anyone at Hewitt have access to my money? No one at Hewitt has access to the money in your account. We have limited power of attorney to do three things in a Client account; 1) trade securities with discretion, 2) request that Schwab send a check to a Client directly or to a Client’s bank, and 3) be paid a fee from the account based on the contract rate. We have no other access or authority.
Are my accounts insured from theft, fraud, errors, omissions and insolvency? All accounts are insured on multiple levels. Charles Schwab coverage is extensive and is explained in a public brochure that is available to all investors. Hewitt also carries Errors and Omissions insurance.
How is my privacy protected? Hewitt complies with all privacy laws affecting financial institutions. Each year our clients receive a Privacy Statement that outlines this responsibility in detail. Those standards are reviewed regularly to ensure they cover all forms of communication. Briefly, we will not release any information to any person who is not directly named on your account, with the exception of legal and regulatory authorities.
What ethical standards does Hewitt adhere to? All personnel including management personnel are required to sign an Annual Ethics Statement that outlines our ethical standards. Everyone at Hewitt adheres to that strict ethical code as part of our daily operations.
How do I get an information package? Prospective clients may contact us directly by email or phone. For direct contact, go to the Contact section and request an information package or call our toll-free number at 800-573-4829. Also available by accessing client forms on this website.
What is Schwab PCRA? Schwab Personal Choice Retirement Account® (PCRA) is a self-directed brokerage account offered through Charles Schwab & Co., Inc. (Member SIPC). PCRA will allow you to select from numerous mutual funds and other types of securities, such as stocks and bonds that are on a major exchange, outside of your regular Deferred Compensation plan’s offerings.