What is a Registered Investment Advisor?
The term Registered Investment Advisor (RIA), i.e., Registered Investment “Adviser” in U.S. financial law, is used to describe an investment advisor who is registered with the Securities and Exchange Commission or a state’s securities agency and is in the business of giving advice about securities. The term has been popularized due to its use within the Investment Advisers Act of 1940 and its association to the term Investment Advisor (IA), i.e., Investment “Adviser” in U.S. financial law.
Individuals or firms that receive compensation for giving advice on investing in securities such as stocks, bonds, mutual funds or exchange traded funds are deemed to be investment advisors. It is also common for investment advisors to manage portfolios of securities. RIAs generally are paid in any of the following ways: a percentage of the value of the assets they manage for you, an hourly fee, fixed fee or a commission on the securities they sell (if the adviser is also a broker-dealer). Learn More.
Why do people hire you?
Our clients typically come to us when there has been, or will be, a significant life event that changes their financial picture. Typical examples include retirement, divorce, the death of a spouse or an inheritance. In such cases, the client is forced to take a more active role in the direct management of his or her assets knowing that achieving their financial goals involves complex decisions that they may not feel capable of or interested in making on their own. People hire us to help them define their goals, create a plan, implement the plan and manage it for the rest of their lives. Having the various professionals in our office to meet all of their financial needs rather than dealing with three or four different people in different locations is a large part of why people hire us.
How do you attract new clients?
We gladly accept referrals. At Sculati Wealth Management, we spend very little time marketing ourselves. The form of advertising that best helps grow our business is “word of mouth.” So if you know someone who you think would benefit from a relationship with Sculati Wealth Management we request that you do two things: Ask your friend or family member whether it is permissible for us to call them, then provide us with their contact information.
What type of clients do you serve?
Our client base represents a wide range of professions and people of all education levels. Many of our clients are entrepreneurs who own or once owned a business. They understand risk and know what it takes to make a good return on their money. Others worked for large corporations and built their retirement savings in 401(k) plans and other retirement investments. When their careers ended and it came time to take control of those assets, requiring the need to learn how to live off of them, they came to us for help in creating a plan to fund their retirement. The educational level of our client base ranges from high school graduate to PhD.
Do you have a minimum account size requirement?
No. We do not require a minimum-dollar-size to open an account with Sculati Wealth Management. We have multiple advisors that can handle a variety of account sizes.
Do you have custody of my assets?
No. To safeguard ourselves and your assets, we use a third-party custodian. Your assets are held by a custodian at Schwab or TD Ameritrade, with proper insurance and protections in place to protect them.
What if something happens to Sculati Wealth Management, or its advisors?
Your accounts will remain safe at your chosen custodian. These accounts can be managed by a different advisor or moved to a different custodian if necessary.
Are there any termination fees if I decide to use a different advisor?
No. As is stated in our Investment Advisory Agreement, there are no termination fees if a client should choose to discontinue our services.
How are you compensated?
We are a fee-only investment advisor. Unlike brokerage firms that charge commissions on a transactional basis, Sculati Wealth Management is compensated through an annual fee, based on your total assets under our management. It is billed on a quarterly basis. This arrangement eliminates payment for “activity” rather than for “growth” and preservation of your account.
What services are included with this fee?
Financial planning, investment advising, education planning, social security analysis, collaborating with other professionals, and more are included.
Will I have to pay any brokerage commissions or fees?
Yes. The brokerage firm that you designate to hold your securities will charge a commission or transaction fee when securities are bought or sold. Such fees are generally modest, rarely exceeding $50. Sculati Wealth Management does not share in these fees.
Who has the authority to make changes in a client’s portfolio?
The investment advisors at Sculati Wealth Management have the authority to manage your portfolio.
Does anyone at Sculati Wealth Management have the authority to withdraw money from my account?
No. We do not have the authority to direct withdrawals from accounts we manage to anyone other than the owner of the account, and only if the proceeds are to be sent to the address of record on the account or wired to an account with the same registration as the account the funds are coming from.
Do you call for my approval in regards to buying and selling securities in my account?
No. All of our accounts have “discretion.” This means that our clients hire us to design a plan, implement it, and manage it on an ongoing basis according to the criteria that has been mutually agreed upon. The terms of our agreement are outlined in a formal Investment Policy Statement. That document allows us to manage your account without bothering you for permission to take action that is consistent with the investment criteria that have been agreed upon with you.
Do you take taxes into consideration when managing my account?
Yes. When we make decisions regarding whether or not to sell a security in your account, we always look at the tax consequences and try to take advantage of any offsetting losses. Whenever possible, we take advantage of the lower tax rate granted for long-term capital gains rather than short-term gains which are taxed as ordinary income.
I am interested in becoming a client. What do I do?
Please visit our Compliance
section to read through our Form ADV Part 2. Afterwards, please contact us
using any of the methods found in our Contact Us
I am interested in referring somebody. What do I do?
and have an advisor at Sculati Wealth Management contact your referral. Making that first call to discuss your finances is a difficult call to make. We would prefer that you gain permission from your referral to have us call them to start the process. Your referral can still contact us using any of the methods found in our Contact Us
section if they prefer.
What does your “new client” process look like?
Our “new client” process varies depending on the prospective client. Typically, we have an initial meeting to get-to-know you. We discuss your thoughts and intentions regarding your assets, any prior experiences you have had, and what you are looking for in a wealth management company. During this meeting we provide you with reading material to take in case there are any additional questions. Afterwards we assist you in collecting the data necessary to establish your financial plan. Once your plan is completed we will have a second meeting to review, discuss, and update this plan if necessary. A third meeting follows to walk you through our Investment Advisory Agreement and your Investment Policy Statement. After walking through these documents, we will setup accounts and complete associated account paperwork. Afterwards, once these items are all in place, we will generate an implementation plan for you that shows how we will manage your assets to stay in line with your financial plan.
Are there any fees involved in the initial “new client” meeting?
No. When we meet with a prospective client it is at our expense. In order for us to be able to provide the best advice possible, it is important that we do our due diligence to understand who you are, as well as the goals you hope to achieve. In the initial meeting we will discuss why you sought us out and identify your primary financial needs. We will also discuss how we do business and why we may be able to help you.
Do you charge to create a financial plan?
No. In order to properly manage your wealth, you must have a financial plan. Creating a plan that focuses on meeting your financial goals allows us to know what your needs are and for you to know how we approach meeting them.
Are there any obligations after a financial plan has been reviewed?
No. Walking through your financial plan is part of us doing our due diligence. We always hope our prospective clients decide to implement the plan and retain us to do it, but there will never be any pressure or gimmicks to persuade you to do so.
How do you keep me updated on the progress of my portfolio?
Phone, e-mail, standard mail, in-person meetings, your third-party custodian’s website, and Sculati Wealth Management’s Morningstar web portal all are utilized to keep you updated. Clients are kept updated on their financial progress via regular phone contact, monthly statements from the brokerage firm that holds their assets, quarterly performance reports prepared by Sculati Wealth Management and in personal meetings. In most cases, it is the client that determines the frequency and type of contact. Some people like to talk to us on a regular basis via phone. Others prefer quarterly contact and an annual or semi-annual meeting to review the plan on a deeper level. It is our preference to talk with clients at least once a quarter and meet at least once a year, if not more.
Sculati Wealth Management will send you quarterly reports that include your investment return compared to a blended index, using the holdings in your account rather than a generic index which would not, in most cases, be close to the way your assets are allocated. Most firms do not offer this capability.
Each of our clients has his or her own portal at our Web site, a secure place to review your quarterly reports and invoices, as well as to send us secure documents. This allows us to receive your important information as quickly and securely as possible while providing security, privacy, and protection. All items we send electronically may be printed so that you can have hard copies.
You will also receive monthly statements from the brokerage firm you have designated for the deposit of your assets. Paperless statements and confirmations are available from our preferred custodian Charles Schwab & Co., Inc.
Additionally, you will receive a personal letter each quarter with our view of the world’s investment climate. Also, we have the ability to generate customized reports to help you with tax planning, monthly income planning, and asset allocation.