Baldwin & Associates: FAQ
Who is Baldwin & Associates?
Mary Ellen Baldwin, CFP® started practicing as a fee-only financial planner in 1997 based on the NAPFA principle of client-focused, comprehensive, financial advice. The goal of every advisor and planner at Baldwin & Associates is to provide guidance for people to create the life they want.
Why choose Baldwin & Associates planners?
We provide customized comprehensive financial planning. No two lives are the same, and one-size-fits-all doesn’t always work. As fee-ONLY financial planners, we are not obligated to use a particular product or fund. Fees erode returns and we select investments that are low-cost and meet or exceed their benchmarks. We don’t believe in market-timing; we use investment strategies rooted in academic research that create long-term investment portfolios, including research such as the Efficient Market Hypothesis proposed by Nobel Prize winner Eugene Fama and Kenneth French, and the Modern Portfolio Theory proposed by Harry Markowitz. Your financial health is not limited to just investment advice. Our services include Cash Flow and Retirement Planning, Tax Planning, Risk Management, and other financial planning areas. (Our Services)
What kinds of investments do you use?
Baldwin & Associates is not tied to proprietary products or funds. Because of this we can move freely to best suit the needs of the client with whichever investment option is most appropriate. The types of investments typically handled include, but are not limited to Mutual Funds, Exchange Traded Funds (ETF’s), Closed-End Funds (CEF’s), Stocks and Bonds. Other assets that are not typically held at TD Ameritrade Institutional (but sometimes can be) including Real Estate Investment Trusts (REIT’s), Unit Investment Trusts (UIT’s), Variable annuities, Variable Life Insurance and passive partnership and ownership interests may fall within our advisory services as well. Real Estate, even that which is held for investment purposes does not usually fall within our advisory services except in the broadest of advisory definitions.
I want to know what’s going on in my portfolio. How do you handle trading?
Each of our clients has a unique individual portfolio, specifically designed to meet their needs. When we trade in that portfolio, the client is always a part of the conversation and a trade is never executed until approval is received. We feel that clients having an active role in the investment decision making process is crucial to the transparency of the process. Accordingly, our client accounts are all non-discretionary, which means we have no discretion to make trades in a client account and must seek their approval before a trade is made.
Will you communicate with my other service professionals (CPA, Attorney, etc.)?
We will communicate with your accountant, attorney, or other service professional when the situation calls for it. However, we will never begin communication with anyone concerning any matter relating to you without your permission. Client confidentiality is extremely important in financial planning and we take it as seriously as it can possibly be taken. We will never share any information of yours with anyone unless you have specifically given us permission. Even with permission to discuss a situation with another service professional, nothing beyond the scope of the question or issue is discussed.
Does Baldwin & Associates hold my money in a safe place?
Baldwin & Associates will never directly hold your money. Your money would be held by TD Ameritrade Institutional Services. Checks we receive are sent to TD Ameritrade via UPS on the same day they are received.
TD Ameritrade is a member of the Securities Investor Protection Corporation ("SIPC"), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). An explanatory brochure is available on request at www.sipc.org. Additionally, TD Ameritrade provides $149.5 million worth of protection for securities and $2 million of protection for cash through supplemental coverage provided by London insurers. In the event of a brokerage insolvency, a client may receive amounts due from the trustee in bankruptcy and then SIPC. Supplemental coverage is paid out after the trustee and SIPC payouts and under such coverage each client is limited to a combined return of $152 million from a trustee, SIPC, and London insurers. The TD Ameritrade supplemental coverage has an aggregate limit of $500 million over all customers. This policy provides coverage following brokerage insolvency and does not protect against loss in market value of the securities.
Cash is held in a TD Ameritrade FDIC-Insured Deposit Account (IDA), an interest-bearing cash account held at TD Bank N.A. and TD Bank USA, N.A., and insured by the Federal Deposit Insurance Corporation (FDIC). FDIC insures cash of $250,000 per depositor.
Why should I choose a fee-only financial planner?
A fee-only financial planner does not receive commissions or any other incentives to use proprietary products. The only compensation received by the planner comes from the fee that is agreed upon by both planner and client, prior to the beginning of the planning. Why is this important? This simply means that fee-only financial planners will not try to sell the client unnecessary investments or products and eliminates an unfair bias towards certain proprietary investments. Fee-only financial planning is usually for the long term. Our goal is only complete when we are able to make a client financially healthy and happy for life.
How do you charge fees?
We offer financial planning services and portfolio management services which are personalized to each client. Our portfolio management services are on a non-discretionary basis which means our clients must approve all changes to their portfolio before we are able to process them. We do not have custody of our client assets. TD Ameritrade Institutional is our firm’s servicing broker and it maintains custody of our clients’ accounts. Account statements are provided by TD Ameritrade Institutional directly to our clients.
Our fee for portfolio management services may be negotiable and is quoted as a fixed fee based on income, asset, and the complexity of the financial situation. The following fee schedule applies:
Portfolio Size Annual Fee
$0 to $1,000,000 1.50%
$1,000,001 to $2,000,000 1.25%
$2,000,001 to $5,000,000 1.00%
Over $5,000,001 0.75%
The fees you pay to our firm for investment advisory services are separate from the fees and expenses charged by fund companies to their shareholders and transaction fees charged by TD Ameritrade Institutional for portfolio transactions. Our annual portfolio management fee is billed and payable quarterly in advance based on the fixed fee in the client agreement.
Our firm will also prepare a comprehensive financial plan with rates negotiable based on complexity of the financial situation and the needs of the client. Our price for a comprehensive financial plan varies.
How often will I receive statements from you? What about tax documents?
You will receive monthly statements for your accounts from TD Ameritrade Institutional. Appropriate tax documents (1099-R, 1099-B, 5498, etc.) are sent to clients from TD Ameritrade when they become available.
If something happens (natural disaster, fire, etc.) and you can no longer operate in your office, what happens to my investments?
In the event Baldwin & Associates were to experience a Significant Business Disruption (SBD) such as a flood or a hurricane, we have a Business Continuity Plan (BCP) in place. Our BCP also includes detailed actions within a Disaster Recovery Plan (DRP) to ensure we can resume business operations as soon as possible. During any disruptions to our business operations, our clients investment portfolio accounts should still be available to them to access as our client accounts are held off-site in electronic format at our servicing broker and custodian, TD Ameritrade Institutional. In the event of a SBD, we would first take reasonable measures necessary to safeguard our employees lives and the firm’s property. We would then make a financial and operational assessment to determine how and when we could recover and resume operations. Throughout a SBD, we would take every effort possible to protect the firm’s records and files and ensure we could communicate with our clients and our financial custodian, TD Ameritrade Institutional. TD Ameritrade has its own BCP in event of a SBD and is committed to maintaining business operations to include processing client orders and transactions, providing access to cash and securities, and providing access to information about balances and transactions in client accounts. Our BCP considers two types of SBD’s: internal and external. An internal SBD would affect only our firm’s ability to operate and communicate (ex. a fire in our building). External SBD’s would cause widespread disruption of operations in the securities industry or our local area and could include a flood or a hurricane evacuation and recovery. In the event of a SBD, our goal is to return to essential business operations as soon as practicable and establish operational communications with TD Ameritrade as soon as possible. We would ensure we are available to our clients and TD Ameritrade Institutional so we would be able to service our clients during a SBD. Our clients should monitor our website which will provide current updates on our operations should a SBD occur. In the event our website is inoperable, our clients will have the phone numbers of our firm and personal phone numbers of our firm’s key personnel to maintain contact.