Investing in your financial success

We believe that every great investment recommendation begins with our client’s goals as the foundation. Facet’s investment approach helps reach your goals by focusing on the things we can control and looking to participate in global markets via broad exposure to major asset classes. 

We feel that a risk appropriate investment strategy requires a delicate balance of personalized and efficient investment of your money. We focus on the things we can control: how much of your money to invest, where to allocate & “locate” those assets, how to minimize taxes, fees & other expenses, and why your behavior matters. Ultimately, we aim to have you benefit from the market, rather than beat it by picking stocks. 

We follow five key principles to guide how, together, we determine the best strategy for investing your money:

  1. It starts with a plan – a personalized financial plan for your life is the foundation of any investment strategy
  2. Markets work – markets are efficient so we aim to have you participate in market returns, and not to try to beat them. Asset allocation and broad market exposure drive long-term returns
  3. Portfolio design matters – certain market factors and risks drive portfolio returns; we align our investments with those factors – and combined with low costs and tax efficiency
  4. A long-term view – time in the market – and not timing of the market – leads to long-term investment success
  5. Discipline drives success – the markets have historically rewarded investors that remain disciplined to their plan, your planner is going to be your partner in remaining discipline

It starts with a plan

Having a financial plan is the key to achieving short-term and long-term goals – such as retirement, buying a dream house, or sending your kids to college. Having a sound investment strategy, allows you to build wealth over time while making progress towards those goals and evolving with life’s uncertainties.

Investing is an important part of an overall financial plan. At Facet, we believe that a personalized financial plan should always be at the foundation of investment strategy.

Bottom line: your investments should always help you reach your life goals, not the other way around.

No way! We don’t like hidden fees. Seriously. We appreciate transparency and as fiduciaries, our sole mission is to provide you with high quality, holistic financial life planning. Your annual Facet fee includes any costs associated with managing your money.

At Facet, we believe there is a better way to provide quality financial planning advice and guidance. We charge a flat fee for comprehensive financial planning, based on the complexity of your life and its planning needs. Unlike other financial advisors, we do not base our fees on assets under management (AUM) or on commissions. We believe these models can create complacency and muddy the intentions of the financial plans created. 

We are in the business of working for you to develop sound financial plans that are tailored to your goals. We will not sell you unnecessary products to create higher commissions. Our fees range from $1,200 to $6,000, annually.This pricing breaks down many of the barriers that keep some people from financial planning in the first place. And we want everyone to be able to plan for a prosperous financial life.

Our commitment to our clients does not change based on your income or net worth. Focusing on the overall financial health and well-being of our client is a core part of our mission.

Regardless of how much money we manage for you, we will always take into account important components of your plan, such as tax planning; however, at over $2 million that requires a bit more of our time. We charge an additional $1,000 for every million dollars we manage over $2 million.

Markets work

We want to be market participants rather than trying to beat the market by picking stocks. Professionally managed portfolios are constructed based on research-driven principles. While index-based ETFs are used in this process, our portfolios are constantly reviewed and optimized to make sure we capture the factors that matter: asset allocation, global diversification, controlling costs, minimizing taxes, and behavior.

Asset allocation is the primary driver of long-term investment success. This concept refers to the strategy that aims to balance risk and reward by investing your money based on individual goals, risk tolerance, and investment time horizon.

At Facet, your financial life plan – designed, in concert, with your planner – drives all investment decisions; including the appropriate asset allocation for your risk tolerance and investment time horizon.

Diversification is investment speak for “don’t pull all your eggs in one basket”. At Facet, we view diversification as a way to mitigate risk to help our clients smooth out their returns and volatility as much as possible, given the desired risk and returns.

Portfolio design matters

“Value” stocks have lower stock prices relative to their underlying fundamental measures, such as book value, sales, and earnings. “Growth” stocks have higher stock prices relative to their underlying accounting measures. This dimension of risk in the investment world is known as the “value effect”.

The term “fixed income” broadly refers to investments that pay out fixed interest or dividend payments until a set maturity date is reached. Upon maturity, investors are repaid the original principal amount. As an asset class, government and corporate bonds are the most common types of fixed income investments. Fixed income investments are a tool to help reduce portfolio volatility.

The fixed income investments within Facet managed portfolios consist of investment-grade government and corporate bond exchange traded funds

Exchange traded funds (ETF) are baskets of securities that trade throughout the day like individual stocks, but provide diversification similar to mutual funds. ETFs are typically designed to track an underlying index such as the S&P 500 (large U.S. companies), Russell 2000 (small U.S. companies), and FTSE Developed Markets (international companies).

We utilize ETFs to build diversified portfolios as we believe asset allocation and diversification are primary drivers of long-term success. Our low cost, index tracking ETFs allow us to minimize fees and taxes without sacrificing a well-balanced portfolio & returns.

Smaller companies have historically outperformed their large company counterparts. These higher long-term returns are the rewards for taking greater risk. At Facet, this dimension of risk known as the “size effect” is evident in the small company exposure within the professionally managed portfolios.

This is one of those primary aspects of investing we have control over. 

Costs matter when it comes to investing and higher expense ratios can reduce investor returns. The expense ratio refers to how much a mutual fund or exchange traded fund charges shareholders on an annual basis. Examples of these costs include management fees, operating expenses and other administrative expenses incurred by the fund. Expense ratios are expressed as a percentage of average net assets.

Facet does not charge you any additional expenses on the money we manage for you.

The expense ratios for professionally managed portfolios at Facet range from 0.06% to 0.08%.

A long-term view

As the old investment adage goes, past performance is no guarantee of future results. Our professionally managed portfolios are designed with the understanding that time steadies volatility and returns. Investing is inherently risky. And with risk comes volatility. One thing is clear: volatility is normal and a natural part of the investing process. The good news is that, with time, volatility of returns tends to lessen and investors are rewarded for their patience.

When investing with Facet, you will work with your planner to create a custom investment plan, which illustrates the long-term performance of your specific index-based portfolio.

We do not believe in categorizing our clients solely based on their age or life stage. Personal financial planning should always be personal. That is why we factor your individual money beliefs, personality, risk tolerance, and time horizon into the creation of your individual portfolio recommendations.

Discipline drives success

The term “asset location” is often referred to as the strategic use of tax-advantaged accounts within a financial plan. Determining where to invest is as important of a decision as figuring out how to invest. The financial planning process allows for a careful examination of our client’s current and projected tax situation to help determine the most advantageous type of accounts to invest in to meet important life goals. We look at all account types, not just the ones that we manage.

To heck with you Uncle Sam!  No seriously, we love freedom and all, but we get really jacked up about the concept of financial independence. A big part of the financial planning process to achieve a genuine sense of freedom is to minimize taxes as much as possible (legally) both now and in the future.

In short, the financial planners at Facet are tax aware when it comes to incorporating investment decisions into a holistic financial life plan. Financial planners add value by helping clients understand their current tax picture and planning for the future. Facet planners assist with identifying the appropriate tax-advantaged investment vehicles for your goals, tax-loss harvesting, and how changing tax laws might impact your situation. For investors in taxable accounts, municipal bond ETFs are used to help enhance returns on an after-tax basis.

No. Facet’s mission is to help you achieve your financial goals & wellness. We believe our investment strategy is built to support that mission. However, our relationship is not defined by us managing your money, if you’d prefer, your planner can provide guidance for you to manage your assets on your own.

Throughout the year, equity and fixed income will rise and fall in value (think of the ticker on Time Square going up and down). “Re-balancing” a portfolio is the activity of buying and selling stocks to reinvest your money to match your investment strategy. An effective re-balancing strategy incorporates tax considerations on when/if to re-balance.

Portfolio re-balancing is an important step in controlling your risk. Re-balancing helps to ensure that your investment plan remains in line with your goals, risk tolerance and investment time horizon. When you re-balance you are selling investments from an asset class that is performing well and buying investments in the asset class that is currently under performing.

While this may sound counter-intuitive, research supports the practice of systematic re-balancing. Remember, we want to control the things we have control over. With investing, re-balancing is one of those best practice behaviors we can control.

Facet managed portfolios are structured to re-balanced.

For investments not managed by Facet, we suggest our clients re-balance their overall portfolio allocation at least once per year. Your planner will work with you to invest in target date retirement funds and using automatic re-balancing features within those plans.