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R.O.I. PERSONAL SEMINAR About R.O.I. Compensation and Financial Motivation Investment Return History Retirement Planning Oath and Values How you can request.

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COMPENSATION & MOTIVATION FEE BASED 1.A disclosed bargain fee for a financial plan, and/or a percentage of assets managed; AND, 2.Not disclosed product.

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Presentation on theme: "R.O.I. PERSONAL SEMINAR About R.O.I. Compensation and Financial Motivation Investment Return History Retirement Planning Oath and Values How you can request."— Presentation transcript:

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2 R.O.I. PERSONAL SEMINAR About R.O.I. Compensation and Financial Motivation Investment Return History Retirement Planning Oath and Values How you can request more information

3 ABOUT R.O.I. Return on Investment Ron Olson = 35+ Years R.O.I. = Since 1992 Stability

4 ABOUT R.O.I. (continued) FAMILY MANAGED, OFFICE IN THE HOME MODEL Very Attentive Comprehensive Service Experienced Experts Very Competitive Costs Electronically Linked

5 ABOUT R.O.I. (continued) A Second Generation FP/IA Business Very Rare Same Place 20 Years – Virtually Impossible Experienced Second Generation to – Take Care of Clients, and Clients Succeeding Generations

6 ABOUT R.O.I. (continued) With BEN, RON AND GRANT YOU GET: Bachelor Degrees in Accounting and Business Master Degrees in Accounting and Business A Doctorate Degree in Law Two Certified Financial Planners, and one CPA Call R.O.I. – Talk to Grant, Ben or Ron!

7 Grant & Ben – Age 13 Full-Time – Grant – 2003 Ben ABOUT R.O.I. (continued) FIDELITY INVESTMENT ADVISOR NETWORK – 1992 Most, quality no-load, no-transaction fee MFs; Best service to small Investment Advisors Network = Single Doorway to: Dozens of MF Families; 1000s of no-load, no-transaction fee MFs

8 TWO QUESTIONS: 1.Where has your advisor been for the previous 20 years? 2.Where is your advisor likely to be for the next 20 years? With R.O.I., the answer to both of these questions is the same, i.e., the same firm and the same offices. STABILITY!!! ABOUT R.O.I. (continued)

9 Not Only The Wealthy Full Disclosure Minimize Conflicts of Interest ABOUT R.O.I. (continued) COMPENSATION = BEST OVERALL INTEREST OF CLIENTS 1. Fully discloses all compensation; and, 2. Minimizes conflicts of interests. R.O.I.s Pledge = Take Care of You for a long time Handsomely rewarded = When pledge is accomplished

10 R.O.I. S TWO MAJOR SERVICES TO CLIENTS: 1.Comprehensive Financial Planning; and, 2.Active Investment Management (More detail? Click Services button in the left hand column.) ABOUT R.O.I. (continued)

11 COMPENSATION & MOTIVATION FEE BASED 1.A disclosed bargain fee for a financial plan, and/or a percentage of assets managed; AND, 2.Not disclosed product commissions that are several times larger than the disclosed fees. NOT R.O.I. is NOT compensated on this basis!!!!

12 FEE RETAINER RELATIONSHIP – 100% Disclosed THE FEE Percentage of managed assets Paid MORE if managed assets grow Paid LESS if they decline Family Managed, Office In The Home model Competitive Initial Fee Percentage Rapidly Declining Fee Schedule COMPENSATION & MOTIVATION (Continued)

13 1.25% of first $250,000 of managed assets 1.00% of next $250,000 of managed assets 0.75% of next $250,000 of managed assets 0.50% of next $250,000 of managed assets 0.25% of many assets in excess of $1 mill For example, a client with a $1,250,000 portfolio would pay, per year: COMPENSATION & MOTIVATION (Continued) = $3,125, plus = $2,500, plus = $1,875, plus = $1,250, plus = $ 625 = $9,375/year, or 0.75% of $1,250,000.

14 SAMPLE FEE BASED ADVISOR Disclosed bargain $500 fee for the Financial Plan AND, Not Disclosed 4%-8% Commission ($50,000 to $100,000!!!!) R.O.I. = 5-10 YRs of Continuous Satisfactory Service COMPENSATION & MOTIVATION (Continued) THE BIG QUESTION: After receiving the undisclosed, up front $50k-$100k commission, is the Fee Based advisor motivated to care for the client for 5-10 years, or to sell another annuity to someone else and make another huge undisclosed commission?

15 Who is paying your advisor to do what? Are you paying your advisor for what you want done you want done? OR Is someone else using your $ to pay your advisor selltheirproducts to sell their products? ROI: ,

16 POSSIBLE CONFLICT OF INTEREST: Because R.O.I. is paid ONLY on a percentage of managed assets, a conflict could arise relative to R.O.I.s advice about a clients use of or allocation of manageable assets (but see Oath and Values, infra). COMPENSATION & MOTIVATION (Continued)

17 INVESTMENT RETURN HISTORY R.O.I.S INVESTMENT MANAGEMENT OBJECTIVES: (1)Participate in Up Markets; AND, (2)Control Participation in Down Markets ACCOMPLISHING BOTH MAKES IT EASIER FOR CLIENTS TO: Reach long-term investment accumulation needs; and, Sleep better

18 TIME PASSIVELY MANAGED S&P500 $1.00 1/1/99 +21% $1.21 1/1/00 -51% $ /10/ % $1.21?? ACTIVELY MANAGED PORTFOLIO $1.00 1/1/99 +32% $1.32 1/1/00 -21% $ /10/02 $1.21?? +16% 5/20/03 =$1.21 5/20/03=$0.68 8/18/03 = $1.32 8/18/03 = $0.74 The first objective of Participating in Up Markets was accomplished. The second objective of Controlling Participation in Down Markets was accomplished. Once again, the first objective of Participating in Up Markets was accomplished.

19 ROI: , When comparing different firms investment performance, it is better to rely upon: it is better to rely upon: Long-term Actual Returns Short-term AND OR Theoretical Returns NOT

20 ROI: , R.O.I.S LONG-TERM AND ACTUAL RETURNS* YEAR YEARLY % RETURN 24.66% 15.49% 17.99% 10.39% 32.42% -1.99% -4.91% -7.32% 30.81% 10.95% 10.00% 16.42% 13.68% % 25.33% ACCUMULATED % RETURN 24.66% 20.08% 19.38% 17.13% 20.19% 16.49% 13.44% 10.84% 13.06% 12.85% 12.59% 12.91% 12.97% 9.71% 10.75% * Based upon most common client allocation in actual clients IRA account that has no new contributions or withdrawals. There can be no assurance that these returns will be obtained in the future – all ROI can promise is our best efforts to Participate in Up Markets and Control Participation in Down Markets. ** Assumes $100,000 initial investment. ACCUMULATED $ RETURN** $124,660 $143,970 $169,870 $187,520 $248,313 $243,372 $231,422 $214,482 $280,564 $311,286 $342,415 $398,640 $453,173 $305,438 $382,806

21 RETIREMENT PLANNING 3 PRIMARY RETIREMENT PLANNING CONCERNS: 1.Outliving Income; 2.Retirement Income Does Not Keep Up With Reality; 3.Dealing With Lifes Contingencies. QUESTION: Which is the most important concern? ANSWER: The one you are currently facing. SOLUTION: A high likelihood of success for all three concerns. A plan that – 1.Provides reliable income at reduced life style = o.k. to sustain life; 2.Provides comfortable life style & future dependence = unwise; 3.Cannot adjust to the contingencies of real life = dangerous; 4.Provides high likelihood of reliable income, comfortable life style AND can adjust to contingencies of real life = ideal.

22 R.O.I.S RETIREMENT PLANNING STRATEGY First Step: Determine actual projected dollar withdrawals via – 1.Comprehensive Financial Plan; or, 2.Committing to Specific Future dollar withdrawals. Second Step: Emergency fund; home equity line; 72 hour kit; Third Step: Short-Term & Long-Term Accounts – administer as 1.Current year withdrawal in clients possession; 2.Short-Term Account = 3 more years of future withdrawals; 3.Long-Term Account = Beat inflation and taxes; 4.Annual Review; 5.Short-Term & Long-Term Accounts = Liquid/Contingencies. RETIREMENT PLANNING (Continued)

23 ClientsInIn Long- AnnualClientsTerm ReviewPossessionIn Short-Term AccountAccount CurrentCurrent yrsUse a 3 yr allocation & fully fundBalance of year.w/drawal3 yrs of w/drawals from L-T ActPortfolio 1 yearCurrent yrs(1) If markets up, use 3 yr allocationBalance of hencew/drawal& fully fund 3 yrs from L-T act; Portfolio from S-T(2) If markets down, use 2 yr allocation account& fund 2 yrs w/drawals 2 yearsCurrent yrs(1) If markets up, use 3 yr allocationBalance of hencew/drawal& fully fund 3 yrs from L-T act; Portfolio from S-T(2) If markets down, 100% in cash account& fund 1 yrs w/drawals 3 yearsCurrent yrs(1) If markets up, use 3 yr allocationBalance of hencew/drawal& fully fund 3 yrs from L-T act; Portfolio from S-T(2) If markets down, client tightens accountbelt & fund 1 yrs w/drawals from L-T act

24 THIS STRATEGY PROVIDES A HIGH LIKELYHOOD OF: 1.Reliable income for life; 2.Retirement income that beats the effects of inflation and taxes; AND 3. Successfully deals with life contingencies. RETIREMENT PLANNING (Continued)

25 We wont take time in this Personal Seminar to review R.O.I.s NAPFA Oath and Values. But please take time to click on the NAPFA Oath and Values button in the left hand column. NAPFA is an acronym for The National Association of Personal Financial Advisors, the only authorized, national association of Fee Only Financial Planners and Investment advisors. R.O.I. is a member and faithfully incorporates NAPFAs Oath and Values in its practice. OATH AND VALUES

26 REQUEST MORE INFORMATION We hope this Personal Seminar has been enlightening. If you have any questions, or would like to personally visit with Grant or Ben Olson, please click on the Request More Information button in the left hand column, to send an , or call us at Thanks for connecting with R.O.I. on the web!!!!


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