financial planning and investment management
  1. What are the financial characteristics of clients who could benefit from your planning and advice?
  2. How do your services and fees compare to those of money management firms and major brokerage firms?
  3. What exactly does it mean when you say you are “fee-only”?
  4. How will we know if we are getting our money’s worth from the fee we pay you?
  5. Will you work with us on an hourly basis?
  6. We don’t think we need comprehensive financial advice. Will you work on just part of our financial situation, such as only managing our investment portfolio or only doing retirement planning for us?
  7. Will you help our children, parents, or other family members with their investments and financial planning as part of our relationship?
  8. Can we give you just a part of our investment portfolio to manage in order to pay a lower fee?
  9. Do you have a minimum account size or a minimum fee?
  10. How frequently do you meet with your clients?
  11. How do you manage your meetings and relationships with out-of-town clients?
  12. Do your clients stay with you for many years? When they leave, why do they choose to do so?
  13. Will we be able to speak with some of your existing clients about their experiences working with Stepp & Rothwell?
  14. With whom will we work at Stepp & Rothwell? Will your principals always be available to us?
  15. Will our relationship with Stepp & Rothwell be confidential?
  16. Will you work with our current accountant and attorney?
  17. Do you prepare tax returns or legal documents?
  18. Is your fee tax-deductible?
  19. What brokerage firm do you use as the custodian of your clients’ accounts? Do you receive any compensation in return for using that firm?
  20. Will we have to move all of our accounts to your custodian if we want to be a client? Will we have to sell everything we currently own?
  21. Do you use “model portfolios” or is each client’s portfolio customized to their situation?
  22. What is your philosophy regarding the rates of return earned by your clients’ investment portfolios?
  23. What does it mean that Stepp & Rothwell is registered as an Investment Advisor? How do we review your disclosure information?
  24. Has Stepp & Rothwell, or any of its principals or planners, ever been cited by the SEC or any other regulatory agency, or sued by a client for any unethical or illegal actions with respect to clients?

  1. Q: What are the financial characteristics of clients who could benefit from your planning and advice?
    A: The most significant attribute that our clients have in common is their desire to work with a professional firm to help them manage their entire financial situation, to build and supervise an appropriate portfolio for their stage in life, and to help them make the best possible decisions regarding the financial issues that face them and their families. Our clients range in age from their twenties to their nineties; most choose us when they are facing a significant financial change such as retirement; their net worth ranges between $2 million and $10 million. Our job is to optimize their financial situation and objectives by minimizing risk and allowing them to maintain their lifestyle now and in the future. Top of Page

  2. Q: How do your services and fees compare to those of money management firms and major brokerage firms?
    A: We provide only one service, and that is comprehensive fee-only financial planning. By comprehensive, we mean that we work in all areas of financial planning — not just in investment management — but in taxes, estate planning, insurance planning, retirement planning, education funding, etc. We believe this level of service is unmatched by money management or brokerage firms.

    We charge an annual retainer fee to provide this one comprehensive service. However, our fee as applied to investments is typically far lower than what a brokerage firm charges. As a result, our total fee may be similar or even less than what brokerage firms charge even though we provide a far more comprehensive service. Top of Page

  3. Q: What exactly does it mean when you say you are “fee-only”?
    A:
    In our industry, the term “fee-only” really means “objective”. When we say we are “fee-only” we mean that 100% of the revenue of Stepp & Rothwell is generated by the annual retainer fees paid by our clients. Neither the firm, nor any of its employees, receives any compensation from any other source. In other words, we don’t earn commissions by recommending or selling any product such as life insurance or investments. This is true all of the time with every client as opposed to some financial planning firms which may offer a “fee-only” alternative, meaning they are willing to work for a fee, but they still have the ability to earn commissions. That creates a potential conflict of interest because their recommendations and advice could be influenced by their commission opportunities as opposed to recommending the absolute best solutions for the client’s situation. Top of Page

  4. Q: How will we know if we are getting our money’s worth from the fee we pay you?
    A:
    Our clients are always seeking the financial benefits of higher investment returns, income or estate tax savings, and help with other financial decisions, and we strive to achieve that — but they frequently tell us that the true value of our services is the peace of mind they get by knowing that they have professional and objective advice to help them through all of the financial decisions and issues that they face with their families. One client recently told us, “I’ve finally got somebody to talk to that knows me and my situation.” Top of Page

  5. Q: Will you work with us on an hourly basis?
    A:
    The short answer is “no” because we think a retainer fee with a known formula is better for our clients, especially considering that we only offer comprehensive financial planning and management. We believe you get a better value, both investment-wise and in terms of your comfort level and satisfaction, with our comprehensive approach, an approach that considers your total situation and seeks an integrated solution. As a result, we are available to talk to you or meet with you at any time — planned or in an emergency, we just don’t charge you by-the-hour when we do. Top of Page

  6. Q: We don't think we need comprehensive financial advice. Will you work on just part of our financial situation, such as only managing our investment portfolio or only doing retirement planning for us?
    A:
    Our expertise is focused on achieving a comprehensive financial solution. We don't believe that we can provide this same level of service on a piecemeal basis because the issues that our clients face are so interrelated. The only exception is entities that have no personal considerations and no subsequent planning needs like private foundations and charities. We do provide limited investment management services in those situations. Top of Page

  7. Q: Will you help our children, parents, or other family members with their investments and financial planning as part of our relationship?
    A:
    Yes. We see the client’s immediate family as frequently being an integral part of a comprehensive plan, so we welcome meetings with other family members at our clients’ discretion. For example, we have helped our clients’ children or parents with their own financial questions. In some situations, these family members decide that they could benefit from comprehensive financial planning, and become clients themselves. Top of Page

  8. Q: Can we give you just a part of our investment portfolio to manage in order to pay a lower fee?
    A:
    By definition, as comprehensive financial planners and not money managers, we cannot achieve a total “peace of mind” solution for you by just managing or considering a portion of your portfolio. You will expect us to provide recommendations in all areas of financial planning in order to help you reach your goals, and for that reason, we consider and work with your entire investment portfolio regardless of where it is held or who is managing it. We include the investment management service as part of our annual fee and believe that provides the best value for our clients. Top of Page

  9. Q: Do you have a minimum account size or a minimum fee?
    A:
    Our fee formula results in a minimum fee of $5,000. There is no minimum investment size. Our formula is provided in the section Our FeesTop of Page

  10. Q: How frequently do you meet with your clients?
    A:
    We meet with each of our clients every quarter in order to review their entire financial situation. In addition, we are always available to meet with clients regarding any issues that should arise in between those meetings. There is never any charge in addition to our annual retainer fee for any additional services that our clients request. Top of Page

  11. Q: How do you manage your meetings and relationships with out-of-town clients?
    A:
    We think it is important to meet with our clients face-to-face at least one time a year, so we frequently travel to see our clients who are out of town. Many of them make regular visits to Kansas City, so we try to adjust meeting times to accommodate their schedule. The remaining meetings are conducted as telephone conferences. Top of Page

  12. Q: Do your clients stay with you for many years? When they leave, why do they choose to do so?
    A:
    We are committed to a long-term relationship with our clients — some have been with us for over 25 years — so, it is extremely rare for us to have a client leave. When they do, it typically is because they have experienced an external financial or personal setback. We often continue to work with the children or other heirs of clients who have passed away. Top of Page

  13. Q: Will we be able to speak with some of your existing clients about their experiences working with Stepp & Rothwell?
    A:
    Yes. We will be happy to provide you with existing client references (with similar situations to yours, if possible) after we have an introductory meeting with you. Given the confidential nature of our client relationships, we will notify the client so that your call will be expected. Top of Page

  14. Q: With whom will we work at Stepp & Rothwell? Will your principals always be available to us?
    A:
    We follow a team approach at Stepp & Rothwell so that there are several Principals and Planners familiar with each client’s situation. One of our six Planners handles the day-to-day relationship with each client and our Principals, Kathy Stepp, Howard Rothwell, and Ken Eaton, are always available as needed. All of our client meetings are conducted by some combination of the Principals and the client’s Planner based on the needs of the client at the time of the meeting. Top of Page

  15. Q: Will our relationship with Stepp & Rothwell be confidential?
    A:
    All of our client relationships are strictly confidential. Each employee signs a confidentiality agreement, and we do not share any information regarding clients with any outside source unless the client requests that we do so. Top of Page

  16. Q: Will you work with our current accountant and attorney?
    A:
    We welcome a working relationship with our clients’ existing advisors — attorneys, accountants and other professionals. Sometimes clients ask us for a referral to a new accountant or attorney and we are happy to make that referral as well. Top of Page

  17. Q: Do you prepare tax returns or legal documents?
    A:
    No. We are not attorneys and cannot prepare legal documents, but we do provide estate planning analysis and advice so that our clients have a clear understanding of the estate plan they establish with their attorney. We do not prepare income tax returns; however, throughout the year we do focus on minimizing taxes and we review every tax return after it has been filed to determine whether any changes need to be made. Top of Page

  18. Q: Is your fee tax-deductible?
    A:
    Our fee is a tax-deductible item; however, it is a Schedule A deduction subject to a floor that is a function of Adjusted Gross Income. Therefore, our fee may be fully deductible, partially deductible, or not deductible at all depending on the client’s tax situation. Top of Page

  19. Q: What brokerage firm do you use as the custodian of your clients’ accounts? Do you receive any compensation in return for using that firm?
    A:
    We use the discount brokerage firm, Charles Schwab & Co., Inc., as the custodian for our clients’ accounts for which we have discretionary management authority. We have worked with Schwab for over 15 years and believe that they provide the highest level of service in the industry, both to us and to our clients. Our clients establish accounts in their own name at Schwab and give us the authorization to carry out transactions in those accounts on a discretionary basis. At no time do we take custody of any client assets. The only thing of material value that we receive in return from Schwab for using them as the custodian of our clients’ assets is software that allows us to access our clients’ data and to manage their portfolio accounting. Top of Page

  20. Q: Will we have to move all of our accounts to your custodian if we want to be a client? Will we have to sell everything we currently own?
    A:
    We are better able to manage our clients’ investments and to make investment recommendations when we have up-to-date information about our clients’ accounts, which we are able to get by having the assets custodied at Schwab. It is not a requirement that the client’s assets be moved to Schwab, however. It is also not a requirement that all of the investment assets be sold and converted to cash before we manage them. We work with the existing investments and determine if and when investments should be sold over time in order to accomplish our recommended investment strategy. In some cases, proprietary assets cannot be transferred to a discount brokerage account, so they must be sold before transfer. Top of Page

  21. Q: Do you use “model portfolios” or is each client’s portfolio customized to their situation?
    A:
    We do not use “model portfolios.” We develop an Investment Policy Statement unique to each client that describes the client’s specific financial situation, including level of assets, how close the client is to retirement, what the client’s risk tolerance is, what their general financial goals are, etc. The Investment Policy Statement specifies the strategy, expected risks and rates of return applicable to their portfolio. This is an essential part of our comprehensive approach to personal financial planning and management. Top of Page

  22. Q: What is your philosophy regarding the rates of return earned by your clients’ investment portfolios?
    A:
    In general we strive to meet the client’s financial goals at the lowest amount of risk. Our clients typically have worked hard to accumulate their wealth and would like to rest assured that they can maintain their lifestyle in retirement without worrying about the risk of catastrophe. Top of Page

  23. Q: What does it mean that Stepp & Rothwell is registered as an Investment Advisor? How do we review your disclosure information?
    A:
    Firms that provide investment advice must be registered as Investment Advisors with their state securities department or the Securities and Exchange Commission. Given its size, Stepp & Rothwell is regulated by the Securities and Exchange Commission, and information about us is available on their website at www.sec.gov. We are required to provide additional disclosure information to all prospective clients and will do so at our introductory meeting. Top of Page

  24. Q: Has Stepp & Rothwell, or any of its principals or planners, ever been cited by the SEC or any other regulatory agency, or sued by a client for any unethical or illegal actions with respect to clients? 
    A:
    No.
    Top of Page

 

 

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