Personal Investing FAQs

What is the difference between financial planning and wealth management?

Financial planning is a component of wealth management, which is generally more comprehensive in scope. Depending on who you receive your services from, financial planning may include only the development of a theoretical plan (possibly including elements from investment planning, estate planning, business succession planning, and fringe benefits planning) without consideration of or coordination with the practical implementation of the planning. Wealth management will often include all of the aspects of financial planning, plus options to coordinate the practical implementation of the planning within the same organization. An example of a wealth management firm is one that has the capabilities to deliver both the theoretical financial planning solutions and the practical money management (investment portfolio) solutions under the same roof in a coordinated manner. For info on 4Thought’s services in this area, see here.

How long have you been in business?

4Thought Financial Group became an SEC Registered Investment Advisor in April 2012, and was originally incorporated in 2010. Its three founders have a combined experience of over 75 years in the financial services industry. For more information, please see here.

Do you follow your own advice?

The three founders have all of their investable personal assets managed by 4Thought. While we don’t require our other Investment Advisor Representatives to invest with us, most of them choose to do so anyway, with few exceptions. In terms of financial planning and wealth management, each of us abides by our basic tenets in the areas of estate planning, business succession planning, investment planning, and fringe benefits planning.

Are you fee or commission based?

We are fee based when it comes to investment advisory services and financial planning. However, if a financial plan we develop for a client calls for the use of life insurance or other insurances and the client asks us to help them implement, we may accept a commission as a broker.

How do I view my account online if I’m already a client?

We provide a consolidated reporting web portal so that you can see all of the accounts we manage for you with all custodians in one place, and we also provide direct access links to the individual custodian web portals. To access both of these options, go to the 4Thought Financial Group website at www.4tfg.com, click “Log In” at the top right and sign in with your username and password. If you are already a client, you should have received two separate emails with login information (one for the consolidated reporting access and one for the custodian access). If you have trouble logging in, please email us at info@4tfg.com or call us at (516) 300-1617.

Do you do estate planning?

Yes we do. This is provided as part of our retainer fee comprehensive wealth management services. We do a review of client assets, documents, insurances, family background, and objectives to come up with an appropriate estate plan, which may involve elements as simple as Wills, trusts, and charitable giving, or as complex as intergenerational planning and family foundations. Once we’ve developed a plan, we can provide referrals to appropriate estate attorneys to draft documents to specification (The cost of legal document drafting is not included in our services).

What’s your view on philanthropy?

We are proponents of philanthropy to the extent that our clients are willing and capable of being philanthropic. Part of our job is to show clients new ways to increase giving that can benefit not only the charity but also the client’s family.

What is a Trust and do I need one?

A Trust is a legal entity created by a document that explains its purpose, the parties involved, and its terms. There are many types of trust, and each has its own set of legal rules of operation. In the broadest sense, there’s a type that you can set up while you’re alive (a Living Trust) and a type that is established when one passes (a Testamentary Trust). One reason to use a trust is to protect assets – it may help to keep them in the family if certain events such as a death occur, for example. Whether you need one or not depends on your personal circumstances. Most people do not initially need a trust, but once their assets grow and their financial life becomes more complex, then it’s quite probable that a trust or even multiple trusts of different types would be beneficial. If you’d like to discuss whether a trust might be appropriate for you, please contact us.

How can I calculate what I’ll need to retire comfortably?

There are a variety of retirement calculators available on the web with which you can calculate this yourself if you have the confidence and time to do this, but the truth is that most of these are unable to take in to account the specifics of your particular circumstances. The most important part of this calculation is a single data input – your living expenses. How much do you spend now? How much do you want to spend in retirement? You’ll also need to know inputs such as your household income, your current asset values, an expected rate of portfolio growth, and an assumed inflation rate. The formula itself is relatively simple, but there are complicating factors: Is there longevity in your family? What if you become disabled? 4Thought has analytical tools that we use that help us to prepare for any surprises – good, bad, or ugly – and take precautionary steps, as well as to adjust retirement plans in progress as necessary. Please contact us for information on how we can take you through this process.

What is a “robo advisor”?

A robo-advisor is the preferred term of the financial media used to describe a variety of digitally-delivered online services that leverage technology to attempt to automate the bulk of (if not all of) the investment advisory services process for retail investors, and in some cases parts of the fee financial planning process. These services purport to provide a low-cost technology-dependent approach to personal financial life, with the early adopters having primarily come from the millennial demographic cohort. For more on this subject, please read the recent article “Human vs Robot”, from 4Thought Chief Investment Officer, Jesse Mackey. 4Thought provides its own set of “robo advisor” services. For info on this, see here.

How do I create a balanced portfolio?

There are many ways to build a balanced portfolio, but one of the key elements of all of these is an attempt to achieve diversity in the portfolio. The simplest approach is to select an appropriate percentage split between stocks and bonds (and potentially other types of assets) in your portfolio based on your objectives and tolerance for risk, and then select a variety of different types of stocks and bonds to fill out the allocation. This is simple enough in concept, but the manner in which this is done can be the difference between meeting your long term life goals or ending up broke – a big difference. 4Thought has its own approach to building a well-balanced portfolio that involves diversifying not just by types of assets, but also by method of investing. We use what we call Multi-Method Investing to help our clients. For more on this approach, see here.

Do I need life insurance?

It depends. Is there anyone that you provide financial support for such as a spouse, children or other dependents? Are you potentially subject to estate taxes? Do you have concerns about ensuring the continuity of a business you’ve worked hard to build? For these and other reasons, life insurance could be a vital part of your overall financial plan – but it’s not necessary for everyone. Depending on your needs and the type of insurance that’s appropriate for you, it could also potentially be used for multiple purposes – not only when you die, but while you’re alive as well. If you’d like help in determining whether you need life insurance, please contact us.

Do you do estate planning?

Yes we do. This is provided as part of our retainer fee comprehensive wealth management services. We do a review of client assets, documents, insurances, family background, and objectives to come up with an appropriate estate plan, which may involve elements as simple as Wills, trusts, and charitable giving, or as complex as intergenerational planning and family foundations. Once we’ve developed a plan, we can provide referrals to appropriate estate attorneys to draft documents to specification (The cost of legal document drafting is not included in our services).

How does tax loss harvesting work for 4Thought’s portfolios?

For taxable accounts, the use of tax loss harvesting to attempt to minimize tax liabilities without hampering returns can be done in two ways through 4Thought: Intra-account harvesting and Inter-account harvesting. Intra-account harvesting is performed automatically within our “Traditional” series of portfolios, which are most often recommended for investors that are either taking systematic withdrawals from their account or are still in the pre-retirement growth mode but are not making systematic investments into their account. Inter-account tax loss harvesting is possible through consultation with our advisory team, and involves moving assets from one account/strategy to another or changing the strategy in an existing account.

What happens to idle cash in my account?

There will always be at least a small amount of cash in your account for operational/trading and fee payment purposes, sometimes for tactical risk management purposes, and sometimes for the purposes of funding systematic withdrawals (if applicable). We bill on this cash just as we do on the value of the securities in your account, as it is managed and coordinated as a component of your total account value. For investors that are taking systematic withdrawals from their account, cash from dividends and other income will be allowed to accumulate in the account to ensure the liquidity needed to consistently fund withdrawals. For investors that are not taking systematic withdrawals, any accumulated excess cash will automatically be reinvested at least quarterly, if not more often (depending on the account’s strategy and portfolio trading).

How are fractional shares treated in my account?

For investors that direct brokerage and custodianship to Folio through the agreement we’ve established with them, fractional share accounting is a component of their services. This means that we do not have to trade only in whole shares, which would limit our ability to get you exactly to your target exposures. The use of fractional shares enables your portfolio to obtain near-exact exposures to the assets we want, even for the smallest of accounts. However, not all Custodians and Brokerage Firms can support the use of fractional shares, so if you decide to transfer the existing assets in your account away to a new Brokerage/Custodian, you’ll want to be aware that the excess fractional portion of each of your positions will need to be liquidated before the transfer is executed. That’ll be done for you at no additional cost.


 Still Have Questions? 

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