Frequently Asked Questions

A Registered Investment Advisor is defined by The Investment Advisers Act of 1940 as a "person or firm that, for compensation, is engaged in the act of providing advice, making recommendations, issuing reports or furnishing analyses on securities, either directly or through publications."

An investment advisor has a fiduciary duty to his or her clients, which means that he or she has an obligation to provide suitable investment advice and always act in the clients' best interests.

Freedom Advisory, LLC is a SEC Registered Investment Advisor.

No. We always give unbiased advice. To ensure to our clients that this is done, we do not accept any type of commissions or compensation from any party other than our clients. By not charging any commissions, we eliminate any conflict of interest we could have with our recommendations.

We serve individuals, pension and profit-sharing plans, trusts, estates, charitable organizations and corporations or business entities. Investors like you...!

Investment management and financial planning fees were tax deductible through tax year 2017. They fell into the category of miscellaneous itemized deductions, and these deductions were eliminated from the tax code by the Tax Cuts and Jobs Act (TCJA) effective tax year 2018.

Securities are held in the name of the client in a brokerage account with Schwab Institutional, a division of Charles Schwab & Co.

The advisor is the only one allowed to directly make any change in the portfolio with discretion based on the pre-established investment objectives and policy. The client can change the investment objectives and policy.

Yes. All information regarding a client is held in strict confidence.

Yes. We always try to maintain taxes at a minimum without it affecting our total return and our main objective in the account.

Advice is provided on equities, municipal securities, mutual funds (open and closed end), bonds (corporate, agency, non-agency), REIT, limited partnerships, ETFs and United States Treasury securities.

No. Past performance of any security is not necessarily indicative of future results.

We use fundamental analysis when considering investment strategies and recommendations for clients. Fundamental analysis is a method of evaluating a company or security by attempting to measure its intrinsic value. In other words, fundamental analysts try to determine its true value by looking at all aspects of the business, including both tangible and intangible factors.

Unless the client and advisor agree upon exceptions, the firm primarily invests client portfolios in a mix of active and passive mutual funds, ETFs and Separate Managed Accounts. Investment Managers are selected based on both quantitative and qualitative analysis. All portfolios are aligned with client risk profile and capacity.

Analysis Description

Quantitative Analysis- historical return and volatility profile of the manager, historical correlation of that manager to various asset classes, the impact that adding a manager would have on our model portfolios.

Qualitative Analysis – examination of the manager’s investment process, assessment of the manager’s risk management process, understanding how the manager’s investment team operates.

Freedom Advisory conducts ongoing account review for Investment Advisory clients, and generally prefers to personally meet and/or correspond with clients on an as-needed basis. Clients are reminded that it remains their responsibility to advise Freedom of any changes in their investment objectives and/or financial situation.

Clients are encouraged to review financial planning issues, investment objectives and account performance with Freedom on an annual basis. The account custodians directly provide each client with transaction confirmation notices and regular written summary account statements directly. In addition, we provide clients with quarterly reporting statements summarizing account activity, holding allocations and performance.

Just keep in mind that as a fee-only firm with a fiduciary responsibility to our clients, we do not accept any commission or any other payments from anyone but our clients.

You can contact any of our advisors and coordinate a meeting in our office or at your place of convenience. If you’re interested in seeing what comes next, you can also view the Freedom Process™.

Market Risk — Either the market as a whole or the value of an individual company, goes down, resulting in a decrease in the value of client investments. This is referred to as systemic risk.

Analysis Description

Equity (stock) Market Risk — Common stocks are susceptible to fluctuations and to volatile increases/decreases in value as their issuers’ confidence in our perceptions of the market change. Investors holding common stock (or common stock equivalents) of any issuer are generally exposed to greater risk that if they hold preferred stock or debt obligations of the issuer.

Company Risk — There is always a certain level of company or industry-specific risk when investing in stock positions. This is referred to as unsystematic risk and can be reduced through appropriate diversification. There is the risk that a company may perform poorly or that its value may be reduced based on factors specific to its industry.

Options Risk — options on securities may be subject to greater fluctuations in value that investing in the underlying securities. Purchasing and writing put or cal options are highly specialized activities and involve greater than ordinary investment risk. Puts and calls are the right to sell or buy a specified amount of an underlying asset ant a set price within a set time.

Fixed Income Risk — Investing in bonds involves the risk that the issuer will default on the bond and be unable to make payments. In addition, individuals depending on set amounts of periodically paid income face the risk that inflation will erode their spending power. Fixed-income investors receive set, regular payments that face the same inflation risk.

Liquidity Risk — The risk that you won’t be able to sell or buy because of the lack of marketability.

ETF and Mutual Fund Risk — ETF and mutual fund investments bear additional expenses based on a pro-rata share of operating expenses, including potential duplication of management fees. The risk of owning an ETF or mutual fund generally reflects the risks of owning the underlying securities held by the ETF or mutual fund.

Management Risk — Your investments also vary with the success and failure of our investment strategies, research, analysis and determination of portfolio securities.

Closed — These funds issue only a specific number of shares through an initial public offering and do not issue new shares as investor demand grows. Prices are not determined by the net asset value (NAV) of the fund, but are driven by investor demand traded at the major exchanges.

Open — With open-ended funds, purchases and sales of fund shares take place directly between investors and the fund company. There's no limit to the number of shares the fund can issue; as more investors buy into the fund, more shares are issued. The valuation of the fund is given by the net asset value of the fund in a given date.

A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. ETFs experience price changes throughout the day as they are bought and sold.

Because it trades like a stock, an ETF does not have its net asset value (NAV) calculated every day like a mutual fund does.

By owning an ETF, you get the diversification of an index fund as well as the ability to sell short, buy on margin and purchase as little as one share. Another advantage is that the expense ratios for most ETFs are lower than those of the average mutual fund.