Frequently Asked Questions
Answers to the most commonly asked questions
What is wealth management?
Darrow offers one service: ongoing asset management and financial planning (commonly called wealth management). The nature of the advice and support we provide evolves over the course of a long-term partnership with our clients, because their financial situation, life stage, and goals will inevitably change.
What is a fiduciary duty?
As a registered investment advisor, Darrow Wealth Management has a fiduciary obligation to act at all times for the sole benefit and interest of our clients. This is the highest act of loyalty, trust and care as established by law.
Unfortunately, not all advisors are held to a fiduciary duty at all times. If your advisor is only a part-time fiduciary, how do you know when they stop acting in your best interest? Darrow Wealth Management is always required to act in our client’s best interest.
Is your firm independent or affiliated with a broker-dealer?
We are 100% independent with no affiliation to an independent broker-dealer such as LPL Financial, Raymond James, or others. As an independent wealth management firm, we don’t have allegiances to a particular fund family, platform, or product. Independence and compensation method help an advisor remain objective when making recommendations.
Advisors associated with broker-dealers (even independent BDs) are often dual registered, a hybrid model allows them to offer fee-based as well as commission-based services, such as insurance sales.
Complete independence also matters when a client is in need of other services, such as life insurance or banking. As an independent wealth manager, we will make referrals to other professionals when clients need of insurance or other products, based on what we believe will be in the client’s best interest.
Does your wealth management program have an investment minimum?
We are currently accepting new wealth management clients who have at least $2,000,000 in investable assets. If you are expecting a large future windfall and don’t currently meet the asset minimum, please contact us to discuss your personal situation.
Investable assets most commonly include current retirement plans, retirement accounts from previous employers, IRAs (traditional, rollover, Roth, SEP, inherited, SIMPLE), brokerage accounts, trusts, proceeds from an IPO or liquidity event, and cash you wish to invest.
What services don’t you offer?
Although we collaborate with a client’s team of professionals in other practice areas, such as estate planning and tax preparation, Darrow Wealth Management does not provide legal, tax, or accounting advice. As mentioned above, we do not offer hourly or project-based planning services.
Who are your clients?
The Darrow Wealth Management team includes nationally recognized specialists in sudden wealth events. So many of our clients come to us before a liquidity event from stock options in an IPO or acquisition, selling a business, inheritance, or other type of unexpected windfall.
Where are your clients located?
The majority of our clients are in the greater Boston area, but we have long-standing relationships with clients around the country. Although we are based in Massachusetts, we’re able to partner with executives and professionals across the United States as a SEC-registered investment advisor.
Technology makes it easy to meet face-to-face, even if we are in different locations. When looking for a fiduciary financial advisor, consider prioritizing the right complete fit over an office location near you. After all, if you move or your advisor does, you probably won’t want to start over with a new firm.
Client Service
Who will I work with at Darrow?
As a Darrow client, you will have a primary advisor who will be your central point of contact. However, we do work as a team in many situations as we believe our clients benefit from the insights and perspectives of more than one seasoned financial advisor.
Why should I become a client?
There are many reasons individuals and families decide to partner with us. Here are five key benefits of becoming a wealth management client.
How can I view my investment performance and holdings?
You may view your accounts and performance at any time via Darrow’s secure client portal. You will also be able to review your holdings daily through our third party custodian’s website.
How is your firm compensated?
As fee-only advisors, we are compensated only by our clients. Like most fee-only advisors, our fees are based on a percentage of assets under management (AUM).
This differs from fee-based advisors, who typically charge an AUM-based fee, and receive revenue or commissions from product-based recommendations, such as life insurance, annuities, or even the selection of investments in your portfolio.
As a fee-only advisor, we don’t sell products like insurance or earn revenues from third parties. We do not receive commissions from transactions. At Darrow, if we refer you to another professional, we aren’t collecting a referral fee.
As a registered investment advisor and fiduciary, we’re always working in your best interest.
What are your fees?
Our wealth management program encompasses investment management and ongoing advisory support. The annual fee depends on the portfolio size, starting at 1% of assets under management. Management fees decrease on the entire portfolio as the asset level increases.
The development of a comprehensive financial plan is an optional service for a separate fee. As there’s a lot of planning and analysis we can do without a full model, we’ll work to understand your needs and goals before making a recommendation.
Investment Process
What is your investment approach?
Many factors go into the construction of our model portfolios. We use a global approach in selecting opportunities and employ both passive and active investments. In building diversified portfolios, we aim to reduce fund expenses and turnover and avoid market-timing strategies.
Does your firm pick stocks and bonds?
Typically not. We employ a mix of passive investments such as ETFs and actively managed mutual funds to build a broadly diversified portfolio designed to withstand market volatility. We do employ strategies involving Treasury bonds, though.
Do you use index funds or ETFs?
Yes. We incorporate them when they are the best available option.
What about options?
There are certain situations where the use of options (such as a covered call) is advantageous. We discuss options strategies with clients on a case-by-case basis.
What will happen to my existing accounts?
Darrow uses Charles Schwab & Co. Inc. as our clients’ primary independent third-party custodian. We take care of all the paperwork and can typically move assets in-kind to avoid any initial sales or tax implications. Once assets are at Schwab, we will begin to reposition portfolios. Current 401(k) and employer retirement plans cannot be moved, but the management of those accounts can be discussed on a case-by-case basis.
The account transition and onboarding process will be discussed in detail on an individualized basis prior to becoming a client.
For all other questions…
Every situation is different and it’s common for new clients to have questions unique to their situation. Please contact our office or schedule a phone consultation with a wealth advisor so we can answer your questions about becoming a wealth management client