Frequently Asked Questions

What is a Registered Investment Adviser (RIA)?

Under the Investment Advisers Act of 1940, as amended, an Investment Adviser is "any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as part of a regular business, issues or promulgates analysis or reports concerning securities..."

A typical Investment Adviser:

• Registers either with its state or the SEC by filing Form ADV and meeting other requirements
• Evaluates client's needs and risk tolerance, and advises on appropriate investments
• May provide other wealth management services, such as retirement, trust, tax, charitable giving, estate and financial planning services
• Monitors clients' portfolios. Regular performance reports may be provided
• Uses a broker/dealer and/or bank to custody assets and to settle and/or to execute trades

This registration does not mean that the advisers are recommended by the SEC, it simply means that they are regulated by the SEC.
In general an RIA with more than $25 million under management must register with the SEC, and those managing less than $25 million are registered at the state level.

Why do I need an Independent Advisor?

There are numerous methods for investors to get investment advice and/or execute their trades. There exist many discount brokerages for those with the time, skill, and inclination to go alone. But if you want advice -- especially unbiased advice – Sunrise Financial suggests doing business with an Independent Advisor. An independent financial advisor is a professional practitioner who functions in a conflict-free environment. The benefits of using the services of an independent financial advisor accrue to the investor throughout the relationship.
We believe independence is essential and here are several reasons

• An RIA has a fiduciary duty towards his/her client.

• Must always act in Client’s best interests and Client’s interests come before those of the RIA

• All fees and any conflicts of interest are disclosed upfront. Form ADV lays out everything

• There is no pressure, and no incentive, to sell proprietary products

• Free to consider each of the thousands of investment alternatives available. There are no artificial limitations or mandates on which investments to use

• An independent financial advisor can weigh the merits of one investment against another, recommending investments only because he or she believes they will contribute to the success of the client’s investment strategy

Is there a minimum account size required to open an account?
No, we do not have any minimums.

Who has custody of my funds and assets?
All of your funds and assets are held by an independent 3rd party custodian - usually Interactive Brokers. You arrange all deposits and withdrawals directly with the custodian through their secure "Account Management" portal on their web site. Sunrise directs and executes the investment of your funds, consistent with our account agreement. We encourage you to visit the Interactive Brokers web site to learn more about them.

Do you guarantee your returns?
No. Past performance can never be a guarantee of future results. The reality is that no one knows the future, so future returns cannot be guaranteed. Some of the greatest investors of our time like Warren Buffet, Bill Miller and George Soros lost money some time or the other but, over the long term, they became successful investors. This is the approach that we follow at Sunrise.

How do I establish an account with Sunrise?
Call us at (540) 318 6768 to schedule an initial consultation.

Can I open an IRA account with Sunrise?
Yes, you can open several different account types including regular, margin, traditional and rollover IRA's, and Roth IRA's.

Do you take custody of my Investments?

No. Registered Investment Advisers are prohibited by law from taking custody of your assets.  In other words, we are prohibited from ever being able to get our hands on your money, except for payment of fees, and then only if you authorize it in advance.

What are the advantages of working with Sunrise Financial?

• Independent, objective assessment of your financial goals and risk tolerance, both important factors in determining appropriate investment strategies.
• Independent, objective money management. Since we do not accept fees or commissions from any 3rd parties (for the sale of products, etc.), our advice is unbiased. We try very hard to avoid any conflicts of interest so that your goals and our goals are the same - to grow your assets. See our Code of Ethics.
• Access to custom designed portfolios to meet your individual goals and needs.
• Professional monitoring and management of your account. 

What makes Sunrise Financial different from banks, brokerage firms and other financial advisory firms?

Sunrise is different from other financial advisory and brokerage firms as well as banks in a number of ways.  First, we provide advice on all aspects of our clients’ finances while at the same time, assisting them with the implementation of their recommendations.  No detail of a client’s finances is overlooked.  Reviews of employment contracts, real estate leases, wills, trust agreements, stock option agreements, property and casualty insurance, non-qualified deferred compensation agreements, private investments, hedge funds, corporate minutes, buy-sell agreements, retirement plan documents, business income tax returns, U.S. savings bonds, and even the evaluation of retirement village contracts are conducted.  Interaction with the client’s other advisors, such as actuaries, accountants, attorneys, bankers, insurance agents, and employee benefits specialists to ensure that everyone is working on behalf of the client is an everyday occurrence.  Brokerage firms and banks do not supply this type of service while other financial advisory firms may only offer a few of these services, and often in a superficial manner. Of those who do provide all these services, their fees is too high. Sunrise by contrast, offers its services in a very detailed manner and at a lower cost.

From an investment standpoint, most advisory firms offer one service: asset allocation with mutual funds.  Some of these advisory firms are compensated by commissions or exorbitant fees.  Other firms sell clients Class C share mutual funds and receive a constant 1.0% of assets regardless of portfolio size.  This is a very expensive option for clients with more than $500,000 in assets.  Sunrise, by contrast, offers several investment strategies including individual stock portfolios such as value-oriented tax-managed portfolios, bond portfolios, and hedge funds.  We will also assist the client in seeking private equity investments, if they so desire.

Banks and brokerage firms sometimes provide a few of the same investment offerings as Sunrise.  However, the advisory fees charged is frequently at twice the cost and are provided without an understanding of and oftentimes without concern for their clients’ overall objectives.

In comparison to brokerage firms, we do not underwrite individual securities that we sell to our clients. Brokerage firms are in the position of having to discourage clients from selling securities that they underwrote when they want to liquidate them, because the brokerage house is responsible for supporting those underwritten securities in the market.

The bottom line at Sunrise is that we focus on the client’s entire financial situation, assists clients in achieving their goals, attempts to provide unparalleled service, and does it without a bias on a fee-only basis.

Deductibility of Fees

Fees paid to any investment manager may be tax deductible, but many people are confused about the issue.

• Investment management fees can be itemized on Schedule A as miscellaneous deductions.
• Only fees paid from taxable accounts can be listed -- not IRA accounts.
• Taxpayers incurring AMT do not get this deduction.
• There is a ">2% of AGI" rule. Fees incurred should be greater than 2% of the Adjusted Gross Income to qualify for this deduction.

Is there a charge for the initial meeting

Sunrise does not charge any fees to prospective clients until they actually decide to become clients.  This may take as many as three meetings and often includes a few phone calls to clarify points of our service, before a client comes on board.

Do you also do Estate Planning
We analyze and educate the client on their estate planning needs. We do basic Estate planning that should suffice to most of the clients. For complicated and intricate situations we can arrange a meeting with a local attorney or meet with your existing counsel to make sure your financial goals coincide with your estate planning desires. We want to minimize your expenses and maximize your wealth. Elaborate estate planning and living trusts are very expensive and should only be done if absolutely necessary.

I do not want to sell some of my assets (shares in a private company etc)
We will analyze all your account holdings and current asset allocation. We do not instantly sell everything in any accounts. We study each investment for performance, tax implications, and portfolio fit before making any recommendations. Many of our clients end up retaining some of their initial holdings. We also cover all five areas of financial planning and help allocate existing company retirement plans, shop for inexpensive insurance, if needed, and meet with their personal legal and tax advisors to confirm congruence of all plans.

What if I do not live in your area? Can I still be your client?

• E-Mail: We find E-Mail to be one of the most convenient and faster means of interaction with our clients.

• Telephone: You can call us anytime. If we aren't available, do not hesitate to leave a message and we usually will return your call within 1 business day. Please do not include any confidential information in the voice message.

• Fax

• Snail Mail: If you aren't comfortable with other means of communication, you can send us any documents through regular mail (USPS, UPS, FedEx etc).

The bottom line is that you want the best financial advisor available, not merely the best one near you.  We strongly believe that a lack of geographic proximity should not prevent us from providing an outstanding service.

What is a Certified Financial Planner Designation?

The CFP mark represents a Certified Financial Planner designation. An individual who has earned these marks has met the education, examination, experience and ethics standards established by the Certified Financial Planners Board of Standards (CFP Board). Therefore, a financial planner who has earned the CFP marks should be distinguished from a financial planner who has not. Consumers need to be aware that there is nothing preventing a person from declaring themselves a "Financial Planner," and it is therefore incumbent upon the consumer to differentiate between a planner who has earned the marks and one who hasn't.

If a financial planner has earned the right to use the CFP marks, this means that he or she has met the requirements for education, examination and experience:

There are three ways to meet the CFP certification education requirement:

• Completing an education program at a college or university whose curriculum is registered with the CFP Board; or
• Submitting a transcript of previous financial planning-related course work to the CFP Board for review and credit; or
• Showing the attainment of certain professional designations or academic degrees.

Candidates for the CFP certification must pass a rigorous two-day, 10-hour CFP Certification Examination administered by the CFP Board that covers the financial planning process and includes such topics as tax planning, employee benefits and retirement planning, estate planning, investment management and insurance. Candidates for CFP certification must prove they have experience in the financial planning process before being authorized to use the CFP marks.

Candidates for CFP certification have their backgrounds checked by the CFP Board, and must also disclose any investigations or legal proceedings related to their professional or business conduct. The CFP Board reviews all such disclosures and investigates those statements that indicate areas of concern.

Candidates must also adhere to the CFP Board's Code of Ethics and Professional Responsibility and Financial Planning Practice Standards.

Additionally, once certified, CFP certificate holders must fulfill a biennial continuing education requirement to stay up-to-date on planning strategies and financial trends affecting their clients.

What is the Chartered Financial Analyst (CFA) designation?

Our goal is to be trustworthy. We believe that the Code of Ethics and Standards of Professional Conduct developed by the CFAInstitute – formerly Association for Investment Management and Research, is a very high standard for fair treatment of clients. A summary of the Chartered Financial Analyst designation and the CFAInstitute ethical standard follows.

The Institute of Chartered Financial Analysts (ICFA) was formed in 1959 in Charlottesville, Virginia. Together with the Financial Analysts Federation, the ICFA formed the Association of Investment Management and Research (AIMR) – later renamed as CFAInstitute, which administers the Chartered Financial Analyst Study and Examination Program.

The CFAInstitute was organized to enhance the professionalism of those involved in the investment decision-making process and to recognize those achieving a high level of professionalism by awarding the designation of Chartered Financial Analyst.

Completion of the CFA program involves three levels with a total of eighteen hours of examination. The candidate must also have 4 years of professional investment management related experience. Pass rates for each level of the examination process are extremely low (ranges from 35% to 55%).

CFA charter holders must disclose any investigations or legal proceedings related to their professional or business conduct. The CFA Board reviews all such disclosures and investigates those statements that indicate areas of concern.

Candidates must also adhere to the CFAInstitute Code of Ethics and Professional Standards.

Each level of the CFA exams requires at least one year to complete. The CFA curriculum covers:

• Ethical and Professional Standards
• Financial Accounting
• Economics
• Private and Institutional Wealth Management
• Equity and Fixed-Income Securities Analysis
• Portfolio Management
• Quantitative Techniques
• Real Estate
• Derivatives