Frequently Asked Questions (FAQs)

1Why do I need a financial advisor?

There are a number of situations where independent planning and wealth management are justified:

  • Your finances are becoming complex, your time is limited, and you want expert help
  • You have an unexpected or major life event to respond to and you want solid financial plans going forward
  • You need to change your financial situation or portfolio investment strategy
  • You want to transfer wealth with purpose and need help with estate planning or social impact investing
  • You want transaction or negotiation support based on rigorous opportunity or risk evaluation
  • You have a group planning challenge that needs informed, and independent perspective
  • Your not sure where to start when in comes to financial planning and portfolio management
2What kind of financial professional are you?

Saffron Capital is a fixed fee financial advisor.  We provide quantitative planning, investing and risk management to individuals, families and closely held businesses. Under applicable laws and statuses, we serve as fiduciaries and trustees with an ethical and legal obligation to place client interests ahead of our own.  In addition, the firm is a Registered Investment Advisor in good standing with the Financial Industry Regulatory Authority (FINRA) and the MN Department of Commerce. Finally, the firm is a registered Commodity Trading Advisor in good standing with the National Futures Association (NFA).

3Who are your typical clients?

We cater to detail-oriented science, engineering, and technology professionals who want nothing less from their planning and investment advisor than the same rigorous opportunity and risk evaluations that they apply in their own careers and businesses. For example:

  • Our clients are typically age 50+, when retirement transition planning is increasingly important and necessary.
  • Existing retirees also come to us for income maximization, investment planning, and capital preservation.
  • Finally, we serve families with integrated business and estate planning needs who seek to transfer wealth with purpose.
4Why should I hire an integrated planning and investment advisor?

Integrated planning and investing is better positioned to help clients to maximize their wealth and income by connecting all the dots, notably client goals, risk tolerance, retirement plans, investment plans, health plans, and estate plans.  Clients also benefit from dedicated Concierge Services and on-demand support to better implement and administer their plans.

5I already have a financial advisor. How difficult will it be to transfer my funds from my current advisor?

Many of our clients have established advisor relationships.  Some continue to have multiple advisors when they retain us.  Others confirm that a move is easy to justify for improved quality of advice,  engagement and information content.  Our goal is to simplify your transition, regardless of what's motivating you.

6Is there a cost for our first meeting?

No. We know that picking an advisor is an important decision. Our initial meeting requires no significant preparation or information sharing. Nor is the first meeting intended to be advice based. The first meeting is 60 to 90 minutes in length and serves to get acquainted, to support basic due diligence, to define areas of shared focus and a potential scope of work.

7How will our relationship work?

The key word is collaboration: collaboration between us and collaboration with your strategic tax and legal advisors.

As a first step, let’s define the initial scope of our shared work, and then proceed one step at a time. Clear scope will include an initial list of actions or deliverables that align to your financial planning and investment needs. Our job is to fulfill that scope and then submit our draft work for your input and feedback.

Over time, we repeat a systematic planning and investment process, recognizing the work scope typically gets easier as your existing plans are updated in response to changes in your goals and circumstances.

8How often will we meet?

The standard planning, feedback and meeting process is quarterly. Tactical execution benefits from regularly updates by phone or mail, depending on your preferences.  Finally, we also provide Concierge Services for on-demand meetings and support at client request. Meetings can be in person, on-line or by phone.

9Anything I should know about the planning process in advance?

The first few months of the planning process requires us to ask lots of questions to help you to clarify your full-spectrum goals, your financial situation, and investment details.  Our process will then develop strategies, curate the advice and continuously seek your feedback.

The planning and investment process can be compromised if you are uncomfortable disclosing non-public personal or financial information. Planning must utilize all of your financial information to develop beneficial strategies and advice for you.  It is also helpful to be open-minded to consider new perspectives and alternative ways to achieve your financial goals.

Finally, technology plays an important role in our planning, investment and risk management process.  It is a key part of the value proposition of working with Saffron Capital.  Clients who are averse to using technology may not realize the full value of financial planning and systematic wealth management. To mitigate this risk, we provide concierge services that includes technology support.

10What types of securities do you provide advice for?

We provide advice on a broad set of assets and securities, including multi-asset portfolios, concentrated equity portfolios, government and corporate debt, tax-free municipal bonds, mutual funds, exchange traded funds, foreign exchange and commodity portfolios. We also provide advice on mortgage debt and employee stock options.  We also have experience assessing  structured or deferred employer benefits. Finally, we provide investment due diligence and capital investing in alternative investments including infrastructure project debt, limited partnership investments and business development companies. Client suitability and account eligibility may restrict the type of securities and investments clients can access.

11What is your account minimum?
We strongly believe that all people, regardless of net worth, need access to quality, independent advice. There are no minimums required for financial planning. There also is no minimum for self-directed investment accounts. $50,000 is our account minimum for managed investment accounts.
12What are your fees?

Saffron Capital is a fee-only financial and investment advisory firm. We are paid only by our clients. That ensures are advice is not biased since we receive no sales commissions, kickbacks or other forms of compensation from any investment or insurance product companies.

Our fees are intended to be simple and straightforward:

  • Financial Planning and Advisory:  We charge $1,750 for the first year to develop your custom planning and cash flow models. For year two and thereafter, our annual planning fee drops to $750 per year for quarterly plan updates and meetings. Our fees are negotiable and hourly pricing at a rate of $150/hr is also available.
  • Investment Management:  We charge a flat annual fee with quarterly payments. Our annual management fee ranges from 1.00% to 0.75% of assets under management (AUM). Our fee declines as a function of AUM and is not commission based or influenced by the amount of activity across your accounts. Please request a copy of our Advisor Client Advisory Agreement for more details.
13Am I locked into a planning or investment advisory contract once I sign up?

Absolutely not! But we’ll be sad to see you go if you decide to cancel your contracts with us! For example, you can cancel a Financial Planning Agreement and we will then refund your annual fee on a prorated basis.  You can also cancel an Investment Advisory Agreement with 30 days written notice.  We will then immediately begin an orderly transfer or liquidation of your securities as you direct.  We will also endeavor to complete your requested account administration well before the 30 day transition period is over, with the actual timing of any transition depending on your transition needs and the the complexity of your account structure.

14What is a bank custodian?

Saffron Capital is in the business of providing financial planning and strategic investment advice.  We are not in the business of taking custody of client funds.  Your funds and securities will be held by a custodian bank and regulated clearing firm that meets the requirements of a “qualified custodian” under Rule 206(4)-2 of the Investment Advisors Act of 1940. 

The custodian of your accounts is responsible for:

  • Fund management, 
  • Securities clearing, warehousing and proxy voting,
  • Providing independent performance reports and trade confirmations,
  • Account billing and security,
  • Support forms for client tax preparation, and
  • Regulatory compliance.
15What bank custodian is Saffron Capital using and why?

Interactive Brokers (IB) is the bank custodian used by Saffron Capital.  The bank custodian and clearing firm warehouses your cash and securities.  All accounts at IB are under your direct control and Saffron Capital only has limited authority to place invetsment orders for you.  Clients who execute an Investment Advisory agreement with us also open an account with Interactive Brokers for bank custody.  The account type may differ depending on need.

Interactive Broker is our preferred bank custodian for several reasons:

  • Balance sheet security -  Interactive Brokers has over $9 billion in equity capital and $6.5 billion in excess regulatory capital,
  • Best fees and yields - Low clearing costs combined with competitive and high rates of return on overnight sweeps and securities lending.
  • Scope of clearing service - World wide clearing capabilities in over 135 markets in 33 countries and involving 23 currencies.
  • Execution prices - A history in floor brokerage combined with a core commitment to exchange clearing helps to deliver better execution prices than most brokers,
  • Advanced technology  - Platform for trade execution supports over 100 order types and automated order routing for model portfolios,
  • Reporting and billing - Comprehensive and independent client reporting and billing services, and
  • Client account service - Responsive back office for easy account and funds administration.

The CEO of Interactive Brokers, Thomas Peterffy,  has described Interactive Brokers as "similar to Charles Schwab Corporation or TD Ameritrade, however, specializing in providing brokerage services to larger customers and charging low transaction costs."

In comparison to other brokers, Interactive Brokers is the largest electronic brokerage firm in the US as measured by the number of daily average revenue trades.  It is also the leading foreign exchange broker in the US. 

The innovation and competitive strength of Interactive Brokers was made most evident when the company became the first broker dealer to offer clients zero-cost trading commissions and the ability to trade fractional shares.  Finally, in 2021, Interactive Brokers was recognized by Forbes as the best online broker.

Interactive Brokers is headquartered in Greenwich CT and has over 1,700 employees in 24 offices in 14 countries.  The full history of Interactive Brokers can found on Wikipedia here.

16Are there any conflicts of interest I should know about?
As a fiduciary advisor, we are required to adopt operational procedures to minimize conflicts of interest wherever possible. However, some conflicts of interest are impossible to avoid completely.  We list basic conflicts and remedies below:
  • Negotiable fees: Differences in total fees may create incentives to favor one client over another. We believe we provide the same care and skill of advice regardless of total fees. However, that alone does not rectify the potential conflict of interests. Risk is controlled in part by applying fees consistently across clients as much as possible. To this end, the investment management fee varies as a function of assets under management (AUM) with the goal that total fees paid per year are generally harmonized within standard AUM ranges.
  • Realized trade prices: For any market transactions, realized prices  could favor one client over another. Whenever possible, we seek to eliminate this risk with block trades at one price for all clients. We also seek to apply trade allocation procedures that distribute shares at an average price whenever possible. Finally, we support periodic reviews of trade allocations to identify any client that may be disadvantaged with the goal that we seek to rectify the disadvantage, if any.
  • Proprietary Trading: Saffron Capital or its employees may engage in trading for their own account. As a result, there is a potential for conflicts of interest. This risk is mitigated by allocating trades to clients first. At the same time, attention to our own account is no different to the focus we provide our clients. Namely, we invest in exactly the same strategies as our clients, thereby aligning interests across accounts.  We like to believe that our clients value knowing that we support our advice with actual ‘skin in the game.’
17I don't live in Minnesota. Can I still work with you?
Absolutely.  Our work is location independent, and technology has simplified our ability to work with clients across the U.S. Our client network also extends to U.S. expats living abroad and to foreign nationals who seek to open a U.S. based investment account.
18What is the scope and cost of your Concierge Services?

Concierge Services are free-of-charge and available for all clients that engage us for both planning and investment advisory services.

Service scope includes:

  • Educational support
  • Access to financial planning and wealth management tools (including account aggregation, Saffron WealthLock, financial planning checklists and process maps)
  • Account administration
  • Benefit program compliance
  • Trust and estate plan administration
  • On-demand meetings as needed.

Hourly fees are applicable only for non-standard services where scope and complexity justify separate contracting.

19Can your Concierge Services help me with medical insurance claims, appeals and disputes?
Yes.  We are prepared to work with you to facilitate insurance claims and appeals and to try to significantly improve your chances for reimbursement success. To this end, Saffron Capital may engage insurance claims specialists, medical experts and legal counsel to achieve client goals.  Contracting on work scope, deliverables and hourly fees ensures client control of all effort and costs.
20What types of estate structures do you provide cash flow models and advice for?
Our capabilities span the following structures, which we model in close collaboration with your strategic tax and legal advisors:
  • Basic to advanced estate planning
  • Outright gifts and ILITs,
  • Charitable trusts including CLATs, CLUTs, CRATs, CRUTs, NIMCRUTs, FlipCRUTs
  • Sales to grantor trusts including GRATs, QPRTs, IDGTs, SCINs, and the structuring of private annuities
  • Estate and gift tax valuation models and discounts
  • Generation Skipping Trusts
  • Estate planning case comparisons
  • Comprehensive structure maps and planning flowcharts