Frequently Asked Questions (FAQs)
There are a number of situations where independent planning, due diligence and cash flow modeling are justified:
- You have an immediate need or unexpected life event to respond to
- You want to change your financial situation or portfolio and you don’t know where to start
- You need specific expertise you don’t possess
- Your time is just too valuable and limited
- You (and others) need independent and objective insight
- A business or transaction requires strategic cash flow modeling, value analysis and negotiation support
Saffron Capital is a fee-based fiduciary. We provide quantitative planning, investing and risk management to individuals, families and closely held businesses. Brad Horn is the founder and principal advisor at Saffron Capital. He has over 30 years of experience in corporate investing, due diligence and risk management. Brad has a Master of Science degree in Economics and Operations Research from the Colorado School of Mines. Brad is also a member of the CFA Institute and is currently taking exams to become a full charter member as a Certified Financial Advisor. His firm is a Registered Investment Advisor in good standing with FINRA and the MN Department of Commerce. The firm is also a Commodity Trading Advisor and Commodity Pool Operator in good standing with the National Futures Association.
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.
- Our clients are typically age 50+, when retirement transition planning becomes increasingly important
- We also support existing retirees who seek income maximization, strategic investment planning or other transaction support.
- Families requiring assistance with estate planning, business succession, charitable giving and social impact investing
We are a preferred option for clients when a simplistic or cookie-cutter approach just isn’t good enough.
Integrated planning and investing is better positioned to maximize client wealth and income by connecting all the dots, notably client goals, risk tolerance, investment plan development, implementation and administration. Integrated planning and investing is ideally suited for complex situations that braid together cash flow modelling, tax planning and investment management.
- Long-term income and benefit maximization for retirees
- Investment or transaction due diligence for closely held businesses or alternative investments
- Estate plan structuring and management.
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, information content and engagement. Our goal is to simplify your transition. We provide a straightforward and effective on-boarding process. At the same time, your initial and ongoing Concierge Services will provided you with account administration, financial plan execution and benefit plan compliance. Concierge services also provide in-person technology support, educational resources and scheduled meetings, as needed.
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.
The integrated planning and investing process is ongoing and collaborative. The first few months of the planning process requires us to ask lots of questions that will 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.
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.
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 $2,500 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 1.5% to 0.5% 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.
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.
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.
Interactive Brokers (IB) is the bank custodian used by Saffron Capital. Clients who execute an Investment Advisory agreement with us can open an account with Interactive Brokers for bank custody, recognizing 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.
- 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.’
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.
- 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