Registered Investment Advisors

Registered Investment Advisors

An understanding of this 12-Step Program for Active Investors may lead investors to believe they can do it on their own. They absolutely can if they wish, but working with an investment adviser is still recommended. Taking the steps to gain a knowledge base of what works and what doesn't work in the market is critically important, and every investor owes it to himself to learn this information. Knowing that money managers cannot beat the market over the long run is essential when choosing an investment method. Many investors decide to manage their own investments through the no-load index funds now available on the market through various mutual funds.

Although indexing can be done on one’s own, there is a high value to working with a qualified Registered Investment Adviser (RIA). Many RIA’s have been registered with the Securities Exchange Commission (SEC) and can provide valuable ongoing advice and education. A study by DALBAR Financial Services found that active investors who invest on their own are more apt to attempt market timing and less inclined to stay invested in a mutual fund for an average of 2.6 years. This is where the investment advisor can help. A good investment advisor supports the process of indexing, encourages long-term buy and hold and rebalancing strategies, advises prudent investing through the ups and downs of the market, and builds a long-term relationship with the client.

There are myriad advisory options available to today’s investor. This plethora of resources can be confusing and disconcerting for the average investor. It is often difficult to know whom to trust. Many investors seek advice from stockbrokers, insurance sales reps, or commissioned financial planners. These types of advisers are customarily paid to sell products rather than help investors solve problems or make wise investment decisions. Investors often question whose best interest these advisors have in mind - their own or the investors’? A commissioned based pay structure often sets up the appearance of a conflict of interest to the prospective investor.

In comparison, a fee-only adviser keeps the best interests of the client in mind, because neither the advisor nor any related party receives compensation that is contingent upon the purchase or sale of any financial products. These advisors provide investors with comprehensive and objective financial advice for a set fee that reflects a percentage of the market value of a managed client portfolio (often 1%). Since the fee is dependent on the size of the portfolio, both the adviser and the client make more money as the portfolio grows.

Index Fund Advisors (IFA) is a fee-only independent financial advisor that provides optimized wealth management by utilizing risk-appropriate, returns-optimized, and tax-managed portfolios of index funds. IFA founder, Mark Hebner and the team at IFA have done extensive research as shown on this web site and Mark Hebner's book on index funds. This research leads our clients to the optimal money management strategy, net of our advisory fees and taxes. IFA completely avoids the futile and unnecessary cost-generating activities of stock, time, manager, and style picking.

The IFA advice is based on the highly respected research indexes designed by Eugene Fama and Kenneth French and documented in their empirical and peer-reviewed publications. Our current and independent advice incorporates more than 85 years of IFA Indexes and Indexfolio risk and return data, third generation index fund designs and more than 30 years of refined passive trading techniques employed by Dimensional Fund Advisors (DFA). IFA does not accept payments from DFA or from any other recommended investments. IFA is exclusively paid by its clients for its advice on optimal wealth management.

IFA adds value through matching people with portfolios by carefully qualifying and quantifying 5 dimensions of an investor's Risk Capacity and matching it to 5 dimensions of a portfolio's Risk Exposure. This process produces investor-specific optimal returns by applying the IFA proprietary concept of 10dRisk™. IFA obtains academically identified capital market rates of returns for its clients from about 12,000 public companies in the U.S. and about 42 other countries around the world. IFA then designs highly tax-managed and low cost trading strategies, maintains ongoing proper risk exposures through rebalancing, manages cash inflows and outflows. and provides quarterly and inception to date detailed measurements of client performance relative to other IFA Index Portfolios and an S&P 500 tracking index fund. This ongoing reporting on performance, gains, income and tax reporting is exclusively available at IFA and adds significant value since measurement is essential to improvement.

In this video, Mark Hebner explains to other advisors how he built his firm and how they may be able to do the same in India.