Firm Description
Otto & Associates, Inc., founded in 1991, provides personalized confidential
financial planning and investment management, primarily to individuals and
families, and also to charitable organizations, trusts, estates, pension and
profit sharing plans, and small businesses. Advice is provided through
consultation with the client and may include: determination of financial
objectives, budgeting and cash flow management, tax planning, insurance
review, investment management, education funding, retirement planning, and
estate planning.
Otto & Associates, Inc. (O&A or Advisor) is strictly a fee-only financial
planning and investment management firm. The firm does not sell any
commissioned products such as annuities, insurance, stocks, bonds, mutual
funds, limited partnerships, or other. The firm is not affiliated with entities that
sell financial products or securities. No commissions in any form are
accepted. No finder’s fees are accepted.
Investment advice, an integral part of financial planning, is provided in
consultation with our clients. O&A does not act as a custodian of client
assets. The client always maintains asset control. O&A places trades for
clients under a limited power of attorney. Investments are reviewed regularly
and monthly reports are furnished by the custodians. O&A is always
available to review these reports with clients.
The first step in working with clients is an initial meeting, which may be by
telephone, at which specific financial needs are identified. The initial meeting,
for which there is a $1,000 charge, is considered an exploratory interview to
determine the extent to which financial planning and investment management
may be beneficial to the client, and advice is given if sufficient information is
provided.
If the initial meeting, perhaps with some follow-up, is not sufficient to resolve
the financial issues presented, within a few days clients are presented with a
proposal that summarizes the issues and includes estimates of the cost. As
the planning relationship develops, periodic reviews are done to review
progress and help ensure that progress is made toward meeting financial
goals.
Other professionals (e.g., lawyers, accountants, insurance agents, etc.) are
engaged directly by the client on an as-needed basis. Conflicts of interest will
be disclosed to the client in the unlikely event they should occur.
Principal Owners
Susan Otto Goodell is a 50% stockholder and David W. Otto is a 40%
stockholder. Elizabeth Otto, who is not active in the business, is a 10%
stockholder.
Types of Advisory Services
Otto & Associates, Inc. provides investment supervisory services, also known
as asset management services, and furnishes investment advice through
consultations. On more than an occasional basis, O&A furnishes advice on
matters not involving securities, such as financial planning matters.
As of 12/31/23, Otto & Associates, Inc. manages approximately $220 Million
in assets for approximately 150 clients, all of which is managed on a
discretionary basis.
Tailored Relationships
Advisory services are tailored to the individual needs of clients. The goals
and objectives for each client are documented in our client relationship
management system.
Clients may impose restrictions on investing in certain securities or types of
securities. Agreements may not be assigned without client consent.
The following services define the typical client relationships.
Financial Planning Services
A financial plan is designed to help the client with all aspects of financial
planning without ongoing investment management after the financial plan is
completed.
The financial plan may include, but is not limited to: a net worth statement; a
cash flow statement; a review of investment accounts, including reviewing
asset allocation and providing repositioning recommendations; strategic tax
planning; a review of retirement accounts and plans including
recommendations; a review of insurance policies and recommendations for
changes, if necessary; one or more retirement scenarios; estate planning
review and recommendations; and education planning with funding
recommendations.
Detailed investment advice and specific recommendations are provided as
part of a financial plan. Implementation
of the recommendations is at the
discretion of the client.
The fee for a financial plan is predicated upon the facts known at the start of
the engagement. The minimum fee is $3,000 and is negotiable. Since
financial planning is a discovery process, situations occur wherein the client is
unaware of certain financial exposures or predicaments.
Otto & Associates, Inc. may also prepare a retirement plan, which is a
projection to help determine whether a client is on track for a comfortable
retirement. If not, solutions are explored. The retirement plan is then
updated and progress towards meeting that goal is assessed. The minimum
fee for a retirement plan is $1,500 and is generally not negotiable. There is
no charge for monitoring the plan.
In the event that the client’s situation is substantially different than disclosed
at the initial meeting, a revised fee may be provided by mutual agreement.
The client must approve the change of scope in advance of the additional
work being performed when a fee increase is necessary.
After delivery of a financial plan or retirement plan, future face-to-face
meetings may be scheduled as necessary. Follow-on implementation work
over and above the scope of the originally agreed fee is billed separately at
the rate of $250 per hour.
Advisory Services
Most clients choose to have Otto & Associates, Inc. manage their assets in
order to obtain ongoing in-depth financial advice and planning. All aspects of
the client’s financial affairs are reviewed. Realistic and measurable goals are
set and objectives to reach those goals are defined. As goals and objectives
change over time, suggestions are made and implemented on an ongoing
basis.
The scope of work and fee for advisory services is provided to the client prior
to the start of the relationship. Advisory services generally include: cash flow
management; insurance review; investment management (including
performance reporting); education planning; retirement planning; estate
planning; and tax planning, as well as the implementation of
recommendations within each area.
The length of service to the client is at both the client’s and the firm’s
discretion. The client or the firm may terminate the relationship by notice to
the other party.
Retainer Services
In some circumstances, an annual retainer fee may be offered in lieu of an
asset based fee for advisory services when it is more appropriate to work on
a fixed-fee basis. The annual fee for a retainer arrangement is negotiable.
Hourly Planning Engagements
O&A provides hourly financial planning services for clients who need advice
on a limited scope of work. The hourly rate for limited scope engagements is
$250.
Asset Management
Assets are invested primarily in no-load mutual funds and exchange traded
funds (ETFs), through discount brokers/custodians, and we also use other
types of investments such as closed end funds and private alternative
investments, where appropriate. Fund companies and private placement
sponsors charge each investor an investment management fee that is
disclosed in the fund prospectus or in legal documents, such as a private
purchase memorandum. Discount brokerage companies and custodians may
charge a transaction fee for the purchase or sale of some funds or
investments. O&A does not receive any commissions or compensation in any
form from fund or management companies.
Investments may also include: equities (stocks), warrants, corporate debt
securities, commercial paper, certificates of deposit, municipal securities,
U. S. government securities, options contracts, futures contracts, and
interests in partnerships. Initial public offerings (IPOs) are not available
through O&A.
Termination of Agreement
A Client may terminate any of the aforementioned agreements at any time by
notifying Otto & Associates, Inc. and paying the rate for the time spent on the
advisory engagement prior to notification of termination. If the client made an
advance payment, O&A will refund any unearned portion of the advance
payment.
Otto & Associates, Inc. may terminate any of the aforementioned agreements
at any time by notifying the client in writing. If the client made an advance
payment, O&A will refund any unearned portion of the advance payment.