Innovative Fee-Only, Fiduciary Firm, Legend Financial Advisors, Inc.® and its National Award-Winning Advisory Team Celebrates 25 Years in Business
Jan 29, 2019 10:45PM
By North Hills Monthly magazine
Legend’s Award-Winning Advisors Jim Holtzman, Diane Pearson and Lou Stanasolovich in front of Pittsburgh’s skyline at the West End Overlook.
In 1993, when founder, Lou Stanasolovich incorporated Legend Financial Advisors, Inc.® (Legend), he did so with the idea that Legend would focus on providing objective, leading-edge financial advice and services to clients. The company would do this by incorporating cutting-edge technology and service techniques while charging below industry fee levels, especially from an investment standpoint. Legend is compensated only by client fees and does not receive any commissions.
Many advisory firms, brokerage firms and product-oriented firms at that time sold investments and insurance products for commissions to make up the majority of their compensation, and even today, many still do.
This practice creates many conflicts of interest and can lead to churning of investment and insurance products to generate additional commissions when new products are sold to investors. These firms obviously have a “sales-driven” culture, not an “advice” culture.
Legend officially opened its doors on January 10th, 1994 with four employees that included shareholder, Diane Pearson and Legend’s first intern. Since that day, Legend has accomplished its original goals and many more and recently celebrated its 25th anniversary on January 10th, 2019.
Clients Pay Only Fees!
From the outset, Legend went against the advisory-industry grain by offering its services for Fees only, known as “Fee-Only”, at a time when most of its competitors were compensated primarily by commissions and some fees. Those firms now refer to themselves as “Fee-Based” firms, a term designed to confuse and/or mislead the general public. Five years ago, Legend started using the term “Non-Commission” in an attempt to clear up this misleading confusion.
Why Retain A Fiduciary?
Legend and its advisors have always acted as “Fiduciaries”. Approximately 15 years ago, Legend decided to officially be governed under Fiduciary Law by calling itself and its advisors, “Fiduciaries” (“Fiduciary Law” applies only when declaring oneself or their firm a “Fiduciary”.). In its most simplistic form, “Fiduciaries” are required to act in the client’s best interests at all times. Even today, few firms in the country refer to themselves as “Fiduciaries” to avoid falling under Fiduciary Law.
Legend has developed services addressing specialty client-types for Personal Financial Planning and Investment Management/Consulting services. These specialty-type clients include:
1. Medical Doctors: Legend provides Medical Practice Financial Planning Services and Retirement Plan Investment Management.
2. Pre- and Post-Retirees: Due to highly complex financial issues faced in pre- and post-retirement, Legend provides value-added guidance and solutions to these individuals.
3. Widowed Individuals: Widows and widowers often initially face one of two financial challenges: having too little in assets or too much oftentimes in assets that may not be optimal to own, such as real estate, businesses and legacy investments. Legend guides Widowed Individuals through complex issues so they can have a secure future.
4. Business Owners: Legend provides Business Financial Planning Services and Retirement Plan Management to Business Owners.
5. Individuals and Families: All clients who do or do not fall into one of the above specialization areas (not retirement plans) are provided Personal Financial Planning services on an hourly basis including, Retirement Analysis and Planning, Income Tax Planning Projections, Tax Reduction Strategies, Education Projections, Funding Strategies, Estate Planning Analysis, Insurance Analysis, Employee Benefit Reviews and Asset Protection Strategies where needed.
6. 401(k)/403(b) Plans: Legend provides Low-Cost Retirement Plan Investment Management Services with state-of-the-art technology offerings for Plan Administrators and Participants that are available to 401(k)/403(b) Plans.
7. Professors as well as College and University Administrators: Legend has significant experience with managing complex financial issues for College Professors and Administrators especially with regard to consulting on their retirement plans as well as intellectual property royalties and business start-up issues.
8. Dental Professionals including Periodontists, Oral Surgeons, Endodontists, etc.: Legend counsels these individuals regarding Practice Financial Planning Services and Retirement Plan Investment Management.
9. Post-Divorce Individuals: Legend has vast experience with helping individuals restart their financial lives after divorce. Diane Pearson is a Certified Divorce Financial Analyst® (CDFA®).
10. Technology Professionals: Legend can guide these individuals through complex financial issues such as compensation plans and stock options.
11. Corporate Executives – Legend works with Corporate Executives to help simplify complex issues involved with deferred compensation plans, stock option and bonus plans as well as income taxes.
12. Sudden Wealth Recipients: Legend has significant experience assisting Lottery Winners, Inheritors, Inventors, and sellers of significant Assets such as real estate or business, etc., Receivers of Royalties (Ex. Oil and Gas), Receivers of Lawsuit Settlements, Sellers of very large stock holdings and/or options, among other such individuals. Legend’s advisors enables these individuals to adjust to the complexities they will face involving these large sums of money and/or investments in a prudent manner.
Personalized Financial Planning
The quality of Financial Planning advice provided by most advisory firms was sub-par, at best 15 to 20 years ago. Only a handful of firms provided, hands on, in-depth, detail-oriented quality Financial Planning advice. Yes, the fees were more expensive, but the value-added was significantly higher.
Financial Planning services were simply lip service in nature for most other firms. Those firms charged minimal fees ($250 or $500 were common charges by brokerage firms or independent brokerage representatives; or free for insurance salespeople) for a Financial Plan, which usually covered few areas, such as investments and life insurance. This type of planning was designed to sell financial products.
Today, quality Financial Planning—such as the type Legend provides—is advice-oriented and very personalized. In-person meetings, conference calls and/or Webcasts to address specific client issues on an ongoing basis and longer-term are performed on an as needed basis. These services include regular reviews of client documents that are transmitted as well as stored in an encrypted electronic vault. These documents can also be made available to the client’s attorney, accountant, banker and insurance agents, if necessary.
Real-time balance sheets which adjust for daily market securities fluctuations, deposits and withdrawals into bank accounts as well as loan accounts are available for the client’s review 24/7. Income and Estate Tax projections as well as Retirement and College funding/spending calculations also can easily be updated upon request. Additionally, clients can input new information directly into the software, if desired.
When necessary, in conjunction with clients, via telephone or Webcast, Legend will conference in the client’s other professional advisors to facilitate information about specific client issues to appropriate parties.
Legend’s Innovative Investment Process
Legend focuses on low fees to manage client monies including client 401(k) or 403(b) Plan balances. Legend fees start at almost an unheard of 0.90% (most advisors charge at least 1.0% to 1.5%) annually for the first $1,000,000 and then drop to 0.75% to $2,000,000, then 0.50% to $5,000,000 and 0.25% thereafter.
Legend has been cited within industry publications for its investment expertise. Stanasolovich was selected by Financial Planning magazine as part of its inaugural Influencer Awards for the Wealth Creator Award which recognizes the advisor who has made the most significant contributions to best practices for portfolio management (Legend views this as a team award.). Stanasolovich has also been named three times to Investment Advisor magazine’s “IA 25” list, ranking the 25 most influential people in and around the financial advisory profession. Legend’s nationally-profiled investment process and/or portfolios have been profiled in numerous publications and Webcasts for Legend’s research and portfolio development acumen.
Legend’s investment process is based upon intense, detailed research from both historical and current financial and economic market events. Not only is Academic and Institutional research utilized, but studies published by leading investment authorities are incorporated into Legend’s investment process. Furthermore, Legend publishes its own economic and investment research publications entitled “The Interesting Investment Themes” research publication and “The Investment Risk” research publication monthly. These internal publications are utilized as sources for client education, public Webcasts, its Website and Legend’s numerous newsletters, which are free to the general public.
Legend recommends personalized investment portfolios for each client, when necessary. Legend believes its below-listed guidelines need to be addressed on an ongoing basis in order for clients to be successful in reaching their goals.
Legend’s Guidelines Of Investment
1. A portfolio Investment Allocation should be well-balanced and diversified as well as personalized.
2. Assets should be tax-efficiently located. Income tax-inefficient investments should be placed in an IRA where they are income tax-deferred for decades and/or Roth IRA accounts where they are never taxed.
3. In conjunction with number two, assets that are held in individual or joint name should be capital gains-oriented such as equity-oriented assets or individual stocks.
4. Securities owned in portfolios should have very low-cost management fees, if possible. This generally applies to mutual funds and ETFs. Stocks have no underlying fees.
5. Buy Institutional Mutual Fund share classes not expensive commission-oriented A,B,C,D share classes.
6. Avoid high cost insurance products such as variable annuities unless the insurance company labels its literature as low-cost.
7. Legend trades client securities in an Income Tax-Efficient manner (matching gains against losses) where possible, utilizing specific share lots, thereby minimizing income taxes. Almost no one should ever use average cost basis for income tax purposes.
8. Legend focuses on numerous low-cost trading practices.
Best Advisors In The Country Awards
When Legend was founded, Stanasolovich and Pearson and later, Jim Holtzman, decided that whatever advice or service that Legend provided, the firm would be one of the nationwide leaders in terms of knowledge about the subject area. Several national publications, as listed below, have selected Legend’s advisors as “Best Advisors” in the country providing evidence of achieving this goal.
Worth magazine’s “The Best Financial Advisors in America”
Medical Economics magazine’s “The Best Financial Advisors For Doctors In America”
Mutual Fund Magazine’s “The 100 Great Financial Planners in America”
“Investopedia Top 100 Most Influential Advisors In The Country”
“While there have been other awards sponsored by publications such as Barron’s (Lou Stanasolovich has been selected for this list as well) and The Financial Times, those awards are based solely upon accumulation of assets under management, not upon the quality of advice like those Legend has won,” states Stanasolovich.
Legend’s Advisors have been selected for more than 60 Quality of Advice Awards by National Publications—few firms in the country approach that total.
Low-Cost 401(k)/403(b) Retirement Plan Services
In 2013, state-of-the-art retirement plan administration services for 401(k)/403(b) Plans became available to firms like Legend. Legend, therefore, began offering these low-cost plan services, along with its own services and expertise, to clients. Due to these industry-wide changes, costs dropped enormously. Legend, in turn, cut its fees for those services in half.
Prior to this new era, servicing and management of investments for 401(k)/403(b) plans was predominately a big institutions’ game and an expensive one. Legend realistically could never charge lower fees to the plans because of the high administration and investment expenses from the providers. Brokerage firms, banks, insurance companies and large mutual funds (especially in the 403(b) world), charged small retirement plans (generally under $50 million in plan assets) and its participants high fees oftentimes exceeding of 2.0% annually for the underlying investments, custodian fees and plan administration fees.
Today, when utilizing these new services and reduced investment costs, Legend can provide services to a $3,000,000 401(k) or 403(b) plan for total costs of as low as three quarters of one percent (0.75%) including its own fee.
To provide a competitive slate of offerings, Legend generally selects three to six administrative firms from dozens that offer low-cost administrative services and a slate of low cost investment options for plan sponsors to choose from. Today, investment options include Index Funds, Target-Date Funds and Stable Value Funds as well as super low-cost Exchange-Traded Funds (ETFs) that many 401(k)/403(b) plans lack.
New Cutting-Edge Website Launch –
Legend will be launching its new Website
(www.legend-financial.com) at the end of February. It will contain a wealth of free information for the general public as well as special sections for Clients Only. General information available to all include Legend’s services, educational information, articles, videos, Webcasts, self-evaluation questionnaires, Financial Planning calculators and many other areas of interest.
Since 1994, Legend has utilized paid interns to facilitate its business operations while providing them with skills, training and experience. To date, Legend has hired more than 350 year-round, interns.
Currently, Legend offers college students that major in Finance, Marketing, Communications, Graphic Arts, Web Design, Audio and Video Technology, Information Technology, Business Administration and Human Resources year-round internships. Most interns receive training of approximately 150 hours per year.
Today, many of Legend’s full-time employees are former interns including shareholders, Jim Holtzman (1994 internship) and Chris Kail (2000 internship).
In 2014, Legend began offering year-round paid internships to local high school students who assist the regular staff and college interns with clerical and administrative tasks.
Legend’s Training Programs
Legend was, and continues to be, a progressive, knowledge-based organization, offering many types of training programs to its employees. Ongoing training improves employees’ permanent skill sets to benefit, not only the employee, but the organization itself and, ultimately, its clients.
In 2004, Legend’s Education Committee observed that it was necessary to create internal videos of every task and area of knowledge in the firm. As a result, each employee receives ongoing training resulting in clients receiving better, more consistent advice and service. Today, Legend’s Educational Video Library has more than 3,000 training videos in numerous areas ranging from Income Tax issues, software training, Investment and Financial Planning strategies and concepts, written communications with clients to even how clients are greeted when visiting Legend’s offices.
Legend’s Free Offerings
Legend offers prospective clients, several free, one-time services, including:
A. A Free Retirement Analysis
B. A Free Investment Second Opinion
C. A Free Stock Market Crash Analysis
D. A Free Portfolio Tax-Efficiency Analysis
E. A Free Annuity Analysis
Legend has many new services and technologies in development to further enhance client service. For example, new investment performance software is being designed in conjunction with an industry leading software company which provides an understanding of what clients actually own. In short, Legend never “Rests on its Laurels” for very long.
For further information, please contact Legend at
(412) 635-9210 or (888) 236-5960 or visit their Website at www.legend-financial.com.