As East Idaho business leaders are certainly aware, every profession has its specialties. Some of us specialize in content creation. Others focus on a specific skill set in manufacturing or repair. While some designations can muddy the waters, others can provide clarity. This is especially true in the world of finance, where the only dependable anchor to navigating those waters is set through self-imposed standards.
Setting the bar for such standards is easier said than done, but for Idaho Falls-based Onyx Financial Advisors, its distinction as a standout fee-only wealth management firm has driven the company’s core business for nearly a decade.
“When I first went into this field, my grandfather told me that the most important value I can offer to my clients is my independence,” says Onyx co-founder Terry Roe. “That was a basis for the decision of our business model.”
In 2014, Onyx was recognized as one of the top 100 fee-only wealth management firms in the nation by the CNBC network.
Financially Firm
Along with Roe, Onyx was co-founded by John Parry and Ken Simpson. It now includes Lindsay Goody and Aaron Sautter. All five advisors are Certified Public Accountants, and each also has the designation of “Personal Financial Specialist” — a professional designation that serves as a definite plus in CNBC’s criteria.
The international network’s recent accolades actually came as a surprise to the Onyx team, Parry said. “What they’re extracting from is the database that we already have to submit to. It’s not like an entry form.” In other words, it’s based on public information already filed with the state’s department of finance.
“Other key areas of emphasis included how we work with third parties,” Goody said. That includes professionals such as attorneys, CPA’s and specialists from various fields. The total number of years in business was another key factor, as well as growth rate, assets under management and a clean track record devoid of regulatory actions and complaints.
“We made a pretty good investment a couple of years ago in getting our website developed, and it really emphasizes what we call a 360-degree wealth-management process,” Roe said. “It involves coordinating with your estate planning attorney, your insurance agent, CPA for tax planning, etc.”
Last year, the firm brought in a specialist to present on long-term care. Just a month ago they had another presenter who discussed identity theft.
“I think these are the kinds of things that CNBC looked at that show we are not just managing assets,” he added. “We are also educating our clients.”
The firm, which serves an account base of roughly 100, was also highlighted for being the only firm recognized within the state of Idaho.
Defining Fee-Only
The title “financial advisor” seems like a pretty straightforward description, but there are actually different types, and the differences matter.
As Eve Kaplan of Forbes puts it, that title is “confusingly broad,” allowing that some so-called advisors actually have no designation, while others are certified as CFA, CFP®, ChFC® and/or CPA/PFS. “These designations are the ones most acknowledged in the financials industry,” she adds. “They all require study, passage of exams and adherence to standards of oversight.”
According to Simpson, the designations also have practical significance in the way that an individual must conduct business.
“If you hold yourself out as a registered investment advisor and you license yourself that way — which we have — it means you have a legal fiduciary duty to disclose any conflict of interest to your clients,” he said. “You have to tell them exactly what you get paid on anything you do for them.”
The registered financial advisor community itself has two distinct flavors of its own: fee-only and fee-based. Under some designations, for example, you can set a fee but still get paid on commissions. “Or, you can be what’s called a fee-only advisor, which is what we are,” Simpson said. “All of the services we provide our clients are covered under a set fee. Regardless of where we recommend that they put their money, none of that affects our fee.”
Based on CNBC’s own specificity, the fee-only world is growing rapidly, Simpson says. “It’s where the client is saying, ‘I’m going to hire you, and I don’t want you to be swayed at all by any kind of commissions whatsoever.”
Team Approach
According to Roe, the firm’s adherence to the fee-only philosophy is not its only point for distinction. The group operates as a team with at least two or three advisors assigned to each account. “So when clients call in, they may be told, ‘If the person you typically work with is unavailable, just tell them your name and someone else can help you, because we all know who you are.’”
Simpson notes that while Onyx serves a highly discerning clientele, the firm is also selective in its approach to new customers.
“What we’re looking for is a relationship that is going to be mutually beneficial,” he said. “We have a process that we go through with everyone who comes in the door. We start with a discovery meeting to find out what they need and what their goals are. The next step is a financial planning meeting where we lay out our recommendations.”
That stage could be as simple as advising a younger client to set up an IRA account and put away 10 percent of what they’re earning. There’s really no need, in that case, for them to hire the firm and pay the minimum fee. “But if they have the need, and they think it would work well for them, we put together a plan and follow up with a mutual-commitment meeting,” he said.
Even then, there is no financial obligation whatsoever. “If nothing else, they just picked our brain,” Simpson added. “And by that time we have a really good idea of whether they are a good fit for us and whether our services are what they’re looking for. In the end, it’s all about developing a relationship of mutual trust and commitment. Everybody wins.”