Question 1

Fiduciary Advisors

Accepted Answer

As objective, third-party professionals, we act with discretionary authority as your fiduciaries at all times. We select your investments, keep your portfolio current, and monitor your expenses for you.

Question 2

Investment Strategies

Accepted Answer

The top-level strategy is to place long-term money into stocks and short-term money into a stabilizing cash reserve. The stocks are globally-diversified across three strategies, a market tracker covering 99% of the investable market, a portfolio biased to profitability, and a portfolio biased to small cap and value stocks. The cash reserve is Cash or U.S. Treasuries. We reserve the right to further tailor your portfolio for taxes and other details of your specific situation.

Question 3

Underlying Theories

Accepted Answer

Modern Portfolio Theory
MPT maximizes risk-adjusted returns by investing in the market portfolio in combination with a theoretical risk-free asset. We apply MPT by investing in a globally diversified stock portfolio and a fixed income portfolio consisting primarily of U.S. Treasuries.

Historically Higher Returns of Certain Asset Classes
Academic research dating back 50 or 60 years demonstrates that certain asset classes have provided higher than average market returns in exchange for the assumption of additional risk. Those asset classes are small cap stocks, value stocks, and stocks the meet certain measures of profitability. Our experience confirms the risks are higher, and there will be extensive periods when we will not receive the premiums.

Disciplined Portfolio Maintenance
Rebalancing is a method for buying low and selling high. It flows capital out of assets that have increased in value and into assets with lower relative valuations. Dividends received by the portfolio may be sufficient to keep a portfolio balanced, but more commonly, the divergence in value of holdings is great enough that rebalancing requires periodic selling and reinvestment.

Question 4

Principal Risks

Accepted Answer

Short-term volatility may be dramatic, and annual returns may be deeply negative. The higher returns of certain market segments may only be apparent when viewing 10-year or longer periods or may not occur at all. The benefit of rebalancing may not materialize until the divergent asset classes revert to their long run average returns. The stock market may not behave in the future the way it has in the past.

Question 5

Implementation

Accepted Answer

We mainly employ Exchange-Traded Funds (ETFs) for their low cost and tax-efficiency. Dimensional, Charles Schwab Investment Management, iShares, Vanguard, and similar companies provide the funds from which we construct our portfolios. We select funds based on the vehicles' purpose, quality, cost, and fit within the total portfolio.

Question 6

Cash Flow/Retirement Planning

Accepted Answer

The greatest long-term financial risk isn't losing your money as that will not happen if you're our client.  The risk is outliving your money!  Are you sure you’re not at risk of outliving your money? Don’t guess. Know where you’re going. Investing is a journey, and you need a roadmap. Our Cashflow Fingerprint® financial planning process produces one for you. We use the Cashflow Fingerprint® to design a plan around the way you want to live.

A big part of our job is to help make sure you’re on a path to retire comfortably AND to remain comfortably retired.  Our proprietary software, the Cashflow Fingerprint®, provides results that will serve as the basis for your portfolio’s asset allocation. We’ll then use the Cashflow Fingerprint® as the guide to make sure you’re going to be okay financially.

Question 7

Household Net Worth Statement

Accepted Answer

Do you actually know your net worth?  If so, do you have it in a format that you can present to a lending institution to procure financing?  At PNW Asset Management, we create a time-stamped Net Worth Statement for your household, and we’ll update it as circumstances change.  Plus we’ll review your older Net Worth Statements over the years to see how it’s growing.

Question 8

Estate Plan Review

Accepted Answer

A integral part of your household’s financial plan is an Estate Plan Review.  Our experience and wisdom in these matters will likely be invaluable.

Are your holdhold’s wills, healthcare powers of attorney, durable powers of attorney, IRA or other tax deferred accounts’ beneficiaries, and pay on death (POD) designations up-to-date?  Are you aware that IRA beneficiary designations and POD designations supersede your last will and testament?  Have you named an executor or personal representative(s) of your estate, and does he/she (they) know what to do upon your death?  Do revocable or irrevocable trusts make sense for you?  Do you have children or other loved ones, especially those who are financially challenged, for whom a trust would make sense?  Is charitable giving from your estate important to you?  Do you know the consequences of having community property accounts versus joint tenant accounts (in states where community property accounts are legal)?  Have you counseled your loved ones on how to keep their inherited property as separate property?  Is your life insurance properly siloed to to minimize the future taxation of your beath benefit?  These are many of the items that we help you address.  We’ll help you get up-to-date and organized, plus we’ll connect you with an attorney or other appropriate professional when needed.

Question 9

Insurance Review

Accepted Answer

When is the last time you reviewed your life, disability, long-term care, and property & casualty insurance policies?  Do you need an umbrella policy that covers liability beyond your homeowner’s policy?  Let us help you make sure your have the necessary insurance in place to mitigate mortality risk and the other risks your insurance policies are designed to cover!  Here again, we’ll connect you with appropriate professionals when needed, and we'll stay involved to coordinate the process.  That's part of our job!

Question 10

Empathetic Listening & Coaching

Accepted Answer

As we mention on our home page, First We Listen.  While the numbers and math are important, we want you to feel heard.  We want to connect with you and earn your trust.  Successful investing is a journey, not a destination.  We want to support and coach you during your journey.  Let’s work together to make sure you and your family are going to be okay during your lifetime and beyond.

Fear has a greater grasp on human action than does the impressive weight of historical evidence.  That's why we'll help you stay calm and rational when things are bleak.  We'll help you avoid behavioral mistakes that often plague investors without the guiding hand of a trusted advisor.  After all, the single most important variable in the quest for investing success is the only variable you ultimately control: your behavior.  You will do far better, in real life, with an empathetic, tough-loving behavioral coach (that's us) than you will on your own.

Question 11

Q: With what types of clients do you work?

Accepted Answer

A: We work with individuals, families, and institutions who seek professional wealth management and financial planning services. Our clients range from ordinary individuals and families to those with specific wealth management needs. For example, if a family is considering the sales of a business, we can help with the pre and post sale wealth management planning and portfolio management. Busy entrepreneurs and professionals who understand the benefits of having a financial plan and enlisting skilled professionals to manage their investment portfolios are another example of clients we help. Surviving spouses and recently divorced individuals who need help managing proceeds from estates or a divorce are also among the types of clients we serve. Finally, we can manage trusts created through estates and charitable foundations.

Question 12

Q: Do you have a minimum account size?

Accepted Answer

A: We have a minimum annual fee of $2,500 per household, therefore our full-service investment management clients’ investable assets should be somewhere around $250,000. For special circumstances, we reserve the right to waive or lower our $2,500 minimum annual fee. Some clients may prefer to hire us on an hourly basis or for comprehensive financial planning services instead of hiring us for wealth management services.

Question 13

Q: How do you work and who holds my assets?

Accepted Answer

A: We work through a Limited Power of Attorney (LPOA) that allows us to interact with an independent entity on your behalf to execute trades and manage your account. PNW Asset Management does not directly hold your securities or cash, and we highly recommend that you DO NOT permit any wealth manager to both manage and to custody (hold/safe keep) your assets. For your protection, your assets are custodied with Charles Schwab & Co., Inc. Schwab is a qualified custodian and a publicly traded financial services holding company headquartered in San Francisco, California. Schwab custodies hundreds of billions in assets for clients and advisers’ clients. Furthermore, Schwab provides you with separate, independent reporting of all balances and securities transactions.

Question 14

Q: Will you customize a financial plan and portfolio exclusively for me?

Accepted Answer

A: Yes! PNW Asset Management provides most wealth management client with a custom financial plan. It’s called your Cashflow Fingerprint®. That custom plan becomes the basis of how your investment portfolio is managed. Most client portfolios are a product of our very personal, financial planning process. We create a mix of stock and bond asset class investments for your portfolio, and we rebalance your portfolio to make sure the allocations stay in balance with your financial plan. As your life situation changes, we revise your financial plan and may recommend adjustments to your portfolio so that your investment dollars are appropriately allocated.

Question 15

Q: What is your investment philosophy and management style?

Accepted Answer

A: At the core of our philosophy is the belief that creating, growing, and keeping wealth is simple. Investors are rewarded for maintaining a consistent and disciplined long term strategy based on time-tested Asset Class wealth management techniques. We do not pick stocks or actively trade your portfolio or try to time the market.

Question 16

Q: What types of investment vehicles do you normally use?

Accepted Answer

A: We believe all of our clients can benefit from low-cost, asset class mutual funds and Exchange Traded Funds (ETF) to achieve broad diversification and attractive risk-adjusted returns. Keeping investment costs low and transparency high is a great combination for investing success provided one has a long term horizon.

Question 17

Q: How will you keep me involved in decisions affecting my portfolio and investment goals?

Accepted Answer

A: Our management system features consistent interaction with each client. As events transpire, we keep you fully apprised of the performance of your investment portfolio. We meet with you regularly to update your personal financial plan (your Cashflow Fingerprint®) and to make sure your plan is consistent with your financial objectives and risk profile. You receive quarterly reports detailing your portfolio holdings, asset allocation, and performance summary. We are available for discussions with your tax adviser. Quarterly statements are provided by the custodian of your account, along with transaction confirmations on purchases and sales. Of course, we are available before, during, and after business hours – by telephone and email – to discuss any questions or concerns you might have, and we’d love for you to stop by our office, 2211 Elliott Ave. Ste. 200, Seattle, WA 98121, during business hours as well.

Question 18

Q: How will I have access to the money I’ll need from my account?

Accepted Answer

A: If you need stable monthly income, we can set up periodic distributions into your personal checking account. Checks can also be mailed or funds wired as needs arise. Information about your account is provided as a matter of course and in several ways. As a PNW Asset Management client, your account includes a Schwab custodian account, and Schwab will provide information concerning your account. Schwab provides account access through the Internet as well. This is an immediate and convenient way to keep fully apprised of the most current status of your account and to help you plan for tax reporting.

Question 19

Q: How are you compensated for your services?

Accepted Answer

A: PNW Asset Management is an independent, fee-only investment management firm. In this capacity, we provide our clients a fee-only fiduciary relationship. Our compensation depends on the value of your assets. Our fees are based on account size, starting at a maximum of 1% per year (billed monthly) of the assets under management. We do NOT earn commissions on your transactions nor do we accept direct payments from brokers or any other vendors. We wish to help our clients, and we have no hidden agenda.

Question 20

Q: What do you mean when you say, “Invest in Wealth?”

Accepted Answer

A: We believe it’s necessary for clients to invest some time and intellectual capital toward understanding elements that can help them reach and sustain financial independence. Having a grasp on what we do and why we do it significantly increases the chances for a favorable investing outcome.

Question 21

Privacy Policy

Accepted Answer

Privacy Notice
This notice is being provided to you in accordance with the Securities and Exchange Commission’s rule regarding the privacy of consumer financial information (“Regulation S-P and S-AM”). Please take the time to read and understand the privacy policies and procedures that we have implemented to safeguard your nonpublic personal information. Nonpublic personal information means personally identifiable financial information and any list, description or other grouping of consumers that is derived using any personally identifiable financial information that is not publicly available.

INFORMATION WE COLLECT
Pacific Northwest Asset Management, LLC must collect certain personally identifiable financial information about its customers to provide financial services and products. The personally identifiable financial information that we gather during the normal course of doing business with you may include:
l. information we receive from you on applications or other forms;
2. information about your transactions with us, our affiliates, or others;
3. information collected through an Internet “cookie” (an information collecting device
from a web server); and
4. information we receive from a consumer reporting agency.

INFORMATION WE DISCLOSE
We do not disclose any nonpublic personal information about our customers or former customers to anyone, except as permitted or required by law, or as necessary to provide services to you. In accordance with Section 248.13 of Regulation S-P, we may disclose all of the information we collect, as described above, to certain nonaffiliated third parties such as attorneys, accountants, auditors and persons or entities that are assessing our compliance with industry standards. We enter into contractual agreements with all nonaffiliated third parties that prohibit such third parties from disclosing or using the information other than to carry out the purposes for which we disclose the information. In accordance with 17 CFR 248.101 through 248.128 Regulation S-AM, we do not provide client information to any affiliates for marketing purposes.

CONFIDENTIALITY AND SECURITY
We restrict access to nonpublic personal information about you to those Employees who need to know that information to provide financial products or services to you. We maintain physical, electronic, and procedural safeguards that comply with federal standards to guard your nonpublic personal information. We will notify you in the event of any material breach of security.

Question 22

Business Continuity/Disaster Recovery

Accepted Answer

PNW Asset Management has a business continuity/disaster recovery plan that will go into effect if our office space becomes uninhabitable, loses internet connectivity for an extended period, or if we have any other business interruption. PNW Asset Management will simply set up in a location that has internet connectivity and will post on our website the best way for you to contact us. Location will be determined by the extent of the disaster or business interruption. In the event of an emergency situation, we will attempt to contact you, and we encourage you to check this page of our website for instructions on how to contact us. Thank you.

Question 23

Security

Accepted Answer

At PNW Asset Management, we go to great lengths, both procedurally and electronically, to ensure our clients have a secure environment in which to interact with us. Employees are required to sign a Confidentiality Agreement and vendors, such as an information technology consultant, must enter in to a Non-disclosure Agreement. Furthermore, we have policies and procedures to protect our clients’ nonpublic personal information at all times.  Please see our Privacy Notice for more information on the policies and procedures we have implemented to safeguard your nonpublic personal information.

Question 24

Our Legal Disclaimer

Accepted Answer

PACIFIC NORTHWEST ASSET MANAGEMENT, LLC Legal Disclaimer Pacific Northwest Asset Management, LLC (hereinafter “PNW Asset Management”) is a registered investment adviser in the State of Washington. PNW Asset Management may not transact business in states where it is not appropriately registered or qualifies for an exemption or exclusion from registration. Individualized responses to persons that involve either the effecting of transactions in securities, or the rendering of personalized investment advice for compensation, will not be made without registration or exemption.

PNW Asset Management’s web site is limited to the dissemination of general information regarding its investment advisory services to United States residents residing in states where providing such information is not prohibited by applicable law. Accordingly, the publication of PNW Asset Management’s web site on the Internet should not be construed by any consumer and/or prospective client as PNW Asset Management’s solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet. PNW Asset Management does not make any representations as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to PNW Asset Management’s web site or incorporated herein, and takes no responsibility therefore. All such information is provided solely for convenience purposes only, and all users thereof should be guided accordingly.

Information on this Internet site should not be construed, in any manner whatsoever, as the receipt of, or a substitute for, personalized individual advice from PNW Asset Management. Any subsequent, direct communication by PNW Asset Management with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of PNW Asset Management, please contact the United States Securities and  Exchange Commission on their web site at www.adviserinfo.sec.gov. A copy of PNW Asset Management’s current written disclosure statement discussing PNW Asset Management’s business operations, services, and fees is available from PNW Asset Management upon request.

Download Our Legal Disclaimer

Question 25

View Our Form ADV / Part 2A + 2B

Accepted Answer

Download our ADV / Part 2A & 2B

Answered

Your Questions