Frequently Asked Questions
What is the difference between an RIA and a Broker Dealer/Wirehouse?
The primary differences are in standard of care and custody. A Registered Investment Advisor is registered with the Securities and Exchange Commission (SEC) and must adhere to a fiduciary standard of care, which mandates that we must serve in the client’s best interests. Brokers (some of the largest also referred to as Wirehouses) are generally regulated by the Financial Industry Regulatory Authority (FINRA), and are only required to adhere to a ‘suitability’ standard by law, though they have the option to adopt fiduciary standards. Suitability ensures that you are given recommendations for investments that are suitable for your risk profile, however it is a lower standard than fiduciary care.
In addition, brokers custody your assets. So if you want Broker X to manage your investments, you must open an account with Broker X’s firm. RIAs do not act as custodians and use a third-party provider. Sontag Advisory recommends Charles Schwab, Fidelity and Pershing. This separation of custody from investment advice creates a system of checks and balances.
Does Sontag Advisory hold assets in its own account?
No. All of our client assets are held with third-party custodians, primarily brokerage firms like Charles Schwab, Fidelity and Pershing. We facilitate the account opening process at these firms by providing clients with the necessary paperwork and handling the interaction with the custodian. At no point in this process will you lose ownership of your funds; the account opening process is a movement of money or securities from your existing account(s) to a new account established under your name at Charles Schwab, Fidelity or Pershing.
Can Sontag Advisory send my assets to a third party without my authorization?
No. We do not have the ability to send funds to third parties without multiple layers of client verification and authorization. Your security is a primary concern.
Do you have a minimum client size?
We are able to serve clients across a wide range of asset levels. The minimum investment size for our Core service model is $100,000. For our Comprehensive service, we generally require $1 million in invested assets, though we do make exceptions depending on the situation.
Do I have to give Sontag Advisory discretion over all of my liquid assets?
No. We are a ‘holistic’ wealth manager, meaning that we report on all assets that our clients own regardless of what we have discretion over. It is common for clients to have assets in ‘held away’ accounts such as 401(K) investments, or investments with other investment professionals. We report on all of these assets so that we can base our planning decisions on your entire financial picture while also providing you with a comprehensive and organized monthly statement.