Who is Dark Horse Wealth LLC
Dark Horse Wealth LLC (DHW) is a fee-only independent registered investment adviser located in the Village of Cazenovia.
The Story of Dark Horse Wealth
Judson Ames, a founding member of Dark Horse Wealth LLC, felt that the vast majority of small to mid-sized investors were primarily being serviced by the brokerage based (commission based) part of the financial advisory industry whose advice can be easily subjected to “conflicts of interest”. From his perspective, too many financial advisers provided services that relied on high cost cookie cutter financial products that obscured their fees. These products generate commissions rather than focusing on providing advice that is in their clients best interest. Consequently, Dark Horse Wealth was founded in 2011 as an independent “fee-only” registered investment adviser to bring the benefits of an institutional style of professional investment advice to the small and middle investors in return for a transparent and sensible fee.
Services We Offer
DHW provides professional investment planning, investment consulting, financial planning, and investment management services to individuals and businesses.
Regular Communication: DHW prides itself on being proactive in our communication with clients. We will regularly reach out to our clients, regardless of their size, to update them about market conditions and provide planning suggestions.
Face-to-face Meetings: DHW proactively works its clients to ensure they make the most of our services by reaching out to them to schedule face-to-face annual investment reviews and financial planning strategy sessions. Those meeting can happen either via a conventional in-office meeting or via Skype, Google + Hangouts and other web video conferencing.
The Fee-Only Advisory Business Model
Dark Horse Wealth works only as a fee-only registered investment adviser. We are not a registered broker working for a brokerage. We are paid directly by our clients to act as their fiduciary, or more simply put, our business model requires us to make decisions that are in our clients best interest. We don’t receive “back door” payments from banks, mutual fund companies or brokerages. It’s simple. Advice for transparent and straightforward quarterly fee.
How We Are Paid
Supervisory Wealth Management clients pay a fee quoted as an annual percentage rate. That fee is broken into quarterly payments made in advance. Such fees range from 0.4% per year to 1.0% per year. We also offer an hourly based consulting service ($150 per hour) which is intended for clients who have specific investment and financial planning related questions but who are not in need of full-service investment management and planning.
For more information regarding our fees please see our form ADV-2A brochure which explains how we conduct business in plain language and can be obtained either via the SEC’s IAPD Adviser Website or we can send a copy upon request.
Why DHW decided to structure its financial advisory as a independent fee-only practice and not partner with brokerage or insurance company:
DHW is one of the areas few “true” fee-only advisory practices. A fee-only practice invoices its clients accounts directly rather than being paid on commission basis. Brokers are paid on a commission basis and DHW found that most financial advisers in the Syracuse area were registered brokers that are paid at least in part on a commission basis.
There are two main reasons why we see the fee-only model as superior to the commission based model:
- Conflicts of Interest with the brokerage based commission model: Fee-only advisers do not work on commission and as registered investment advisers are obligated to act as your fiduciary and “act in your best interest”. Brokers compensation depends on the product they sell and share the resulting profits from the product they sell with their brokerage or insurance company. This known as the commission based compensation model. This model often can incentivize brokers into selling higher cost investment products (particularly insurance products) and strategies to their clients. Higher costs are not in investors best interest, hence the commission based model inherently may lead to “conflicts of interest” between a adviser working on the commission based model and their client.
- Higher fees and lack transparency in commission based compensation model: In in our experience it is unlikely that a client of a broker will know how much in “dollars and cents” they are paying in fees because the account is not being directly billed and too often no invoice is sent. Instead a commission is paid by the investment product manager to the broker and the fee is quoted as percentage and buried in disclosure that is hard to and or hard to understand. Too often this process leads to total fees that are well in excess of 1%
“Understand our 1% Rule of Thumb”
Any fee will lower your returns. Period! Controlling your fees is the easiest thing for investors to control. In our opinion is the easiest way for investors improve their chances of maximizing potential returns. We believe most investors should have access to a financial professional and personalized service for an “all in” cost (fund fees + trading costs + adviser fees) that is less than 1%. As your fiduciary, we will do our best to help you try to adhere to the 1% rule by helping clients minimize transnational related expenses (e.g. commissions).
What Types of Investments Do Use?
We invest in primary in stocks and bonds. Our goal is to keep our client’s fees low and we, therefore, favor ultra low fee mutual funds and exchange-traded funds (ETF’s) that invest in both domestic and international stocks and bonds when building investment plans for our clients.
We do not sell insurance products. Our decision to not enter the insurance sales space was driven by our belief in low fees. Insurance products with investment components (e.g. whole life and variable annuities) tend to have extremely high fees in our opinion. In our opinion, this tends to make insurance products into bad investment products. Insurance should be used sparingly as a safety net and should very rarely be considered for investment purposes due to their high fees.
What We Will Not Do
*We will not put our interest over your interests.
*We will not work as a broker that sells you investment products in return for a commission.
*We will not just sign you up as a client, but you and in cookie-cutter investment solution, and then not contact you for years.
Judson Ames, CRPS® the owner of Dark Horse Wealth LLC and oversees the investment process. He spent five years working for a $2 billion investment management firm serving institutional clients in New York City as an assistant portfolio manager and holds a CHARTERED RETIREMENT PLANS SPECIALIST(CRPS®) designation. He is a graduate of Syracuse University and is President of the Cazenovia Rotary Club (2014/2015) He is a member of New York Society of Security Analysts Association, and the CNY Syracuse University Alumni Association.
Russell J. Brownback: Mr. Brownback is a former Managing Director of both BlackRock and Lehman Brothers. He was also one of six founding partners of the hedge fund R3 Capital. His 23 years of expertise in economic policy and financial market interface made him an advisor to numerous Wall Street senior executives as well as officials sitting on the Federal Reserve and US Treasury. Mr. Brownback also teaches finance at Syracuse University’s Whitman School.