Also See: About the Firm | A Message from Thomas Mullooly
F.A.Q.'s
What is the difference between a stockbroker and an investment advisor?
To answer bluntly, a stockbroker is an employee of a brokerage firm. In almost all cases, stockbrokers are compensated 100% on the commissions and trailing fees they generate. So they must continually raise new money to invest or continue to own investments that need to be turned over. Their compensation is NOT tied directly to their performance of the recommendations to their clients. Clearly, there may be times when the stockbroker's interests may be in direct conflict with your interests.
A Registered Investment Advisor may not accept commissions unless he is affiliated (employed) with a brokerage firm. This includes receiving trailing fees for mutual funds and annuities. The only compensation a fee-only investment advisor (like Mullooly Asset Management) may receive comes from his clients. Which is why, at Mullooly Asset Management, we take responsibility for our recommendations and further believe all industry members dispensing investment advice should be accountable for investment performance.
So an Investment Advisor works only on fees from clients?
That is correct. There is no other compensation. The advisor works solely in the interest of the client.
What other kinds of fees can a client expect when working with a Registered Investment Advisor?
The other expenses that clients may have would be any expenses that the brokerage firm assesses. This is WHY so many Registered Investment Advisors use discount brokerage firms…to keep YOUR COSTS down. Discount brokers also make available almost ALL mutual funds, load and no-load, to the clients. Even no-load annuities, too!
So you do NOT work for a discount broker?
Correct. We utilize a discount brokerage firm for trades. We are not employed by a brokerage firm. We also have clients that maintain account relationships at full service firms. This is because they may wish to maintain a long-standing relationship with another firm or a particular broker (they are not yet ready to tell their nephew, the junior broker at another firm, that they are dissatisfied). If you so desire, we can notify your brokerage firm or broker to simply mail duplicate confirmations and statements to our firm for tracking purposes.
So, I do not necessarily need to have all my assets moved to a discount broker?
Absolutely not. Many clients have assets scattered literally at several firms. In many cases, we have separate arrangements for clients that want and need advice on the options in their retirement plans or 401(k) plans where they are employed. There is no possible way to maintain custody of assets like that!
I do not make very many transactions, why should I pay a fee for assets I may not be doing anything with?
Good question. Clients that deal with big brokerage firms often ask this one! Let's walk through an example that may open your eyes. There are two issues in this question. The first deals with costs, the second with the "buy and hold" mentality, which we can discuss later.
Say the client has an account with Big Firm XYZ. He owns a few stocks and also has $75,000 in three of the firm's growth mutual funds. Each fund has sales charges and management expenses of 1.7% per year. Remember, sales charges, like 12b-1 fees, are in addition to management expenses.
On the mutual funds alone, the client is paying $1275 in expenses. ALL MUTUAL FUNDS have management expenses. Some are higher than others. There may very well be another fund (maybe a no-load fund?) with a similar objective that has FAR lower fees.
By the way, you can go through the same exercise with annuities, and find the same result.
The next step in this process is this: suppose you have been in these funds for four years. Ask yourself if the advice and timely recommendations you have received have been worth the $5100 you have paid so far. Wait! We are not done! You may still be subject to a back-end fee if you redeem shares!
One more thing. How much is your firm charging you just to maintain these accounts? $100…$150…$200 in annual fees? Extra for check writing privileges? Account Inactivity fees? IRA fees? Has your account been farmed out to a call center? Clients have told me they are now being charged a fee each month to have their dividends mailed out!
While there is no guarantee that a discount brokerage firm will NEVER charge fees, or raise fees, most investment advisors, including Mullooly Asset Management, LLC want to make sure their clients are NOT being charged additional unnecessary expenses.
Someone told me that fees paid to an investment advisory firm are deductible? Is this true?
Very possibly. If you can itemize your deductions, you may be able to deduct what you pay a financial planner or investment advisor. Check with your tax specialist for the final call.
Can I deduct the commissions I pay my broker?
No.
I am involved in a program with my brokerage firm where I pay a fee instead of commissions. Isn't this the same thing?
No! The growing trend in brokerage firms is to wrap the clients up in annual fees instead of commissions. Read the fine print, they will tell you that these fees are "in lieu of commissions" and therefore NOT a deductible expense. Additionally, if you have fixed income (bonds), why are you paying a fee for assets you may never sell? Did they reduce or eliminate the markup in the bonds when they were bought or sold? What is their policy on IPO's, where there already IS no commission charge? Do you own mutual funds in a wrap account? Why are you paying fees on top of fees? Again, we will not even broach the subject of performance.
At Mullooly Asset Management, LLC, we will negotiate your fee upfront and put it in writing. This is so there will be no gray areas, no misunderstandings of what is included and what is not included. This is because you are our client. We work for you.
Remember, the only compensation Mullooly Asset Management, LLC may receive comes from our clients.
We set the firm up this way! We do not want our goals to run in conflict with the goals of our clients. Which is why we take responsibility for our recommendations and further believe all industry members dispensing investment advice should be accountable for investment performance. We have heard countless situations where clients have told us that after being placed in a fee-based program they RARELY heard from their advisor again.
So clients let you buy and sell in their accounts all the time?
NO! We sign a non-discretionary investment advisory agreement with our clients. It works just like your current brokerage or advisor relationship. We cannot make a transaction without getting your approval in advance. Period! We get confirmations of your transactions and copies of your account statements, just like you.
Can I access my accounts online?
You can access your accounts online through this website. Simply click on the tab titled "My Account."
I need more information! What next?
You have options. You can call us at 732-223-9000, or fax us at 732-223-9600 or you may email us at info@mullooly.net.
Mullooly Asset Management, LLC
Valley Park Professional Center • Building M
2517 State Highway 35 •
Manasquan, NJ 08736
info@mullooly.net
Office: 732-223-9000 •
Toll Free: 877-223-7300 •
Fax: 732-223-9600
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