Welcome to The Sum.

By: The Sum Financial Planning | Published 08/12/2019

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Welcome to The Sum.  
Thanks for stopping by to hear about what we believe is real financial planning. I’m grateful for your time.

First, let me introduce myself as the founder of The Sum.  My name is Michael Rahn. I created The Sum after over a decade in the financial services industry.  My background is in finance and I spent many years at a big firm caring for my clients’ financial needs.  I’m a native Houstonian and am married to a woman who’s way out of my league.  My wife is a blessing.  I’m passionate about God, aviation, and serving people.  I also like to seek the truth; reality some might say.  When I found it in financial services, I didn’t like where I was. So, I started The Sum.

What does “The Sum” mean? It’s all inclusive.  The Sigma is a Greek symbol that is often used in mathematical terms for summation.  If you look closely at our logo, you’ll see a Sigma in the middle of a cube.  You’ll also see arrows pointing outside the cube.  Why? Well, our goal is to provide advice on all things financial while thinking outside the box. This is real financial planning.  I owe a huge debt of gratitude to my friend and mentor for creating the design.  Thank you, my friend. You know who you are.

What is The Sum? 
The Sum is a Registered Investment Advisor firm. That means The Sum is a legal fiduciary. Fi-what? You may hear this term get tossed around when exploring advisors.  Fiduciary is a term that lawyers, doctors, and CPAs have used for decades.  In simple terms, it requires a professional to legally act in the best interest of their client. Why wouldn’t all financial professionals do that?  Unfortunately, there are plenty of instances where compensation structures drive or tempt financial professionals to act differently.  The unfortunate reality is many financial professionals can do so if they follow their “suitability” requirements.  Suitability does not equal fiduciary. Here’s an example. Imagine you are a bodybuilder and you meet with a doctor over the phone.  The doctor asks your height and weight without knowing your interest.  The doctor tells you that you are overweight for your height (because you are a bodybuilder) and prescribes you a diet that would put you on track for your acceptable height to weight ratio.  The doctor isn’t necessarily doing anything to harm you, but also is not necessarily properly prescribing to your specific needs.  It was a suitable recommendation, but not a fiduciary recommendation. No doctor who wants to continue practicing would do this to you.

What makes The Sum different?  
There are many things that make us stand out.  One worth noting is our fee structure.  Most firms will charge a percentage of assets under management.  The industry lingo here is AUM. Side note, I’m referring to those firms who are already RIAs.  The common fee for RIAs is 1% of AUM.  That means that firms will get 1% of whatever amount you hand over for them to manage.  So, they are making decisions for you based on how much they convinced you to turn over.  What if you only turn over half of your investable assets? Do you get half the advice? The Sum does not charge a percentage fee for AUM.  Instead, we charged a fixed fee based on your net worth.  We calculate your net worth leaving out your primary residence.  This fee covers all financial advice and we refer to this as Comprehensive Financial Planning (Check it out HERE). If you’d like The Sum to manage your account for you, we’d be glad to.  We charge an additional fixed fee that covers the time required to take this task off your plate. 

How about an example? 
I’m glad you asked.  Assume a $5,000,000 client hires RIA XYZ.  XYZ charges the client 1% or $50,000 per year to manage the account(s) for them.  XYZ also says they’ll throw in financial planning (advice) for that fee.  On top of that fee, XYZ invests in a portfolio of mutual funds that has an underlying weighed average expense of .80% of $40,000 in this example.  So far, client is committed to $90,000 of recurring expenses for this service.  Worth it? Well, you decide.  There are conflicts involved here (and everywhere).  At The Sum, we feel that we’ve removed some of the bigger and more common conflicts.  Using a net worth fee, we are not required to keep your assets. If you decide that you want to expand your portfolio to real property/assets, our revenue is not at stake to help you with that decision.  Let’s say you want to purchase two rental homes at $200,000 each and pay cash. That requires XYZ to give up $4,000 ($400,000 x 1%) in revenue per year. This creates a potential conflict with the advice they are giving. 

The same client example above working with The Sum will pay $15,000 as a flat fee for Comprehensive Financial Planning, $1,500 for Investment Management (if you want us to do it for you), and approximately $3,500 in underlying expense ratios. We use passive ETFs and this is an example of a portfolio with approximately .07% of expenses.  Add up the savings and The Sum is reducing this client’s fee by $70,000! That’s $20,000 versus $90,000.  

How can The Sum do this? 
The Sum is independent.  That means we don’t owe anyone anything except our clients.  We don’t work for another RIA, we aren’t contracted to an insurance company, and we don’t promise to sell products for another company.  We don’t have products at all.  A high level of service at fair price does not require a team of 10 advisors to serve one family.  Technology is great in today’s environment.  Given our excellent technology package and low overhead, we can serve our clients at the highest level for a fair price.  We practice what we preach.  

What’s next? 
We’d love the opportunity to give you a personalized answer to how we can serve you.  If you interested in what The Sum can offer you, give us a call (281-940-4859), send us an email (info@thesumplanning.com), or visit our website (www.thesumplanning.com).  
The coffee is on us.

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