Questions about Summit Financial Consulting

Who is Summit Financial Consulting?

Summit Financial Consulting, LLC is an independent financial planning and investment advisory firm based in Sterling Heights, Michigan. Founded in 2003, Summit works with individuals, families, retirees, business owners, trusts, and other clients who want their investment and financial-planning decisions considered as part of a broader financial picture.

Who is Summit Financial Consulting especially well suited to work with?

Summit Financial Consulting is especially well suited to people whose financial lives have become more complex as they accumulate assets, approach retirement, own a business, or begin coordinating multiple financial priorities.

That often includes retirees and pre-retirees, professionals, executives, business owners, and families managing several types of investment or retirement accounts who want help making thoughtful, long-term financial decisions rather than pursuing a single product or short-term investment idea.

What types of financial situations does Summit Financial Consulting commonly help with?

Summit Financial Consulting commonly helps clients navigate situations where several financial decisions need to be considered together.

These may include retirement-income planning, pension and Social Security decisions, 401(k) and IRA rollovers, investment management, tax-efficient withdrawal strategies, Roth conversions, business and real-estate considerations, insurance needs, and estate or legacy planning.

The planning process may also include projections of future cash flow, asset values, and withdrawal needs to help clients evaluate different financial scenarios before making major decisions.

Is Summit Financial Consulting independent?

Yes. Summit Financial Consulting is an independent, fiduciary advisory firm. Because we are not tied to a single product provider, we have a large toolbox to consider when evaluating the appropriate solutions for a client's specific goals and risk tolerance. As a fiduciary, our team is required to act in the client's best interest when evaluating those solutions.

Think of it like choosing a drill instead of a screwdriver: both can get the job done, but the goal is to choose the optimal tool for your situation.

How does Summit Financial Consulting consider taxes in its recommendations?

Summit Financial Consulting considers tax efficiency as part of the broader planning process because investment, retirement, and tax decisions often affect one another.

When additional tax input is helpful, Summit Financial Consulting can involve CPAs and accountants to review recommendations from a tax-efficiency standpoint before important decisions are made.

Can my CPA, attorney, or another advisor work with Summit Financial Consulting?

Yes. Clients are welcome to continue working with the professionals they already know and trust. Summit Financial Consulting can collaborate with your CPA, attorney, insurance professional, or another financial advisor. We are happy to hold joint meetings when it is helpful to coordinate recommendations before a financial decision is made.

Why does Summit Financial Consulting start with a financial plan?

Summit Financial Consulting starts with the broader financial picture because investments, retirement income, Social Security, taxes, insurance, gifting, and estate decisions can all affect one another. Rather than looking only at an investment portfolio, the financial plan helps our team understand how those decisions work together.

How does Summit Financial Consulting get paid?

Summit Financial Consulting is compensated through investment-management fees and financial-planning fees, depending on the engagement. Investment-management fees are generally based on the assets Summit Financial Consulting manages. Financial planning may also be available separately for clients who prefer planning without investment management.

Specific fees and compensation arrangements are described in Summit Financial Consulting's Form ADV Part 2A and client agreement.

How do tax, insurance, and estate-planning needs fit into Summit Financial Consulting's process?

Summit Financial Consulting takes a coordinated approach to financial planning, recognizing that investment decisions often overlap with taxes, insurance, and estate planning.

When those needs come into play, clients can draw on related Summit resources, local insurance partners, and attorneys, or continue working with professionals they already know and trust. Tax preparation is available through Summit Tax Services, group health insurance and ancillary benefits through Summit Health Services, property and casualty insurance through Summit Insurance Services and local agency partners, and estate-planning documents through attorneys.

The goal is to help clients keep the different parts of their financial lives working together without requiring them to replace the professionals they already use.

What does Summit Financial Consulting think is the biggest risk retirees face?

We believe that Sequence of Returns Risk is a major concern for retirees, yet most of the potential clients we meet with are not aware that this risk exists. This risk is based on the order of returns within an investment portfolio, and when combined with a withdrawal need, it can deplete an investment account at a quicker rate than one may expect.

For example, if someone has $100,000 and needs to withdraw $20,000 for a kitchen remodel (or any other type of income need), then they need to withdraw 20% of this account. If the market experiences volatility and this account drops to $80,000, then the same $20,000 withdrawal is now 25% of the account. They are required to withdraw a large piece of their investment pie in order to fulfill the same withdrawal need. Larger percentage withdrawals can deplete an account at a faster rate, especially when they occur more than once. This is why a retiree who starts their withdrawals at the beginning of a sustained market downturn may become a victim of Sequence of Returns Risk. A few rough years early in retirement can have significant impacts on the long-term success of their financial plan.

We combat this by implementing The Bucket Plan strategy for our clients. This places a new bucket, or phase, in between Accumulation and Distribution. By adding a Preservation step, we are able to reduce the market risk on assets that may be needed for income in the next handful of years. This Preservation Bucket will not be hit as hard by any potential market volatility and allows the Accumulation assets to remain at their standard risk level, since they would avoid withdrawals and thus avoid the Sequence of Returns Risk. Accumulation assets can focus on growth, while Preservation assets focus on income. Then, as the Preservation Bucket is depleted over time, we simply refill it with a portion of the Accumulation assets.