Ruedi Wealth Management Customer Relationship Summary (CRS) – June 30, 2020
Ruedi Wealth Management (hereafter, RWM) is registered with the Securities and Exchange Commission as an Investment Advisor. Brokerage and investment advisory services and fees differ and it is important for a retail investor to understand the differences. Free and simple tools are available to research firms and financial professionals at Investor.gov/CRS, which also provides educational materials about broker-dealers, investment advisors, and investing.
What Investment services and advice can you provide me?
RWM offers investment advisory and financial planning services to retail investors. We invest our clients’ money in mutual funds and exchange-traded funds (ETF’s), which are a diversified “basket” of thousands of stocks or bonds. We don’t attempt to pick individual stocks or bonds, and we don’t attempt to time the market. We create a financial plan for the vast majority of our clients, which dictates the allocation of stocks-to-bonds our clients are invested in. As part of our standard service, we perform the ongoing management of client accounts. Client accounts are managed on a discretionary basis, which means we have full investment authority and can buy and sell the securities in our clients’ accounts without prior approval. We do not provide advice on limited investment offerings or proprietary products. We have a minimum account size of $25,000 to become a client under our RWM Co-Pilot advisory model, or $250,000 to become a client under our traditional investment advisory model. For more detailed information about our firm and the services we provide, please view our Firm Brochure (ADV Part 2): https://adviserinfo.sec.gov/firm/summary/173262.
Or learn more about the services we provide on these pages of our website:
Conversation Starter: Given my financial situation, should I choose an investment advisory service? Why or why not?”
Conversation Starter: How will you choose investments to recommend to me?
Conversation Starter:What is your relevant experience, including your licenses, education and other qualifications? What do these qualifications mean?
What fees will I pay?
For clients in our RWM Co-Pilot advisory model, we charge 1% for the assets under management, billed quarterly in arrears. A client with $25,000 would pay $250/year. This fee covers trading charges, and custody charges from our custodian Betterment. The fees for the investment funds themselves are around 0.25% blended, which RWM receives none of, and are in addition to the 1% fee.
For clients in our traditional investment advisory model we use Charles Schwab as the custodian, and we charge a blended advisory fee: 1% for the assets under management up to $1 million, then 0.75% from $1M-$3M, then 0.5% from $3M-$5M, and then 0.25% above $5M. The example shows a client’s blended advisory fee with $1.25 million in assets ($1M at 1%, and $250,000 at 0.75%). The fees are billed quarterly in arrears. Charles Schwab charges $20/trade, which RWM receives none of. The fees for the investment funds themselves are around 0.25% blended, which RWM receives none of, and are in addition to the advisory fee.
See our Fees Page for more info.
The more assets in a retail investor’s advisory account, the more a retail investor will pay in fees. The firm may therefore have an incentive to encourage the retail investor to increase the assets in their account. You will pay fees and costs whether you make or lose money on your investments. Fees and costs will reduce any amount of money you make on your investments over time. Please make sure you understand what fees and costs you are paying. See our Disclosure Brochure (ADV 2) Section 5 for more detailed information about our fees and compensation: https://adviserinfo.sec.gov/firm/summary/173262.
Conversation Starter: Help me understand how these fees and costs might affect my investments. If I give you $10,000 to invest, how much will go to fees and costs, and how much will be invested for me?
What are your legal obligations to me when acting as my investment advisor? How else does your firm make money and what conflicts of interest do you have?
When we act as your investment advisor, we have to act in your best interest and not put our interest ahead of yours. At the same time, the way we make money creates some conflicts with your interests. You should understand and ask us about these conflicts because they can affect the investment advice we provide you. Here are some examples to help you understand what this means. For example, when deciding to keep money in your 401(k) or 403(b), versus rolling it over to an IRA that we manage, there is an incentive for us to have you roll it to an IRA so we can earn our management fee. Another conflict of interest emerges when a client asks advice about paying off a mortgage which requires a large lump sum of money, versus continuing to pay the mortgage. Paying off the mortgage would result in a reduction in assets we manage, and consequently a reduction in our management fees.
Conversation Starter: How might your conflicts of interest affect me and how will you address them?
How do your financial professionals make money?
All employees are compensated through a fixed salary, and not by any other factors such as time, complexity, type of products, or by any commission. In addition to salary, the following employees are partial owners of the firm, and receive distributions from the profits of the firm: Paul A. Ruedi, Paul R. Ruedi, David Ruedi, Daniel Ruedi, and Ryan Repko (by way of Kati Repko’s ownership).
Conversation Starter: As a financial professional, do you have any disciplinary history?
Do you or your financial professionals have legal or disciplinary history?
Yes, Paul A. Ruedi has one disclosure on his Form U-4 from 1985 which can be viewed here: https://adviserinfo.sec.gov/individual/summary/1301608#disclosuresSection.
You can go to Investor.gov/CRS for a free and simple search tool to research any of our financial professionals.
Conversation Starter: Who is my primary contact person? Is he or she a representative of an investment adviser or a broker-dealer? Who can I talk to if I have concerns about how this person is treating me?