Frequently Asked Questions
1) Can you give me some background on Enlight Financial?
Enlight Financial, LLC is a boutique planning firm located in Manalapan, NJ, though we work with clients in every part of the country. We are registered with FINRA, and use Charles Schwab as our custodian for client accounts.
The Enlight team is comprised of Preeti Shah, CPA and CFP®, an administrative assistant, and partnerships with specialists that enable us to provide each valued client with a breadth and depth of expertise. We work with carefully chosen CPAs, student loan experts, physician mortgage, lenders, home, auto, umbrella, life, disability, and malpractice insurance agencies, and asset protection, physician contract, and estate planning attorneys.
Although we have an impressive team in place, our goal is to stay small and keep our overhead low so that we can continue to deliver personalized, detailed, and affordable advice to those who entrust us with their financial futures. We envision lifetime relationships with our clients, and only accept those who are a good fit and for whom we can truly add value.
2) If Charles Schwab is your custodian, does that mean you work for them and will try to sell me their products?
This is understandably a commonly asked question, and the answer is: No and No.
Enlight is not an employee or representative of Charles Schwab, we are simply using their custodial services. In fact if the need arises, we may connect with multiple custodians in the future — like Vanguard, Pershing or Fidelity. We are not tied to just one firm. We also use vendors such as EMoney, Morningstar, and Advyzon, for planning, investment analysis, and performance reporting. Like Charles Schwab, these are simply tools or firms that help us deliver quality service.
In addition, Enlight is not affiliated with any other company or product; we are completely independent. This allows us to choose from the thousands of funds available, whether it be Pimco, Oppenheimer, Prudential, T Rowe, or other.
Lastly, with our fee based investment accounts, it doesn’t matter what fund we put you in, our compensation is the same because it is not based on commissions. Therefore we can truly work in YOUR best interest with unbiased recommendations.
3) How can I be assured that my money and information is secure?
The financial planning industry has numerous compliance safeguards in place to ensure that everything we say and do meets strict ethical and legal guidelines. In fact, even our LinkedIn profiles and personal activities are heavily monitored. Also, anyone with access to your information has gone through a background check and fingerprinting.
In addition, all of the software, filing systems, storage systems, computers, mobile devices, and tools that we use are subject to encryption and strong security standards. Surprise audits are also conducted by the state to verify that protocol is being followed.
And as mentioned above, your money is held in custody by Charles Schwab — not us. Enlight can only make trades or requests on your behalf, we cannot access your money ourselves at any time.
4) Why do I need a planner, why can’t I just park my money in index funds and do this myself?
1) We offer more than just index investing.
2) Planning involves more than just investing.
1)Index investing has grown in popularity as an understandable backlash response to the excessive fees generated by active managers who would churn investments and still deliver subpar performance in comparison to the market.
Unfortunately we’ve swung from one extreme to the other in this process:
BEFORE: ACTIVE investing in ACTIVE funds
TREND: PASSIVE investing in PASSIVE funds
Enlight’s investment strategy is a hybrid of the two extremes:
ENLIGHT: PASSIVE investing in (semi) ACTIVE funds
While technically we use what are termed active funds many of them are more like closet index funds, in that they are value-based, stable funds with solid fundamentals and low turnover.
We like using moderate active funds instead of fully passive funds because we believe there should be some ability to swap out stocks or bonds if they are not performing well. Indexes are not built to perform, they are built to mirror the state of the economy and/or an underlying asset class. Simply investing in index funds passively does not always optimize the performance returns for the risk being taken. A passive index fund will not make any changes unless the underlying index changes as well.
Our strategy simply allows for more flexibility and diligence rather than a complete hands-off approach. In our experience this strategy has proven to be successful, and we will happily show you our methodology and performance history when we meet.
2)Also keep in mind that proper financial planning does not consist of just investing or insurance or taxes. You may very well be able to do a few things on your own—many people do file their own taxes or enjoy doing their own investing.
However, there are many more ways to strive for financial health, including tax planning (not just filing a return), retirement planning, estate planning, education planning, budgeting, record-keeping, emergency planning, small business planning, and more. Many times we can also offer you products you may not be able to obtain on your own, such as alternative investments or funds with institutional class shares and lower expenses.
If you do want to manage your own finances eventually, sometimes you may benefit from using a planner for a short period of time, such as 1-3 years, to get you on the right track and educate you on various aspects you might normally overlook. After working with a planner initially, you might be able to manage things yourself long-term. There is no single solution that is right for everyone, but until you work with a comprehensive planning firm you may not come to know which areas you’ve been neglecting.
5) So if I use you, will you get me huge returns on my portfolio and make me a lot of money? And can you make my taxes go away, I pay too much!
Unfortunately the answer is most likely “no” — we’re probably not going to earn returns that are way above market, or put you in secret trusts and oil partnerships with huge tax deductions.
Our first goal with the core part of your portfolio is to diversify your holdings so that you are not vulnerable to one particular asset class and potentially losing huge chunks of your principal. We aim to help reduce volatility and fund important goals like education and retirement, while working to optimize your investments for returns based on the risks that you are taking.
If you have enough left over to create a “satellite portfolio” — which is above the cash flow we need to generate from your core portfolio — Enlight can certainly design a second strategy which is more aggressive. We have worked with various alternative investments and securities beyond typical equity and bonds.
Meanwhile, good tax planning can add to your bottom line too — it’s not only about chasing hot stock tips! However there is no magic way to make taxes disappear. In the good old days there was more flexibility in the tax code, now the IRS has become very strict and clear on what is allowed. Still, we often find that clients are not taking full advantage of the legal ways in which the IRS does offer tax benefits, and tax planning is one of the most important things we do.
6) What will this cost me?
Glad you asked, there are two ways you can work with us:
Investment Management |
| $0 – $500k | → | 1% AUM* |
| $500k – $1 mil | → | 0.75% AUM |
| $1 mil + | → | 0.5% AUM |
*AUM = Assets under Management
$5000 fee minimum
Payable quarterly
Financial Planning only
1st year payable in-full, quarterly thereafter |
Fees may be negotiated higher or lower for residents / early career
professionals with low net worth balances,