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Madrona Financial Services Review

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Madrona Financial Services, registered in 2005, serves 10 state(s) with a licensed staff of 2 advisors. Madrona Financial Services manages $286.8 million and provides investment advisory services for 518 clients (1:259 advisor/client ratio).



Firm Information


Summary Firm
Minimum Investment Ask firm
Average Client Balance $553,583
Total AUM $286.8 million
Fee Range Ask firm
Advisor / Client Ratio 1:259
Languages Offered Ask firm
Specialities Ask firm
Website Visit Site
Phone Number 425-212-3777
Headquarters Everett, WA
Locations See locations
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SEC Filings View SEC IAPD CRD #115753


Disciplinary Questions


After checking the disciplinary records of Madrona Financial Services, our system found no disciplinary questions to ask. Checks take place monthly.



Conflict Questions


After checking the regulatory records of Madrona Financial Services, our system has identified the following question(s) to ask. Learn more.


What percentage of income does Madrona Financial Services receive from fees versus commissions?


Madrona Financial Services can accept commissions for its investment advisory services. These commissions may be earned from the sale of investment or insurance products and are paid by the companies providing the products being sold. While this allows for a broader range of investment options and management styles a firm can offer, it can also create an incentive for the firm to put their financial interests ahead of your own. Is the firm’s purpose to provide you financial planning and ongoing advice or to sell commission-based products to its clients?


Does Madrona Financial Services offer mutual funds that have 12b-1 fees?


12b-1 fees increase the total annual cost of owning a mutual fund with no guarantee of higher returns. Some firms receive these fees as payments, which creates an incentive to promote them.


How does Madrona Financial Services approach insurance sales? What conflicts do I need to be made aware of?


Currently Madrona Financial Services actively practices as insurance brokers or agents, or they are affiliated with an insurance company or agency. This arrangement creates a conflict where the firm and its representatives may be motivated to insure clients with products, including annuities and life insurance, that generate high sales commissions when lower-cost alternatives may exist.


Regulatory disclosures state that Madrona Financial Services sells proprietary investments and products. Please provide me a list of the products and a summary of how much Madrona Financial Services earns from them.


Madrona Financial Services recommends proprietary investments and products that could generate larger commissions than other similar non-proprietary products. This could also limit the number and diversity of investment options available to you and may impact their transferability. Do not be afraid to ask how much they will earn from the product or what other non-proprietary options are available.


Does Madrona Financial Services offer products that have performance-based fees, or does it accept performance-based fees? Will any of my assets be invested in those products?


When performance-based fees are charged, the financial advisor is paid for outperforming a benchmark, typically an index. While this may seem like an attractive compensation structure to ensure your advisor is making your money work for you, often, the managers of those products are incentivized to take inappropriate risks to beat their performance benchmark. For instance, research has shown that mutual funds that use incentive fees take on more risk that funds that do not, and tend to double down and increase their risk following a poor performance. This could be detrimental to a client during down markets.


Does Madrona Financial Services perform side-by-side management? How does Madrona Financial Services mitigate conflicts that arise from managing accounts with differing fee structures?


This typically occurs when firms manage mutual funds or hedge funds alongside smaller retail accounts. Side-by-side management can create an incentive for the advisor to favor the larger funds, potentially leading to unequal trading costs and unfavorable trade executions for their retail clients.


Our system found no other conflict questions to ask. Checks take place monthly.



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Disciplinary History


An important aspect of the Trust Algorithm is processing the SEC Form ADV Part 1 filing of each Registered Investment Advisor (RIA). “Item 11 Disclosure Information” contains a list of valuable disclosures that are relevant for Americans.

As identified in SEC Form ADV Part 1, Item 11 “Disclosure Information”, the Trust Algorithm identified the following disciplinary disclosures for Madrona Financial Services:




Cost


Unfortunately, there is no single, uniform pricing standard for working with a financial advisor. Catchphrases, including "fee-only," can be helpful; however, Americans often get confused with competitors promoting "fee-based" in response. To learn more, explore our series of articles about what financial advisors do and what it may cost to work with one, as well as what their titles mean and how to make a smart choice.

Ultimately, to understand the underlying costs of advisory services, we always recommend asking for an itemized fees breakdown and reading the firm's ADV Part 2 Brochure (Item 5, "Fees and Compensation").


View Fee Disclosures




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This automated report was generated using SEC and FINRA data and was last updated on September 16th, 2022*. For data support, email "support@investor.com". Views: 192 (trailing six months). Firms that receive a 4.5 or 5-star rating are considered Trusted by investor.com. Learn more.


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