Kennewick, Washington is home to Cornerstone Wealth Strategies, an up-and-coming financial consulting organization. The company founder and CEO is Matt Riesenweber.
Cornerstone Wealth Strategies appears to be a straightforward advising firm at first view, however, upon closer inspection, there are many problems.
There are numerous issues with this company, from charging excessive prices to putting its customers in danger. I think anyone considering working with or already working with this financial advisory firm would benefit from reading this review.
Who are Cornerstone Wealth Strategies?
Kennewick, Washington is home to Cornerstone Wealth Strategies, a financial advisory firm. They went live in 2018 and are already serving customers in 8 different states. Postal code: 99336 and street address: 8905 W Gage Blvd #110.
The firm’s five CPAs look after 838 customers and $772,4m in assets under management (AUM).
They’re connected to LPL Financial, a nationally recognized financial advisory firm. Because of its association with LPL Financial, CWS appears to be a promising business partner.
But the problems I’ve encountered with them indicate otherwise.
Cornerstone Wealth Strategies’ core team consists of:
- Matthew Riesenweber, aka “Matt,”
- Wiser, Matt
Cornerstone Wealth Strategies is presided over by Matt Riesenweber. Since 2003, he has been providing financial advice as a CFP® professional. Abilene Christian University is where Matt Riesenweber earned his degree.
Matt Wiser manages the company’s clients’ finances. He joined Matt Riesenweber’s team in 2007, and he has an MBA from Harvard. To guide their clients’ investment strategy, Matt Wiser is largely responsible for conducting investment and financial analysis.
Cornerstone Wealth Strategies also employs Joel Ockey and Cameron Burch as financial advisors. Other than Matt Riesenweber, no one else at CWS possesses a well-regarded credential in financial consulting, which is one of the firm’s defining features.
Most investment firms employ several financial planners and/or certified financial analysts. However, such is not the situation here.
It’s probably one of the main causes of the many biases inherent in their offerings. The following are some of the most glaring problems with this financial advisory firm, and why you should avoid them:
Reasons to Avoid Working with Cornerstone Wealth Strategies
There is a Broker-Dealer connection at Cornerstone Wealth Strategies.
Cornerstone Wealth Strategies states in its registration that they are a broker-dealer or are associated with one.
This means that the securities they recommend to their customers are the source of their income. A financial advisor’s job is to help their customers find the investments that will help them achieve their financial goals and meet their specific needs.
It seems counterintuitive that a financial advisor would recommend a low-performing investment because of the money they stand to earn.
Because of this potential conflict of interest, several industry professionals advise against using broker-dealer-affiliated financial advisors.
There’s a potential for bias here. Another problem is that these advisors would also try to cross-sell commissioned insurance products, which would hurt the sales of their investment products.
In such a scenario, financial advisors may act more like salespeople and put personal gain ahead of their client’s best interests. Clients’ lack of awareness of this conflict of interest is a major problem.
When you contact Cornerstone Wealth Strategies, Matt Riesenweber probably won’t tell you that. That your financial advisor is suggesting investments that fit your needs is a common misconception. When in fact, they would only recommend assets that would maximize their profits.
Provides 12b-1 Funds and Fees
Investment options with 12b-1 fees are available from Cornerstone Wealth Strategies. This is still another major problem with working with this financial advisor since it serves just to boost their income at the expense of yours.
Only the 12b-1 fees separate mutual funds that charge it from those that don’t. You may believe that by paying more for these mutual funds, you will receive better returns.
The SEC compared the performance of mutual funds charging and not charging 12b-1 fees. They discovered no distinction between the two in terms of profitability.
Only the financial advisor, who may receive a commission from the fees, stands to gain from such mutual funds.
Advisors benefit more from recommending mutual funds with 12b-1 fees than those without such costs since they receive a portion of the fees. This would imply a higher cost for no additional benefit.
As a result, your profits will be decreased since more of your money will go toward paying the 12b-1 costs.
Provide services as Insurance Agents or Brokers
Cornerstone Wealth Strategies also provides services as insurance brokers or agents in addition to financial advisory. This means they have a business relationship with an insurance carrier or brokerage and earn commission on sales of specific policies.
This is bad news for you as a client. Your advisor may recommend insurance, but they just want to boost their income by making you think they care about your financial well-being.
It’s important to remember that paying for insurance is going to cost you money.
The advisors at Cornerstone Wealth Strategies may also steer you toward annuities and life insurance with large sales commissions, which is a major red flag.
Once again, it all boils down to whether or not your financial planner is looking out for your best interests. They won’t give you any preferential treatment while they’re getting paid to promote your mediocre stuff.
Charge Performance-Based Fees
Products from Cornerstone Wealth Strategies are available for a fee based on how well they perform. Avoid doing business with companies that demand payment based on their performance.
With this arrangement, you only pay your financial advisor if they beat an established benchmark or index. This method of compensating your financial advisor may look great on paper.
But if you pay your financial advisor depending on how well they do, they have the incentive to use high-risk tactics to beat the market average.
Studies of mutual funds with performance-based fee structures have shown that they encourage risky investment strategies with mediocre returns. When the market is down (like it is now due to widespread disease), taking such a risk is even more perilous.
Exactly why is it the case?
For the simple reason that if you choose a high-risk approach, you may end up losing all of your money.
Since 1985, registered investment advisors (RIAs) have been allowed by the SEC to use a performance-based remuneration system for select customers. Before that, in 1940, Congress passed the Investment Advisers Act for RIAs, which forbade financial advisors from employing such a remuneration system.
Congress had taken this action because it did not want the public to have to deal with the hazards posed by these harmful practices any longer than was necessary.
Fees for Cornerstone Wealth Strategies’ services are based on the firm’s performance. This means that they would advise you to take unwarranted risks with your money. Working with such a financial advisor would be extremely risky.
This is one of CWS’s many conflicts of interest. Management by Cornerstone Wealth Strategies is done in tandem with the client. As a result, smaller investors will face higher trading expenses and worse transaction executions than larger funds.
Experts agree that side-by-side management is inefficient and unethical, much like performance-based pricing. That’s because it has a direct impact on the quality of the advisor’s service.
CWS may not provide enough assistance if you have a modest account because it is more profitable for them to administer larger mutual funds. Due to their shared management, you risk receiving mediocre results.
Securities Suggested for Trading
Cornerstone Wealth Strategies has stated in its disclosure that they engage in the trading of suggested securities. This means they will only recommend investments that they trade.
Conflicts of interest arise from trading suggested securities.
Take your friend’s blog about the best schools in town as an example. Nonetheless, your chum also owns several educational institutions there. How reliable are their ratings at this point? They’d be biased, wouldn’t they?
To help their customers achieve their objectives and satisfy their specific needs, financial advisers provide advice on appropriate investments and securities.
If you were to hire Cornerstone Wealth Strategies, you would be advised to invest in the same assets that they trade. This indicates that they are utilizing your money to benefit themselves financially.
Price manipulation is a tactic employed by certain financial consultants. Because of this bias, financial advisors often recommend traded securities to their customers without their knowledge.
Therefore, as a client of Cornerstone Wealth Strategies, you may not even realize that you are being manipulated.
Poor Advisors/Clients Ratio
CWS employs a total of 5 people. There are a total of 838 clients whose accounts are being managed by these 5 persons, at a ratio of 1 advisor to every 168 clients. Thus, at Cornerstone Wealth Strategies, each advisor is responsible for 168 customers. Do you have any idea how crazy it is here?
With such a low ratio of advisors to clients, it’s clear that Matt Riesenwebever’s firm can’t offer individualized financial guidance to its customers. It’s practically hard for a financial advising firm with a small team and a large client base to provide individualized attention to each of its customers.
Financial counseling firms respond to this problem by providing standard, generic recommendations to the vast majority of their clientele. Getting generic recommendations is one of the worst things that may happen in the financial world.
That’s because each customer has their own specific set of needs and objectives. The reasons why you want to save money won’t be the same as mine. As a result, expert guidance and one-on-one assistance are crucial in this industry.
However, when a financial advisor provides advice that is one size fits all, they are ignoring their client’s individual needs. This leads to less-than-ideal outcomes at best. The financial advisers at Cornerstone Wealth Strategies provide their clients with generic and mediocre investing advice, given the advisor-to-client ratio.
What does this entail for the customer?
The advisors at Cornerstone Wealth Strategies have several competing interests. It’s plain to see that their advisors gain by putting their client’s needs last.
Keep in mind that Matt Riesenweber is just a businessman looking out for his bottom line. In most cases, a reputable financial advisory firm will not expose itself to such risks. Because they prioritize satisfying their customers over expanding their bottom line.
Cornerstone Wealth Strategies, on the other hand, appears to prioritize its own needs ahead of those of its clients. This company, for instance, boasts a 1:68 advisor-to-client ratio. They can’t possibly provide one-on-one service to every customer.
They would have to deliver basic, boilerplate advice to their clients instead of personalized service that helps them succeed. This is done so that all customers are attended to promptly.
Similarly, because they are paid depending on how well their clients do, they are willing to put their clients in harm’s way to make a buck. This evidence compels you to keep your distance from Cornerstone Wealth Strategies.
Cornerstone Wealth Strategies is a young and problematic financial advisory firm. They act as a broker, trade-in suggested stocks, and even offer advisory services. Massive conflicts of interest arise from all of these problems. It’s quite unlikely that such a financial advisor will give its customers good service.
The fact that their clients aren’t aware they’re getting subpar results is a major problem for these advisors. They needlessly squander time and resources on a dishonest financial adviser. There are a lot of ethical concerns that prevent me from recommending Cornerstone Wealth Strategies.
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