Wealth Management &
Trust FAQs

AWM&T is a state-chartered trust company that provides financial planning, investment management, and trust services to the American Armed Forces, whether active duty, retired, or Veterans. Learn more about us.

AWM&T provides financial services exclusively to the military community. We understand the complexities of military life because we live it, too. A large number of AWM&T's employees are Veterans, military spouses, dependents, or are currently serving—making us a financial partner uniquely positioned to understand your family like no other can.

We are a not-for-profit, tax-exempt organization wholly owned by AAFMAA. Our net income above expenses is returned to AAFMAA and ultimately back to our Members in the form of lower fees and other benefits.

As part of our pledge to stand with the military families we serve, we promise you'll always have personal contact with AWM&T—never a call center.

As a fee-only financial planner and investment manager, AWM&T does not charge commissions. We believe this eliminates the inherent conflict of interest that exists when you use a broker who is compensated for selling commission-based products.

Our comprehensive financial planning is offered at a flat fee, and investment management and trust services are charged at an annual fee based on the percentage of assets under management. View our fee structure.

Because we are a state-chartered and regulated trust company, we have a fiduciary obligation to place our clients' interests first, ahead of our own. A stockbroker does not have to meet this standard.

You can contact AWM&T by phone or email:

• 1-910-307-3500
• wealthmanagement@aafmaa.com

Our mailing address is:

AAFMAA Wealth Management & Trust
639 Executive Place, Ste 200
Fayetteville, NC 28305

To create a financial plan tailored to you and your goals, we'll need to get to know you. We ask you to provide your Relationship Manager with your:

• Income and expenses
• Family life
• Current assets and investments
• Recent tax returns
• Current retirement schedules or projections
• Any existing insurance and estate planning documents

Your financial planning consultation begins with you and your Relationship Manager and spans three to four meetings. These meetings allow your Relationship Manager to get to know you, your family, and your finances as they review your current situation and short- and long-term goals.

Then, your Relationship Manager consults AWM&T's team of financial planners, trust officers, and investment professionals to analyze your information and develop your customized financial plan. Once created, our team meets with you to review their initial findings and key insights, including recommendations to improve your finances. After this review, your final plan and recommendations are presented.

The fee for a comprehensive financial plan is $3,500. We provide financial planning services on a fee-only basis; there is no obligation or expectation that any plan recommendations be executed through AWM&T or any of its affiliates, although you are free to do so.

Net worth is the value of a person's assets minus the liabilities they owe.

Cash flow is the movement of money in and out of an individual's accounts.

An insurance analysis is an assessment of an individual's financial situation to determine the risk an individual is able to assume to buy the correct amount of insurance coverage.

Education funding is the process of calculating the costs of education for an individual or multiple individuals and subsequently charting a plan of action to save funds.

Retirement planning is the process of determining retirement income goals and creating a plan of action to achieve those goals over an extended period of time.

Estate planning is the process of making plans to transfer an individual's estate—cash, property, and possessions—after their death.

At AWM&T, our investment services are centered around you. Your dedicated Relationship Manager meets with you to discuss your goals and their timelines, risk tolerance, sensitivity to taxes, and personal investment preferences.

Your Relationship Manager then works with our military investment professionals to create an investment policy statement just for you. Then, we develop your investment strategy, build your portfolio, and measure its performance over time.

After establishing your portfolio, our investment team continues to manage and monitor your investments, adjusting as necessary to optimize returns. Your dedicated Relationship Manager keeps you informed and will meet with you to review your portfolio's performance.

Your portfolio is custom-tailored to you. Some of the core portfolio strategies we use and how they help our clients meet their objectives include:

• Equity: Primary investment objective is appreciation of principal. Income is not important. Stock exposure is 80 to 100%.
• Aggressive: Primary investment objective is appreciation of principal. Income is secondary. Stock exposure ranges from 70 to 90%.
• Growth: Primary investment objective is appreciation of principal. A moderate level of income is needed. Stock exposure ranges from 50 to 70%.
• Balanced: Investment objectives are to preserve principal purchasing power and generate moderate income. Stock exposure ranges from 40 to 60%.
• Income-growth: Primary investment objective is a moderate income, and the secondary objective is preservation of principal. Stock exposure ranges from 20 to 40%.
• Income: Primary investment objective is a high rate of income, and the secondary objective is preservation of purchasing power. Stock exposure ranges from 0 to 30%.
• All fixed income: Primary investment objective is generating income. Appreciation of principal is not important. Fixed income exposure is 100%.

AWM&T's investment philosophy is to do what is right for our Members, always. To keep this promise to our investors, our investment philosophy observes these guiding principles:

Proper Asset Allocation

We believe that the most important factor determining investment success is proper asset allocation that matches your long-term investment goals, timeframe, and ability to tolerate short-term market volatility.

According to one of the most highly regarded studies on portfolio performance, 90 to 95% of the returns generated by a large sampling of pension funds over 10 years were due to their asset allocation, not their security selection. In other words, an investor's exposure to a particular asset class was more important than the specific securities within that class—demonstrating that investment success is based upon asset allocation and affirming our investment philosophy.

Diversification to Mitigate Risk

While we believe in the power of a long-term, focused, and properly allocated portfolio, we are keenly aware of the need to mitigate risk whenever possible. As such, diversification strategies are key to our investment process. By dividing a portfolio carefully among selected asset classes, an investor can maximize potential returns at an acceptable level of risk.

Active Management

Our investment process uses a combination of mutual funds and individual stocks and bonds when constructing your portfolio. We use actively managed mutual funds (where the managers seek to outperform an index through investment selection) whenever we feel that the management of that fund can deliver better risk-adjusted returns, net of taxes and fees, than a passive index approach could. We will use passive index funds to obtain our desired asset class exposure when we cannot find an appropriate active fund.

Rigorous Assessments and Reviews

We conduct a rigorous review and assessment process before any mutual fund, stock, or bond is purchased for a Member's portfolio. Once purchased, all investments are monitored continuously and adjusted as needed.

Precisely Calculated Rebalancing

We believe systematic rebalancing of assets is essential to maintaining the consistency of an investment account's returns and risk profile. We do not use a periodic rebalancing method where portfolios are rebalanced at specific times of the year. Instead, we use a percentage-based methodology where portfolios are rebalanced whenever set parameters are reached. When an asset class exceeds a specified percentage of the portfolio, we pare back that class and move it into an underrepresented class.

The cost of AWM&T’s military investment management services varies with your total investments:

• 1.00% per annum on the first $500,000
• 0.80% per annum on the next $500,001 to $2,500,000
• 0.60% per annum on the next $2,500,001 to $5,000,000
• 0.40% per annum on the next $5,000,001 to $7,500,000
• 0.20% per annum on the next $7,500,001 to $10,000,000
• Fees negotiated on accounts above $10,000,000

A trust allows you to protect your assets for your beneficiaries, including you and others. Establishing a trust can allow you to:

• Distribute assets to beneficiaries
• Protect assets from creditors
• Support a surviving spouse
• Protect a child's inheritance
• Preserve wealth for future generations
• Avoid probate
• Reduce taxes

AWM&T can act as a trustee with most trust types, including:

• Revocable living
• Irrevocable
• Charitable remainder
• Charitable lead
• Testamentary
• Special needs
• Irrevocable life insurance
• Court-appointed
• Foundations

Contact us to discuss which trust best suits your needs.

Irrevocable trusts are ideal for tax planning. If you own a life insurance policy, you might consider using an irrevocable life insurance trust (ILIT) as the owner and beneficiary of your policies to provide maximum estate tax protection and long-term asset management for the proceeds.

To learn more about trusts for tax planning, contact us.

Trusts require extensive recordkeeping and tax reporting. The trustee carries out these responsibilities. Selecting a corporate trustee, like the military trust professionals at AWM&T, ensures your account is managed by specialists who have the necessary experience to preserve your wealth and protect your legacy.

As your trustee, AWM&T will:

• Prepare all records on behalf of the trust, including statements and tax returns
• Communicate with beneficiaries
• Honor and act in your best interests in accordance with the trust agreement

Trust administration fees:

• 0.20% per annum in addition to investment management fees

Irrevocable life insurance trusts:

• $1,000 per year (during the lifetime of the insured)

Please note that AAFMAA Wealth Management & Trust is prohibited from the unauthorized practice of law and cannot draft any documents for clients; we would be pleased to provide recommendations for counsel if requested.