Providing a full range of fee based wealth management services

Frequently Asked Questions

Answer: There are many advantages to having an individualized account or separately managed account as opposed to a mutual fund.  One critical advantage is that individual accounts have the ability to be extremely tax efficient, a problem that many mutual fund investors discovered in the past two years (2000-2001) when they lost money on their funds yet still owed taxes on these funds.  We can lower tax liability much easier than a mutual fund; this is a big reason we have never set up our own mutual fund.  Another reason is that we feel risk-adjusted performance can be enhanced because we do not "pay up" for stocks and we are very disciplined as to our price parameters.  The specifics can best be detailed after a private meeting to assess what you are specifically looking for with your retirement plan, trust, or personal assets.

Another advantage of going directly with a money manager that investors are just discovering is the significantly reduced costs.  We recently obtained a new account in which the investor was using class C mutual fund shares through a broker for his retirement plan.  The new client was not particularly happy with his broker's selections of late; in addition, he had no idea that our personalized separate accounts would actually save him money.  (The broker charged 1% annually and we would charge .90%, so no big deal, right?) But he learned after our initial meeting that the broker's 1% was simply a "middle man" sales charge and that there were additional money management charges from the actual money manager of the fund, plus commission costs for the manager's activity.  His annual costs actually totaled 2.16% (the 1% he thought he was paying was just what the broker had made each year for selling him the fund) compared to our annual .90%.  In other words, the broker had him thinking the costs were comparable when in actuality he was paying 140% more per year (and when factoring in the transaction costs, the difference becomes even greater).  The same holds true when a broker acts as a "middle man" with a separate account money manager. If you go to most managers directly, you can pay substantially less than if you do so through a broker.  Plus the managers can then trade with whom they wish, as opposed to solely through the broker who refers clients to the money manager.  It is often not in the best interest of the investor to have every trade mandatorily placed with the same brokerage firm and that is why we do not accept such "brokerage directed" accounts.  All the above are aspects to consider when looking towards investing your retirement or personal assets.

Answer: This is a very good question and one that we do not hear quite enough. Most investments are sold based on performance and unfortunately risk and total costs are typically only glanced over. We feel both risk management and low costs are two critical variables that should be emphasized when choosing someone to advise you (in any capacity) on your investments. Investors must also totally agree with the broker's, planner's, or advisor's professional investment philosophy and feel very comfortable with his/her method of research and communication, as well as investment style.

Here are eight critical points to cover with your financial advisor to initiate and maintain a solid long-term relationship with any investment professional.

1. Know Your Investment Professional's Philosophy of Investing
2. Discuss the Keys to Successful Investing
3. Don't Be Afraid to Ask How Your Investment Professional is Compensated
4. Be Honest About Your Current Financial Situation, Goals and Objectives
5. Ask about Other Services Your Investment Professional Offers
6. Schedule a Regular Financial Check Up
7. Call When Circumstances in Your Life Change
8. Be Open About Your Financial Circumstances and Risk Tolerance

Answer: There are numerous differences depending on the firm with which the broker or financial planner is licensed.  As an independent investment advisor we are registered and regulated by the U.S. Securities & Exchange Commission and place trades for clients through a variety of sources including electronic communication networks (ECN) that we feel can be executed in the client's best interest.  Most brokers or financial planners can be very limited as to when they can execute trades, share research or in some cases even offer products.  The other big difference is that the majority of brokers and planners are compensated via commission dollars based on transactions (purchase & sales), and in doing so may have a more inherent conflict of interest. In attempts to avoid potential conflicts of interest, our money management services are based on fees so that we do not have quotas to fill or feel obligated to make trades to generate income for ourselves.  Our entire focus is to build the best portfolio for you to meet your specific goals and objectives.

Answer: When placing assets under our management, your money is protected via several methods.  First, we never take custody of clients' assets, utilizing nationally recognized and financially sound brokerage firms or banks to actually hold your assets.  You should never make your checks payable to the investment advisory firm.  Secondly, your account is insured from fraud and theft up to $10M (with more protection available if needed).  This includes $500,000 protection directly from the SIPC.