Our firm provides investment advisory services to retail investors, including asset management and wealth management services. Asset management includes investment management on a discretionary basis and according to a client-approved investment policy. Discretionary investments are performed primary using stocks, bonds, exchange traded funds (“ETFs”) and cash equivalents. Wealth management and financial planning incorporates many services including identifying financial situations and goals, investment objectives, and risk tolerances.
Based on the information you provide us and the initial discussions we have with you during the development of your financial and investment plans, we create a customized investment plan and policy including the mix and ranges of various assets (stocks, bonds, ETFs, etc.) that correspond to your risk and return objectives, tax circumstances, income needs, and other considerations that may be unique to you. Your customized investment plan may rely largely and wholly on one or more of the firm’s investment models that we maintain and manage. Your investment account under our discretionary basis is routinely monitored and reviewed for suitability and rebalancing.
We manage assets on a discretionary basis. Our clients give us authority to buy, sell, trade, and allocate investments in an account consistent with client-driven objectives. We only manage accounts on a non-discretionary basis when required by a client and agreeable to us. Non-discretionary management means we recommend investment policies, asset allocation, and/or specific securities; however, the client makes the determination if any or all recommendations are implemented in portfolios. We have investable asset minimum of $1 million per client relationship. For more details about our advisory business and the types of clients we serve, please refer to items 4, 7, 8, and 13 of our ADV Part 2A (“Brochure”).
You will pay a mutually agreed-upon fee for our services per the terms of your signed agreement with the firm. The fee will be a recurring “asset-based fee” that is calculated based on a percentage of the managed assets in your account. You will be billed once every three months, in advance; the asset values will be determined by market value as of the end of the previous calendar quarter-end (March 31, June 30, September 30, December 31). In rare cases, we may agree to client requests to bill on a fiscal year and/or in arrears instead of ahead. The more assets that are in your account, the more you will pay in fees. This fee structure means we are incentivized to invest your assets in a way that delivers growth in alignment with your objectives and to encourage you to increase the assets in your account.
You could also pay fees to other third parties depending on your account type and custodian. These fees include custody fees, brokerage and transactional fees, trust fees, accounting fees, and fees related to certain investment securities we may use, including ETFs and mutual funds. You will pay fees and incur costs whether you make money on your investments.
Fees and costs will also reduce any amount of money you make on your investments over time. Please makes sure you understand what fees and costs you are paying. For additional information on fees, refer to Item 5 of our Brochure.
When we act as your adviser, we have to act in your best interest and not put our interest ahead of yours. At the same time, the way we make money creates some conflicts with your interests. You should understand and ask us about these conflicts because they can affect the investment advice we provide you. Here are some examples of what this means:
For most of our clients, we recommend that you use Charles Schwab & Co. as your custodian. Schwab does not compensate us for making this recommendation, but we do receive services that benefit us and our ability to manage and administer our clients’ accounts. Examples of these benefits are electronic access to accounts, operational support, practice advice, trade execution, market data, research, and educational workshops and conferences. For scale purposes and easy of management, we have an incentive to encourage our clients to use the same custodian.
We use certain investments, including ETFs, often from the same providers. Although the decisions are always based on fiduciary duty—including investment considerations, costs, and liquidity—most ETFs used are from a limited amount of providers, including BlackRock/iShares, State Street, and Vanguard. Should we have enough assets with any one provider, we would likely receive services and benefits, including research and market data. Regardless of merit, we have an incentive to increase investments with limited providers. For more information, refer to Items 5, 6, 11, 12, and 14 of our Brochure.
All compensation paid to our financial professionals is a function of our firm’s overall revenues from advisory fees which creates an incentive for us to find and retain clients and grow client assets. The structure of that compensation are salary and bonuses tied to the firm’s profitability and the professional’s job performance. Additional compensation is paid via perquisites including family health care, reimbursed expenses, increased vacation time, and other benefits.