What are your fees?
Our fee structure is based on the assets that we manage for each customer, but our fees range from 1.6% to 2% per annum. All returns on the performance page are net of the highest possible fee, so depending on your fee, your net return may have been greater.
Briefly explain your investment approach.
We invest differently in up and down markets. We seek to fully participate in the upward trends of the stock and bond markets, while preserving or increasing your multi-year gains when those inevitable and severe markets corrections occur.
When does your approach not work?
Our approach may have some degree of difficulty performing as well as it’s long term average during periods when market prices change direction very frequently in a trendless, sideways market. This is rare and these periods tend to mainly be short-lived.
What size is your average client relationship in terms of assets?
Our published minimum is $200,000; but we will consider investments as low as $50,000 under certain conditions. Our average size client relationship is between $300,000 and $500,000.
Many of our clients have some of their investment money with another RIA firm. If you already have an existing relationship with another financial advisor that you are happy with, but you like our past results, you may consider using our firm for part of your portfolio. Diversification of money managers is a good strategy if both are performing well.
Many firms do a good job of providing a broad overall structure and plan for your financial portfolio. Investors look to us to complement their existing relationships by providing a defined specialty and focused approach, at least for part of their assets. Sometimes they desire more frequent account surveillance and a more direct, controllable relationship to the person “working the levers”.
I feel that no one can effectively “time the market”. Is that what you are trying to do?
There are two different meanings of the term “time the market”. One meaning may entail that someone tries to predict the frequent up and down “wiggles” in stock prices. This requires many trades and we would agree with you, that cannot be done successfully. The other meaning may concentrate on reacting to the changes in the longer, more intermediate term trends of the markets. Those types of systems, that react to more meaningful changes in a significant trend, are successfully used today in thousands of applications. You already experience the benefit of these systems every time you fly in a plane or drive a car.
How transparent and liquid are the securities you invest in?
All securities in your account will be widely traded and priced daily. Almost all Strategies employ index-based funds that are designed to track the performance of the major market indices such as the S&P 500, the Nasdaq, and the Russell 2000. Accounts can be liquidated at any time.
In addition, through our relationship with Fidelity Custody and Clearing Solutions, you will receive a simplified, consolidated statement each month reflecting all your investment positions and transactions in your Fidelity brokerage account.
How are my assets protected?
You have your own individual account. Accounts are carried by National Financial Services LLC, a Fidelity Investments company and a member of NYSE and SIPC.
Securities in accounts carried by National Financial Services LLC (NFS), a Fidelity Investments company, are protected in accordance with the Securities Investor Protection Corporation (SIPC) up to $500,000. For claims filed on or after July 22, 2010, the $500,000 total amount of SIPC protection is inclusive of up to $250,000 protection on claims for cash, subject to periodic adjustments for inflation in accordance with terms of the SIPC statute and approval by SIPC’s board of directors. NFS also has arranged for coverage above these limits. Neither coverage protects against a decline in the market value of securities, nor does either coverage extend to certain securities that are considered ineligible for coverage. For more details on SIPC, or to request a SIPC brochure, visit www.sipc.org or call 202.371.8300.
“Excess of SIPC” Coverage
In addition to SIPC protection, NFS provides for brokerage accounts additional “excess of SIPC” coverage through Lloyd’s of London, together with other insurers.¹
The excess of SIPC coverage will be used only when SIPC coverage is exhausted. Like SIPC protection, excess of SIPC protection does not cover investment losses in customer accounts due to market fluctuation. It also does not cover other claims for losses incurred while broker-dealers remain in business. Total aggregate excess of SIPC coverage available through NFS’s excess of SIPC policy is $1 billion. Within NFS’s excess of SIPC coverage, there is no per-account dollar limit on coverage of securities, but there is a per-account limit of $1.9 million on coverage of cash. This is the maximum excess of SIPC protection currently available in the brokerage industry.
¹ Fidelity’s “excess of SIPC” insurance is provided by Lloyd’s of London together with Axis Specialty Europe Ltd., Markel International Insurance Company, XL Specialty Insurance Company, and Munich Reinsurance Co.
About Fidelity Clearing & Custody Solutions
Fidelity Clearing & Custody Solutions provides a comprehensive clearing and custody platform, brokerage services, trading capabilities, and practice management and consulting to registered investment advisors (RIAs), including strategic acquirers and professional asset managers, as well as retirement recordkeepers, broker-dealer firms, banks, and insurance companies through National Financial Services LLC (NFS) or Fidelity Brokerage Services LLC, Members NYSE, SIPC. In addition to providing services to third-party institutions, the NFS brokerage platform supports all the clearing and custody businesses at Fidelity, including Fidelity’s retail and capital markets businesses, bringing NFS assets under administration to $3.1 trillion.