Services
Services
Creating an investment management program
I can assist you in creating a new investment management program or in evaluating and revising all or part of your existing program. The key term here is customization. You are in control. All processes and practices are developed to fit within your firm’s structure and philosophy. However, you may not want to develop a full-fledged investment management program within your firm. Perhaps you want to outsource some or all these activities to another advisor. You may simply need a formal and documented process of developing an investment plan as well as the processes and procedures to turn that investment plan over to an outsourced investment manager.
Ongoing Investment Management I can manage all or part of your investment management tasks. I can act as an investment sub-advisor or as a third-party asset manager (TPAM). A sub-advisory relationship involves you as the advisor contracting directly with me whereas a TPAM relationship involves each of your clients contracting with me. Regardless of the relationship, you are the financial planner; you are in control – to the extent you want to be in control – even in a TPAM relationship. This is because the client’s investment portfolio is just a tool to accomplish their financial goals – and that goal development and how their investments fit within their plan is determined between you and the client. Again, I can be as involved as you want me to be. I can assist in developing an investment plan for a client or you can simply prescribe what I am to do.
Investment Management – What are we talking about? I’ve mentioned the creation of an investment management program and the outsourcing of investment management tasks on an ongoing basis, but what do I mean when I refer to “investment management?” A non-inclusive list of services I offer:
- Assess and periodically reevaluate your client’s risk profile to include each client’s risk need, risk-taking ability, and behavioral loss tolerance (risk tolerance).
- Develop instruments and processes to determine a client’s risk profile. Develop an investment plan tailored for each individual client.
- Draft an Investment Policy Statement (IPS) congruent with the client’s risk profile and financial goals.
- Develop custom benchmarks and create associated model portfolios that fit with your investment philosophy and style.
- Evaluate and back test model portfolios.
- Customize portfolios for each client, perhaps to accommodate legacy positions, concentrated asset positions, the client’s human capital, or ESG constraints and biblically based values.
- Rebalance portfolios to include tax aware rebalancing.
- Tax loss harvesting. Evaluate portfolio performance and generate periodic performance reports.
- Monitor financial markets and economic conditions to take advantage of investment opportunities and manage threats.
- Communicate with and make presentations to clients. Evaluate client portfolios with respect to achieving financial goals.
- Reevaluate financial goals and adjust investment strategies to accommodate changing market conditions and life events.
- Evaluate withdrawal strategies.
- Implement a variety of investment strategies from passive long-term strategic asset allocation to a range of active approaches to include tactical adjustments and tilts given changing market conditions, option overlays for income generation and risk management, and analysis and selection of individual securities.
Investment Philosophy
Investment Philosophy
My Investment Philosophy. There is no one right way to invest. Passive investing is the default approach I recommend. However, we must realize passive investing is not really so passive. Strategies targeting certain risk factors such as market capitalization, style, yield, momentum, and volatility are all considered passive index-based strategies. In addition, passive investing does not rule out the use of derivatives such as futures or swaps. Which do you choose? Any selection would imply some active decision on what is expected to generate superior investment performance given your client’s situation. As for true active investing, it has a place only if the expected extra returns more than compensate for the additional costs to generate those returns.
Your Investment Philosophy. As I said, there is no one right way to invest. However, your own view of financial markets will dictate how your clients should invest their assets to achieve their financial goals. Without a coherent view, you may find yourself never really confident of your investment strategies and continually change strategies as you search for what feels right to you. This may result in your clients losing confidence in your ability to help them achieve their goals and causing unnecessary anxiety for both them and you. Even if you outsource your investment management tasks, your investment manager needs to understand your investment philosophy to match investment strategies with your view of what is best for the client.
How I May Help? I may be able to help you develop an investment philosophy. We will most likely begin by assessing your views on the efficiency of the financial markets. In the end, we’ll discover if you are a passive or active investor or somewhere in between and what strategies feel right for you. Whether you have settled on an investment philosophy or would like some help discovering it, you don’t have to conform to a TAMP’s investment philosophy and its standard models and strategies. Instead, my goal is to work with you to tailor the investment management function that best suits your firm and your clients.
Pricing
PRICING
Investment Plan: $200/hour. Investment plans for your clients are offered on a fixed fee basis based on an hourly rate of $200/hour (see the description of services for individual clients) . This fee may be waived or discounted depending on the extent ongoing investment management services are utilized.
Ongoing Investment Management: Ongoing investment management requires an initial investment plan.
Fees for ongoing investment management are based on three possible arrangements, depending on your needs and circumstances:
- flat fee based on an hourly rate of $200/hour,
- market value of assets under management (AUM fee),
- combination of a flat fee and an AUM fee.
For each arrangement, fees are based on the complexity and costs of providing ongoing investment management.
The standard advisory fee based on the market value of the assets under management for each investment account is calculated according to the following blended fee schedule:
Account Value
Annual Advisory Fee
The fee schedule applies to each of the financial professional’s clients. However, fees are negotiable. Factors affecting fees include, but are not limited to, total AUM, the number of clients, technology needs, and the strategies employed for each portfolio. In addition, given sufficient total AUM of the financial professional and the nature of services provided by CIM, a cliff schedule may be used where once a breakpoint is reached, all assets are billed at the same breakpoint base fee.
Fees are prorated and paid in arrears on a quarterly basis. You may also elect to have fees paid monthly. Fees are based on the average daily balance during the quarter.