asset management assocates
Private Portfolio Management

   


 

Initial Meeting

After a free personal consultation, the client's needs, objectives and risk tolerances are established. The client's overall situation is also reviewed and if it is determined that there is a match, then we proceed.

Note: Organizations, associations, non-profits or other entities should have an "Investment Policy Statement". This more formally outlines investment objectives and restrictions that coincide with the charter of the organization.  It would also outline who is on the "investment committee", how investment policy decisions are made and how distributions are authorized. We could help you draft this document. See Managing a Foundation or Endowment"

The first meeting would determine if the fee structure will be purely asset based or if there is also a financial planning requirement. The client should walk away with a fair understanding of where they stand and what services will be required. Our primary objective is to build assets for a client and most of our customers are looking to organize an investment portolio and develop a more consistent investment strategy. The following pertains to a managed investment account.

Overview of a managed portfolio 
  1. The client sets up an account with a discount brokerage firm.  In some cases accounts are set up directly with a mutual fund company.
  2. On the investment company application, the client authorizes the advisor to make trades on the account.
  3. After the account is established,  the advisor begins to select investments and makes transactions on a discretionary basis for the client's benefit.
  4. The client receives transaction confirmations directly from the brokerage or investment firm.
  5. The client also receives statements directly from any other investment firm where accounts are held.
  6. Asset Management Associates independently creates and provides an easy to read quarterly report to the client.
  7. Asset Management Associates continually monitors all client accounts and positions and adjusts them when required. 
  8. The advisor works with the client on an as needed basis. Fees are not charged for phone calls or meetings when required throughout the year.
Investments Used 
  • Investments are primarily unmanaged indexes, exchange traded funds and managed “no load” mutual funds. We can also used privately managed portfolios run by independent managers.
    1. A,B, and C shares of mutual funds are not used due to the attached sales fees. We can however purchase “A” shares of some funds with the sales charges waived.
  • Exchange Traded Funds (ETF's) are being used more due to their low expenses and liquidity.
  • Other index or managed funds are also used.
  • Individual bonds are used at the client's discretion and request.
  • Individual stock positions are also used but we try to not be stock pickers. We use individual stocks only as a means of additional diversification and to take advantage or the opportunities they offer.
  • Special “wrap” programs (managed or unmanaged) are not currently being used but are available at "cost" through our discount firms. At this time we do not use these programs.
Performance Objectives

We tend to be more risk averse. When looking at an investment, we always look for the downside risk and how that risk could be avoided or offset by another investment position.  Much has been written about the benefits of owning the "stock market" via the S&P 500 or other similar indexes. The problem is that these indexes can go into long periods of dormancy and could also generate significant losses. For this reason, we are looking for more stable returns and greater diversification outside of what many of us would call "the market".

Although the specific objective is determined by the client, we typically try to outperform inflation and/or interest bearing accounts and add to that as much market performance as we can without subjecting a client to too much risk. Most investors have different perceptions of risk. It takes time to understand the exact risk level a client can accept.It should also be noted that returns are never guaranteed.

Personal Relationships

Objectives are personal. This is not a mechanized portfolio management product. Each client's situation and emotional make up is different. 

Conservative Program  
  • In general this is a conservative form of investment management.
  • Individual securities are used on a limited basis.
  • Options, futures or other derivative investments are not used directly although these stategies may be employed through some of the funds that we work with.
  • Margin accounts are used only for convenience.
  • We do not invest borrowed money.
  • We do not speculate on stocks. 
  • We do not speculate on short term changes in market direction.
  • Accounts are well diversified across sectors, markets and managers.
  • Our objective is to control and limit risk generating more stable results.
Fees
  • Fees are typically charged based on an annual percentage of assets.
  • Typical fees run between ½  and 1% per year depending on the size of the account and the specifics of the service.
  • The client is under no obligation to continue the service.
  • Any fees paid in advance will be refunded.
  • There are no fees earned by the advisor for any transaction made.
  • There are also no fees earned from any investments held.
  • The only fee the advisor earns is that paid by the client.
  • The client can authorize fees to be deducted from their account or may pay separately by check.
  • Some clients will pay fees for research and planning. This is charged on an hourly basis.

Accounts We Can Work With
  • Individual IRA accounts from pension and 401k rollovers.
  • 403b accounts established through schools or  non-profits.
  • Trust accounts set up for special needs or individuals.
  • Non-profit organizations and associations.
  • Private Foundations or Donor advised funds.
  • Regular Personal Accounts held individually or jointly.
  • Small business pension profit sharing plans via their IRA, SEP, SIMPLE or defined benefit plan.
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