We are first and
foremost focused on client success.
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Focus on the
client begins with understanding and capturing our client’s objectives
and constraints. Through understanding our clients, we can answer
the questions necessary to develop the investment policy statement.
This statement serves to set investment objectives, define a standard
of performance, establish risk parameters and liquidity guidelines,
and review any applicable investment restrictions.
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Answering
the E.T.H.I.C.S. questions assists in capturing the client's objectives
and contraints. |
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xpectations
and Tolerance: What are the client's goals and purposes for the
account? What is their risk comfort level or |
| tolerance?
How risk-adverse are they? How much risk can they take with their
investments? |
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T
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ax
considerations: How badly does the client need to avoid taxes?
What are the client's current tax considerations, federal |
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state, as well as future estimates? Active investment produces taxable
events; is the client aware of tax consequences inherent in investing?
Is there a tax strategy in place? |
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H
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orizon:
Over what horizon will the client judge portfolio performance?
When will the client need to start drawing down |
| principal?
What are the time horizon differences between the client and any other
beneficiary of the account? |
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I
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ncome
Requirements: What income sources are at the client’s disposal?
What is the level of volatility in these sources? What level |
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income does the portfolio need to produce? What factors might change
this income requirement? |
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C
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onstraints:
Are there any restrictions or preferences on acceptable investments
such as foreign securities, municipal bonds, socially |
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companies, etc. Is there a preference to support local or regional
companies? |
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ophistication:
What is the client’s level of investment understanding? Does
the client understand the turbulent nature of |
We
believe that outcomes are dependent on establishing goals
and objectives.
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During a client’s
lifetime, needs and objectives tend to evolve. Early in the life cycle
of investing clients usually build portfolios geared towards wealth
accumulation, typical in an Aggressive Growth, Growth or Growth and
Income profile. As clients mature into the distribution phase of their
investment life cycle, their needs turn more income-oriented, more consistent
with an Income and Principal Preservation profiles.
Account narratives provide a short description of the appropriateness of
nominal objectives to meet client’s goals and objectives. These narratives
define clients by Aggressive Growth, Growth, Growth and Income, Income and
Principal preservation.
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We believe that disciplined asset allocation is the most important determinant
in any portfolio and is the best predictor of volatility and total portfolio return.
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We believe that designing
the proper asset allocation consistent with the individual’s unique investment
objectives is a critical first step in meeting long-term goals and expectations.
To accomplish the goals and objectives of our clients, it is our responsibility
to control risk and to limit or prevent surprises. Maintaining a fully invested
portfolio where holding just enough cash to meet known or anticipated cash
distributions allows us to participate most efficiently with the market.
Our asset allocation guidelines are based on Modern Portfolio Theory (MPT),
which locates the combination of assets that minimize risk while simultaneously
maximizing return prospects. Our asset allocation guidelines must be flexible
enough to handle the substantial variation in clients’ objectives and constraints
and are designed to adapt as individual investment needs evolve over time. They are
true guidelines with ranges of acceptable investments; these ranges allow us to
accommodate for the unique aspects of each client’s goals and objectives.
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We believe in active management and a consistent process.
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Actively managed
portfolios require care and constant refinement utilizing a measured
consistent process. Whether buying equities, fixed-income securities or
mutual funds we adhere to a detailed buy process. Consistency must also
be applied in the process of selling our holdings.
Thorough research is used before securities enter into the portfolio;
until the reasons for purchasing a security change the security will remain
in the portfolio. Our sell discipline is comprised of four separate, but
equally important criteria:
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Change in fundamentals
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Company no longer meets projections, or has lost credibility in the market place
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Dramatic price movements
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Better investment opportunities
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We believe that performance measurement against absolute (personal goals
and objectives) and relative (benchmarks) targets is essential.
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plan would be incomplete without regular portfolio review and
re-balancing. Clients’ portfolios need periodic evaluation to
determine whether holdings continue to meet investment objectives
and the client’s risk profile.
The Trust Administration Committee reviews all portfolios
annually. Periodic, monthly and quarterly reviews performed
by the Account Executive are intended to supplement the annual
review performed by the Trust Administration Committee. The
Account Executive evaluates the portfolio’s ability to meet
the account objectives that were established with the client.
The frequency with which we review clients’ portfolios depends
on the volatility of the assets in the portfolio and current
market conditions. In a volatile market, more frequent review
is required. Through actively managing our portfolios, both
the equity and fixed-income markets are constantly reviewed.
Individual securities are reviewed daily and frequently inter-daily
as security specific news is released. Individual fixed income
instruments are reviewed on a quarterly basis unless more
frequent review is necessary. Due diligence on mutual funds
is performed routinely through analyzing prospectuses and
on-site meetings.
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From the first
meeting with the client, we establish a communication standard. In
the end, our targeted success is determined not only by performance,
but on how effectively we communicate with our clients.
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