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PRIVACY
AND INTEGRITY QUESTIONS
INVESTMENT
PHILOSOPHY QUESTIONS
CLIENT
SERVICE QUESTIONS
FEE
QUESTIONS
PRIVACY
AND INTEGRITY
Is your firm regulated and by whom?
Based on assets under management, Elliott & Associates
falls under the Federal jurisdiction of the Securities &
Exchange Commission (SEC). We are required to file an updated
Form ADV with the SEC annually. The Form ADV is publicly available
and a required disclosure to all new clients. Additionally,
we are required to register with each state in which we exceed
its threshold for registration – typically a certain
number of clients in any one state.
What steps have you taken to ensure that my private financial
information remains confidential?
Annually, all clients receive our Privacy Statement, which
outlines our compliance with Federal privacy regulations.
We do not maintain any client information on our web site,
directly or via links. There are business reasons for which
it is necessary for us to communicate with a client’s
brokers, accountants, attorneys or other members of a client’s
financial services team. However, we would not discuss any
private information without first obtaining the client’s
consent.
How can I corroborate this information?
Integrity is vital to our success. We are always interested
in adding new clients, and the best way to obtain new customers
is through client referrals. These references provide a firsthand,
close up perspective on our commitment to clients. Client
consent is always obtained prior to our providing a reference.
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INVESTMENT
PHILOSOPHY
Do you use mutual funds?
We do not use mutual funds to build our managed portfolios.
Instead, we use individual stocks and bonds. The fee we earn
is to manage money, and we do not believe clients should pay
a second management fee to a mutual fund. Our portfolios are
large enough to diversify without the use of mutual funds,
and in most cases the total costs (our fee plus transactions
costs) are less than the typical 1.2-2.0% management fee most
mutual funds charge.
Do you manage accounts separately?
Each account we manage is maintained separately and managed
to meet the specific needs and risk tolerances of that particular
client.
Do you use a model portfolio? In other words, do all accounts
look exactly alike?
No. We build all portfolios individually by evaluating each
client’s specific needs and risk tolerances. Stocks and
bonds are then bought (or not) for each portfolio depending
on its suitability for that client and its fit with that client’s
existing holdings. Suitability is determined by a number of
factors unique to each client such as age, risk tolerance,
investment goals, and other assets, etc.
Do you have a minimum account size?
We would like all new accounts to be $500,000 or larger. Our
strategy of using individual stocks and bonds to build a portfolio
works best with larger accounts. We evaluate accounts under
$500,000 on a case-by-case basis, and depending on the investor’s
circumstances we may begin managing assets worth less than
$500,000.
Do you review my capital gains tax situation individually,
or are the same decisions made for all accounts?
We review each account individually to minimize capital gains
taxes for each client. When requested, we also try to implement
tax strategies within E&A managed accounts that address
outside gains/losses any specific client may have.
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CLIENT
SERVICE
Does your fee only cover a certain number
of face-to-face meetings per year? Will I be billed for extra
meetings and phone conversations?
Our management fee covers everything. We have an open door
policy that allows clients to schedule meetings and call with
questions anytime, without incurring additional costs. Knowing
our clients allows us to manage money effectively. By listening
we understand their needs better, and when their situations
change, the proper investment adjustments are made. Also standing
quarterly or semi-annual reviews work well for many clients.
What if my financial situation changes?
Your financial situation absolutely will change over time.
And your investment strategy and investments should change
with it. Our individualized approach allows us to anticipate
changes and to switch gears as necessary.
Do you provide custodial services also? That is, do you
“hold” the assets you manage?
We do not hold client assets. All of our managed accounts
are held by a custodian –usually a brokerage house or
bank trust department.
Is Elliott & Associates a broker?
Elliott & Associates is not a broker. We do not hold assets.
Where are the accounts you manage maintained or “held?”
We have established relationships with financial institutions
at most major national and regional brokerage houses. We also
manage a number of accounts maintained by bank trust departments.
Are you compensated for setting up accounts with certain
brokers?
We are not affiliated with any broker or bank or any other
financial services firm, and we do not receive any monetary
compensation from any of the custodians we use. We do, however,
receive research from a number our accounts’ custodians.
We make recommendations for clients who request information
about custodians, but the ultimate decision is the client’s.
Who gets paid the commissions and/or brokerage fees generated
by trading within my account?
Fees, commissions, and account maintenance charges that are
incurred by the client’s account(s) are paid directly
to the custodian for the services they provide. We are not
compensated in any way by commission or other transactional
fees.
What if I already have a broker I want to continue working
with?
We will work with any existing relationship. However, any
custodian we work with must be able to provide a very high
level of service and superior execution of trades.
What is an LPOA and why is one necessary?
LPOA is short for Limited Power of Attorney. Basically this
is the “trading authorization” that allows us to
initiate trades in our clients’ accounts. It is a document
provided by the custodian (i.e. broker) and must be signed
by the client. An LPOA only allows Elliott & Associates
to initiate trades within the specified account – it
does not provide authorization for any transfers to/from the
account.
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FEES
How are your fees determined?
We apply a fixed percentage to the market value of the assets
under management.
Do
you bill in advance or in arrears?
We bill quarterly in arrears. The fee for each quarter is
based on the market value of assets at the end of previous
quarter. Invoices are then sent during the last month of the
current quarter and payment is due by the end of the quarter.
That is, payment is due by the last day of the quarter for
which services were rendered.
What are my options for paying your fee? Can I pay it directly
from the account(s) you manage?
Most custodians provide clients the ability to pay management
fees directly from the investment account(s). A signature
is usually all that’s required. Whether we bill the client
or bill the client’s account, a copy of the invoice is
provided each quarter for the client’s records.
If I hire Elliott & Associates to manage my assets,
how long does the management agreement last?
Our standard management agreement has an initial term of one
year and is renewable for one year on each anniversary. It
is however, cancelable at any time with 30 days written notice.
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