REGULATORY,
PRIVACY AND INTEGRITY QUESTIONS
INVESTMENT PHILOSOPHY QUESTIONS
INDEPENDENCE AND
CUSTODIANSHIP QUESTIONS
CLIENT SERVICE
QUESTIONS
FEE QUESTIONS
REGULATORY, PRIVACY AND INTEGRITY
Is your firm regulated and by whom?
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, and we grow through client referrals.
These references provide a close-up perspective on our commitment to clients
and their privacy. Client consent is always obtained prior to our providing
a reference.
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INVESTMENT PHILOSOPHY
Do you manage separate accounts?
Each account we manage is maintained separately and managed to meet the
specific needs and risk tolerances of each client.
Do you use a model portfolio? In other words,
do all accounts look alike?
No. We customize all portfolios individually to meet each client’s
specific needs and risk tolerances. Investments are then purchased (or
avoided) 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 risk tolerance,
investment goals, cash flow needs, and other holdings.
Do you have a minimum account
size?
Our focus is on adding new clients with manageable assets of $1.0 million
or more. Our management approach is best suited for larger accounts. Our
intensive client service approach requires significant time and resources,
and it is nearly impossible to service smaller accounts to our standards.
We evaluate prospective new client accounts of $500,000-$1.0 million on
a case-by-case basis.
Do you use mutual funds?
No, we do not use traditional mutual funds in our managed portfolios.
Instead, we develop accounts with individual stocks, bonds, and exchange-traded
funds (ETFs). Our clients’ accounts are large enough to achieve
proper diversification without layering fees with mutual funds. With the
vehicles we use, we are able to tightly control diversification, risk,
and cash flow. ETFs provide a great alternative to mutual funds for adding
exposure to market sectors where individual stock selection is very difficult
and/or expensive (small-cap, foreign currency international, emerging
markets, and certain sub-industries).
Do you review capital gains
tax situations individually, or are the same decisions made for all accounts?
We review each account individually to minimize capital gains taxes for
each client. In-depth capital gains analyses are conducted during the
fourth quarter. Where appropriate, we also implement tax strategies to
offset “outside” gains/losses for clients.
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INDEPENDENCE AND CUSTODIANSHIP QUESTIONS
Is Elliott & Associates
a broker? Do you provide custodial services?
Elliott & Associates is not a broker. E&A is a Registered Investment
Adviser (RIA). We do not maintain custody of any client assets. All of
our managed accounts are held by third-party custodians.
What are my custodianship
options?
We have established relationships with several brokerage firms. We recommend
utilizing one of our existing relationships.
Are you compensated
for directing accounts to or maintaining relationships with certain brokers?
In other words, do all accounts look exactly alike?
No, we are completely independent from any other financial services firm,
and we are not compensated by any custodian we use. We have several particularly
effective relationships that provide excellent service and compelling
pricing. We receive sell-side research from these and other firms.
Who receives the
brokerage account fees and/or transaction costs generated by activity
within my account?
Custodian-related 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.
How much can I expect
to pay in brokerage fees and/or commissions?
Our goal is to keep your “all in” investment related costs
(i.e. management fees plus brokerage costs) less than 1.00% annually –
a goal we can achieve for new accounts.
What is an LPOA
and why is one necessary?
Limited Power of Attorney (LPOA) provides E&A “trading authorization”
necessary to direct trades within our managed accounts. An LPOA is put
in place via a custodian document signed by the client. An LPOA only allows
Elliott & Associates to initiate trades within the specified account
– it does not provide authorization for transfers unless the client
specifically allows E&A to bill the account for fees.
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CLIENT SERVICE QUESTIONS
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.
How often will my portfolio(s)
be reviewed?
We utilize processes that ensure 10-15 client-level portfolio reviews
each year.
What reports will I receive
and when?
Portfolio summaries and performance figures are provided by E&A quarterly.
These reports provide cost basis information, current valuation, asset
allocation weightings, and recent and long-term performance. Clients also
receive monthly custodian statements..
What if my financial situation
changes?
As your financial circumstances evolve, we will adjust your portfolio
strategy to meet your changing needs. Our individualized approach is exceptionally
flexible and allows us to anticipate changes act accordingly.
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FEES
When do you begin billing? Will I be billed
for your proposal?
We do not begin billing until a management agreement is in place. We do
not bill for any time spent up-front or for the proposal we develop.
What is your management fee structure?
E&A provides investment management services on a fee basis. We do
not sell products and do not receive any commissions.
How will my fee amount be determined?
Fees are billed quarterly based on the value of assets under management.
Can you estimate my total investment-related
costs?
Our goal is to keep your “all in” costs (i.e. management fees
plus brokerage costs) less than 1.00% annually – a goal we can achieve
for new accounts.
What are my options for paying your
fee? Can I pay fees directly from my managed account(s)?
Yes, our custodians allow clients to pay management fees directly from
their investment account(s), which we recommend. A signature is usually
all that’s required.
If I hire E&A, what are the terms
of the management agreement?
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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