NOTE: In almost all cases, I require clients to work with me on some type of financial plan before we continue working together to monitor investments.  I do this because I believe that each person's circumstances are different. In order for me to provide you with the best advice that I can, I need to fully understand what your financial situation is and what your goals are.  I don't believe that I can provide you with a reliable road map if I don't know where you're starting, where you want to go, or how you want to get there.    

WHO IS IT FOR?

Anyone who wants to receive ongoing investment advice rather than one-time investment advice or an annual review of their portfolio. 

WHAT IS THE PROCESS?

If you have completed a financial plan that includes investment recommendations, and you want to continue to receive regular investment recommendations on your portfolio, you can opt to enter into an agreement with Quabbin Advisors for the Portfolio Review service.  This service provides you with quarterly reports for your portfolio and includes an annual update to your financial plan. 

For this type of engagement, we would likely start with the target asset allocation we agreed to in your financial plan.  This allocation should reflect your particular goals, resources, investing knowledge, timeframe, risk tolerance and risk capacity.  

After signing the agreement, you would ensure that I have access to the relevant investment accounts. 

That is generally accomplished through some combination of:

1) linking your accounts through the account aggregation software that I use so that I can see positions and transactions

2) opening an account with the platform that I use

Option number 2 allows me to place trades for you and to see your investments and statements when I need to.  This is an easier and more cost-effective method for me.  However, it is NOT required. You are free to keep your money wherever you like.

If you open an account on the platform that I use, your fees will be slightly lower because my costs are less and it is less time-consuming for me to monitor your investments.    Also, if you choose Option 2, you still have the ability to place the trades yourself.  

You will receive quarterly reports on your portfolio  along with any recommendations that I have for you.  Depending on where your account is, you would either choose to make the trades yourself or I would place them for you after receiving written approval.  Or you could say, "thanks for the recommendation, but I'm not doing anything". The decisions are always yours.

WHAT DOES IT COST?

The annual fee is based on the amount of money in your investment portfolio and where your accounts are located.  

For clients with accounts at the custodian I use, the fee for this service is 0.15% (or, 15 basis points for you finance people) of the amount of your investment portfolio.  There is a minimum fee.  For 2020, the minimum fee for this service is $750 per year. The fee is payable at the end of each quarter.

For clients who prefer to have their accounts elsewhere, the fee for this service is 0.25% of the amount of your investment portfolio.  The minimum fee for this option is $1,250 per year. The fee is payable at the end of each quarter. 

I have a minimum fee so that I can work with people who might not have a large portfolio but who still want investment advice.  There is a certain amount of work that goes into monitoring a portfolio, and the minimum fee reflects that reality.  

This pricing seems low.  What's the catch?

No catch - just a simple and straight forward approach to managing investments.  

Many advisors from national or regional firms will charge 1% or more per year to manage your portfolio.  Robo-advisors, who place customers in automated investment allocations cost in the range of 0.25% to 0.50% per year (from what I have seen).   I can charge less because I work hard to keep my overhead low and because I do not believe in frequent trading or frequent rebalancing.  

When we come up with an investment plan, I recommend what I consider to be high quality, low-cost investments that you can hold for years.  When you combine low-cost investments with minimal trading, this helps to keep your overall expenses low and allows your money to reap the benefit of the magic of compounding.  

While I keep abreast of the market and what is going on in the economy, I don't generally react to market news unless it is extraordinary.  We will talk or email several times a year, but my recommendations are generally in line with what we have talked about as a long-term strategy and are provided on a quarterly basis.  

I have no motivation to get you to make trades.  I receive no commissions or fees based on your trading.  I receive no bonuses from any boss for pushing a certain stock, fund, or annuity.  

If you are a patient, long-term investor who believes that focusing on low-cost, high quality investments is a sound strategy, then you might be interested in my approach.  If you are interested in the latest hot stocks or funds and want to trade a lot, I am probably not the advisor for you.