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Here is what you can expect to receive from us for your portfolio management fee:
- An Investment Policy Statement (IPS) based on your risk tolerance, time horizons, and financial goals.
- In order for the IPS to be effective, you must tell us what the money in your account will be used for (GOALS) and when it will be needed (TIME HORIZON).
- How well you sleep at night with the investments we select (RISK TOLERANCE) will help us make the right investment selections to help you meet your goals.
- Periodic review of financial goals and account performance.
- Assistance with all financial matters, such as real estate purchases, refinancing, lease vs. buy for a new car, etc.
- Monthly statements and trade confirmations sent direct from your account's custodian via email or regular mail.
- Securities Investor Protection Corporation (SIPC) account protection up to $500,000 (includes $100,000 for money market cash).
- Additional account protection of $100 million is provided by London Insurers.
- Quarterly online review of your employer’s retirement plan (requires userid and pin to access company’s plan website).
- Past statements and trade confirmations available online for your review.
- Quarterly Household Portfolio Reports via email or regular mail.
- Gain/Loss tracking for both taxable and retirement accounts.
- Bi-monthly email newsletter, Plan Wise.
- Online account access.
- Checkwriting.
- Debit Card.
- NO IRA maintenance fees.
- NO inactivity fees.
ALCUS Financial Group, LLC provides comprehensive, fee-only financial planning services to individuals and investment management services to both individuals and small businesses. The firm is a Registered Investment Advisor.
Client Services
Our clients benefit from a process that moves them steadily toward their goals through continuous planning and review. This process encompasses the following steps:
Financial Planning
Based on your personal goals and objectives, and supported by information regarding your assets, liabilities, retirement plans, insurance policies, and special needs, we prepare a comprehensive financial plan.
Implementation
Next, we assist in the implementation of our recommendations, which may include:
· Rebalancing your personal investment portfolio
· Changing your employer sponsored retirement plan investments
· Modifying your life and disability insurance plans
· Refinancing home mortgage and other loans
Working with your attorney, insurance agent, or tax specialist
In helping you to implement any recommended changes we will, of course, work directly with your attorney, insurance agent, or tax-specialist as needed. With your permission, we can share relevant parts of our analysis with your other advisors and consult with them to ensure timely updates to your plan. Financial planning involves more than just preparing a comprehensive analysis: success also depends on all of your advisors working together as a team.
Continuous Planning
In addition to providing regular updates of your net worth and tracking your progress toward reaching your financial goals, we are available to answer other financial questions that arise.
Examples of such questions include:
· Should I refinance my mortgage?
· Is it better to buy or lease my next car?
· Does it make sense for me to convert to a Roth IRA?
Investment Management
Investment success requires the systematic and disciplined implementation of a consistent investment philosophy. Our process for helping you to build the investment portfolio that will move you most rapidly toward your financial goals includes the following:
Developing the Investment Policy Statement
The investment policy statement is the written master plan for your portfolio. It includes an explicit statement of your investment objectives, as well as the strategy that will be used to pursue those objectives. The investment policy statement will include:
· A formal description of your goals for the portfolio
· Target returns and maximum acceptable risk
· Asset allocation to be used
· Specific investment constraints (e.g. disallowed investment vehicles)
· Benchmarks to be employed
· Monitoring and reporting procedures
Asset allocation refers to the process of determining how much of your portfolio will be invested in different types of investments or market segments. Here’s a partial list of the asset classes in which we invest :
- Cash and money market investments
- Treasury, corporate and municipal bonds
- U.S. stocks
- Derivatives of US stocks, specifically stock options
- Real estate securities
- International large company stocks
- International small company stocks
- Emerging market stocks
Investment Selection
Once an investment policy has been adopted, including an asset allocation plan, we implement the plan through the selection of specific investment vehicles to fill each asset class. These investment vehicles will most frequently take the form of exchange-traded funds (ETFs). We use the following criteria when selecting investments:
- The investment must represent a clearly-defined market segment
- The investment must remain fully- invested at all times
- The investment must have low fees and expenses
In addition to the 130 (and growing!) ETFs that are generally available, we have access to a number of institutional mutual funds that satisfy the above criteria particularly well. See the “Investment Philosophy” section for a more detailed discussion.
Monitoring and Reporting
We monitor portfolios daily and generate quarterly performance reports. You also receive regular monthly account statements from the firm holding your account (typically Ameritrade Advisor Services).
Rebalancing
Over time, different asset classes will experience different rates of return, with the result that the portfolio will drift away from its target allocation. As needed, we rebalance the portfolio by reducing holdings of those asset classes that exceed their target allocation and increasing holdings of those classes that have fallen below their target allocation. Rebalancing, if pursued systematically, is a discipline whereby we periodically sell assets that have become relatively expensive and reallocate to assets that are relatively cheap. Or, put another way, it is a systematic way to “buy low and sell high.”
The effect of taxes and transaction costs on rebalancing:
In order to minimize the transaction costs and taxable gains generated in client portfolios, we employ a strategy of “passive rebalancing” whenever possible. Since dividends, interest, and capital gains distributions are paid out by investments throughout the year, we accumulate these distributions and reinvest them – but typically not into the investments that paid them; instead, these go into those investments that are below their target allocation. We do the same with any additional contributions that are made to the account. In this way, the portfolio is rebalanced without generating any taxable gains beyond those that would have been recognized anyway. The process can be reversed when dealing with portfolios that are making regular income distributions.
The ALCUS website is available 24 hours a day and contains a wealth of current information on personal finance and investments. In addition to news and general market information, our site offers the following:
- Account Access
- Enewsletter Subscription Service
- Library of personal finance articles
- Reports on various investment categories
- Message forms for communicating with us
- Financial calculators
- Links to other web resources
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