Investment Advisory - Compensation
Philosophy & Policies:
There
is a measure of controversy among advisors and the public regarding which form
of compensation is "best". Such controversies tend to
hinge on the misconception that Fee-Only, or Fee-Based, arrangements generate recommendations
that are goal-driven, whereas Commission-Only are compensation-driven, when in
reality the actual determining factor rests more with the professionalism and
capabilities of the advisory consultant than with any given form of compensation.
Many
perceive, in the above, an inherent conflict of interest while, when analyzed,
commissions, with or without 12b-1 trail fees, often result in lower overall
long-term costs to the client than a level, or scaled, percentage of assets
under management. In fact, many argue that
over time "fee-only" percentages based on assets under management, "cost"
more. "Cost" is, however, a relative factor and clients
therefore need to understand that professional Advisors must be fairly
compensated, moving forward, for the level and value of the services they
provide.
We
believe that no one single method is or even can be the "best";
therefore, we offer several fee arrangements as a means of customizing this
issue in the overall best interests of our clients.
Financial
/ Investment Services:
Services
provided are by a separate written agreement (Fee-Based), or by Prospectus
(Commission-Only), or by a combination of the two, as applicable.
-
*Fee-Based
Advisory Fees - are based on a percentage of assets under
management. Minimum investment $50,000, 18 months minimum time
frame, with fees generally payable quarterly, in advance, based on an
accounts valuation on the last business day of the preceding calendar
quarter. Percentage scale as follows:
| Account
Type |
Value
of Account |
Fee
Rate* |
| Equity |
50,000-1,000,000 |
1.00% |
| |
Next
2,000,000 |
.875% |
| |
Next
2,000,000 |
.75% |
| |
Over
5,000,000 |
.50% |
| Fixed
Income |
50,000-1,000,000 |
.625% |
| |
Next
2,000,000 |
.50% |
| |
Next
2,000,000 |
.40% |
| |
Over
5,000,000 |
.30% |
(*Above
fees subject to adjustment and they do not include any separate account fees, wire transfers,
insufficient fund charges, redemption fees, program
administrative/management fees, tax liabilities, etc.)
SEE
BELOW: "Fee-Based ~ Our Value-Added Advantage"
-
Commission-Only
- percentage set by vendor, based on a sliding scale, tied to the volume
invested and/or Letter of Intent (i.e. as in Mutual Fund A
Share arrangements), as governed by Prospectus.
-
Combination
Fee-Based & Commission - exists when a client acquires both
investment (which can be either Fee-Based or Commission-Only) &
insurance services (which are offered on a Commission-Only basis).
Insurance
Planning Services:
All
insurance services and products are offered on a commission-only basis. We
pay referral fees, as set out in our Rewards web page, only on
non-securities & insurance products.
*Fee-Based
~ Our Value-Added Advantage
At no extra charge
we offer assessment of current equities & fund positions and compare
these to a customized "Targeted Portfolio" based on the
"Active-Disciplined Investment Methodology" of managed asset
allocation*.
[*ASSET ALLOCATION: INVESTORS
NEED TO BE AWARE THAT NO INVESTMENT PLAN/ASSET ALLOCATION CAN ELIMINATE THE
RISK OF FLUCTUATING PRICES AND UNCERTAIN RETURNS].
The "disciplined" aspect of this methodology
lessens "style drift" (i.e. Large Cap to Mid and/or Small
Cap) & asset class "over-lapping/over-weighting" (i.e.
multiple stock holdings of any given one company in differing Portfolios), and tax inefficiencies.
Investment
styles include three major approaches; namely:
-
Passive
- creates a "core" portfolio with benchmark holdings meant to
mirror major market indices; therefore, by its' very nature, this approach
makes it hard to out-perform the market. This is a highly conservative
methodology.
-
Active
- makes more speculative investments to enhance potential returns but in doing so
can subject the portfolio to style drift and phantom income & taxes due
to its' inherent "active" buying & selling style.
-
Active-Disciplined
- marries the above two approaches and in our application creates a stable
core of Index holdings, based on selected Indexes*, and
then encircles this core with a layer of holdings under the active
management approach to help enhance returns with the goal of avoiding the negatives of
either the pure active or pure passive methods.
[*Index Disclaimer:
An Index is a portfolio of specific securities (common examples are S&P,
DJIA, NASDAQ), the performance of which is often used as a benchmark in
judging the relative performance of certain asset classes. Indexes are
unmanaged portfolios and investors cannot invest directly in an index. Past
performance is not indicative of future results].
The
"Active-Disciplined" approach concentrates on the method of
implementation, asset mix, and equity mix, rather than timing or specific
manager issues. The concentric investments bias in the actively managed
model are based on such established factors as: the current macro economic
environment (inflation, monetary policy, GDP), interest rates, earnings &
profit expectations, asset class returns, historical data, & consumer
sentiment. Fundamentally, this approach reflects the basic understanding
that markets do not move in a linear fashion and are best understood and worked
with under a "probability standard" calculation that strives to
estimate a given risk exposure with the intent being to limit such exposure to 1 standard deviation.
The
Process: To arrive at this "Targeted Portfolio" we
identify a client's best asset allocation mix by
measuring their investment for their specific level of risk.
The
"Targeted Portfolio" is then developed using the choices generated from
a research process that is predicated on performing rigorous, disciplined, value-added research.
Each asset selected must meet a unique criteria for its respective asset class.
Our research is integrated with advanced techniques of portfolio development to unite
our clients' goals with these investment opportunities.
A
"Targeted
Portfolio" is designed across asset classes in important industries in those companies most likely to perform well relative to their
competitors. In our experience, portfolio strategy "targeted" on
this kind of asset allocation, with broad diversified representation within each asset class, creates the best opportunity
for success with respect to the desired degree of risk any given client
expects.
Our strategic approach
can result in an
effective unification of a clients' goals and appropriate investment opportunities to achieve
consistency and stability over the long term. The result is often an optimal &
customized "Targeted Portfolio" that aims to match the lowest risk to
correspond with the rate of return a clients' specific investment objectives
& risk tolerances indicate.
Link to List of > All Professional Services
(0507202A-31006)
Contact Us
Today! Phone: 1.800.482.5347 /
www.LeagueFinancial.com
/ Info@LeagueFinancial.com
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