Investors often struggle to find the advisor that will be the best fit for themselves and their family. And, they wonder what to expect from an advisor, and how the advisor’s services will meet their individual needs. We have tried to anticipate many of the questions you might have about us so that you can come to the very best possible decision. We will be happy to discuss any other issues or concerns with you so that you have a full understanding of how we work with our clients.
About Investor Solutions
We pride ourselves on our intellectual capital. Our advisors all have advanced academic degrees in related fields, professional certifications and years of experience in helping clients to achieve their goals.
We believe we provide compelling value to several types of clients that are underserved and/or overcharged:
- Individuals, trusts and/or families wishing institutional quality management of their assets to meet their needs for reliable retirement income and/or growth of principal for future enjoyment.
- Qualified Corporate Retirement Plans.
- Not for profit and other institutions.
Our business revolves around you. We work directly for you, not some Wall Street Bank seeking to maximize its own profits. The quality, experience, credentials and qualifications of our advisors are second to none. We are thought leaders in the advisor space and focus all of our intellectual capital on portfolio management and financial advice for your particular situation. Importantly, we are totally independent and as a fee-only advisor we have no financial ties to any other custodian, product producer, or service provider. We never receive commissions on any assets we recommend. This leaves us free to pick the very best products and providers for our clients with no outside influence or conflicts of interest.
We have a single mission: Improve your security and help you to meet your goals. We don’t manufacture product, sell anything, custody assets, underwrite new issues, trade our own accounts, make markets, or loan money. At best those activities are a distraction from the core mission, at worst they generate unmanageable conflicts of interest. We are independent of any outside control and free to devote our entire resources to meeting your unique needs. You are not just a number here. Your first hint that we aren’t a giant impersonal machine will be that we have a live person answer all your calls. Your investment advisory team services a limited number of clients and will know you and your family’s situation intimately.
The firm was founded by 38 year industry veteran Frank Armstrong in 1993 as an independent, fee-only, Registered Investment Advisor (RIA). Today the firm has grown to 12 professional employees serving 500 clients in over 30 states with assets under management of over $500 million dollars. Based in Coconut Grove, FL Investor Solutions is a widely recognized by the media for providing prudent disciplined investment strategies tailored to the individual needs of its clients.
Working with Investor Solutions
Of course, we want to have a long close personal relationship with you. However, not all clients want regularly scheduled weekly meetings. In addition to our detailed monthly reports, our wealth management clients have virtually unlimited access to their advisory team whether by personal visits or phone, email, or web conferencing. We are here to serve you. You set the number of visits you are comfortable with or that your situation requires.
We review all client accounts frequently for rebalancing, tax loss harvesting, or other tax management opportunities. Additionally, every cash flow provides an opportunity to rebalance your portfolio back to target weights.
In most cases we can manage your account with your employer’s plan for you and report on it as part of your total financial picture.
Investor Solutions executes all trades for the accounts we manage. We will arrange for a non-managed account if you wish to execute trades outside of our managed accounts. You can make those trades directly with your custodian. We neither report on nor charge for these accounts.
Of course, with your permission we will share financial information (i.e. tax estimates, realized gain loss information, minimum required distributions, etc.) with any of your other professional advisors.
Yes. As part of our process as we begin to work together we will develop and provide you with a complete investment plan for your approval prior to your becoming a client.
Generally no, unless there are very significant tax issues, we will make trades under the investment policy that we have agreed on with you in advance. Of course, your custodian will promptly report all activity in your account, and you will have 24/7 access to account details on the custodian’s web site.
Our personal attention starts with a live person answering the phone, and a team of advisors and operations staff dedicated to serving your needs. We communicate with distant clients by phone, email, Skype, fax, and internet meeting technology. Many have remarked that they find that we are as responsive as advisors in the next building.
Yes, the majority of our clients reside outside the state of Florida.
Absolutely! After our initial review and analysis we will present you with a comprehensive plan tailored to your unique situation and needs. Only after we agree on a plan and you accept it, will we implement and manage it for you until you tell us otherwise.
Each client of a taxable account receives a realized gain loss report from Investor Solutions, and your custodian will provide you with a 1099 for your tax return.
You can view your account daily on your custodian’s web site, or through the Investor Solutions site. Your custodian provides monthly position and transaction and reports, and Investor Solutions provides monthly performance reports.
Each client is assigned a team consisting of a senior advisor and associate advisor that will be completely familiar with your entire financial picture.
As trusted advisors wealth managers our professionals create and implement strategies designed to efficiently assist you to meet your financial goals. By bringing our experience and discipline to your problems we free you up to spend time doing the things that matter to you.
Wealth managers have access to intellectual capital, systems, products and services which are seldom available to individuals or small institutions. And, we bring a discipline to the practice of investment management honed from years of experience and financial research.
Investments & Philosophy
We provide efficient, economical, tax sensitive and effective exposure to targeted segments of the global economy through passive investments including institutional class index funds, exchange traded funds (ETFs) and structured funds. All assets are marked to market every day, totally transparent, fully disclosed, liquid, audited, registered, and appropriately regulated.
Individual stocks carry huge risks as opposed to fully diversified portfolios, and there is overwhelming credible evidence that individual security selection increase costs, risk, tax exposure, while reducing returns.
Our investment philosophy is based on rigorous academic research into market behavior and the sources of returns. We don’t make forecasts or attempt to predict market movements. Rather we manage risks in an attempt to provide an optimum outcome over time tailored to the individual needs or our clients. Investors should take no more risk than they can afford and are emotionally able to bear. So, choosing the right level of risk is an important key to success. Once they have established the appropriate level of risk, it’s critical that they remain fully invested through the market cycles. At every risk level, we work very hard to optimize performance and manage risks through broad diversification and exposure to those factors that generate returns. Because equity markets can be volatile portfolios must be designed to weather occasional storms, provide sufficient liquidity to meet anticipated cash flow needs, and allow the investor to sleep well at night, while meeting the investor’s financial goals. The most efficient way to accomplish that is to divide the portfolio into two portions:
- A safe portion which will provide for anticipated withdrawals for several years into the future, and temper the risk of the portfolio as a whole.
- The risky portion will fluctuate in value as markets constantly adjust, but provides the opportunity for higher returns to hedge inflation and generate real growth.
Optimum portfolios can be devised for any individual investor’s unique situation by properly combining the two segments. That division should be driven by carefully considering the investment’s time horizon, cash flow needs and the investor’s risk tolerance.
- Equities: True Global diversification with a distinct tilt toward smaller companies and value pricing, foreign and domestic real estate, and commodities futures.
- Fixed Income: Short to medium term high quality, broadly diversified portfolios.
We execute our asset allocation plans using exclusively passive investments because we are unaware of any credible evidence which proves that the selection of individual securities or attempts to time the market do anything but add risk and cost while reliably reducing returns.
Cost & Compensation
In addition to our fee, each of the mutual funds or exchange traded funds (ETFs) have an internal operating fee, and the custodian may collect transaction fees on some trades. The total costs of investing through us compare very favorably with many no-load mutual funds.
Our fees are paid directly by our clients based on the amount of assets under our management. Importantly, we receive no compensation from any other source, and have no financial tie to any product provider, custodian, or service provider which eliminates the vast majority of conflicts of interest that permeate the financial services industry.
Security & Confidentiality
Your privacy is a primary concern of Investor Solutions. We will never share financial or personal information with anyone else without your express permission in advance.
We are authorized to direct your custodian to make trades on your behalf in your account. However, we are not authorized to transfer funds except if you specifically authorize us in writing to transfer to an account with identical registration in your name, or by a letter from you specifically authorizing payment to a third party.
No, we don’t custody assets. For your protection all your funds will be held by a leading independent third party custodian in an account registered in your name. We can never take a penny of your funds (unless you specifically authorize us to deduct your fees quarterly).
Your account is not an asset of the custodian, and not subject to their creditors. They simply safeguard your assets. Additionally, unlike many of the large banks and stock brokerages, none of our primary custodians have significant exposure to trading losses in their capital accounts. We are confident of their financial integrity. However, there is an additional layer of protection in the event of their failure.
SIPC (Securities Investor Protection Corporation)
All of our custodians are covered by SIPC and excess SIPC policies subject to limitations. Importantly, SIPC does not protect against fluctuations in value of your securities. Rather is covers account holders against loss due to fraud or theft in the event of a custodian’s financial failure.
SIPC is an often misunderstood yet essential part of our financial safety net that protects investors by helping to maintain order in the world of brokerage accounts. While a number of federal, self-regulating, and state agencies deal with cases of investment fraud, SIPC’s focus is very narrow. SIPC was not chartered by Congress to combat fraud, instead the SIPC functions to free up investor assets when they get bogged down in a financially troubled or failing brokerage firm. When a brokerage firm is closed due to bankruptcy or other financial difficulties and customers are missing assets, the SIPC steps in, and works to return the customers’ cash, stock and other securities. Without SIPC, investors at financially troubled brokerage firms might lose their securities or money forever or wait for years while their assets are tied up in court. However, SIPC does have limits with regard to the types of assets that it will cover and to what amount it will extend the coverage to individuals. In addition, individuals must maintain records to verify claims if items are missing.
Asset Coverage and Limits – SIPC coverage is extended to cash and securities, such as stocks and bonds, and it is not extended to commodities, futures contracts, unregistered fixed annuity contracts, or limited partnerships. You can contact the SIPC or your custodial firms directly to see exactly what assets in your account are covered. When verifying coverage through your custodian, make sure you get it in writing. Customers of failed brokerage firms are able to get back all of the covered securities that are already registered in their name or are in the process of being registered. After this first step, the firm’s remaining customer assets are then divided on a pro rata basis with the remaining funds being shared in proportion to the size of their respective claims. If sufficient funds are not available in the firm’s customer accounts to satisfy the claims within their remaining asset pool, then the reserve funds of SIPC are used to supplement the distribution, up to a ceiling of $500,000 per customer, including a maximum of $100,000 for cash claims. Additional funds may be available to satisfy the remainder of customer claims through excess insurance coverage purchased by the custodian or after the cost of liquidating the brokerage firm is taken into account. Like FDIC, it is important that you are aware of the various layers of coverage as you may be able to gain more coverage at a firm by simply changing how the assets are registered or held.
Each custodian also provides excess account protection above SIPC limits. Details vary by custodian. (Account protection does not cover fluctuations in the market value of securities)
Behind the Scenes
Account maintenance is not glamorous, flashy or sexy. However, carefully tending your account adds substantial value over time. While you may seldom notice it, it goes on in the background in every one of our accounts as part of our comprehensive, continuous discretionary management mission. We take care of the dreary, tedious details so you can enjoy the things that are important to you and rest assured that your investments are being professionally managed.
A professionally run investment process does not mean hyperactive trading or even generating occasional trades just to demonstrate that we are doing something for you. Frequent trades and speculation are not in your best interest, and we have plenty to do without generating transactions for “window dressing”.
During the initial getting to know you period, we carefully asses your risk tolerance, goals, and time horizon to design a tailored strategic asset allocation plan that meets your needs. It’s important that you know you have sufficient liquidity to weather any financial storm and meet your distribution requirements on time while providing sufficient growth potential to meet your family’s longer term objectives. It’s a balancing act. You should not take any more risk than you are comfortable with financially and emotionally. We firmly believe that sleeping well is a legitimate financial objective. But, you must take enough risk to earn the returns you need to get you to your goals.
Once you are comfortable that our suggested asset allocation plan meets your unique needs, we take over to execute, monitor and maintain the plan on your behalf. You are now free to travel around the world. We have your back.
For each asset class in your plan, we will select the best fund available based on cost, diversification, methodology, and fidelity to the asset class. Our core belief that passive funds provide the lowest cost, widest diversification, lowest risk, lowest tax exposure and highest probability of success drives the selection process. Some of the funds will be restricted to clients of advisors, while others may be available to the general public. But, each will be selected on its merits because we believe that they are “best of class”. Each fund will be properly registered, audited, regulated, marked to market daily, and completely liquid.
Assets grow and follow different trajectories as markets evolve. Rebalancing maintains the agreed asset allocation, and risk profile that you selected. However, because markets have a well established pattern of regressing to the mean, rebalancing offers the opportunity to capture additional returns through a consistent pattern of selling high and buying low when an asset class exceeds predetermined tolerances. The triggers we have selected balance the requirement to maintain our strategy within narrow tolerances with our belief that too frequent trading drives up costs and tax exposure with little benefit. Our sophisticate internal systems identify opportunities as they present themselves so that we can capitalize on them for you before they are lost.
Tax Minimization Strategies
Taxes are by far the biggest expense investors face. Each dollar captured by the IRS, is a dead drag on performance and accumulations. Once it flies off to the IRS, it’s not coming back. So, a tax minimization strategy will yield big dividends for taxable accounts. We employ several different tactics to limit your exposure to taxes:
Tax Loss Harvesting
If any of your securities experience a decline in value from your adjusted purchase prices our management systems will detect it and we can sell those securities to recognize a tax loss. This loss can later be used to wash against any other gains you may have either inside your portfolio or as the result of the sale of any other asset. So, it’s like having money in the bank to use to pay future gains. At the time of sale of the asset we can buy a similar fund representing the asset class so that you remain exposed to the class for the duration of the transaction. At the end of the 31 day “wash sale” period we can repurchase the original asset while retaining the loss to carry forward. No one likes seeing any asset class decline in value, but over time they all recover and go on to new highs. Meanwhile it’s like turning a lemon into lemonade.
Dividend and Capital Gain Avoidance
Mutual fund and ETF dividends and capital gains distributions are normally taxable. But, in many cases they can be avoided by selling the security prior to a known distribution. If the tax cost of selling the security prior to the distribution is less than the cost of paying the tax on the distribution, we can sell it to eliminate or minimize the impact. Because each client has a different cost basis for each holding, our systems examine every asset in every taxable account to discover opportunities.
Asset location strategies
Because some asset classes have higher turnover and dividends, where possible our strategy is to place higher tax generating assets inside tax deferred accounts. Each client presents a different combination of taxable and tax deferred accounts, so this determination must be made on an individual basis.
Review accounts continuously to reduce costs or risks
The market continuously evolves and improves choices for the sophisticated investors. Prices have fallen dramatically for both ETFs and traditional index funds. We want to capture that benefit for you. If we have the opportunity to switch to a lower cost but substantially similar product without generating a tax cost to you, we will automatically make the change for you. However, each account and each holding has a different cost basis, so that decision must be made on an individual account basis.
Evaluate alternative strategies and new asset classes continuously
As markets evolve, new products and asset classes become available that have the potential to increase returns and/or reduce risk at the portfolio level. Our investment committee meets regularly to evaluate the opportunities for you. Along with the very good, Wall Street churns out a number of products that range from bad to toxic. So we are diligent in reviewing new offerings and very conservative in adopting new strategies until they are widely accepted and time tested.
You are never out of the loop. You will have the big picture and all the detail you need to support it. We report to you performance over multiple time periods, attribution analysis, holdings, costs, account actions, additions and distributions. You will get a complete consolidated picture of all your accounts with us, including pensions, IRAs, and taxable accounts.
We don’t custody assets. Your every cent is held by a leading discount brokerage in your name. You can always cross check with your custodian’s web site or printed statements. We reconcile every account to the penny every night against your custodian.
Manage cash flows
Whether you are taking distributions or making deposits, every cash flow gives us the opportunity to rebalance the portfolio. If you are taking regular distributions, we will make sure it gets to your account every month at the same time so you can have confidence the funds are there when you need them. And if you are required to make Required Minimum Distributions (RMDs) from your tax deferred accounts, we monitor to make sure you don’t get any unpleasant surprises from the IRS.
Professional Advisor Team
You will have a team of two professionals advisors that have in depth knowledge of your situation and goals. All Investor Solutions advisors have extensive experience in providing advice and hold both advanced academic degrees and professional certifications. They are a valuable resource for a wide variety of your investment and financial planning questions and concerns.
Your advisor team will hold regular reviews with you to report on account performance and your progress towards meeting your goals. You set the frequency, time and method of meeting to meet your lifestyle and convenience. Whether it’s in our office by telephone or Skype, we are here to serve you.
You can rely on Investor Solutions to manage and maintain your accounts with a professional and disciplined approach that handles the details for you in the back ground so you can have a life and enjoy the things that are important to you. Relax, we have your back.
What else should I consider?
Before you reach a final decision on an advisor, always read and understand their ADV (The Required Disclosure that Investment Advisors must provide to you), insure that they are properly licensed and registered, and check out their regulatory history.
The Central Registration Depository (CRD) is a computerized database that contains information about most brokers, their representatives, and the firms they work for. For instance, you can find out if brokers are properly licensed in your state and if they have had run-ins with regulators or received serious complaints from investors. You’ll also find information about the brokers’ educational backgrounds and where they’ve worked before their current jobs.
You can ask your state securities regulator or the Financial Industry Regulatory Authority (FINRA) to provide you with information from the CRD. Because your state securities regulator may provide more comprehensive information from the CRD than FINRA, especially when it comes to investor complaints, you may want to check with your state securities regulator first. You’ll find contact information for your state securities regulator on the website of the North American Securities Administrators Association. To contact FINRA, either visit FINRA’s BrokerCheck website or call FINRA’s toll-free BrokerCheck hotline at (800) 289-9999.
Thanks for considering Investor Solutions to meet your investment goals. For any further information contact an advisor at 800 508 8500.
ARTICLES & LATEST NEWS
“INVESTMENT STRATEGIES FOR THE 21st CENTURY”
by Frank Armstrong
“THE INFORMED INVESTOR”
by Frank Armstrong
“THE RETIREMENT CHALLENGE – SINK OR SWIM”
by Frank Armstrong
“SAVE YOUR RETIREMENT”
by Frank Armstrong