The financial industry has much at stake when U.S. and state government agencies tasked with regulating the offerings of financial services to the general public begin discussing changes to those laws. This has led to some firms in the industry utilizing a number of confusing professional titles (e.g. advisor, broker, rep), making it more difficult for the public to understand the duties/responsibilities of those professionals when providing services to them.
What is a Fiduciary?
In recent years, the term “fiduciary” or utilizing a “fiduciary standard” has gained a foothold in the financial industry. Basically speaking, a fiduciary is someone who is entrusted with the care of money or property. In the world of investments, a fiduciary is someone who makes investment decisions on behalf of another person. For an investment professional, being a fiduciary means having a legal obligation to put a client’s best interests first and above all else.
Why Work with a Fiduciary?
We believe that it depends upon an individual’s needs. According to Stanley and Fallaw, authors of “The Next Millionaire Next Door”, the marketplace for investors is comprised of three sectors:
Do It Yourself Investors
of the marketplace
They handle their own investments and generally do not trust anyone else with their money. They do not have a desire to work with a fiduciary or other advisor.
Competent, but Wanting a Second Opinion Investors
of the marketplace
They want the control over their own investments but may want a second opinion or additional research/information from a professional before making a final decision. They may or may not desire to work with a fiduciary, depending upon their ability and confidence in recognizing whether the advice they receive is objective or biased.
You Handle It
of the marketplace
They lack the time, talent, or temperament for investing their own money. They prefer to let a fiduciary or other advisor make investment decisions on their behalf.
Choosing the Right Investment Professional
We believe that investors looking to hire someone to work with their investments should begin the process by hiring an RIA (Registered Investment Advisor), as these types of advisers are fiduciaries and are legally required to act in the client’s best interests.
To determine whether a particular financial professional is a good fit, the client should ask about an adviser’s investment philosophies, sources of compensation, fee schedule, and any potential conflicts of interest. This information is available to the public in a disclosure document called Form ADV Part 1 and Part 2. If the adviser also sells commission-based products (as with dually registered firms – both RIA and broker/dealer registered), they may have a conflict in serving the client’s needs first. TABER Asset Management is not dually registered.
TABER Asset Management’s Approach
Trust between a client and an advisor is critically important. That is why TABER Asset Management only recommends financial products that are in the client’s best interests. We adhere to a fiduciary standard.
Our investment portfolios are customized for each and every client. They are designed to fit your personal financial goals and comfort level with price fluctuations (market risk).
We primarily utilize individual securities, such as stocks and bonds, rather than limiting our choices exclusively to funds (e.g. ETFs, open and close ended funds). This allows us to concentrate rather than overly diversify a client’s holdings, which creates the potential for higher (or lower) returns on investment.
Our research process utilizes an active, not passive, approach to the selection of investment holdings. The investment approach is “bottom up” rather than “top down” – paying close attention to companies and their managements, industries, and macro-economic conditions, in that order.
Through multiple major downturns in the markets, TABER Asset Management has a history of seeking to maintain clients’ account values better than the market averages. Better downside market protection allows for more asset value to compound in the next “up” cycle of the markets.
We are a fee-only adviser. Our compensation is based upon a percentage of assets in the client’s account(s), rather than from commissions from trading in the account(s). We place trades in client accounts based upon their long-term investment merit.
TABER Asset Management works with independent third-party custodians to hold our clients’ assets. Custodial firms provide 24/7/365 online access to client account information, as well as monthly electronic or paper account statements. This transparency helps foster trust in our asset management relationships. Additionally, TABER Asset Management generates its own reports to clients detailing investment results.
If clients wish to speak with us, they are spared the hassle of a phone tree that requires repeated punching of a 1 or 3 or 8 on a dial pad, only to reach someone they have never talked to before. Unlike systems that treat them as an account number, their relationship with us is highly valued and prized.
Our fee structure is simple and easy to understand. Assets under our management are charged an advisory fee that is based upon the size of the portfolio. Trading costs and other fees are directly billed by the third-party custodian holding the client’s portfolio. Our goal is to keep these brokerage charges to a minimum, since our revenue is based upon the client’s portfolio size.
We believe that charging a set percentage of fees for managing our clients’ assets puts our mutual interests in alignment. When account values increase, the client has more money and we receive more pay. If the account values decease, our pay declines as well. Offering a proven, time tested investment strategy with a transparent fee structure increases the likelihood of a favorable investment experience and results for our clients.