Our Wealth Management Process
We identify and affirm the client’s investment objective, then create and modify an investment policy statement suited to that objective.
The five critical action steps:
- Design: Asset allocation design and implementation.
- Select: Superior investment selection based on researched-based fund data.
- Diversify: Diversification by investment style, strategy and asset class.
- Risk: Adjustment of risk and volatility levels according to individual preferences and market conditions.
- Quality: Low-turnover, low-expense and tax-efficient portfolios.
The mechanics of how we do it:
- We assist the Client in establishing a separate custodial account with the independent third party firm of Fidelity Investments—a nationally recognized custodian
- The Client grants Fama Fiduciary Wealth LLC a limited power of attorney to initiate positions and to buy or sell (trade) in the account, all of which is subject to previously agreed-upon guidelines specified in writing by the Client.
- We then use the Fidelity platform as an economical and flexible base of operations to position assets among a choice of approximately 20,000 mutual funds representing top no-load and load-waived families.
We manage portfolios on a discretionary basis but never take custody.
- Once in place, the ongoing maintenance of the investment program is discretionary in nature. “Discretionary” means we have the right—as well as the affirmative obligation—to make changes in the investment selections as we deem fit.
- We will make periodic adjustments, including rebalancing as required, based upon our market outlook as well as other client-specific factors.
- Although our firm advises all Client accounts and makes all purchase and sale decisions, we do not take possession or custody of assets. All assets are held at Fidelity Investments in the individual client’s name. Some assets are also held at Charles Schwab, Vanguard and other third-party custodians.
- Fidelity provides our clients with full SIPC insurance coverage as well as supplemental coverage for additional protection, all at no cost to the Client.
We actively review and upgrade portfolios as needed.
- We review market conditions and each client’s portfolio on a regular and ongoing basis and choose investments that we believe will deliver superior returns within their respective category or peer group.
- Individual investment strategies and risk tolerances are reviewed periodically to insure that each portfolio remains properly positioned for achieving the Client’s objectives.
- We study and analyze individual portfolio behavior during periods of excessive market volatility and disruption. This critical analysis serves as confirmation to us and to the Client that the portfolio is properly positioned in terms of risk and allocation.
We seek balance and equilibrium.
- We seek to balance reasonable growth with modest risk and we focus much of our energy on this “risk-reward” trade-off.
- We like the idea of all-weather portfolios, ones which will maintain stability and experience only modest fluctuations given any market environment.
- We emphasize data examination and the analysis of timely research. This practice positions each portfolio for the widest possible range of market outcomes—bear market, bull market, or sideways market.
- We believe that a highly disciplined and methodical approach to investing increases a Client’s ability to achieve their financial objectives with the least amount of emotional distraction.
- By taking this more stable pathway, we believe that our clients are more likely to feel comfortable knowing that we have increased the likelihood of them achieving their financial objectives.