Frequently Asked QuestionsClick on a question below to view the answer. A: We provide our services to individuals, families, businesses, trusts, partnerships, not-for-profit organizations and retirement plans who wish to pursue long-term goals based on our strategic approach to managing wealth. Q: Describe your broad services. A: We have developed a consultative client management process for helping our clients achieve their financial goals. We conduct an initial deep discovery meeting to determine each client’s financial needs in relation to their unique values; goals; personal, professional and institutional relationships; assets; and interests. We then form a far-reaching plan to achieve their goals. We work with their other experts—or help them select the appropriate experts—to ensure that each component within their wealth strategy plan is carefully executed and seamlessly integrated to serve their needs. Q: Do you strictly handle investments? A: While asset management is our core business, we also provide our individual clients with wealth management services such as tax planning, retirement planning, estate planning, risk management and asset protection, and cash flow management. Q: How much does it cost to hold the initial planning meetings with your firm? A: There is no cost for our initial Discovery meeting. We feel it is time well spent to first get to know one another—before we seek mutual commitment and before we begin charging a fee. Q: How much do you charge for your services? A: We are a fee-based advisor, with our fees based on a percentage of your assets that we manage. Your fee will be fully disclosed to you, in writing, before you make any decision to move forward with us managing your investments. We believe a fee-based approach best aligns our interest with yours, helping us to meet our fiduciary obligation as a Registered Investment Advisor firm. Our fees are on a sliding scale; as your portfolio grows, the percentage decreases. In addition, we take a family approach to investing. Aggregating assets to determine your fees (while managing each portfolio according to its distinct policies) enables favorable rates for your immediate family. Q: Do you have a minimum portfolio size? A: Our minimum investment size is $500,000. If your current asset level does not meet our minimum requirements but you have unique circumstances you would like to discuss, please do not hesitate to give us a call. A: We are not. Broker-Dealers are held to a “Suitability Standard” when determining a client’s portfolio. In other words, investment decisions made on behalf of clients must be “suitable.” Kraft Asset Management, LLC is an SEC-registered Investment Advisor and, as such, is a Fiduciary, which is generally considered the highest legal duty one party can have to another, and which obligates KAM to act in the very best interest of the client. Q: What happens to my current holdings if I become a client? A: Before any changes are made, we first analyze your existing portfolio and discuss our recommendations to you. Our overall goal is for your portfolio to make sense for you and your lifetime objectives, in the most cost-effective way possible. Ways we achieve this goal are to capture your unique willingness, ability and need to take on market risk via appropriate (global) diversification; to minimize the expenses involved with investing; to manage for appropriate asset location between taxable and tax-sheltered accounts; and to eliminate any unnecessary complexity within the collection of accounts within your portfolio. If existing holdings lend themselves to these objectives, we leave them in place. If changes are warranted, we work with you to ensure any transactions occur as smoothly and cost-effectively as possible. Q: Do you trade and hold my assets for me? A: While you grant us a Limited Power of Attorney (LPOA) to execute transactions on your behalf, you remain in control of your assets. Accounts are held in your name at a quality custodian such as Schwab Institutional or Fidelity Investments. Q: Describe your investment approach. A: For managing your financial portfolio, we offer a prudent approach based on our fiduciary relationship with you as your trusted investment advisor. Fiduciary duty is generally considered the highest legal duty one party can have to another. As a Registered Investment Advisor firm, we have a legal responsibility to always act in your best interests – and we take that responsibility seriously. We apply a structured asset class investment approach, tailoring your portfolio’s level of risk (and its expected returns) according to your personal needs, goals and circumstances. We adhere to the tenets of Modern Portfolio Theory and to the guidelines provided by the American Law Institute in drafting the Uniform Prudent Investor Rule. They indicate that the overwhelmingly largest determinant of portfolio performance is asset allocation – how your assets are allocated among the various asset classes. We build portfolios accordingly, using low-cost institutional managers who provide structured asset class mutual funds and diversify globally to reduce risk. Many other financial services firms offer an approach based on “active management”. Active management assumes that the markets are generally inefficient, allowing clever individuals to regularly exploit and profit from anomalies in the market (beyond the costs of consistently seeking and executing such trades). And yet, there is overwhelming academic evidence that the collective wisdom of all market players – especially in today’s electronic era – results in highly efficient markets. Markets reflect fair pricing almost instantaneously upon the release of any good or bad price-related news. In offering a “structured portfolio” approach, we heed the academic wisdom. We believe that the opportunities to exploit the inefficiencies are too few and far between to effectively and affordably pursue. Q: What if I need a bond (fixed income) portfolio or other special holdings? A: Our philosophy is that equity investments are for growth; fixed income is to help control overall volatility in a portfolio and to provide for steady, reliable income and contingency reserves. We address your fixed income needs as an integral part of your overall portfolio as well as by considering the special needs, characteristics and (often hidden) costs inherent in the bond market. If a bond portfolio tailored to your needs makes sense for you, we build one for you based on an analysis of each bond’s full range of characteristics (sector, maturity, credit rating and more). Through our relationship with BAM Advisor Services, LLC, an affiliated entity of the Buckingham Family of Financial Services, we have access to strategic fixed income resources and a network of regional and national bond dealers that help provide a wide range of security availability as well as fair and competitive institutional level pricing for you. A: If you have already heard of DFA, you may be aware that it seeks to protect the reliability and manage the costs of its funds by requiring investors to access them via a select group of financial advisory firms. You can learn more about DFA by clicking here to visit their Web site. Our firm is proud to be among the select firms who have access to DFA funds. We often find that they provide the best vehicles for building portfolios that can be cost-effectively designed and managed to target your unique objectives through all types of markets. However, we receive no commissions for using DFA funds. Whenever we feel there is a better investment option for your particular needs, we use it. |