Each account we manage is maintained separately and managed to meet the specific needs and risk tolerances of each client.
No. We customize all portfolios individually to meet each client’s specific needs and risk tolerances. Investments are then purchased (or avoided) for each portfolio depending on its suitability for that client and its fit with that client’s existing holdings. Suitability is determined by a number of factors unique to each client such as risk tolerance, investment goals, cash flow needs, and other holdings.
In short, no. As a boutique professional services firm, we do focus on adding high-net-worth clients who have established or wish to establish private investment portfolios with custom structuring. Because we offer a unique, independent opportunity, our management approach is typically best suited for larger portfolios. However, we always evaluate prospective new client accounts on a case-by-case basis to determine the best fit for the client and his/her needs.
No, we do not use traditional mutual funds in our managed portfolios. Instead, we develop accounts with individual stocks, bonds, and exchange-traded funds (ETFs). Our clients’ accounts are large enough to achieve proper diversification without layering fees with mutual funds. With the vehicles we use, we are able to tightly control diversification, risk, and cash flow. ETFs provide a great alternative to mutual funds for adding exposure to market sectors where individual stock selection is very difficult and/or expensive (small-cap, foreign currency international, emerging markets, and certain sub-industries).
Do you review capital gains tax situations individually, or are the same decisions made for all accounts?
We review each account individually to minimize capital gains taxes for each client. In-depth capital gains analyses are conducted during the fourth quarter. Where appropriate, we also implement tax strategies to offset “outside” gains/losses for clients.
INDEPENDENCE AND CUSTODIANSHIP
Peloton is not a broker. Peloton Wealth Strategists is a Registered Investment Adviser (RIA). We do not maintain custody of any client assets. All of our managed accounts are held by third-party custodians.
We have established relationships with several brokerage firms. We recommend utilizing one of our existing relationships.
Are you compensated for directing accounts to or maintaining relationships with certain brokers? In other words, do all accounts look exactly alike?
No, we are completely independent from any other financial services firm, and we are not compensated by any custodian we use. We have several particularly effective relationships that provide excellent service and compelling pricing. We receive sell-side research from these and other firms.
Who receives the brokerage account fees and/or transaction costs generated by activity within my account?
Custodian-related fees, commissions, and account maintenance charges that are incurred by the client’s account(s) are paid directly to the custodian for the services they provide.
Our goal is to keep your “all in” investment-related costs (i.e., management fees plus brokerage costs) less than 1.00% annually – a goal we can achieve for new accounts.
Limited Power of Attorney (LPOA) provides Peloton Wealth Strategists “trading authorization” necessary to direct trades within our managed accounts. An LPOA is put in place via a custodian document signed by the client. An LPOA only allows Peloton to initiate trades within the specified account – it does not provide authorization for transfers unless the client specifically allows Peloton Wealth Strategists to bill the account for fees.
Does your fee only cover a certain number of face-to-face meetings per year? Will I be billed for extra meetings and phone conversations?
Our management fee covers everything. We have an open door policy that allows clients to schedule meetings and call with questions anytime, without incurring additional costs. Knowing our clients allows us to manage money effectively. By listening we understand their needs better, and when their situations change, the proper investment adjustments are made. Also standing quarterly or semi-annual reviews work well for many clients.
We utilize processes that ensure 10 – 15 client-level portfolio reviews each year.
Portfolio summaries and performance figures are provided by Peloton Wealth Strategists quarterly. These reports provide cost basis information, current valuation, asset allocation weightings, and recent and long-term performance. Clients also receive monthly custodian statements.
As your financial circumstances evolve, we will adjust your portfolio strategy to meet your changing needs. Our individualized approach is exceptionally flexible and allows us to anticipate changes and act accordingly.
We do not begin billing until a management agreement is in place. We do not bill for any time spent up-front or for the proposal we develop.
Peloton provides investment management services on a fee basis. We do not sell products and do not receive any commissions.
Fees are billed quarterly based on the value of assets under management.
Our goal is to keep your “all in” costs (i.e., management fees plus brokerage costs) less than 1.00% annually – a goal we can achieve for new accounts.
Yes, our custodians allow clients to pay management fees directly from their investment account(s), which we recommend. A signature is usually all that’s required.
Our standard management agreement has an initial term of one year and is renewable for one year on each anniversary. It is, however, cancelable at any time with 30 days written notice.
REGULATORY, PRIVACY AND INTEGRITY
Peloton Wealth Strategists falls under the Federal jurisdiction of the Securities & Exchange Commission (SEC). We are required to file an updated Form ADV with the SEC annually. The Form ADV is publicly available and a required disclosure to all new clients. Additionally, we are required to register with each state in which we exceed its threshold for registration – typically a certain number of clients in any one state.
Annually, all clients receive our Privacy Statement, which outlines our compliance with Federal privacy regulations. We do not maintain any client information on our web site, directly or via links. There are business reasons for which it is necessary for us to communicate with a client’s brokers, accountants, attorneys or other members of a client’s financial services team. However, we would not discuss any private information without first obtaining the client’s consent.
Integrity is vital to our success, and we grow through client referrals. These references provide a close-up perspective on our commitment to clients and their privacy. Client consent is always obtained prior to our providing a reference.