Frequently Asked Questions
1. What is a Registered Investment Advisor?
An Investment Advisor is a fiduciary who has a duty of undivided loyalty to his investment advisory clients and must deal fairly and honestly with them.
Any person or entity that holds itself out as an investment advisor and manages 30 million dollars or more in assets, must be registered with the Securities and Exchange Commission. Gardey Financial Advisors is an investment advisory firm registered with the Securities and Exchange Commission as a Registered Investment Advisor. Our Securities and Exchange Commission file number is 801-22431.
The Investment Management Service includes the following:
Inventory of Holdings
We determine exactly what securities are in your portfolio. The descriptions of CDs, bonds, notes, common stocks, preferred stocks, money market funds, etc., are obtained. The cost basis of all securities is also obtained. This information serves as a basis for analysis and is readily available through our computer system.
Investment Goals
Through discussions, the client’s investment goal(s) is determined. Also established is the degree of risk that the client is willing to incur.
Retirement Projections
Retirement projections are prepared for individual clients using assumptions concerning rates of return, inflation, life expectancy and income needs.
Asset Allocation Targets
In consultation with the client, targets are established for each asset category, and a Personal Investment Policy is established.
Investment Recommendations
Based on the Investment Goal that has been established and on the asset allocation targets that have been set, an Initial Investment Recommendation is prepared. This Initial Investment Recommendation includes a review of the present inventory of holdings and makes specific recommendations for sales and purchases. These Investment Recommendations are then reviewed with the client. Securities are selected, whenever possible, to avoid or minimize transaction fees. The impact of federal, state, and local taxes are also considered.
Implementation
The recommendations are normally implemented by Gardey Financial Advisors using a limited trading authorization.
Portfolios are reviewed by their assigned Financial Advisor on a regular basis.
Periodic Meetings
Periodic meetings are held with the client every four to six months to discuss investment goals, investment policy, market and economic conditions, the status of the portfolio, and various financial planning topics.
Consultation Privileges
The client is entitled to consultation privileges at all times. Subjects might include questions on the portfolio, inquiries concerning new investment products, recommendations received from brokers, and various financial planning topics.
3. Do we share in any commissions resulting from our recommendations?
No. We never receive commissions or any other form of remuneration as a result of our recommending a particular product or service. No advisor can be entirely objective if the advisor’s recommendations are in any way tied to his income.
We serve individuals, businesses, retirement plans, and trusts throughout the United States. Our assets under management are in excess of $195 million.
5. Who can benefit most from these services?
Anyone who has a financial, tax or investment problem, or who wishes to establish a disciplined approach to asset investment and long-term planning for his or her financial future can benefit.
6. How much money do you need to start a financial program?
There is no minimum dollar requirement. Our comprehensive financial services are provided on a fee basis. Our typical client will have investment assets of $500,000 or more.
7. Are our fees deductible for federal tax purposes?
Fees for individuals may be deductible. Under the present tax law, professional dues, trade publications, fees for tax preparation, investment fees, and certain employee business expenses are deductible to the extent their sum total exceeds 2% of adjusted gross income. Fees for pension and profit sharing plans are fully deductible.
8 . Where are investment securities held?
Securities are normally held in the name of the client in a brokerage account with the discount broker Charles Schwab & Co., Inc.
9. Who has authority to make changes in a client’s portfolio?
All clients retain complete control over their investment objective and portfolio asset allocation, which determine the way the portfolio is invested. Clients may approve each individual investment recommendation before it is implemented, or they may authorize Gardey Financial Advisors to implement investment changes without prior consultation with the client.
10. Will client information be kept confidential?
Yes. All information regarding a client is held in strict confidence.
11. Do we sell financial planning products such as securities, insurance or tax shelters?
No. We sell only financial advice. Under no circumstances do we ever accept any kind of commission.
12. Are taxes minimized whenever possible?
Yes. Every attempt is made to keep taxes to a minimum. In addition, the client’s marginal tax rate is projected annually so that this information can be used in minimizing the impact of taxes on the portfolio.
13. Are legal services provided?
No. We are financial advisors and do not provide legal advice.
14. Advice is provided on what types of securities?
Advice is provided on equities, corporate bonds, commercial paper, warrants, bank deposits, municipal securities, mutual funds, annuities, limited partnerships, options, commodity futures, and United States Treasury securities.
15. Is investment performance guaranteed?
No.
16. Once a program is implemented, does the relationship end?
No. We continue to monitor economic conditions through our Investment Committee and provide a minimum of three meetings annually for each client. Also, we are available, without any additional fees, for any consultation required to respond to the needs of our clients.
17. How is overall investment policy established?
Investment policy is established by the Investment Committee headed by Jonathan Gardey who is a Financial Advisor and Director of Research, and composed of the other 4 Financial Adviors: Kim Gardey, Garnet Sherman, Robert Whiting, and Thomas Chisholm.
18. Will I have to pay any brokerage commissions or fees?
While transaction fees may be necessary to implement portfolio transactions, every attempt is made to see that trading costs are avoided or minimized. These fees are paid to Charles SChwab & Co and are never shared by Gardey Financial Advisors.
19. What method of investment analysis is used?
Emphasis in growth investments is placed on the use of no-load mutual funds. Analysis of past fund performance in up and down markets and the investment goals and investment philosophies of the funds are used as a basis for these recommendations. Data on mutual fund performance is obtained from a number of sources, including Morningstar® Mutual Fund Service and Advisor Intelligence. Information regarding the investment goals and portfolio management philosophies of the individual funds is obtained from the review of their prospectuses and other industry sources.
The risk reduction portion of the investment portfolio will normally be placed primarily in individual issues along with some actively managed no-load bond mutual funds.
20. What impact does the use of mutual funds have on the fees that are paid?
Gardey Financial Advisors evaluates a mutual fund’s performance on the basis of its total return, including expenses, to insure the greatest investment advantage to the client. A client pays a fee directly to the firm for investment management services. Mutual funds held in the portfolio charge an indirect “fee” to cover fund management expenses. This indirect fee is divided among all of the fund’s shareholders and is deducted by the fund from its income distributions.
21. Will you accept management of investment portfolios made up of individual stocks?
Yes. While emphasis is placed on no-load mutual funds for common stock investments, portfolios made up of individual securities will be accepted for investment management.
22. How are Investment Management accounts reviewed?
Each individual security held in the portfolio is reviewed and the portfolio as a whole is reviewed. The Director of Research continually monitors available resources for information which may affect the performance of investments held in a client’s portfolio. The performance of each mutual fund included in the Investment Committee’s recommended strategy is reviewed monthly. The performance of any other mutual fund(s) which may be held in a client’s account is reviewed at least twice a year. The credit ratings for all individual bonds are monitored monthly. The timeliness and financial strength of common stocks are reviewed no less than quarterly. Each portfolio is normally reviewed three times a year. Individual investments are reviewed by the Director of Research and individual portfolios are reviewed by the assigned Financial Advisor using guidelines and investment strategies approved by the firm’s Investment Committee.
Contact Kim Gardey or Tom Weadock by phone at 989-791-3880 or 800-550-3880, or by going to the “Contact Us” page, and an appointment will be arranged. There is no charge for this initial meeting.
24. How can I be assured that my interests and yours are one and the same?
This objective is achieved by our refusal to accept commissions for the purchase of financial products recommended for you. In this way, any possibility of a conflict of interest is removed.
