Frequently Asked Questions

This is a quick summary of the most common questions
potential clients have about working with us.

Are you financial planners or money managers?
We are both; we believe that sound money management is grounded in the fundamentals of financial planning. Our base service level to all clients includes both financial planning and sophisticated asset management. We think of traditional planners and brokers like this...

Imagine you want to sail around the world. You conduct a search far and wide for the wisest, most experienced captain. You find him (or her) and he helps you choose a boat; teaches you about sailing with books and diagrams; even shows you how to read a compass. But on departure day, he loads you in the boat and shoves you out to sea. You say, "Hey! Aren't you coming with us?"
"Nope, you're on your own. I've got another client waiting."

We navigate the journey side by side with our clients.

Are you brokers?
We are not brokers. We accept no investment or insurance commissions, and we sell no financial products. We are an independent investment advisor; we are not affiliated with any brokerage, mutual fund or insurance company or bank. We are registered directly with the Securities and Exchange Commission (SEC) as a "Registered Investment Advisor". The use of the term "Investment Counsel" in our name is restricted by Federal law to firms that provide fee-only money management services.

Our advice is always independent, and we act in a fiduciary capacity for all clients.

What does your service cost?
Our standard fee schedule for equity and balanced objective accounts starts at 1.0% for the first 2.5 million dollars, and declines to 0.50% for amounts over 5 million dollars. We make adjustments to the fee schedule for non-profit groups and income-only accounts. This fee includes all planning and money management services. Our contract is open-ended, and can be terminated at any time by the client with no penalty or cost.

What is the process for opening an account?
Naturally, we would need to have a personal meeting, either in our office in Lafayette, or in your home or office. If we both agree that things are a good fit, we will prepare an Asset Management Agreement and custodian account paperwork for you. Your custodian account (at Schwab or Fidelity) can be funded with cash or by transferring your existing investments "in-kind." Most of our clients transfer their existing assets in-kind from their current broker. We prefer to handle any planned asset liquidation at the new custodian so that we can control the timing and cost for you. The last thing you want is a large commission check going to your old broker simply because you have decided to close your account.

The custodian will file the asset transfer paperwork directly with your existing broker. Many people transferring their existing accounts to our management prefer not to have to call the previous broker and explain everything. Such calls can prove awkward, and some people would rather not have to make them. Our relationships with Schwab and Fidelity make it easy for that to happen.

How can I trust a small company to hold my money?
You shouldn't! Either Charles Schwab or Fidelity Investments hold all of our clients' securities and cash in safekeeping. While we direct the custodian as to what to buy and sell, the custodian conducts all trades in the client's behalf and holds the shares. Schwab or Fidelity send our clients monthly account statements and provide customary full-service on-line access to view all accounts. All accounts are covered by SIPC and supplemental insurance carried by the custodian.

Why do you use outside stock pickers?
Primarily because we like to hire the best stock pickers in the world, without limitations placed on us.

We believe quite strongly that stock picking by advisors is wholly incompatible with true wealth management.

An individual investor's trusted advisor should never be the party picking stocks. The trusted advisor must be able to hire and fire the stock pickers in order to keep the client's best interest foremost. The bear market of 2000 to 2002 should have served as a final lesson that a focus on "stock picking" instead of "wealth building" can lead to disaster. Some attorneys argue that the duty to act as a client's fiduciary effectively rules out stock picking on the part of the advisor.

Stock picking is an extraordinarily difficult trade. In our experience, fewer than one tenth of one percent of all professional practitioners of the trade ever get very good at it. Those that do get good at it have a relentless focus on the task. We believe that the degree of focus required means that a good stock picker cannot be expected to understand more than one particular style or sector of the market. If we were to pick stocks, we could only realistically expose our client to the area of the market where we are most focused.

As an example, if an investor has his or her account with a growth stock expert, that investor will be invested in growth stocks – even if growth stocks become grossly overvalued! In contrast, we will seek to rotate our clients' capital to the sector and the managers that offer the greatest potential.

If I'm paying you, and paying the stock pickers, don't I pay twice?
Not at all. First, we have access to special institutional shares at most mutual funds and separate account managers. Our clients get all loads (front and back-end) waived in full from the funds we favor. In many cases, the fund offers a special "institutional class" of shares at much lower fees. For example, one fund that is on our "highly recommended" list offers shares to the public with a 3% load, and 1.73% annual fees. Our clients pay 0% load and 0.95% in annual fees for the very same fund.

The second – and more important – factor is that our fees are more than made up in the value we add to our clients. We keep our clients on course; we let them sleep at night. Our performance record speaks for itself. Moreover, while we have consistently outperformed our objective benchmarks, we believe that we outperform even more dramatically what most investors would accomplish on their own. By constantly changing direction and chasing recent winners, investors have a tendency to "waste away" potential profits.

What about bonds?
We have a particular expertise in municipal bonds. Rick Ashburn spent the first 12 years of his career specializing in California municipal bonds. He has served as an advisor to two state treasurers and dozens of municipal governments throughout the state.

While we do not pick individual stocks for clients, we do build custom portfolios of municipal bonds. For taxable bonds, we favor a few special purpose mutual funds since the very best managers in that sector consistently earn more for their shareholders than investors can earn by holding bonds directly.

What investments do you supervise besides stocks and bonds?
Most of our clients have allocations to alternative asset classes. These include private real estate offerings, venture equity and debt holdings and specialized trading funds. The investments are sometimes made directly by the client, and sometimes via private limited-access funds that we advise.

We believe that some of the very best long-term investment opportunities lie in the private investment markets, and that these assets are an important component for building wealth.