Frequently Asked Questions About Wealth Management
Frequently asked questions about Emerson’s Wealth Management:
- What is a "Global Income Opportunity" portfolio?
- How do you help me determine my risk tolerance?
- Can Emerson work with my current accounts and holdings?
- Does Emerson require a minimum account size to become a client?
- I understand Emerson has “Discretion” over my account. What does “Discretion” mean?
- How can you reassure me that my investments are safe at Emerson?
- What is a Chartered Financial Analyst (CFA)?
- Does Emerson do investment research in house?
- How do I know what is happening with my portfolio of investments?
What is a "Global Income Opportunity" portfolio?
Emerson’s approach to balanced wealth management involves working with a client's specific needs to create a customized Global Income Opportunity (GIO) portfolio. A GIO approach strives to create a well-diversified portfolio that invests in different types of assets throughout the world. The goal is to optimize returns and control risk by taking advantage of changing market conditions. The foundation of our Global Income Opportunity strategy is supported by modern portfolio theory and is widely accepted as a reasonable approach to wealth preservation.
How do you help me determine my risk tolerance?
Our first determination of your risk tolerance comes from a personal meeting focused on understanding your financial needs and what you want your investments to accomplish. This discussion will include a review of historic returns and volatility of various types of investments. This may also include a risk tolerance questionnaire. Once we have agreed on your goals we will establish an asset mix for your investments and manage your accounts according to these guidelines.
Can Emerson work with my current accounts and holdings?
Yes. We're happy to recommend tax-efficient strategies to transition from current holdings into more suitable target holdings if applicable. This can be done immediately or gradually, depending on your needs and the risks associated with the individual holdings. We also recommend strategies to consolidate your various accounts to simplify your financial affairs.
Does Emerson require a minimum account size to become a client?
Yes. Our minimum asset size for one relationship is $1 million. We must maintain a minimum relationship size to assure we can provide you with customized and personal service. We are committed to existing clients that may have investment portfolios below Emerson’s minimum size.
I understand Emerson has “Discretion” over my account. What does “Discretion” mean?
Most registered investment advisors including Emerson, ask you to sign a limited power of attorney agreement to manage your assets. This agreement grants us the “Discretion” to efficiently make investment decisions, such as buying and selling securities, on your behalf according to your investment objectives. However it is only a limited power of attorney, meaning we do not have the discretion to move assets in or out of your accounts without your written authorization to the custodian.
How can you reassure me that my investments are safe at Emerson?
Emerson will not physically touch or custody your investments. To assure your assets are protected, we use reputable financial institutions (banks or brokerage companies) to custody our client’s accounts. These institutions act like a safe deposit box for your account. They are responsible for crediting and collecting income, settling purchases and sales, reconciling cash & security positions and providing you with an accurate report of your security holdings. While the custody provides safekeeping of your securities, they are still subject to market value changes due to changing market conditions and specific company performance.
By retaining the advisory responsibilities ourselves, and entrusting the custody of your assets to an independent firm, we believe that we are most prudently fulfilling our fiduciary responsibility while assuring you of transparent accounting. Emerson clients may select from a variety of custodian institutions including Charles Schwab, Fidelity, or certain bank trust companies. Client assets are segregated accounts at these institutions, and they are not a part of the institution’s balance sheet. Also, each custodian carries SIPC and private insurance on client accounts.
What is a Chartered Financial Analyst (CFA)?
The CFA Institute awards this designation to investment professionals that have passed a series of comprehensive security analysis examinations over at least a three year period. The credential is globally recognized for setting high standards of integrity, investment competence and professional excellence. Emerson investment team includes six CFA charter holders, and we believe credentials like the CFA are an important indication of an investment firm’s commitment to excellence and integrity.
Does Emerson do investment research in house?
Yes. Emerson’s team of Chartered Financial Analysts (CFAs) is dedicated to our proprietary processes for asset allocation and security selection. While we have access to a number of independent third party research sources, all of the investment decisions in your portfolio are made by the Emerson investment team. Your portfolio of investments will include actively managed stocks and bonds along with some carefully selected exchange traded funds or mutual funds for some parts of a balanced account. We believe Emerson’s proprietary research adds value to each client’s investments, and our research is a core competency of the wealth advice that we provide to you. (For a more detailed explanation of our research and investment products please refer to the Institutional portion of the web-site.)
How do I know what is happening with my portfolio of investments?
As an Emerson client you will be kept well-informed of our investment decisions and transactions within your accounts. Emerson meets and has phone calls with our clients as often as necessary. We also provide quarterly commentaries, periodic “Emerson Update” emails, and host an annual Investment Summit, which invites our clients to ask questions of our Investment Strategy Committee. Additionally, both Emerson and your custodian have account information easily accessible and readily available. You may access your accounts via the web – using either Emerson’s web-site, or your custodian financial institution’s web-site. The web-sites provide an informative summary of transaction and trade activity, portfolio holdings and your monthly statements. This transparent combination of available information from Emerson and your custodian creates a system of checks and balances for you to know what is happening with your Emerson portfolio.