Finding the Right Investment Advisor: Key Questions Pilots Need to Ask Now At Cleary Gull, we think the best way to find the right investment advisor is to focus on the four Ps: people, philosophy, process and price. These four crucial ingredients are what we believe determine investment performance, and thus the right advisor to help you achieve your retirement goals. To get you started, we ve answered each of the 20 questions we recommend you ask any potential advisor or firm. PEOPLE Just like choosing a doctor, you need an investment advisor you can trust. You want to make sure that your advisor understands your needs and has the means and capabilities to execute your plan. 1. What is your firm s corporate structure and experience? How many employees do you have? Founded in 1987, Cleary Gull is a wholly owned subsidiary of Cleary Gull Holdings, a privately held, employee-owned organization. Cleary Gull serves clients nationwide through three operating divisions: Wealth Management, Institutional Advisory, and Investment Banking. Cleary Gull currently has 60 employees, including principals, who are devoted to our client-focused investment services. Plus, our staff members have 17 years of experience working with pilots. 2. Is your firm a Registered Investment Advisor? Yes! We are a federally registered investment advisor and broker/dealer with the SEC, and a member of FINRA. Cleary Gull investment professionals are Chartered Financial Analysts (CFAs) and/or licensed registered representatives. 3. What s your experience? Our clients include active and retired pilots, high-net-worth individuals and families, charitable organizations, and other business entities. We re happy to supply references upon request.. How much money do you advise on or manage? As of June 30, 2014, we have over $2.5 billion in assets under management. How long have you been working with pilots? We have worked actively with pilots for more than 17 years, and we re confident our expertise can help you achieve your ideal retirement. How many pilot families do you serve? We currently serve more than 550 individuals and families coast-to-coast, which includes more than 375 pilot families.
4. Are you familiar with my airline s insurance benefits in retirement? Absolutely. With active and retired pilots and retired airline employees on our staff, we re always up to date with benefit options specific to pilots, and can help you make sense of all the decisions you need to make before you retire. 5. Who will be my contact person and where will I meet with him or her? You will work with a Cleary Gull Retirement Consultant specific to your airline who will coordinate your pre-retirement planning, review your retirement and investment objectives, and deliver your customized and comprehensive ClearWealth proposal. We welcome meetings in our Milwaukee office, in your home, or a mutually convenient location. 6. Who will service my account after I become a client? At Cleary Gull, we believe a team approach provides optimal customer service. Your team will consist of your retirement consultant, financial and estate planning professionals, a relationship manager, portfolio manager, and an account services specialist, all dedicated to providing one-on-one support to you. 7. What is the background, education and experience of those giving advice and making investment decisions? Are your advisors CFPs? Do you have CFAs managing my portfolio? Will I have access to a CPA? What other experts will I have access to? Our associates are graduates of prominent colleges and universities and also hold all necessary securities licenses. Additional degrees our team holds include the following: MBA-Finance; MBA-Business Chartered Financial Analyst (CFA) Chartered Financial Consultant (ChFC) Certified Financial Planner TM (CFP ) Certified Investment Management Analyst (CIMA) Certified Public Accountant (CPA) Advanced Money Management Wharton School and Accredited Estate Planner (AEP) Individual biographies are available upon request or on our Website, www.clearygull.com. 8. How can you help me transition into retirement? Do you provide guidance on Retirement timeline planning and transition steps? We can help with pre-retirement, focusing on maximizing your 401(k) investment, as well as working with retiring pilots by providing retirement income strategies. Our 15-month, pre-retirement timeline service will help keep you on top of all important decision deadlines and help you evaluate and ultimately decide on your optimum retirement date, best pension option and primary Social Security claiming strategy.
9. What about other services? Do you sell any financial products, including life and long-term care insurance and annuities? No, but we will assist you in securing insurance and related products through other third party consultants and brokers. We receive no compensation of any kind for this review and referral service. Do you provide IRA liquidation analysis and Required Minimum Distribution calculations? Yes. We help you determine goals and objectives, analyze strategies to lower taxes, and investigate opportunities that will help enhance and preserve your entire estate. If necessary, we ll also help you find independent legal counsel and work with them, as permitted, to implement your family s plan. Do you provide estate planning? Yes. We help you determine goals and objectives, analyze strategies to lower taxes, and investigate opportunities that will help enhance and preserve your entire estate. If necessary, we ll also help you find independent legal counsel and work with them, as permitted, to implement your family s plan. Do you have a program to assist surviving beneficiaries? Definitely. We re here for you now and we will be here for your loved ones after you are gone. Our Family Survivorship Guidance Program helps spouses and surviving beneficiaries when they need it most. So when you become a Cleary Gull client, we assist in organizing your estate objectives, documents and records. When necessary, we will be there to help ensure a seamless transition. PHILOSOPHY There is no one size fits all method of investment management, but understanding your advisor s approach as well as making sure that you agree and are comfortable with it will help you avoid sleepless nights spent worrying about your portfolio. 10. What is your approach to investment management? Is it holistic? Absolutely. Our first step is to review your personal and financial goals. We have a full range of services in order to help you meet those goals, including quarterly portfolio performance tracking, asset allocation analysis and appropriate investment adjustments. Additionally, you have unlimited access to your service team on any investment, estate, insurance or tax planning issue (Note: See question 9 above as we do not provide tax or legal advice). You will enjoy unlimited check writing, credit card, bill payment, funds transfer, direct deposit, income tax withholding and Quicken downloads from your Custodian. As an optional service, you can have access to a full service brokerage account for making individual security transactions.
11. Describe your investment philosophy. We believe in the selection of active investment managers and passive strategies combined in a portfolio designed to achieve your desired outcome. Do you base advice on asset allocation? Market timing? Do you use mutual funds or individual securities? We manage a diversified portfolio of investments to achieve your personal and financial objectives. We believe asset allocation and active investment manager selection is key. Strategic asset allocation is driven by your desired outcome. Our understanding of valuation and risk, inherent in asset classes and their market segments over time, drives our tactical asset allocation decisions. Our extensive investment manager research and selection process is used to achieve diversification among chosen investment strategies, help manage risk, and achieve objectives. Our clients portfolios generally consist of individual securities, mutual funds and ETFs. 12. How do you manage fixed-income (bond) portfolios? Our philosophy toward fixed-income is generally conservative. Fixed income s purpose is to help balance the volatility of equity accounts and provide retirement income. Do you use bond funds or individual bonds? Do you purchase bonds out of the firm s inventory? We typically block purchase individual investment-grade corporate and government bonds using a diversified approach. Fixed income mutual funds may also be used to take advantage of certain market conditions that cannot be approached as effectively with individual bonds. We use multiple, independent bond dealers to help achieve best execution on the purchase or sale of individual bonds in client accounts. PROCESS If you have decided that you trust the advisor and you have kindred philosophies, it is essential to determine that they have a documented, repeatable process to manage your assets. 13. Do you provide a hypothetical projection of account values, retirement income and income tax? Is this a one-time service or is it ongoing? Yes. Initially, we ll provide a ClearWealth Proposal prepared for your unique set of circumstances, which includes: A detailed investment policy statement An asset allocation analysis based upon your goals and your risk tolerance Full investment management recommendations Portfolio stress-testing analysis using sophisticated investment management software An analysis factoring in your resources (income & assets) and your goals, giving due consideration to taxes, inflation and anticipated lifestyle changes (we do not provide tax or legal advice; please see our answer to Q 9). We update this analysis at least annually to keep your investment program on track.
14. Do you provide historical performance records for the investments you recommend? Is this performance audited? Do you provide appropriate benchmarks for comparing portfolio performance? Yes. Your ClearWealth Proposal includes a recommended asset allocation, a 10-year performance report on the investments we recommend in the proposal and on the proposed portfolio performance in total. All performance is presented against customized and/or relative benchmarks so you can see an apples-to-apples comparison and determine how much value is actually added. 15. Who actually custodies my account assets and is my account insured? Your account would be held at Cleary Gull s clearing broker, RBC Correspondent Services, a division of RBC Capital Markets, LLC (RBCCM). Our clearing firm is responsible for executing and processing security transactions and carrying your account on a fully disclosed basis for Cleary Gull. RBCCM is a member of the Securities Investor Protection Corporation (SIPC). SIPC is a nonprofit membership corporation funded by its member security broker-dealers. SIPC protects the securities clients of its members in the event of the failure of a member firm. SIPC reimburses clients the cash value of their securities up to $500,000 per client. Any cash in a client s account would be reimbursed by SIPC up to $250,000 (reducing the $500,000 above). RBCCM has purchased an additional policy that offers coverage in excess of the protection provided by SIPC. This coverage covers additional securities and cash protection up to $99.5 million per client, of which $900,000 may be in cash. A $400 million aggregate limit applies to this additional coverage. RBCCM also offers protection if a client s securities are missing because of theft by an outsider, computer fraud or theft by an employee for personal gain. In such cases, the firm s CAN$310 million Financial Institution Bond coverage would cover the client s losses, subject to that policy s terms, conditions and limits. Note: Neither SIPC protection, nor protection in excess of that offered by SIPC, covers a decline in the value of a client s assets due to market loss. Additional information is available upon request or at www.sipc.org. 16. What kind of statements do you provide to track my investments? RBC provides you with your monthly and/or quarterly brokerage account(s) statements. In addition, we provide a quarterly performance review that includes your portfolio holdings, performance and relevant benchmarks for comparison purposes, as well as other information. You can also review your account online via secured account access through a link to the clearing broker s website that is provided on Cleary Gull s website. Screens illustrate all current account values and security positions, account activity, and your current asset allocation. The password-protected site allows you to download your account data directly and conveniently into Quicken.
PRICE As one of the main factors to understand before selecting an advisor, it s critical to understand the fees and expenses involved. They can have a dramatic effect on investment performance over time. 17. How are you compensated? And what is your fee? Our Pilot Program clients benefit from a discounted fee of less than 1% on assets managed. Most of our clients satisfy fees on a pre-tax basis, from the IRA itself. 18. Are all fees transparent? Yes! Our fee structure is competitive, and we emphasize that all fees are disclosed with complete transparency. 19. Are there additional management fees or trading costs? Are securities trading costs included in your fee? Are there additional transaction charges for purchasing/redeeming mutual funds? Your account is charged for the actual transaction costs of trading your individual securities, mutual funds and ETFs at $9.00/trade. 20. Do you employ best price execution on trades? Are bond trades included in your advisory fee, or do you reserve the right to mark-up bond prices on bonds invested in a portfolio? Yes, we employ best price execution. Individual bonds are included in the fee and Cleary Gull does not mark-up bond prices in your portfolio.