What are the
advantages of a Separately Managed Account (SMA)?
What if I am located out of state or in another country?
Are you regulated or licensed? What does CFP mean?
How do I know that my money will be safe if I invest with Lennox Financial?
Why do I need a broker? How do I select a broker?
What is the minimum amount I need to invest?
What does it cost to invest with Lennox Financial?
Why should I believe that you are any good at managing money?
What kind of performance can I expect?
What are the advantages of a Separately Managed Account
(SMA)?
When
you invest in a mutual fund, or a limited partnership, or an investment trust,
your money is pooled with other investors’ money. Usually you own an “undivided
fractional interest” of the whole pool of money. In a Separately Managed Account, your
money is held in a separate account with your name on it, and it belongs only
to you. In a mutual fund, if other
investors add or withdraw money (flow of funds) the performance of the fund
(and thus your performance) can be adversely affected. You do not have this problem in an SMA.
In
a mutual fund, the fund management is guided by the investment objectives
stated in the prospectus. In an SMA
the account manager is guided by your own individual investment policy that is
designed specifically and uniquely to meet your personal investment
objectives. It is the difference
between buying clothes off the rack versus having them custom made for you.
A
mutual fund (or other type of pooled fund) may have tax consequences that are
undesirable for you. Whatever the
tax consequences, you have no control over them. With an SMA, you can request that the
investment manager take your specific tax situation into consideration when
investments are being made and/or positions are being sold. In short, a Separately Managed Account
gives you more control over your money and how it is invested for you.
What if I am located out of state or in another country?
Lennox
Financial has clients in many different states, and we have worked with
investors as far away as
Are you regulated or licensed? What does CFP mean?
Yes,
absolutely. The securities industry
is one of the most heavily regulated industries in
CFP
is a registered trade mark and stands for Certified Financial Planner. John Boyle holds the professional
designation of CFP. This means he
has completed a rigorous course of study that includes such topics as
investment, taxation, risk management, and retirement & estate
planning. It is necessary to pass a
series of examinations to obtain the designation; and it also means that the
holder subscribes to a code of ethics.
You can learn more at www.cfp.net
and www.fpanet.org.
How do I know that my money will be safe if I invest with
Lennox
Financial never holds your money and does not have access to your assets. In addition to being registered and
regulated, this separation from access to your assets is a significant
protection for you. (Not all advisors
operate this way, and you certainly do not have this protection in a
fund.) Your money and securities
will be held at a licensed broker/dealer of your choice. The broker should have federal SIPC
insurance as well as private insurance to cover the assets in your
account. You will grant Lennox
Financial authority to trade the securities in your account, but this authority
will not include the ability to withdraw assets from your account. Furthermore the account will be solely
in your name and the assets will not be commingled with anything belonging to
anyone else.
Additionally,
we recommend that you open your account with a licensed broker/dealer that
provides the ability for you to view your account in real time on the
internet. This way you can monitor
everything that is going on in your account at all times. Most clients find that this is not only
a good security precaution, but if Lennox Financial is providing full
management service, it allows them to learn by looking over our shoulder.
Why do I need a broker? How do I select a broker?
Securities
can only be purchased through a licensed broker/dealer. Some firms merge multiple activities and
keep the trading in house, but this has the potential to lead to abuse, fraud,
and theft. We recommend that the
function of purchasing securities be separated from the management or advisory
service. Thus we recommend that you
select an independent, reputable, and insured broker/dealer. Additionally, since Lennox Financial is
providing advice and/or management, there is no need for you to pay for any
additional services (beyond trading) from a broker. A high quality, deep discount broker is
all you need. We do recommend that
the account has the ability to be viewed in real time on the internet.
You
are free to use any broker/dealer that you choose (unless the broker/dealer
will not cooperate with us, or imposes costs or other impediments that make it
undesirable for us to accept your account). If you do not know how or where to look
for a broker, we will be happy to suggest some names for you to
investigate. Depending on the type
of account that you select with us, you should know that it may be advantageous
for you to be on an institutional platform, and on the same platform as our
other clients. This can improve
service and the efficiency of trading by allowing us to perform block trades
and monitor positions more easily.
After much experimentation, we have found that the institutional
platform at Ameritrade Advisor Services seems to offer an excellent combination
of service and low price, which means a good value for you.
What is the minimum amount I need to invest?
Lennox
Financial does not like to impose a minimum as a way of screening prospective
clients. There is no minimum if you
open a self-directed account. We
have found through experience that the objectives of managed accounts are
jeopardized due to a lack of efficiency if the accounts are too small. Therefore we look for at least $100,000
in balanced, long-only portfolios, and $150,000 in All-weather accounts that
employ hedging techniques. Special
speculative accounts can be as small as $25,000 and fixed income accounts start
at $250,000. The typical account
size we have had great success with, and like to manage, ranges from $500,000
to $2,000,000. We would be happy to
discuss your individual situation.
What does it cost to invest with
The
real answer to this question is the improvement in net performance that you can
expect after all fees are deducted.
In the past, we have been able to keep our clients delighted with their
net results. Our fees are
structured to be competitive with the other investment choices available to
you. Our goal is to have your
self-directed account cost less and perform better than if you invested through
a full service broker. Our managed
accounts are designed to provide more service and be price competitive with
mutual funds. In the end, we expect
to provide better results because the account is tailored to your individual
situation. A full schedule of fees
can be obtained by requesting us to mail you a disclosure brochure.
Why should I believe that you are any good at managing
money?
Decades
of experience and multiple licenses sound good, but the real proof is in the
satisfied clients that have stayed with us over many years. Unlike a mutual fund, we cannot publish
one performance number, because all of our accounts are managed by different
individual investment policies.
However, with risk management as a guiding principle, we have
consistently made money, even in years when the major stock indexes turned in a
negative return. It is easy to
exaggerate and promote false expectations.
We try hard to be very realistic and honest. In the past we have suggested clients
start with a small investment, and then add to their account as they gain
confidence in the ability of Lennox Financial to meet their investment
needs. Using this approach we have
attracted over time a number of multi-generational accounts where whole
families have invested with us from grandparents to grandchildren. John Boyle would be happy to discuss
realistic performance expectations with you based on your specific
circumstances.
What kind of performance can I expect?
As
stated above, we cannot guarantee a specific result; and everyone’s
situation is different. However, we
would be happy to discuss the kinds of results we have had in the past, and
provide realistic guidance regarding expectations for the different kinds of
accounts that we offer. Ultimately,
performance is dictated by the markets.
Our goal is to provide positive results within the guidelines that you
set. In the past, we have been able
to exceed expectations. Our number
one priority is to have satisfied clients; and we do everything possible to
obtain great performance from the portfolios that we manage. Please give us a call for an honest and
frank discussion of what we can do for you. Call 781-592-6662
Close this window to return to
prior page