PRESTIGE Advisors provide services to those clients:

q       Who are individuals, pensions, or trusts with significant investable assets whose primary goal is to earn reasonable returns for the risks they are prepared to take.

q       Who wish the development and/or implementation of an investment policy.

q       Who wish assistance in the selection of multiple managers and/or mutual funds.

q       Who wish assistance to monitor and manage multiple asset class investments for client portfolios.

We are a financial planning practice that specializes in Wealth Management. Our special skills include tax-planning, portfolio planning disciplines, money manager selection, performance monitoring, and fiduciary counsel.  We are solely concerned with assisting our clients in meeting their life goals through proper management of their financial resources. We are especially prepared to plan for individuals with complex health care problems. Wealth Management means that we measure our success through our clients' success in achieving their goals, not by performance statistics. PRESTIGE Advisors are not money managers, stockbrokers or insurance agents who operate on a commission basis.

We believe that we are uniquely qualified to integrate the skills and talents of financial planning with investment skills, knowledge, and technology, previously available only to the large institutional clients, for the benefit of retail and small business clients.

Our practice begins and ends with the needs of the client. It is client driven. We derive solutions only after appropriate data (both qualitative and quantitative) have been gathered and evaluated. We identify related issues and direct clients to other appropriate professionals for their resolution. Implementation, continuous monitoring, and as necessary, modification, is an integral part of the process.

We believe that wealth management is a financial planning process and the steps leading to the development of the policy should follow that process. PRESTIGE develops and implements policies for institutional (pension plans and trusts) and individual clients.

• The client drives the entire process.
• Whoever manages your money should have comparable standards.
• Total Returns is the goal, Capital Gains, Dividends, and Interest
• Appropriate Benchmarks are critical for the managers.
• We want returns that are appropriate to the goals and objectives.
• We are experts in portfolio allocation.
• We are disciples of the seminal studies from Brinson, Hood, and Beebower.
• We do not believe in market timing in any guise.
• Our incentive system is fee-only. We have no incentive for churning or guiding investments into areas that would maximize our income.
• Many investors take unnecessary risks, that is, uncompensated risks.
• Many investors unknowingly take risks beyond their risk tolerance.
• We are not money managers. We are wealth managers who sole reason is assist the client to achieve their financial goals.

We cannot successfully assist a client without full cooperation.  The planning process must be at least as important to the client as to us.  Our clients are individuals, trusts, endowments, or pension plans.  However, we treat each client as an individual.  For example, with a trust client, we will not simply focus on the investment portfolio. We will carefully balance the unique needs of each of the income and beneficiaries (for example, current cash flow requirements, inflation, taxes, risk tolerance, and legal constraints).

Few individual investors effectively manage their investments without assistance.  Markets go down and interest rates go up, sometimes for extensive periods. It is easy for emotions to take control. As a qualified Investment Advisor whose interests are aligned with the client we provide invaluable objective advice and a long-term perspective to assist the investor in achieving lifestyle and financial goals.

We believe that our clients must set goals and objectives. It is our responsibility to educate them in the process and to assist them to define, quantify, and prioritize their goals. It is our responsibility to assist them to recognize that they may have "hidden goals" (for example, risk management issues) The PRESTIGE Advisors' framework of wealth management is to establish a focused investment policy.  We develop investment policies.  We believe that wealth management is a financial planning process and the steps leading to the development of the policy should follow that process.

In the framework of wealth management, an investment policy is, in effect, a focused financial plan (i.e. investment plan).  We believe that wealth management is a financial planning process and the steps leading to the development of the policy should follow that process.

PRESTIGE Advisors:

1. Work with and educate clients in order to determine, with time and dollar specificity and in priority order, their personal or institutional goals (including the hidden goals).

1.      Investment Objectives

2.      Investment Time Horizon

PRESTIGE Advisors maintains at least a Five Year mantra. The time horizon is always at least five years.

2. Evaluate existing investment assets and establish constraints that apply to asset categories. These constraints might require minimum percentages (for example, a minimum money market position to meet liquidity needs), or maximum positions (for example, restrictions on the percent allocable to more volatile positions, such as international equities.

3. Establish the diversification requirements for all assets and for each individual asset category.

4. Determine projected cash flow needs (or surplus) and liquidity and marketability requirements for the plan assets.

5. Determine the constraints (e.g., asset-class limitations, non-reposition-able assets, taxes, and legal). Diversification should take into account investment classes, maturity ranges, economic sectors and geography.

6. Determine the client’s risk tolerance.

7. Develop the system for the selection of investment managers and an asset allocation.

8. Develop systems for monitoring and evaluating the investment policy and the managers’ performance.

The primary market for our services are clients (including trusts, pensions, and other fiduciary accounts) with investment portfolios between $500,000 and $20,000,000.  The investments must remain with the investment portfolio for at least five years. PRESTIGE Advisors maintains a five-year mantra on the investment portfolio. The mantra is required to allow a full economic cycle to produce the long risk/reward portfolio management results.

During the initial interview with clients, the goal is to determine the prospective client’s needs and to decide if PRESTIGE Advisors can be of assistance. Generally, PRESTIGE Advisors requests that the prospective individual client bring all their investment statements, wills, trusts, pension, social security, and tax documents, as well as, any other items about which they have questions. For trusts and pension plans, we require information about the current organization, goals and strategy, structure, and reward/retirement systems along with investment and financial statements. This portion of the interview may take as little as 20 minutes or as long as several hours. At the end of the meeting, PRESTIGE Advisors usually reaches one of four conclusions:

1) The client’s primary needs are not ones PRESTIGE Advisorscan assist in resolving. In these cases, it usually makes professional referrals to two or three estate planning attorneys, pension consultants, tax accountants,  elder law attorneys, disability, life, and property and casualty insurance specialists. PRESTIGE Advisorsencourages the prospective client to let it know if the problem is resolved or to return for a future appointment if it is not resolved.  The applicant neither charges nor receives referral fees.

2) The client needs, in PRESTIGE Advisors’ opinion, broad-based planning beyond wealth management, that is, a comprehensive plan. In this case, PRESTIGE Advisorswill perform a comprehensive plan. If so, we will complete a preliminary but detailed data-gathering questionnaire. This enables us to evaluate the nature of the work and to develop a proposal that we will present at a subsequent meeting.

3) The client does not meet the minimum account size regarding investment assets but requires guidance. If PRESTIGE Advisors believes appropriate under the circumstances (e.g. a small IRA accounts), we will recommend a core allocation model using funds or similar. We provide the prospect with background sheets on the funds and encourage the prospective client to call if a question arises in the future.   The applicant charges no fees for this service.

4)      The client is a candidate for a wealth management investment policy. For these qualified prospects, PRESTIGE Advisors explains how we may assist.  We describe in detail the services and fees.

Client Education and Data Gathering

The data gathering begins with an education program. PRESTIGE Advisors provide the client with a mini-educational program. The program typically takes between thirty minutes and one and one half hours.

The purpose of the program is threefold:

1. To introduce the client to the basic concepts of modern investment theory (Asset Allocation, manager style).
2. To provide a basic vocabulary framework (e.g. volatility, style, systematic and non-systematic risks).
3. To make our client of our philosophy and biases (e.g. our belief in the work of Brinson, Hood, and Beebower, and a total rejection of market timing).

Fees for Policy Development

Once the plan is completed, PRESTIGE Advisors draft a customized investment policy for the client.  The price of the plan and policy development typically ranges from $300 to $15,000 for individuals with complex cases.  Costs for attorneys, accountants, actuaries, insurance agents, and other specialist are not included.  Fees for institutional pension and trust policy development are negotiated based upon the specific situation and complexity.

At the time the client initiates the financial planning process,  PRESTIGE Advisors will provide the client a fee estimate. Before the commencement of services, the applicant requires a prepayment of $500 or fifty percent of the fee estimate, whichever is less. Clients may terminate an advisory or financial planning arrangement at no penalty cost and at any time with upon a thirty-day written notice. Any unearned prepaid fees will be refunded.

PRESTIGE Advisors will analyze the data, develop the necessary tables (e.g. allocation), and perform the necessary analyses (e.g. cash flows, capital needs) to determine the appropriate recommendations. Based on these analyses, it develops a customized investment policy. The first step in the process of wealth management is for the client to define his goals and objectives. Each objective has a time specificity, dollar amount, and priority.  PRESTIGE Advisors follows a planning protocol and considers the following asset classes and styles:

I. Cash Equivalents

II. Fixed Income

A.      Short Term

                                                               i.      Corporate

                                                             ii.      Government

                                                           iii.      Municipal

                                                            iv.      International

B.      Short/Intermediate

                                                               i.      Corporate

1.        Investment Grade

2.        Below Investment Grade

                                                             ii.      Municipal

1.        Investment Grade

2.        Below Investment Grade

C.      Intermediate

                                                               i.      Corporate

1.        Investment Grade

2.        Below Investment Grade

                                                             ii.      Municipal

1.        Investment Grade

2.        Below Investment Grade

                                                           iii.      International

1.        Developed Nations

2.        Emerging Nations

D.      Long Term

                                                               i.      Corporate

1.        Investment Grade

2.        Below Investment Grade

                                                             ii.      Municipal

1.        Investment Grade

2.        Below Investment Grade

                                                           iii.      International

1.        Developed Nations

2.        Emerging Nations

III. Equities

A.      Stock

                                                               i.      Large Capitalization Domestic

1.        Growth

2.        Value

3.        Core

                                                             ii.      Middle Capitalization Domestic

1.        Growth

2.        Value

3.        Core

                                                           iii.      Small Capitalization Domestic

1.        Growth

2.        Value

3.        Microcapitalization

                                                            iv.      International

1.        Developed Nations

a.        Top Down

b.        Bottom Up

c.        Small company

2.        Emerging Markets               

B.      Real Estate

C.      Tangibles

                                                               i.      Precious Metals

                                                             ii.      Collectibles

In recent years, researchers and practitioners have made vast improvements in the theory and application of investment portfolio management. These investment management advances allow institutions and individuals to better manage the risks and returns of their investments. However, most of the public is unaware of the latest applications. Unfortunately, while some investors, such as large pension plans, embrace the improvements, the vast majority of the public and most financial advisors are either unaware or do not apply these techniques. Many fiduciaries of pension plans and trusts, who have personal liability, have become (or should be) aware of the need for outside financial expert advice for diversification.    It is important to understand the major reasons why most investors and advisors have not adopted this advancement:

1)      These improvements are relatively new (1990 & 1992). The commission and other reward systems prevalent among brokerage firms still foster finding the “hot” stock picks that imply insider information and get rich “quick’ schemes.

2)      Many Financial Advisors lack the sophistication or interest to adopt improved methods.   Many individuals, brokers and financial planners perform “quasi-diversification”. For example, an his advisor once placed an investor into two funds, one a growth and another, an income fund, in order to diversify.  A review of the portfolios showed a fifty percent (50%) overlap in companies. The advisor received a commission and the client did not know the difference until it was too late.

3)      The application takes patience, discipline, time, resources and extensive dedication of the financial advisor and client.  For example, when everyone seemingly was rushing investments into the “dot com goldmine” the portfolios with value equities did not shine until the sharp market downturns.

4)      Although it is effective, portfolio allocation management is boring. During high growth times diversification looks foolish, but during downturns—and no one can predict short-term downturns—the investor is protected and is rewarded in the eventual upturn. It is more fun to be a “stock picker”… just extremely risky.

PRESTIGE establishes two accounts, an investment account (long term) and a cash flow reserve account (short term).   PRESTIGE Advisors will not consider any funds for the investment account unless they are available for a minimum of five years. If a client requires a funds within five years we will neither develop an investment plan nor assume the responsibility of investing the assets. We consider this time line as approximately one economic cycle.  The cash flow account is funded with two years’ worth of the client’s anticipated cash flow need. We do not charge a fee for the cash flow account.

• We believe that the cash flow account comforts the client.

• The client has total control over the timing of the withdrawal of the funds from the cash flow fund.

• We do not accept funds for management that we know we may have to return in just a few years.

• We believe that the strategy that the client is not paying us a management fee for funds that we would soon be paying him.

• We emphasize total returns. Our clients are not affected by the typical problems of sources from dividends and interest.   Many such investors are psychologically locked into an artificial cash flow straitjacket. In order not to dip into capital they must constrain living expenses during low interest rates and spend heavily during high interest rates.  

We establish a simple investment plan for the cash flow account. If the client is unsure of his needs we may recommend a 100 percent money market fund. For most clients the funds will be laddered using money market and T-bills and/or short- and limited term-, high quality, low-volatility bond funds.  We structure this account and monitor the balance; however, we do bill the account.

Implementation of the Policy

  For those clients who say, “It makes sense, let’s do it” we schedule a follow-up appointment to present our fund specific recommendations, which we present In an action plan.

 At the subsequent meeting, we discuss in detail the allocations we propose to make and the managers we have selected to implement the investments in each asset class. At this meeting, the paperwork is established to establish a new account under PRESTIGE Advisory management, including account transfer documents and our investment advisory agreement.

Ongoing Management and Policy Monitoring

In addition to our financial planning, PRESTIGE Advisors provides an on-going financial advisory service that includes implementation, monitoring, and reporting with respect to the policies it develops. However, the client may choose to engage another financial advisor for such implementation, monitoring, and reporting. PRESTIGE Advisors imposes a minimum $500,000 asset value for starting and maintaining a personal and pension plan investment advisory. It will consider those accounts that anticipate meeting the threshold in the near future.

Rebalancing is the action of readjusting a portfolio’s asset-class allocations from its current weightings, determined by market forces, back to the client policy’s “normal weight”. PRESTIGE Advisors will rebalance a client portfolio when it deviates by 7.5% from the major investment asset class policy established for the portfolio, or annually, whichever is sooner.

PRESTIGE formally reviews the client investment and cash flow accounts on a quarterly basis. If, in the normal course of events, we find a need to trade in the investment account we use this opportunity to transfer funds from the investment account to the cash flow account, bringing the cash flow account back up to the two-year reserve.  If we see no need to adjust the investment account and the cash flow has at least six months’ worth of reserves we will generally not make any transfers.  If we enter a bear market, such as 1973-74, we maintain a second tier for emergency liquidity, the short end of our fixed income ladder.

Once a prospective client becomes a wealth management client of the firm, our regular reporting format is the quarterly report. The reports are staggered to meet the timeliness of the client. Quarterly, we send out post cards at the end of the month preceding the reviews, which provides the client four choices:

1. Please call our office and schedule an appointment to visit and review your quarterly.

2. Please call our office and schedule a telephone appointment to review your quarterly. We will send you the quarterly in advance of the call.

3. Please call and request your quarterly. Upon your instructions, we will mail the quarterly to you and you may call with any questions.

4. This is a default option, that is, unwritten. If we receive no response, we automatically mail the quarterly report at the end of the following month, with a quarterly review letter prepared by the President.

The quarterly includes:

q       Summary of market highlights from previous three months

q       A “Volatility Report”

q       Detailed Positions Report

q       Presentation of client’s current allocations compared to policy allocations

q       Managers’ Review 

We believe that there should be a regular review of a client’s situation to determine if he is continuing to move in the direction of achieving his goals. This includes revisions in strategic allocations as a result of revised assumptions or changing client circumstances or goals.  We should continue to educate our clients, always remaining vigilant  to each one’s expectations.

Our responsibility is to assure that our client stays the course and does so with a minimum of emotional pain. The focus should be on the client and the achievement of his goals, not the performance of the portfolio.

As we subscribe to numerous data services, (e.g. Ibbotson) as well as regularly interview the managers we provide a background on the current activities of the manager. We also provide a number of statistical tables regarding the selected managers. For new clients we explain the meaning and significance of such items as R² , standard deviation, and expense ration. For subsequent reviews we use the statistical table to discuss the activities of managers whom we believe deserve special attention.

The President as the Financial Adviser will review each account personally. PRESTIGE Advisors will reassess the total portfolio and the performance of each of the investment classes as compared to the client’s target performance objectives in real rates of return, i.e. performance above risk-free rates. PRESTIGE Advisors will prepare a written report quarterly and annually that focuses identify the needs for rebalancing, if any. We also provide a comprehensive annual review with the client to assess changes in circumstances. 

PRESTIGE Advisors does not accept custody of checks or securities. If a client has a check or securities, the applicant provides a pre-addressed envelop  or transportation to deliver the material to one its partner firms, Schwab or Smith Barney. If there is significant business to transact we will contact the office most convenient to our client and make an appointment for the client with the branch manager or a representative.

As the applicant maintains its own database, it provides specialized tax reports at the request of the client or the client’s accountant.

If a client requires a cash flow, it establishes a separate “cash flow” account at no charge.

Initially, it funds the account with an 18 to 30 month cash reserve. It usually includes a combination of money market and short-term bond funds. When the applicant rebalances the investment portfolio, it continues to fund the client’s cash account to maintain this 18 to 30 month reserve.

Annually or upon the request of the client, the applicant prepares an updated capital needs analysis to ensure that the client is continuing to meet the goals and objectives.

Ongoing Management Monitoring fees are paid quarterly in advance, and are based on a percentage of assets under management, as shown by the balance in the client’s most current statement of account. PRESTIGE Advisors standard fees for monitoring the performances of the client’s Equity and Balanced Mutual Funds, and the client’s Fixed Mutual Funds, respectively, are calculated on an annual basis according to the schedules.

Policy Development and Ongoing Management Monitoring fees are negotiable.

In order to provide its clients the best available managers for its asset classes PRESTIGE Advisors provides the alternative of either mutual funds and/or private money managers.

PRESTIGE Advisors’ fees cover investment advice and portfolio management, a quarterly portfolio report including an in-depth analysis of the account and its performance, ongoing analysis by PRESTIGE Advisors in relation to material changes in the client’s financial situation, rebalancing the portfolio in terms of the client’s policy, and account servicing. The fees apply to all money under PRESTIGE Advisor’s management. It does not include commissions, money managers’ expenses, transaction and trading costs or other expenses of the funds.  Any payments to PRESTIGE Advisors from funds will be credited to the clients’ management fees.