They design, implement, and manage custom tailored portfolios of liquid assets for high net worth investors. In order to avoid the potential conflict of interest found in most of the financial industry, they do not accept commissions on any transactions in client accounts. They sell no assets. Instead, they charge a management fee that is based on the market value of the account. That fee ranges from 1.5% per year down to 0.5%, depending on the size of the account.
For the safety of the clientâ€™s assets, they do not hold cash or securities at Brookside Capital, Inc. Assets are held at a brokerage firm or bank custodian of the clientâ€™s choice. The minimum account size is generally $1 million.
There is a wide range of issues to consider when designing a portfolio strategy for a client. Among these issues are age, other assets held, income requirements, taxes, specific funding goals, and personal preferences. However, the most important consideration is defining the acceptable level of risk for each client. They have found that this is both a financial and comfort level that varies broadly by client. Through financial modeling and some proprietary questionnaires, they help the client understand their specific acceptable risk level, and then design a strategy that optimizes the potential rate of return without exceeding that risk limit.
Stated simply, all clients want to make as much money as they canâ€”without exceeding their own unique risk level.
In selecting assets, they start the decision process at what they call the â€œSEPâ€ level. SEP stands for â€œSocial, Economic, and Politicalâ€ themes. Their research has unquestionably shown that understanding these global, long-term themes is the most essential element in determining investment success or failure. Their Board of Advisors is the key group in helping them understanding these themes. Some examples include The Revolution in Healthcare, Homeland Security, Consumer Value, The Information Age: Part 3, Nanometrics, and The Education Failure. There are many others, and the list is fluid and always evolving.
They meet with their clients often to keep them up to date on their portfolios and their outlook. This also gives them the opportunity to keep their current on any changes in their lives so that they can make any necessary adjustments in their portfolio strategy.
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