PivotPoint Advisors FAQ
What Makes PPA different from Bernie Madoff?
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We have had this question a lot since our
account values haven’t dropped very much over time and neither did Bernies. In fact Bernie NEVER HAD A DOWN MONTH. We have had plenty. We just haven’t had any LARGE down
months. The difference between us and
Bernie, though, is that Bernie Custodied
his client’s money. This means
that Bernie’s name was on the brokerage accounts, even though it was his client’s
money in the account. WE DON’T CUSTODY
ANY CLIENT MONEY. We use Brokerage firms
like Fidelity and TD Ameritrade to hold your money. We don’t have access to your money at the
custodians and you can go on their websites any time of the day or night to see
your account values and positions.
How easy is it to
access my money after retirement?
·
The investment approach we use keeps your money
very liquid. This means that your entire
account value is available to you 3 trading days after you would request
it. There are no fees to get started and
no fees to stop using us. Many people
will have money sent to them from their investment accounts each month as a
retirement income stream. We manage the
balance. Some prefer to have a
guaranteed income stream, we can help them with that as well. Your ability to take money from your account
as a single withdrawal or a regular income is always available.
There are only two
Principals in the firm, what happens if one leaves?
·
Since your investments are always liquid, if
something changes at our firm, you have the ability to take your investments
elsewhere. There is no charge to do
this. You can choose a different
advisory firm with Fidelity or TD Ameritrade or completely move your account to
a different brokerage firm altogether.
This is no different than a broker retiring or leaving a large
firm. You, the client, need to decide to
stay with the broker or someone else at the firm.
What brokerage
firms do you use to hold client assets?
·
Fidelity and TD Ameritrade are our most
common. We also manage funds for Federal
Employees and others via their user name and passwords, but minimally.
Are there any
trading fees?
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Fidelity currently doesn’t charge any trading
fees for the investments we use.
Fidelity also doesn’t charge account fees or IRA fees. We find this to be highly significant. TD Ameritrade only charges a trading fee if
we don’t hold the position for at least 30 days.
Do you manage
taxable accounts as well as IRA’s and 401k’s?
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Definitely.
How can we tell if
your investment has done better than our own?
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If you give us a list of your current positions,
I can give you a graphic comparison as well as risk and return statistics. The software we use make this a quick and simple
process.
Do you manage
401ks and 403b’s?
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Yes we do.
We find it ironic that regular people must manage their largest asset
themselves. There are many different
ways we can help you manage your 401k account.
What is your fee?
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Our fees begin at 1.5% annualized but are taken
at the rate of .125% of each accounts month ending value. The fee comes directly out of the investment
account. 401k accounts begin at 1.25%. Our fees are negotiable for larger balances.
Do you have any
performance figures you can share?
What is the risk?
·
As you will see in any small print disclosure,
if you invest in the market, there is always a risk of loss of capital. Our entire approach is designed to first
minimize risk of loss and THEN try to capture as much gain as possible. As of this writing, we have only experienced
dramatically less draw downs compared to the S&P 500 index without giving
up any return compared to that index.
Risk and return statistics can be found here.
Do you take
positions in inverse ETF’s?
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We have the ability to do this, but will only
take these types of positions in bear markets and in the Moderately Aggressive
portfolios.
What investments
do you use?
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Our approach solely utilizes Exchange Traded
Funds (ETF’s). ETF’s allow us to keep
our accounts extremely liquid. ETF’s
don’t charge fees to buy them and don’t charge fees to get out of them like
mutual funds can. ETF’s are also much
cheaper to own compared to a mutual fund.
The average mutual fund charge is over 1% where the main fund we use
(IVV – S&P 500 index) only charges 7 one hundredths of 1 percent (7 basis
points). ETF’s also take individual
stock risk away from our portfolios and replaces it with market risk which is
much less risk in our view.
Who makes the
trading decisions?
·
Don Miller is the Chief Investment Officer and
guides our investment policy and decisions.
Actual trades are made at our trade desk by John Norquay or another
qualified investment advisor.
If I move my
account positions to PPA, will you sell them immediately?
·
Not usually.
If the position you move into our account has the potential to
outperform our investment system in the next shorter to intermediate period of
time we will keep it. If the positions
you move into our management are dramatically under performing we will speak
with you about liquidating them sooner than later. This is done on a case by case basis.
When I move my
portfolio, do you buy right away or wait for a good opportunity?
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We don’t buy new positions just because new
money came into the account. If we
believe the market is currently overbought, we will wait for a wholesale
purchase opportunity. This is done on a
case by case basis.
Do you have an
account minimum?
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We reserve the right to have a $500 per year fee
minimum. Currently we don’t exercise
this right. Since Fidelity has no
account fees and no trading fees, a small account can be traded the same as a
larger account. We try to help anyone
who desires our help.
Can I add or
withdraw funds at any time without fees?
·
Absolutely.
If you have a 401k account, there may be a minimum transfer amount, but
our brokerage accounts have no fees to transfer funds into or out of them. You can do so as often as you choose.
Can I see what my
holdings and account values at any time?
·
Absolutely.
When you open an account with us, you can go to the custodian website
and receive a username and password. You
can then access your account holdings and values any time of day or night.
Do you provide
guidance with how much should be invested with PPA vs elsewhere?
·
We are happy to speak with you about your
individual situation and help guide you as to your portfolios allocation. This is a personal service, provided without
cost and done on a case by case basis.
What is the
difference between the Moderately Aggressive and Moderate Models?
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This could be a lengthy answer. In short, the Moderately Aggressive model
makes more trades than the Moderate. We
try to capture some of the shorter term market cycles. We may buy one day and if the market takes a
very fast increase, capture the profits a day or two later. We would take a dozen 1% increases in a year
and only hold them 2 days each while sitting in cash the rest of the year if
the market allowed us to get a 12% return with no volatility! Our moderate model will wait for more
confirmations before we buy and will get out of the market if we feel a decline
is approaching.
How do we take the
next step?
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We can take your information over the phone or
email, get an account number set up, then email forms for signature. Once we receive the signed forms back via
email, fax or snail mail, the account will be set up.
What information
do you need to open an account?
·
For all accounts we will need:
1. Full
name(s) of account owner(s).
2. Address
including street, state and zip.
3. Date
of birth for each owner.
4. Social
security number for each owner.
5. Drivers
license number for each owner.
6. Name
of employer and your title or position there.
7. If
IRA, beneficiary name and date of birth.
What are your
credentials for managing money?
·
John Norquay has been in the investment industry
since 1992 and has or has held his stock brokers license, registered principles
license, investment advisors license and
insurance licenses.
·
Don Miller owns a seat on the Chicago Mercantile
Exchange, has an MBA from UW. Wisconsin, holds his Investment Advisor’s license
and has been managing money very effectively for over 10 years.
How can I check
with my company to see if you can manage my 401k?
·
Contact us and we will find out what 401k
provider your company utilizes. We can
then advise on the most efficient method or route to take.
