| Q. |
Why do you primarily use mutual funds instead of individual securities like some firms?
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| A. |
We use mutual funds, rather than individual securities, as the primary investment vehicle to manage our client’s portfolios for a variety of reasons. First, the liquidity and diversification offered by mutual funds as compared to individual securities is difficult to duplicate. Even with a large number of individual holdings, it would be extremely difficult to get well-diversified holdings in all the key market segments such as large-cap growth and value, mid-cap growth and value as well as small-cap growth and value. And that doesn’t even include foreign stocks and bonds (which at times have been a significant part of our client portfolios) and alternative investments such as real estate, commodities, emerging markets, and more.
Second, even if you could build a portfolio with enough individual holdings to get reasonable diversification across all those asset classes, it is very unlikely that one manager would be an expert in all of them. Most managers have a specific investing style whether it’s growth oriented or value oriented, large-cap focused or small-cap focused. And few can handle both domestic and foreign stocks. But with mutual funds we can tap top investment experts worldwide in each of those areas. You're not wedded to a particular asset class or investment approach.
Third, using mutual funds allows us to adjust your portfolio quickly and
efficiently when market events or your personal circumstances require immediate
action. And because we are leaving the specific security selection to others,
we have more time to spend monitoring your account and making sure it is
properly positioned to meet your investment objectives with a minimum amount
of risk.
One area where we will, in certain circumstances, use individual securities
is bonds. For investors with at least $500,000 to devote to bonds, we will
develop a structured portfolio of individual bonds, which provides greater
control over principal while reducing the impact of interest
rate fluctuations. 
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Q. |
But my money is in a taxable account, aren’t mutual
funds tax-inefficient compared to individual securities?
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| A. |
If your investments consisted of only one mutual fund, it would indeed be difficult to control the taxable events. However, an adequately diversified portfolio of mutual funds can indeed be run in a tax-aware manner. There are a couple of key elements here. First, we pro-actively harvest tax credits (i.e, losing positions) all year long -- not just in the fourth quarter or December like many managers do. We will match these losses against any gains we may take over the course of the year.
Second, we actively monitor our holding periods. Are the gains long-term yet? Can we postpone any gains until the next calendar year?
Third, our typical fund holding in taxable accounts tends to have lower tax costs (difference between pre-tax and after-tax returns) and higher tax efficiency (keep more of pre-tax returns) than funds with similar market exposures or mandates. We ask managers if they manage their portfolios in a tax-aware fashion: is pre-tax or after-tax return more important to them?
Lastly, we also monitor a variety of mutual fund data to anticipate capital gain distributions. This may impact the timing of our transactions. We may wait to buy a fund until after the distribution has taken place or conversely, we may sell a fund a bit quicker in anticipation of a distribution.
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| Q. |
What are your fees?
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| A. |
We’re happy to provide you with our complete fee structure as well as historical performance of our client accounts. Just click here to request a free, no-obligation information kit.
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| Q. |
How do I know when you make trades in my portfolio?
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| A. |
All accounts managed by KIM are held directly in your name by E*TRADE, Fidelity
Investments, Charles Schwab or such broker dealer or bank as KIM may select.
Superior customer service is enhanced through our direct computer links. In
this way, we monitor your account daily, check balances and efficiently make
changes to your portfolio when warranted. Although we do not consult clients
before each trade is made, you should always be aware of the activity in your
account. To ensure you are always well informed, the institution where your
securities are held (E*TRADE, Fidelity, Charles Schwab or other) will directly
send you confirmation statements of any trading activity in your account. In
addition, you will be mailed monthly statements, summarizing all holdings under
the Kobren Insight Management program.
On a quarterly basis, we will send you a detailed report on the status of your account. We will review the performance of your portfolio, discuss KIM's investment strategy over the past quarter and outline our strategy for the future. Your personal representative will review all reports with you to ensure your portfolio is properly positioned to best achieve your investment objectives.
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| Q. |
What if I need to get money out of my account?
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| A. |
The money in your KIM account is always available to you. Should you need money quickly, simply call your personal representative and the funds will be transferred by bank wire to your checking account, or a check can be mailed, as soon as funds are available from the sale of your mutual fund positions. Also note that KIM has limited discretion over your account. While KIM has the ability to make investment decisions on your behalf, we do not take custody of your securities or assets. Deposits made to your KIM account are mailed by you directly to E*TRADE, Fidelity Investments, Charles Schwab or other broker dealer/bank.
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| Q. |
How Do I become A Client?
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| A. |
Deciding to become one of our private clients is the first step in taking charge of your financial future. KIM has the people, the tools and the expertise to develop and manage an investment program designed to help you meet your financial goals.
As the first step in getting to know each other, we ask you to complete a Confidential
Investor Profile. This profile is vitally important in helping us understand your particular investment goals, needs, and attitudes toward risk. In that regard, please be as thorough as possible in completing your profile. The information in your profile will be maintained in the strictest confidence.
Your profile is a starting point for you and your personal KIM account manager to discuss how we might formulate an appropriate investment and asset allocation strategy, and construct a portfolio that can meet your needs and objectives within your tolerance for risk.
After we receive your profile, your Account Manager will call you to set
up a time to review your portfolio. He/She will act as your liaison with
our investment committee both for the initial review and to work with you
over
time so that as your needs change, they are properly reflected in your
portfolio.
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