- Why hire David Wendell Associates?
- What is your minimum portfolio size?
- What is your fee structure?
- When are your fees for investment counseling services billed?
- Do you have custody of client assets?
- Do you invest in bonds?
- Do you invest in mutual funds, exchange traded funds (“ETFs”), index funds, bond funds or other funds?
- Do you sell investment products, such as annuities, life insurance or other structured financial instruments?
- What distinguishes your firm from other advisory firms?
Why hire David Wendell Associates?
As investment counselors, our business is to provide investment advice based on the individual investment needs of our clients. Our mission is to help our clients attain their stated investment goals in a prudent, conservative and straightforward way. We have a long-term track record as a firm and have helped our clients navigate the changing conditions in the economy and the stock market since our firm’s founding in 1979.
We have a defined investment philosophy and we use a disciplined approach for selecting companies to recommend for investment. Our philosophy and our approach have not changed in the 36 years since our firm’s founding.
We recommend owning high-quality, growing companies and holding them as long as their managements are doing their jobs to increase shareholder value. We favor financially strong companies in expanding areas of the economy with demonstrated track records, above-average growth rates in their earnings and dividends per share, and the potential to grow at superior rates in the years ahead.
We review each client portfolio on its own and our recommendations are based on the investment needs of our individual clients:
- We do not employ a “model portfolio” strategy in which all client portfolios conform to a standardized model irrespective of client desires, objectives or tax considerations.
- We do not automatically assign stocks to portfolios regardless of client objectives or preferences.
- We do not try to time the market and we do not use an “in and out” trading strategy.
- We do not structure our portfolios based on market indices or other passive strategies.
Communicating with our clients is important to us and clients are informed whenever changes are made to their portfolios. Our quarterly appraisals show the amount invested, the acquisition date and the market value as well as the annual income and dividend yield of the stocks in clients’ portfolios. Clients also receive monthly statements from their chosen custodian for their assets. Custody arrangements are discussed below.
We normally include a letter with our quarterly appraisals discussing the economy and the investment background. We also write a periodic newsletter on topics of current interest to investors.
As of early-2015, our clients have been with us for an average of 12 years. Our staff has worked together for an average of 15 years and five members of our staff have worked together for an average of 21 years.
What is your minimum portfolio size?
Our minimum portfolio size is $500,000. However, under certain circumstances, such as referrals, a family of portfolios or other special situations, our minimum portfolio size is negotiable. For portfolios larger than $3 million or charitable organizations, our fee for investment counseling services is negotiable.
What is your fee structure?
Our fees for investment counseling services are structured as follows:
|Annual Fee Schedule
(rates per thousand dollars of market value)
|On the first||$500,000||$8.00|
|On the next||$500,000||$7.00|
As an example, the annual fee for a $1,400,000 portfolio would be $9,900, calculated as follows:
|$8.00 x 500 = $4,000|
|$7.00 x 500 = $3,500|
|$6.00 x 400 = $2,400|
Fees are payable quarterly, after our investment counseling services have been rendered.
The fee in this example is equal to 0.71% or 71 basis points of the $1,400,000 in assets under management. As with all financial matters, there are many issues and alternatives to consider and we strongly recommend that all options relating to costs for investment counsel services be reviewed and compared.
In most cases, all portfolios within a family group are pooled together in order to qualify for a lower fee than if treated as separate, individual portfolios.
We never receive a commission on the sale or purchase of any asset. Our financial incentive is to give independent, objective advice which we consider to be in the client’s best interest.
Compensation for our services is based on the market value of the portfolio under management on the last business day of the preceding calendar year.
When evaluating different investment advisory firms, the fee structure, fee rate and other compensation arrangements, as well as the services provided, should be carefully reviewed and compared.
When are your fees for investment counseling services billed?
Fees are payable quarterly, after our investment counseling services have been rendered.
For existing clients, annual fees are calculated based on the market value of the portfolio on the last business day of the preceding calendar year.
For new clients, our investment counseling fees for the first year are prorated and calculated based on the portfolio’s market value as of an agreed-upon date, usually the prior end-of-quarter.
Do you have custody of client assets?
We are never in possession of our clients’ securities or funds and we do not have custody of client assets.
Our clients custody their assets wherever they desire. Many of our clients choose national, well-known full service brokerage firms while others choose bank trust departments, law firms and discount brokerage firms. For clients desiring discount brokerage services, our firm has an institutional relationship with Charles Schwab & Company. For clients desiring full service brokerage at discounted commission rates, we have a negotiated relationship with the Waltham, Massachusetts office of Morgan Stanley.
Do you invest in bonds?
Our analytical work focuses primarily on the common shares of leading, high-quality companies with superior prospects for above-average growth. However, if clients desire fixed-income securities, we also recommend bonds. For these types of securities, we emphasize quality, liquidity, tax considerations, diversification, maturity spreads and valuation factors.
For example, if fixed-income securities are desired we typically recommend U.S. Treasury notes, municipal bonds and/or investment grade corporate bonds. In our work, we aim to take advantage of existing yields and/or to minimize the impact of future interest rate changes on the level of income.
Do you invest in mutual funds, exchange traded funds (“ETFs”), index funds, bond funds or other funds?
On occasion, for specific reasons and upon request, we have recommended certain mutual and exchange traded index funds.
Do you sell investment products, such as annuities, life insurance or other structured financial instruments?
We do not sell any investment product and we do not receive commissions on the sale or purchase of any asset.
What distinguishes your firm from other advisory firms?
We invest in companies, not the “stock market.”
When we evaluate a company for its investment merits, we are evaluating its potential as a business. If a company can expand its market share with new products and services, grow its revenue and steadily increase its earnings and dividends, then the common stock of that company should increase in value over time. This can be easily verified by looking at the long-term price and earnings per share trends of publicly owned stocks.
We focus on identifiable investment characteristics.
We focus on companies in market segments that are expanding at above-average rates, with demonstrated track records and with the potential to grow at a superior pace. We favor financially strong companies that tend to do well in good times as well as bad times.
We do our own investment thinking.
Some firms outsource the research function while others outsource the investment decision-making process. Some firms outsource both functions. We have a disciplined process and we make our stock selections on the basis of our fundamental analysis and judgment combined with our regularly compiled extensive valuation and investment review.
Our work is price sensitive.
Our research and analysis of companies includes identifying stocks whose appraisals (price/earnings ratios) are attractive for current purchase. Our objective is to help our clients make good long-term investments, as opposed to merely purchasing the stock of a good company.
We maintain a long-term perspective.
Building a portfolio usually takes place over a period of many years. It is vital to have a well-defined investment plan and to stick with it over the long haul. If the stocks selected are those of well-managed, growing companies, with enough time an investor is likely to be well-rewarded for holding them.
As part of our long-term perspective, we maintain a healthy skepticism for consensus-type thinking. We are cautious about opaque, exotic, and complicated investment concepts and we place a premium on common sense.
The information provided herein represents the opinions of David Wendell Associates and is not intended to be a forecast of future events, a guarantee of future results, nor investment advice.