Q. What
does an Investment Advisor do?
A. An
Investment Advisor generally provides discretionary
investment management services consistent with
a client’s goals and objectives for a designated
portfolio. A qualified Investment Advisor adds
value in a number of areas:
-
Helping the client identify life goals (e.g.
wealth accumulation, education, retirement,
estate planning)
-
Projecting the cash requirements
to achieve those goals
-
Analyzing the available assets
from which to meet the cash flow requirements
-
Determining the client’s
investment risk tolerance
-
Selecting an asset allocation
strategy that best matches the client’s
goals with the funds available for investment
and the client’s risk tolerance, liquidity
needs and tax situation
-
Achieving investment goals
while minimizing taxes on capital gains and
income
-
Structuring and executing an
investment plan to help achieve those goals
Q. What
is your investment philosophy?
A. Bradley,
Foster & Sargent believes investors will
be successful by identifying high-quality, established
companies which possess a strong business franchise
and management, a solid balance sheet and growing
cash flow, among other qualities. By following
these companies and waiting for the right opportunity
to purchase them for client accounts at attractive
valuations, we believe our clients will be able
to fully participate in buoyant markets and achieve
capital preservation in adverse markets.
Quality growth companies with these characteristics
often sell at expensive valuations. Our
approach is to adhere to a strict pricing discipline,
striving to buy these companies at what we perceive
to be reasonable prices. Using this approach,
we seek to buy at prices which provide “a margin
of safety,” a phrase coined by Ben Graham, the
dean of financial analysis.
We do not believe that it is possible to predict
future stock market movements with any degree
of consistency. Thus, we do not operate
as market-timers. We establish different
asset allocation guidelines for each of our clients
based upon their own investment objectives. These
allocations are reviewed on an on-going basis
and, during times of high valuation, we may defer
new stock purchases. Nevertheless, we maintain
core equity positions.
We believe in prudent diversification to moderate
risk within portfolios and will generally hold
20 or more stock positions diversified among
attractive industries, depending upon the size
of the portfolio.
Q. Do
you consider taxes in your investment strategy?
A. Yes; one of the advantages of working
with Bradley, Foster &
Sargent is that we offer customized investment
strategies to minimize taxes. At the outset of
a relationship, this is accomplished by transferring
portfolios electronically to Bradley, Foster & Sargent
without liquidating positions that may have large,
embedded gains or positions that the Portfolio
Manager plans on holding in the portfolio going
forward. Portfolio Managers employ various
strategies on an ongoing basis (such as taking
advantage of the lower, long-term capital gains
tax rate, when possible) to minimize taxes on
both capital gains and on income.
Q. What
makes Bradley, Foster
& Sargent distinctive?
A. Many investment firms prefer to work
with large institutions or, if they primarily
serve individuals, utilize a model portfolio
approach. At Bradley, Foster & Sargent, we
focus primarily on serving individuals, families
and smaller institutions. In order to deliver
superior investment results, Bradley, Foster & Sargent
devotes the time required to understand the needs
of each client and to develop a customized approach
which addresses these needs. Each client has
a direct relationship with one of our nine experienced
investment professionals who seek to achieve
the client’s financial objectives.
Q. How
does a money manager like Bradley, Foster & Sargent
differ from traditional securities brokers?
A. Unlike most brokers, we are not paid
commissions based upon the purchase and sale
of securities. Bradley, Foster & Sargent’s
compensation is based solely on the market value
of assets under management in each portfolio. Accordingly,
our interests are aligned with our clients’
interests. If we are successful in increasing
the value of your holdings, our fees increase;
if your assets under management decrease, our
fees decrease, as well.
Q. How
long has Bradley, Foster & Sargent managed
client accounts, how many accounts do you manage
and what is the average size of an account?
A. As a firm, Bradley, Foster & Sargent
has managed client assets since 1994. However,
many clients have had long-standing relationships
with the Portfolio Managers at their previous
firms. The nine Portfolio Managers have each
been in the investment business for an average
of 30 years.
As of June 30, 2010, Bradley, Foster & Sargent
had approximately $1.267 billion of Assets Under
Management represented by approximately 982
client relationships. Thus, the average account
size per relationship was approximately $1.290
million.
Q. Do
you have an account minimum?
A. Yes; we have an account minimum of
$500,000 which can be in the form of cash, securities
or any combination of the two.
Q. What
are the advantages of hiring an investment
management firm like Bradley, Foster
& Sargent?
A. The advantages of being a client of Bradley,
Foster & Sargent include:
-
Forging a close working relationship
with an experienced Portfolio Manager
-
Constructing a customized/individualized
portfolio consistent with client objectives
-
Minimizing capital gains and
income taxes on the client’s portfolio
-
Achieving capital appreciation
in good markets and capital preservation in
adverse markets
-
Minimizing transaction costs
-
Working with a firm which seeks
to deliver excellent service
Q. How
are you compensated?
A. We are compensated by charging each
client a fee, billed quarterly in arrears, which
is based on the value of their Assets Under Management
at the end of each quarter.
Q. Who
at Bradley, Foster
& Sargent will manage my portfolio?
A. Each client works with one Portfolio
Manager who makes the investment decisions and
is responsible for the performance of the account.
The Portfolio Manager is supported by a Portfolio
Assistant who provides complete administrative
support for the relationship.
A. Yes; bonds and other fixed income
instruments are used in our clients’ portfolios
to generate income and to lessen volatility
in adverse markets. We invest our clients’ funds
in municipal bonds; high grade corporate bonds;
U.S. Treasury bonds, notes and bills; TIPS;
convertible bonds; preferred stocks; and fixed
income mutual funds.
Q. What
is your portfolio turnover?
A. We like to invest for the long-term. Occasionally,
there may be a special situation or turnaround
company which is sold when the stock price
reaches a certain target price, but, consistent
with our investment philosophy, we strive to
identify good companies and hold on to them. It
is not easy to find great companies at favorable
prices. It is usually better to hold a
quality growth stock than to sell it if it
becomes richly valued, especially in taxable
accounts.
Q. Who
owns Bradley, Foster &
Sargent?
A. Bradley, Foster & Sargent, Inc.
is owned by the nine Principals of the
firm.
Q. Who
can benefit most from the services at Bradley,
Foster & Sargent?
A. We serve a diverse clientele which
includes individuals, families, entrepreneurs,
professionals, non-profit organizations and smaller
institutions. Most of our clients come to
Bradley, Foster & Sargent for the following
reasons:
- Successful business persons and professionals
who are too busy to effectively oversee their
investments on a day-to-day basis and do the
research necessary to manage their portfolios.
- Individuals who have had an erratic track
record managing their own funds and wish to
forge a long-term relationship with an experienced
investment professional.
- Individuals nearing retirement age who will
depend upon the prudent management of their
capital to provide for their desired lifestyle
in retirement.
- Individuals and families who already possess
substantial wealth and their primary objective
is the preservation of capital and income generation.
- Individuals who depend upon a secure and
substantial level of income from their assets
to maintain their lifestyle.
- Individuals at the early phases of their
career who are interested in the long-term
accumulation of wealth.
- A growing portion of Bradley, Foster & Sargent’s
Assets Under Management are accounted for by
smaller institutions which seek superior investment
results and excellent service.
Q. I
want to be sure my personal information is
kept confidential. What protection is
afforded by your Privacy Policy?
A. We share your concern. It is against
federal and state laws for any employee to disclose
information about your account with anyone outside
the firm unless such disclosure is authorized
by you. Our Privacy Policy has been established
to conform with all applicable federal and state
laws. Click here to
access our Privacy Policy.
A. Contact
us!
A. You will receive confirmation of each
purchase and sale of a security from your custodian
(our preferred custodians are Charles Schwab
and Fidelity Investments). Additionally, each
client is sent monthly account statements from
their custodian that details all activity and
lists the market value of each asset. Moreover,
Bradley, Foster & Sargent sends a quarterly
package which includes a portfolio appraisal,
market commentary and other relevant information. Finally,
clients, through meetings and periodic reports,
may receive information about their accounts
and performance relative to their goals and appropriate
indices.
A. Typically, no. In most instances, you
will be advised to transfer the assets in your
portfolio electronically.
A. Clients’ assets are held by a
custodian. Our preferred custodians are Charles
Schwab and Fidelity Investments. A custodian
is usually a bank or brokerage firm which has
custody of a client’s assets, collects
interest and dividends and settles security trades.
Generally, the custodian reports all transactional
activity and portfolio holdings through a monthly
statement. A custodian may also act as a broker
to execute trades on behalf of the client.
Bradley, Foster & Sargent does not perform
custodial functions. We do not hold cash or securities
for customers.
Q. How
do I access my account?
-
To obtain information – Many
custodians provide 24-hour Internet access. Using
your own password, you will be able to access
information on your account at any time.
-
To obtain funds – Clients
may request Bradley, Foster &
Sargent to process a distribution, as needed. Alternatively,
Bradley, Foster & Sargent can establish
a periodic, regularly scheduled distribution
to clients’ bank accounts through electronic
means.
