What sets AIS apart?
Many investment advisers offer targeted guidance on the selection of a portfolio of investments. On the other side, many financial planners offer “big picture” guidance on financial topics such as taxation, long-term planning, and debt management. AIS has been managing investments for nearly 40 years using analytical rigor and research. We start by looking at the “big picture” of your financial situation. Then, only after we’ve agreed upon your financial goals, we will develop a practical portfolio allocation strategy and financial plan based on your financial inputs and our investment expertise.
We are independent, meaning we have no product to sell. We emphasize cost-effective solutions. We dissuade clients from seeking services unless we agree that the benefits may outweigh the costs. Finally, we come from a background of analytical rigor. We provide research-based solutions for most any financial issue that arises.
We work best with clients who are analytical and thoughtful. Successful investors typically resent being sold a product, and instead want to understand the inevitable trade-offs associated with different investment options. We believe that doing the right thing for our clients will create goodwill that will sustain our business.
We are fiduciaries and seek to avoid any conflicts of interest with our clients. The traditional brokerage model provides incentives for broker representatives to market products or to trade to generate commission income. This structure creates the potential for conflicts of interest. The independent fee-only Registered Investment Adviser model properly aligns incentives and puts client interests first. This allows independent advisors like AIS to focus on our clients’ needs rather than pushing products.
Science vs. Salesmanship
Our structured, rational, and quantifiable approach to portfolio construction stands in sharp contrast to the rudderless approach of traditional investment managers who implicitly believe that markets fail—they attempt to pick stocks that are “mispriced” and second guess the fluctuations inherent in capital markets. Though their rhetoric may be compelling, their track records are not. The evidence is clear: Investors are better served by simply maintaining broad exposure to the appropriate segments of capital markets in a disciplined manner, consistent with their tolerance for risk.
Our investment research process involves a feedback loop that combines academic rigor with real world application. Our inputs include a review of capital markets data going back as far as 1926, a competitive investment management marketplace that constantly fosters innovation, and client input regarding their investment objectives. We continuously challenge our fundamental assumptions and the basic tenets of our investment approach (market efficiency, diversification, discipline, and cost minimization). Our observations are published in our monthly publication, Investment Guide, and applied in building and maintaining client portfolios. This time-tested, objective approach allows us to provide our clients with the best tools available to meet their investment goals.
Our approach to wealth management reflects an abiding belief in the ability of capital markets to reward investors for the capital they supply. Markets are competitive—and that is good news for investors. Firms compete with each other for investment capital, while investors compete for returns. This relentless quest drives security prices to their fair value so that no investor can expect greater returns without bearing greater risk.
We employ statistical reasoning to identify asset classes—groupings of securities that have unique risk and return attributes. This framework allows us to construct a portfolio designed to meet the particular needs of each client in a manner that is measured and deliberate. Our objective is to provide the strongest returns possible consistent with each client’s tolerance for risk. In order to avoid sharp variations in portfolio value, we choose from asset classes with historical returns that have been positive, but not highly correlated with one another. We include asset classes that have performed well during a variety of economic environments including the inevitable boom and bust phases of the business cycle that the long-term investor is sure to encounter.
What Fiduciary Duty Means at AIS
Our fiduciary obligation to our clients is of paramount importance. Disclosures alone are insufficient to meet this obligation. We actively seek to promote financial literacy among our clients and readers so that they can make informed decisions regarding their financial well being. We are bound by the duties of due care, loyalty, and good faith toward our clients because of the trust and confidence our clients place in us.