Q: Describe your firm
A: GSIA is an independent, fee-only, Registered Investment Advisor (RIA), licensed in the State of Idaho with ability to serve clients in and outside Idaho. Independent means we are not owned by, working for, or attached to any other company.
Q: What is a Registered Investment Advisor?
A: The term Registered Investment Adviser (RIA) is used to describe an Investment Adviser who is registered with the Securities and Exchange Commission or a state’s securities agency. The term has been popularized due to its use within the Investment Advisers Act of 1940. An RIA is an individual or firm that is in the business of giving advice about securities such as stocks, bonds, mutual funds, or exchange traded funds.
Q: I’ve heard you must operate according to the Fiduciary Standard. What is that?
A: An RIA must adhere to a fiduciary standard of care laid out in the US Investment Advisors Act of 1940. Simply stated, this standard requires the advisor to act in the best interest of the client and to eliminate, or expose to the client, any existing or potential conflicts of interest.
Q: Aren’t all financial services professionals required to work in my best interest at all times?
A: No. Most are held to the “Suitability Standard”. The suitability standard, by contrast, requires brokers or insurance agents who are regulated under this standard to recommend investment products that are “suitable at the time of purchase”. Further, they are not required to disclose potential conflicts of interest, such as the compensation derived for selling one product over another.
Q: What services are provided by the firm?
A: The services provided are money-management, investment advice and financial planning for families and non-profit companies and foundations.
Q: Can you provide advice beyond the best way to invest my money?
A: Yes. The decision on how best to invest funds comes after a thorough review and discussion of other critical aspects of your personal financial life. We want to be certain you have the right estate plan, insurance elements, and a smart tax strategy. A review of these matters might result in recommendations to add or change other elements of your overall financial plan.
Q: Can you recommend other professionals should the need arise?
A: Yes. Referrals are made to accountants, attorneys and insurance professionals who are personally known to our firm and have a reputation for expertise and high integrity. Such referrals are purely a way to add value to our client relationship. We are never compensated for making or receiving a referral.
Q: What is your investing philosophy?
A: Our philosophy consists of low cost index investing via exchange traded and mutual funds with selective use of individual stocks and fixed income instruments. Statistics have shown that over long time horizons (i.e. 10 years or more) very few money managers beat the performance of the index matching their investment style. We don’t see the value in paying higher fees for the likelihood of lower performance. We shun high expense structure assets, and don’t see a reason to ever pay a sales commission (or load) to purchase or sell an asset.
Q: What’s the difference between your firm and the large commercial firms?
A: We believe it is the degree of intimacy in the personal finance relationship we achieve with clients. We don’t have the challenges of achieving sales quotas, profit goals, number of clients, and all the other mandates that large corporations place on their employees. The only metrics that matter to us are whether the client is satisfied with their portfolio results and the value they get from our relationship. Large firms will claim their market and industry analysis is superior but great analysis is readily available to all firms. The big name firms also have large overhead expenses which almost always results in their charging higher fees for similarly defined services.
Q: Isn’t it risky for me to do business with a small firm?
A: Any responsible investment advisory firm will use a separate custodian to hold client assets. GSIA uses Charles Schwab as custodian for client assets. The client gets a monthly statement from Schwab along with 24×7 online account access. All accounts are SIPC (Security Investor Protection Corporation) insured; on top of that, Schwab maintains further protection from an international insurance company.
Q: What is the minimum amount to do business with your firm?
A: We don’t have any account minimums. Our philosophy is to help those people who would benefit from our services. We have different fee arrangements, one of which is best suited (and most cost effective) for the client based on the amount of investable assets in question.
Q: How are you compensated?
A: GSIA is a fee-only investment advisor which means the only compensation comes directly from the client. There are no sales commissions, referral fees, or other compensation from any source whatsoever.
Q: What is the fee structure?
A: There are three different fee arrangements; Hourly Rate, Fixed-Fee project, and Percentage of Assets Under Management. The hourly rate is $135 and the Fixed-Fee project is a flat fee based on the estimated work involved. The percentage based fee is never greater than 1% and is often lower, depending on the amount of assets being managed.
Q: Is there a contract involved in doing business with GSIA?
A: Yes. The contract is a simple document that outlines the services to be performed and the fee arrangement. The client or GSIA can cancel the contract at any time with five days written notice. There are no cancellation or termination fees.
Q: What’s the best way to evaluate whether to do business with GSIA?
A: We should have an initial consultation to discuss your needs and our expertise, philosophy, etc. The initial meeting is complimentary and completely confidential. There is no obligation and you will never be hounded with follow-up. We’ll both know if the relationship feels right and we want to take it any further. Client references will be made available as needed.
Q: What if I have further questions?
A: Feel free to email or call with questions. The contact information can be found in the “contact us” section of the website.