HCM’s only fee is a percentage of the assets under management. We receive no commissions, no loads or other charges. Management fees are tax deductible; confer with your tax professional. - How is this fee arrangement beneficial to the client?
Our fees increase if, and only if, the value of the assets increases. Our fees decrease if the value of the assets decreases. This arrangement puts the client and manager in alignment, and is conducive to achieving long-term investment objectives. - I have a stockbroker who gives me advice; why do I need an investment advisor?
Brokers are salespeople who get paid when their customers trade. Their employers, the brokerage firm, get paid when customers trade. Brokers are influenced to increase trading activity and recommend financial “products” that pay the highest commissions. Fee only advisors have no such conflict. · I use no-load mutual funds so I don’t pay any fees or commissions. Mutual funds are not charities; they are for-profit enterprises. No-load simply means you do not pay a fee for the privilege of investing in the fund. There are still management fees which, according to the Morningstar Mutual Fund Reports, are 1.51% for the average equity fund. Funds pay commissions to trade stocks and bonds. The commission expense is in addition to the management fee and can be found in the fund prospectus. · Won’t a mutual fund provide diversification and good returns? Probably over-diversification! Most funds seek refuge in owning too many stocks in the hope of achieving returns that mirror the market averages. Further, they must be fully invested and are restricted in their investment style. Taxes are a problem for fund holders because funds must pay out gains each year while losses cannot be deducted by fund holders. · What if I need funds from my account quickly? HCM invests only in liquid assets. Your funds are readily available. Hopefully, forever! However, there is no minimum contractual time period; funds can be withdrawn, or added on a daily basis. · Can HCM provide advice on all my financial concerns? HCM has the experience to discuss any concerns you may have. However, you should consult experts in legal, trust and tax matters. We will indicate when you need to seek expert advice in these areas.
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