Investment Management Services
Investment Management Fees
Elements 5 provides personalized investment management services for an annual fee based on the value of assets managed for the client. Client assets are held at Charles Schwab, and investment management fees are calculated using the average daily balance of aggregated managed accounts.
The current annual fee schedule is:
- $5,000 for accounts up to $500,000.
- 1.00% on the next $500,000, up to $1,000,000.
- Up to 1.00% on assets over $1,000,000.
Elements 5 charges a minimum annual fee of $5,000 for investment management services. For smaller portfolios, that minimum fee allows Elements 5 to provide discretionary investment management together with basic financial planning related to the managed assets.
Fees are set forth in the written Financial Services Agreement between Elements 5 and each client. Investment management and financial planning services may be combined for some clients, particularly where ongoing planning and portfolio management are both part of the relationship.
Project-Based Financial Consulting
For clients who do not need ongoing investment management or comprehensive financial planning, Elements 5 may also provide project-based financial consulting at $400 per hour. This may be appropriate for clients who want advice on investment selection, portfolio review, retirement distribution planning, self-directed account design, or other targeted financial issues.
The Elements 5 Approach to Investment Management
Elements 5 provides customized investment management because each client’s financial situation, goals, values, time horizon, and risk tolerance are different. Investment recommendations are designed to reflect the client’s objectives, liquidity needs, tax considerations, and other relevant circumstances.
Elements 5 combines personalized advice with a disciplined fiduciary standard of care. David Schram has affirmed adherence to the Best Practices published by the Institute for the Fiduciary Standard, follows the Standards of Professional Conduct of the CFP Board, and brings advanced investment management training reflected in credentials including the CIMA® certification administered by the Investments & Wealth Institute, formerly IMCA.
Elements 5 primarily uses a strategic asset allocation approach to design and manage client portfolios. We develop a long-term allocation framework for each client and monitor the portfolio over time, using rebalancing when deviations from target allocations become material.
In managing portfolios, Elements 5 performs fundamental and qualitative review of investment vehicles, including mutual funds and exchange-traded products. We also evaluate how those investments fit within the client’s overall portfolio and Investment Policy Statement.
Quantitative tools and technical market data may be reviewed from time to time as supplemental information, but they do not drive our primary investment decisions.
Investment Policy Statement
Each investment management client receives an Investment Policy Statement (IPS) prepared by Elements 5. The IPS serves as a written guidance document for managing the portfolio and helps define the client’s investment goals, objectives, strategy, asset allocation, risk tolerance, liquidity needs, time horizon, tax considerations, and any unique circumstances.
The IPS is typically reviewed annually and at a minimum every three years, depending on the client’s circumstances. It may also be updated earlier when there are material changes in the client’s financial situation, goals, withdrawals, deposits, or other planning needs.
What Clients Can Expect
Before managing assets, Elements 5 meets with clients to review their current financial situation, investment objectives, time horizons, and tolerance for risk. These discussions help establish an appropriate portfolio strategy and provide the foundation for the client’s Investment Policy Statement.
Investment management clients can generally expect:
- Review of financial goals, liquidity needs, time horizon, and risk tolerance.
- Preparation of an Investment Policy Statement.
- Portfolio construction and investment selection based on the IPS.
- Ongoing monitoring, rebalancing, and portfolio review.
- Periodic meetings and updates as client circumstances or market conditions warrant.
The goal at Elements 5 is to provide disciplined, personalized portfolio management that remains aligned with the client’s objectives as markets and life circumstances change.