In order to best meet your needs, it is extremely important for us to know you well. We have found that this is best accomplished through personal meetings or phone conversations. We begin by listening very carefully to you: What are your priorities and concerns? What are your future spending needs? Where do your see yourself in five, ten, or twenty years? Since every client is unique, we also try to take inventory of your real assets, financial assets, liquid assets, liabilities, unrealized gains & losses, investment concentrations, and cash flows. Our aim is to design an optimal strategy for growing and protecting your assets that is tailored to your specific goals and aspirations.
At this stage we also like to teach you about the historical risks and returns associated with long-term investing. Our goal is two-fold. First, we wish to educate you, because we find that well-educated clients tend to be happier clients. Second, we try to understand your personal risk tolerances and return expectations.
From these discussions, we begin to formulate a strategy that includes determining an appropriate asset allocation and creating an Investment Policy Statement (if necessary). An Investment Policy Statement is a written document that clearly sets out the client’s goals, investment horizon, liquidity needs, tax consideration, risk tolerances, return objectives and unique circumstances. A properly developed investment policy supports long-term discipline. It also helps ensure that market volatility (causing overconfidence or panic) will not lead to ad-hoc revisions in strategy.
Once you have decided to hire Marathon, we will prepare an Investment Management Agreement between you and Marathon. The Investment Management Agreement gives Marathon the right and responsibility to make investment transactions in your account in accordance with the objectives stated in the Agreement and your investment strategy (discretionary authority). At this time we will also provide you a copy of our Form ADV (Form ADV is disclosure document required by security regulators).
You can always terminate the Investment Management Agreement at any time for any reason. Of course, there are never any penalties or additional fees that we assess to you if you ever wanted to end our relationship. Any outstanding fees due to Marathon would simply be prorated to reflect the quarter-to-date services that had been rendered.
At the same time that you sign the Investment Management Agreement, you will select a broker that will act as the independent custodian of your separate investment portfolio. We encourage you to establish a brokerage account with a deep discount broker instead of a full-cost one. We would be happy to assist you in selecting an independent broker based upon criteria such as cost, ease of communication, and quality of reporting.
Marathon will prepare all brokerage account and account transfer paperwork for your signature. Signing the paperwork will automatically direct your existing broker to make the account transfer. We will also try to help you locate your cost basis information in your taxable accounts so that we can help keep track of your capital gains. Transfers typically take one to four weeks from the date the forms are signed. At this point, if you have a particular individual who has been helping you at your former brokerage firm, we encourage you to call him/her to let him/her know of your decision to change advisors.
It is also important to note that Marathon never has physical possession of your assets. Your assets are held by the custodian (brokerage firm) of your choice in an account bearing your name. Additionally, Marathon does not have authority to deposit/withdraw cash or securities from you account (with the exception of management fees).
After your new brokerage account has opened and the securities have transferred into your account, we can begin to implement the investment strategy. The process of transitioning your portfolio that reflects the intended strategy can take up to six months (or sometimes longer).
Each quarter, Marathon will mail you a series of custom reports. Your broker will provide you with monthly statements that give an inventory of your assets and itemize all transactions. On an ongoing basis the broker will also provide you with trade confirmations, and year-end 1099 Report.
Marathon provides an exceptionally wide range of reports. You are encouraged to contact us at any time for additional account information or for other reporting requests. We pride ourselves on our responsiveness to client needs. We also work closely with your accountants and attorneys to provide any additional information.
From time to time, market conditions will cause the portfolio’s investments to vary from the established target allocation. In order to remain consistent with the diversification and asset allocation guidelines, we will need to reallocate the portfolio back to the recommended weightings.
On an ongoing basis, we track the performance of your investments and compare them to an appropriate investment benchmark. Tracking your portfolio performance is one of the best ways to measure the effectiveness of the investment strategy. It is also one of the best ways to make sure that your long-term goals are on track for being achieved.
We also believe it is important to meet with you periodically (preferably annually) and to find out if you are satisfied with the progress of your investment strategy. However, we rely on you to schedule the meetings. We also rely on you to notify us when your investment objectives change or when material events in your life have occurred.