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How long has William Mack & Associates, Inc. (WMA) been in business?

How is WMA compensated for their services?

How are Retainer Services fees calculated?

Are the Retainer Services fees tax-deductible?

What is included in WMA's services?

What is the minimum portfolio size?

Do you offer a complimentary consultation?

How often do you communicate with clients?

What is WMA's investment philosophy?

How often are my investments reviewed?

Are WMA personnel invested in the same holdings that their clients are invested in?

How often are investment changes made?

Do you contact me before making any changes to my portfolio?

Does WMA attempt to ''time'' the markets?

Where are my assets actually held?

Will I receive monthly statements regarding my investment accounts?

Can we hold individual stocks in my accounts?

What is a Registered Investment Adviser?

Can you help with my company retirement plans?

 

 

How long has William Mack & Associates, Inc. (WMA) been in business?

WMA was founded in 1992. The founder, William Mack, has been in the financial services industry since 1982.

How is WMA compensated for their services?

WMA is a fee-only company. As a fee-only firm, we are unencumbered with the potential conflicts of interest that are inherent in commission-based firms. Because of the way in which we are compensated, when it comes to investment advice, our method of compensation ensures that the client always comes first. We refer to our compensation as a “Retainer Services” fee because of the comprehensive nature of the services we offer.

We do not receive any compensation from custodians such as Charles Schwab & Co. or Fidelity nor do we receive any compensation from any mutual fund companies. WMA does receive computer support from custodial firms related to tracking portfolios and handling transactions.

How are Retainer Services fees calculated?

The amount of the fee is based on the amount of assets we are managing. In a typical situation, our compensation is approximately 1% or less per year.

For example, at the beginning of each quarter, we take the value of the portfolio and multiply it by 0.25%, which is the Retainer Services Fee for the coming quarter. We then deduct the amount of the fee automatically from the client’s investment account(s). In this example, drafting this 0.25% fee each quarter results in an effective annual fee of 1.0% of the value of the portfolio (see our ADV Part II for specific details). We include a fee draft notice, which details the calculations involved, along with a “Portfolio Summary” and our market commentary—all of which we mail to you after the end of each quarter.

Are the Retainer Services fees tax-deductible?

Yes, with certain limitations. Section 212 of the Internal Revenue Code permits an itemized deduction for investment management fees related to non-retirement accounts. While fees from retirement accounts such as IRAs are not tax deductible, they are considered tax-free withdrawals with respect to investment management fees. As always, it is best to consult your tax professional regarding this or any other tax-related issue.

What is included in WMA's services?

In addition to investment management, WMA will—at no additional cost—provide comprehensive financial planning advice with respect to retirement planning, education funding, cash flow analysis, insurance and estate planning, plus any other financial-related goals or objectives. In addition, as a Retainer Services client, there are never any additional charges for meetings or phone consultations. All of the services we offer are covered entirely by the retainer fee. We will even work with your other advisors—tax, legal, insurance—to ensure that your overall plan remains on track.

What is the minimum portfolio size?

The compensation for Investment Management Services is based on a percentage of the assets being supervised.  When entering into a new client relationship, WMA typically requires a minimum portfolio size of $250,000 in order to offer the client with the full range of services that WMA provides. However, since there are many variables associated with an individual's financial situation, including the future potential and ability to accumulate assets, as well as relationships with existing clients, WMA at its discretion, may reduce the minimum portfolio size requirement.  WMA’s fee may be higher or lower than may otherwise be available through other types of advisory firms for similar services.  

Do you offer a complimentary consultation?

Yes. It is important to get to know each other before entering into a relationship. We need to determine whether or not a potential client has reasonable goals and objectives, and whether or not we believe we will be able to address those goals and objectives. In addition, we want the client to be a good “fit” for our firm.

How often do you communicate with clients?

In order to stay on top of the investment holdings and the performance of your portfolio, WMA provides a Portfolio Summary along with our market commentary every quarter. Since we encourage frequent communication, we are always available for in-office meetings, telephone calls, or e-mail communications. While the frequency of communication is client-specific, we strongly encourage meeting at least annually in order to review your progress, and discuss any changes that might have occurred that would prompt us to make adjustments to your plan.

What is WMA's investment philosophy?

Diversification, tax-efficiency, and low-cost investing are the cornerstones of our investment philosophy. As Certified (mutual) Fund Specialists, we can utilize actively managed and index mutual funds, as well as ETFs, when crafting a portfolio strategy designed to achieve a client’s specific goals and objectives.

How often are my investments reviewed?

While physical reports (i.e., Portfolio Summaries) are sent to clients on a quarterly basis, investment management is an on-going, daily process. Our investment committee monitors the political, economic, and market landscapes on a daily basis, and meets weekly to discuss what action, if any, should be taken with respect to our client portfolios. In this way, we are continually reviewing each of the holdings that are in our client portfolios.

Are WMA personnel invested in the same holdings that their clients are invested in?

Absolutely yes. As the saying goes, “we eat our own cooking.” Clients can be assured that we have absolute faith in our investment philosophy, and that the vast majority of our own personal investment assets are invested right alongside those of our clients. Changes made to our personal portfolios are done in concert with changes made in client portfolios.

How often are investment changes made?

Typically, portfolios are rebalanced once per year. However, changes can be made whenever necessary—either in response to a change in our Investment Strategies, or a change in a specific fund, or in response to a change in a client’s specific circumstances.

Ideally, once we identify the top fund managers, index funds, or ETF's that will be included in our various Investment Strategies, they would perform as expected and never need to be replaced. Realistically, things change, and we as advisers must be prepared to act when necessary.

For example, let's assume there is no change in a client’s goals, objectives, or tolerance for volatility. However, we learn that a top fund manager plans to retire. In this case, the investment committee convenes in order to determine whether or not the replacement manager meets our stringent criteria. If the replacement manager fails to meet our criteria, a change to the portfolio would be in order. Other examples would include changes at the fund level, whereby the fund may have changed its investment approach or the types of stocks they invest in.

Do you contact me before making any changes to my portfolio?

At the beginning of our relationship, we construct an Investment Policy Statement that requires us to adhere to a specific asset allocation strategy, with a specific risk profile. Naturally, this strategy is tailored to your specific goals and objectives. We do not contact you when making portfolio changes within the confines of the agreed-upon Investment Policy Statement. However, in the event we recommend a change to the Investment Policy Statement, we would first contact you before making such changes. In other words, we will never make a portfolio more aggressive or more conservative without first contacting you, as that would require a change in investment policy.

Does WMA attempt to ''time'' the markets?

No. We help our clients allocate their portfolio between assets they will need to access in the near-term—and assets that will not be needed for years and years.

For short-term money, we avoid the volatile stock market altogether—making market timing unnecessary. For the longer-term money, the goal is to participate in the next 100% advance, not to avoid the next 25% decline. In this case as well, market timing is equally unnecessary.

The results of our time-tested approach are restful nights for our clients, since they are comfortable knowing that their money is invested appropriately. There is no need to remain glued to the television set, being subjected to each gut-wrenching turn of the stock market. In the words of renowned investor Peter Lynch:

"Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves"¬

Where are my assets actually held?

For your protection, all assets are held by independent custodians such as Charles Schwab & Co. WMA never takes possession of client assets. While WMA is listed as an advisor on your account, the actual physical relationship is between you and the custodian. The websites of the various custodians will also explain other protections they offer in terms of fraud or insolvency. Charles Schwab & Co. created a brochure titled “Your Assets are Protected at Schwab” (http://www.schwab.com/public/file/P-3042070/MKT45080-04_2.pdf).

Will I receive monthly statements regarding my investment accounts?

Yes. For your safety, security, and protection, monthly investment statements are produced by the custodial firms such as Charles Schwab & Co. Inc. indicating the value of your accounts, as well as any activity that took place during the month. Your investment accounts are also available for viewing via the internet 24 hours a day, seven days a week. If you would prefer, you can elect to have electronic delivery of all account information, rather than delivery through the U.S. Postal Service.

Can we hold individual stocks in my accounts?

Yes. You can contact us at any time with a request to purchase a stock (or stocks) in any of your accounts. Keep in mind, however, that our core portfolio strategies are constructed utilizing actively managed mutual funds, index mutual funds, and ETF's. As such, you would take the initiative with respect to the inclusion of individual stocks in your portfolio. Upon request, we can utilize our substantial resources to help you track any stock holdings, but the ultimate buy, sell, or hold decision is ultimately your responsibility.

What is a Registered Investment Adviser?

A Registered Investment Adviser is a fiduciary who has a duty of undivided loyalty to his investment advisory clients, and must deal fairly and honestly with them—placing the client’s interests first. Any person or entity that holds itself out as an investment adviser must be registered with the Securities and Exchange Commission or the local State Authority.

Can you help with my company retirement plans?

Yes, we can help you review and determine an appropriate strategy regarding your company retirement plans. In some instances, where the investment options are vast, clients request that we actively manage their company retirement plans on an ongoing basis. In those instances, we will track, manage, and report on those assets, which will be subject to our normal Retainer Services fee.