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Questions | Overview

DOES CURBSTONE PROVIDE FINANCIAL PLANNING SERVICES TO ITS CLIENTS?

The principals of Curbstone have a long history of providing financial planning services to clients.

In addition to individuals in the firm who maintain degrees as Certified Financial Planner, Accredited Retirement Plan Counselor, and Accredited Asset Management Specialist, the firm also has a history of providing consulting services to legal counsel in settlement cases.

Planning services are performed on a fee for service basis.

WHAT IS ASSET ALLOCATION AND HOW WILL I BENEFIT FROM IT?

Asset Allocation is the percentage of stocks, bonds, and money markets held by an account at any point in time.

We believe that a portfolio's asset allocation is a major determinant of both performance and risk (volatility). Therefore, each of our clients has a specific asset mix which is dependent upon that investor's particular time-horizon, risk profile and investment objective. We bring to our clients a proprietary method of asset allocation whereby the portfolio's asset mix is periodically adjusted to reflect the current probabilities of stocks and cash outperforming each other over the client's time-horizon.

We believe discipline is the key to superior risk-adjusted performance and to meeting specific client objectives within the appropriate risk parameters. We maintain a strong buy-sell discipline and are not influenced by fads or the prevalent market sentiment. We are long-term investors, who believe that by owning securities and classes of securities which offer above-average expected returns (relative to their respective risk factors), the short-term performance will take care of itself.

A disciplined approach to asset allocation should over reasonable time horizons increase your predictability of return and reduce your volatility of return.

HOW DOES CURBSTONE IMPLEMENT ITS ASSET ALLOCATION STRATEGIES?

Curbstone employs several management systems in serving a diverse clientele. The management system selected will depend upon the size, nature, and income demands of the account to be managed.

Our internal management system utilizes Dynaporte software to construct and monitor asset allocation models combined with cost-efficient Exchange Traded Funds, equities and bonds to implement client strategies.

External management systems typically utilize Hammer Asset Management models and strategies designed to respond to our specific requirements and client needs.

All management systems are constantly monitored on behalf of the client, in accordance with a client-designated risk profile.

Client portfolios are segregated into two distinct categories:

Accounts are then further segregated into one of five risk categories defined by each client's need for preservation of capital, desire for income or growth goals, and comfort with swings in the value of the portfolio.

Portfolios are then individually designed, tailored to the client's risk/reward profile using exchange traded funds, stocks and bonds. Further, specific themes may be designed to meet the client income or growth requirements. The Curbstone solution allows for the cost-effective administration and management of your account without sacrifice of diversification.

WHAT IS THE ADVISORY PROCESS THAT WILL SERVE MY INVESTMENT MANAGEMENT NEEDS?

Our goal is to satisfy client needs that are typically not being met in advisory relationships.

Asset managers typically do not perform well in terms of educating their clients or in terms of consultative services to their clients. Trust departments often do a better job of consulting with their clients, but perform poorly in the asset management area.

By combining individuals skilled in consultative services with individuals devoted to portfolio services, we believe that we provide the best client-oriented services available.

Such consultative advisory services may include the following components:

• Introduction to Concepts of Asset Allocation
• Data Collection and Analysis
• Analysis of Current Portfolio, Securities Selection, Risk Profile
• Evaluation of Income Needs
• Testing Tolerance for Volatility
• Observations and Recommendations
• Selection of Risk Profile
• Construction and Monitoring of Portfolio

All client assets are held in custody by independent custodians.

Client risk profiles may be changed as circumstances may dictate.

HOW ARE MY ASSETS PROTECTED WITH CURBSTONE FINANCIAL MANAGEMENT CORPORATION?

 

When we established our asset management system, a great deal of thought was given to the protections afforded our clients. Abuse of clients at the hands of trustees, brokers, and judges are not uncommon in the news, and for this reason we have established safeguards in our management system to provide the ultimate level of protection and comfort to our clientele, as follows:

CUSTODIAL PROTECTION

We hold no client assets in our company accounts. Our independent managers hold no client assets in their company accounts. We pool no client assets and we do not commingle client accounts.

All client-managed accounts are held by an independent trust company in the legal name of the account only. Our clients execute a limited power of attorney, which allows the manager to execute trades on behalf of the account and allows for the payment of management fees only to the investment manager.

Any withdrawal from the account must be authorized by the client of record. If the withdrawal is going by wire or check to the account of record, it can be authorized by telephone. If the withdrawal payee is to be other than the account of record, the withdrawal must be authorized, in writing, from the authorized individual of the account of record, before the withdrawal is made.

The custodian is an independent entity, which reports independently to the account of record, providing an audit trail of all transactions to the client. This audit report can then be utilized to confirm entries on the investment manager's report.

If there is ever a reason to terminate the investment manager, there would be no need to terminate the custodian. The client would merely need to inform the custodian that the relationship with the manager had been terminated, and that the custodian should await further instructions.

The custodian also performs independent tax reporting, separate from the analysis provided by the investment manager.

FEE PROTECTION

Clients are protected against excessive fees and charges as a result of client-oriented fees and custodial relationships.

We also pool all related accounts for fee purposes. This gives the client with several accounts the ability to pool the accounts for fee purposes only, giving them the fee advantage afforded only larger accounts.

INVESTMENT MANAGER PROTECTION

The investment manager operates under a client-executed Limited Power of Attorney, which authorizes the manager only to buy or sell securities on behalf of the account, and to receive management fees per the management agreement. The investment manager has no authority from the client or the custodian to withdraw funds from the account for any other purpose. Additional withdrawals must be authorized specifically by the client.

Our managers make decisions relative to your account based upon the strict guidelines they have been provided by you in conjunction with our consultants. Your asset allocation will be carefully monitored to be responsive to your investment experience, your time horizon, your individual tolerance for risk, and your need for income distributions. Individual tax considerations are also monitored on your behalf.

Our managers are governed by the Investment Adviser's Act and are periodically audited by the SEC. In addition, advisers are governed by the CFA or CFP (Certified Financial Planner) Code of Ethics. Any questionable behavior on the part of an adviser could result in sanctions against the adviser and could result in the loss of the CFA (Certified Financial Analyst) and CFP designations.

ASSET ALLOCATION PROTECTION

We practice dynamic and strategic asset allocation, defined as a series of asset allocation decisions based upon current market dynamics, client time horizon, and income needs. Although no discipline guarantees investment success, a disciplined approach to asset allocation tends to increase predictability of return and decrease volatility of return. This is a valuable approach for the client who desires to smooth the peaks and troughs of investment experience over time.