Do you manage portfolios on a non-discretionary basis?
We manage only fully discretionary portfolios. You, the client, provide a limited power of attorney for us to manage your assets within your objective but at our discretion. However, it is possible to have selected assets in an account which you have transferred to us that we do not manage; in such cases, these are set aside, and we do not follow or supervise the assets, we have no authority to sell such assets, and we do not, of course, charge fees on the value of those assets. Because of the possibility for confusion, this arrangement is discouraged and should be used only where the alternative of a separate account, not managed by us, is not feasible.
If I decide to use your services, how much money should I put into my account?
Your question can be answered properly only after a detailed consultation with our staff. All of your personal financial circumstances (such as the amount of your investable assets, your tolerance for risk, your time horizon and much more) must be taken into consideration.
How would you describe the riskiness of the accounts you manage?
Because we are primarily an equity manager, none of our managed accounts should be considered risk-free in the manner of a stable value account such as those that invest in short-term government securities. Our accounts cover various risk profiles from moderate (Conservative Account) to volatile (Gold Account).
What if I don’t wish to have my money invested in a certain industry or company?
All accounts are entirely individual. Monies from one client’s account are never pooled with those of another client. Accounts are always personalized to reflect the preferences of each client. This means that, provided we accept the mandate, you can give instructions to avoid specific stocks, sectors, or markets.
How large should my portfolio be before considering using your management services?
Our standard minimum account size is $500,000 for global accounts and $200,000 for gold or resource accounts. Those figures are somewhat flexible depending on individual circumstances. However, this does not properly answer your question. The primary issue – regardless of the size of your total portfolio – must be whether our style is appropriate for you as an individual. This said, however, the majority of our clients will have total investable assets in the high six-figure or low seven-figure range.
Can I put my IRA into one of your managed accounts?
Yes, but certain strategies are not allowed in IRAs. Otherwise, our overall management style is the same.
Can you manage money for corporations or trusts as well as for individuals?
Yes. Please accompany your application with a corporate resolution or a copy of your trust documents, as applicable, along with any special instructions.
If I am not a U.S. citizen, can I employ your services?
Yes; we can hold your account with one of our offshore custodians. Indeed, U.S. residents may use an offshore custodian as well.
If I have more than $500,000 to invest, can I participate in both a Growth account and a Gold account?
Yes, indeed. This can be done in two ways. You may provide a guideline for allocation (for example, 1/3 Gold, and 2/3 Global Growth) which can be held within one account. Or you may divide the funds into two separate accounts with different objectives. Remember, our standard minimum for a global account is $500,000 and for a gold account $200,000.
Can I use existing securities to fund a managed account?
You can transfer either securities or cash (or both) to meet the $200,000 minimum. The firm can offer you an opinion as to which securities to sell and which to hold. This selling can be done either in your present account, or after stock is transferred to your new account. Once you have spoken with our account representative, we will send you the appropriate forms to move your accounts from where they are currently held through to our clearing broker. It’s easy to transfer an account.
If I open an account with Adrian Day Asset Management, where will my funds be held?
No assets are held directly by our firm. We have carefully selected a variety of custodians, some based in the United States and abroad. Each custodian is a multibillion dollar financial institution. Within the United States all accounts are insured by the Securities Investors Protection Corp. (SIPC).
Can you help me with the paperwork necessary to open an account?
We will gladly do so. For all questions related to the opening of your account, please call 410-224-2037 or email AssetManagement@AdrianDay.com.
How long is it after I open account before it is fully invested?
There is no time schedule. Unless a client insists of being fully invested at all times–which we do not recommend–we invest when there is value, and do not invest when there is not. (The section on “cash” in “Investment Tactics” under “About Us” at the top of this page, discusses our use of cash more fully.) Generally, we take time to invest new funds, since not losing right off the bat is important; it is difficult to make back initial losses. (A 20% loss, for example, requires a 25% gain just to get back to breakeven; a 50% loss requires a double.) What tends to happen, however, is that our allocation to particular sectors or markets (for example, oil and gas, or Japan) may go unfilled for a while, but then gets invested quickly as opportunities arise. So initially, a new account may be rather lopside (a lot of Europe but no Asia, for example), but over several months becomes positioned appropriately.
When I have questions about my account, whom do I contact?
You can call the office (410-224-2037), or, if you prefer, e-mail (AssetManagement@AdrianDay.com) anytime. We will be certain to put you with the appropriate person to answer your questions.
Can I add to my account or withdraw cash at any time?
You may add to your account as you wish. You may also, of course, withdraw your funds at any time. Some clients have regular withdrawal schedules and others prefer to simply request withdrawals on an ad hoc basis. However, it may be that a large unanticipated withdrawal of cash could mean we may be forced to sell securities at less than the best price. Please provide as much advance notice as possible for upcoming withdrawals.
Commissions on some trades are higher than they would be at internet discounters. Why?
We are very conscious of commissions and other costs, but weight these costs against the service and execution we require. We look at the entire “package” rather than at the brokerage commission in isolation. This is particularly important for a firm such as ours that buys many foreign stocks, including those in emerging markets, and foreign bonds. My experience is that many of the discounters have terrible executions on foreign stocks, including Canadian ones, even though the stated commission may be low. We have examined many discount brokerages and even used them in the past, but without success. The spreads are wide, the executions awful, and with very high currency exchange rates, as well as the inability to trade in certain markets or buy certain securities all together. Usually, buying the identical stock in the same amount at both a discounter and at one of our select brokerages would result in paying a higher total cost at the discounter, even though the stated commission was lower – this is assuming the discounter even executed the order. We buy directly in the foreign markets using foreign currency limits; most discounters using the U.S. O-T-C market and, because of wide spreads, would frequently miss trades that we filled at other brokers. This discussion does not even touch on other issues of service – the ability to invest in private placements, for example, which we found impossible in a practical sense at discounters; the ability to sell puts in IRA accounts.
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