Contractually, either party, the client or the firm, can terminate by providing a written notice to the other, 30-days in advance. However, Valentine Ventures typically waives the 30-day advance notice period if a client requests a termination. Aside from a final billing (based on a prorated amount of accrued management fees) there are no other charges or restrictions on the funds being released from the firm’s control.
Valentine Ventures’ sole compensation are the fees it charges, as described elsewhere on this site. In addition, the client pays trade commission on some, but not all, of the investments in their portfolio (typically $8.95 per equity trade and reasonable amounts on bond trades). The firm will often use Exchange Traded Funds (ETFs), each of which reduce their value by an Operating Expense Ratio (OER)–however the OER on ETFs is famously low compared to mutual funds.
Anyone that answers this question with a number/percentage, or a range of numbers/percentages, is either a fool or a charlatan or both. Valentine Ventures devotes its entire energy to maximizing returns within the risk constraints unique to each of its clients. The overall investment environment during the term of the
relationship will determine the vast majority of the return, and that cannot be predicted nor avoided. The foremost goal is to establish a reasonable financial plan, and then execute it with the most appropriate investment mix.
For starters, we don’t have access to your money—by design. Your accounts are held by an independent custodian and brokerage firm (Charles Schwab & Co., Inc). Our firm is afforded, by you, a Limited Power of Attorney that allows us to trade the account, receive information about the account, move money to you (for you), and bill the account for management fees. We cannot distribute your funds to our firm.Ultimately, because of the importance we assign to our role as your fiduciary, we abide by a Code of Ethics, as mandated by the Advisors Act of 1940, and hold ourselves to the highest level of integrity and compliance of all laws and regulations.
It is the sum of the accounts that will be under our care. For example, two accounts of $375,000 within one household meet the standard. Excluded from the calculation are accounts that we cannot manage using our investments, such as College 529 plans and most 401Ks (some “self directed” 401Ks that avail the participant of the assignment to an investment adviser will count toward the minimum as we’ll be managing it like all other accounts). If a client has $750,000 among “manageable” accounts, Valentine Ventures will offer its advice on the best allocation among choices for all accounts it does not manage (like 529s and 401Ks). Once the threshold is met, we will generally invite in immediate family members who may not, on their own, meet the minimum.
No. As long as the combined values of all accounts under direct management equal $750,000 or more by household (see prior point above), the minimum requirement to form a relationship is met—there is no requirement to release all investment funds to Valentine Ventures.
No. Occasionally, long-held securities will have material unrealized taxable gains embedded in them. We balance the liquidation of these issues with the risks associated with holding them, and in consideration of the tax impact. Additionally, if a client holds a “sacred cow” (dearly held issue) there is no requirement to part with it. At times it may even be desirable to split an account into two, to allow us to manage a portion while the client manages the other, if that’s of interest to them.
Yes and no. Before a portfolio is constructed, the client is fully aware of what the construction of the portfolio will entail, and they will have approved of the Asset Allocation targets via the Investment Policy Statement. However, as investments are bought and sold, clients are not consulted as to their opinion of the desirability of the transaction. That type of collaborative relationship exists within a retail brokerage arrangement, but not a discretionary investment management relationship.
All investments, and their trade confirmations, are available for client observation shortly after transactions occur (clients have full viewing access to their account online 24 hours a day via the Charles Schwab website.) Additionally, the performance of all investments, individually and collectively, is communicated to clients at quarter-end. The firm goes to great lengths to communicate its
ongoing investment strategy throughout the year.
At the current time, a Contingency Plan exists in the event that Mr. Valentine is unable to manage the firm that allows for an orderly shut down of the company. In that event, clients would be notified and assisted in the transition to a new firm of their choosing, if needed. Eventually, the firm will have the infrastructure, resources, procedures and processes in place necessary to ensure its survivability without the role of any one member of the firm, including its founder.
No, Valentine Ventures has not been accused of any violation of the law or its fiduciary duty to clients and is not aware of any such accusations pending. The members of the firm abide by a Code of Ethics, as mandated by the Advisors Act of 1940, and the firm holds itself to the highest level of integrity and compliance with all laws and regulations. As a Registered Investment Adviser, the company is held to the “fiduciary standard” obliging it to act solely in the client’s interest.
While we’d like to say that we’re right for everyone, we’re not. We are ideally suited for individuals that would like to deliberately plan for financial independence (or the maintenance of said independence if it’s already been achieved), and who understand their own limitations in managing the assets that assist them in that regard. Our clients trust the financial planning process and its output, and are comfortable delegating the authority for investing because they lack the time, interest, expertise, or emotional restraint (or some combination of those qualities) to manage their own investments.