Frequently Asked Questions
We are located in Houston, Texas USA 1707 W Sam Houston Parkway S
Houston, Texas 77042
An Investment Advisor generally provides discretionary investment management services consistent with a client’s goals and objectives for a designated portfolio. A qualified Investment Advisor adds value in a number of areas:
- Helping the client identify life goals (e.g. wealth accumulation, education, retirement, estate planning)
- Projecting the cash requirements to achieve those goals
- Analyzing the available assets from which to meet the cash flow requirements
- Determining the client’s investment risk tolerance
- Selecting an asset allocation strategy that best matches the client’s goals with the funds available for investment and the client’s risk tolerance, liquidity needs and tax situation
- Achieving investment goals while minimizing taxes on capital gains and income
- Structuring and executing an investment plan to help achieve those goals
We feel both risk management and low costs are two critical variables that should be emphasized when choosing someone to advise you on your investments. Investors should agree with the advisor's investment philosophy and feel comfortable with their quality and method of research and communication, as well as investment style. Here are some critical points to cover with a potential advisor to clarify and establish a solid mutual long-term understanding and relationship.
1. Know your investment professional's experience and philosophy of investing.
2. Make sure there is a communication and personality fit between you and your advisor.
3. Ask if they have specific investment strategies designed to help and protect you during current market conditions.
4. Ask and understand how your investment professional is compensated.
5. Be honest about your current financial situation, goals, objectives, and risk tolerance.
6. Ask about the services and limitations of your investment advisor.
7. Schedule a regular financial check-up, to make sure you are on track or to make adjustments.
8. Call when circumstances in your life change that may impact your investment strategy.
9. Examine investment performance history, being sure to compare results obtained under particular market conditions, not just over a particular time frame.
10. Be realistic in your expectations regarding the returns expected on your account in light of the overall performance of the broad market indices and your risk considerations.
The Broughton Investment Group, Inc. is a “fee-only” registered investment advisor, and as an asset management firm, we are concerned with the growth of your investment portfolio and the protection of your assets. We work directly for you and receive no compensation from any other source than the monthly asset management fee we collect from each client therefore, we execute trades when we believe they will benefit the portfolio. A traditional stockbroker working for a broker/dealer or bank is typically a sales person who is compensated by generating commissions from the sale of investment securities and/or investment products.
Each custodian we work with has insurance (SIPC, FDIC, Lloyds of London, etc.) to protect your assets in the event your custodian has financial problems or goes out of business. We only work with custodians who are financially sound with the assurance that they are well-positioned within the financial services industry.
Fiduciary: A fiduciary is a person or company that is legally appointed and authorized to act in the best interest of their clients. This duty extends in all aspects of conduct, from investing wisely to safeguarding private information. RIAs must put their clients interests in front of their own. This is a key difference between the independent RIA community and the traditional Broker/Dealers (BDs). BDs are only obligated to provide suitable investments, but those may not always be the best.
Discretionary: Discretionary is a type of authority that allows us to buy and sell securities without client consent. However, as a fiduciary, RIAs are required to buy and sell securities that are in your best interest, and that are in line with your risk tolerance, objectives, and needs. At The Broughton Investment Group, Inc., we receive a limited discretionary authority on client accounts. "Limited" means we cannot add or move money from the account without your consent.
Custodian: A custodian is a bank or financial institution that holds onto the client's investment assets. As independent RIAs, The Broughton Investment Group, Inc. works closely with many custodians to provide safety and security for our clients.
Active Management: Active management is an investment philosophy that believes that through using key market technical indicators, decisions can be made on a daily basis as to where to best allocate your money. This requires a disciplined set of rules, procedures, and dedication to execute correctly. While active management is not always the best method of investing, at times it can prove far superior to the traditional buy-and-hold approach.
Registered Investment Advisor (RIA): RIA is a legal term for investment advisors that are registered either with a state division of securities or with the Securities and Exchange Commission (SEC). RIAs have a fiduciary responsibility to its clients.
The Broughton Investment Group, Inc. Registered Investment Advisor, Inc. is a registered investment advisor under the Securities and Exchange Commission (SEC) – Investment Advisers Act of 1940.
You will receive confirmation of each purchase and sale of a security from your custodian (our preferred custodian is TD Ameritrade). Additionally, each client is sent monthly account statements from their custodian that details all activity and lists the market value of each asset. Moreover, The Broughton Investment Group, Inc. sends a quarterly package which includes a portfolio appraisal, market commentary and other relevant information. Finally, clients, through meetings and periodic reports, may receive information about their accounts and performance relative to their goals and appropriate indices.
Yes, we believe strongly that communication is the key to a long-term, successful relationship with our clients. You will receive a monthly statement from your custodian and a monthly portfolio review statement from The Broughton Investment Group, Inc. detailing all transactions, securities held, along with performance data for your portfolio. You will meet with your Client Manager on a monthly basis to discuss any changes in your portfolio. We also send you a monthly market review letter and newsletter.
Clients’ assets are held by a custodian. Our preferred custodian is TD Ameritrade. A custodian is usually a bank or brokerage firm which has custody of a client’s assets, collects interest and dividends and settles security trades. Generally, the custodian reports all transactional activity and portfolio holdings through a monthly statement. A custodian may also act as a broker to execute trades on behalf of the client.
The Broughton Investment Group, Inc. does not perform custodial functions. We do not hold cash or securities for customers.
We will review your current holdings with you prior to signing up with us. Your Client Manager will work with you to determine which securities or mutual funds we may wish
to hold or sell. You are able to instruct us on which securities you wish to own based on possible tax consequences.
Our only compensation is derived from each client paying us a monthly investment management fee. Any transaction fees incurred by the buying/selling of securities are the responsibility of the client.
Yes, most of our clients enjoy the convenience of having their monthly investment management fee deducted from their portfolio. The option of making your monthly fee payment by check is also available if preferred.
No, you may add or subtract assets from your portfolio as often as you like. If you decide not to retain our investment management services, we require a 3-day notice and you will only be charged fees on a pro-rated basis.