Frequently Asked Questions

Our Investment Philosophy

  • How would you describe your investment philosophy?

    Our investment philosophy is based on two important factors: risk and return. That's why our investment management philosophy and methodology take full advantage of the latest academic research, emphasizing a long-term approach, extensive diversification, and strategic rebalancing.

    Instead of making wild guesses and hoping it all works out, you need a solid approach that's proven and time-tested. And that's exactly what we provide. From Modern Portfolio Theory and the Fama-French Three Factor Model to recent discoveries in Behavioral Finance and Neuroeconomics, you benefit from the fact that our investment management services reflect the latest academic research.

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  • How do I choose the portfolio model that's right for me?

    With more than 100 models from which to choose, it might seem a daunting task. No worries, though, because we'll do all the work for you! Whether you choose to talk with one of our financial advisors or use our interactive Guide to Portfolio Selection online, you'll find that the entire process is quick, painless and easy. Just answer some simple questions to help us understand more about your specific situation and we'll show you an asset allocation model that's right for you.

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  • What is the Edelman Managed Asset Program (EMAP), and what makes it different?

    We created EMAP to help investors avoid the deceptive business practices that are so pervasive in the retail mutual fund industry. Over the past decade, many people have discovered that their investments were far riskier than they had thought, were costing them much more than they knew, and were earning returns that were lower than they wanted or needed. EMAP is designed to help solve these problems.

    EMAP accomplishes this by extensively diversifying your investments, maintaining a long-term approach and strategically rebalancing your portfolio. Instead of gambling your future on the performance of a single stock, market sector or nation, your money will be diversified among thousands of securities. 

    And instead of worrying about whether the stock market will rise or fall tomorrow, EMAP's outlook is focused on years, even decades – matching the deadlines for your goals and objectives. Most importantly, your portfolio will be rebalanced whenever the opportunity arises, helping to manage your risks and potentially improve your returns. And all the while, EMAP uses low-cost exchange-traded funds and institutional-class mutual funds.

    All this explains why EMAP is different from other investment management programs. Unlike stockbrokers who pitch "hot stocks" or the latest fads in the hopes of "fast profits," EMAP is based on solid academic research. EMAP portfolios typically encompass as many as 19 distinct asset classes and market sectors, carefully balanced to help you manage risk. 

    EMAP features dozens of asset allocation models.  There's a simple reason for this: you're unique, and although other investment advisors stuff everyone into the same "conservative," "moderate" or "aggressive" boxes, we know you're not like everyone else. That's why we have found it necessary to offer so many different asset allocation models. But don't worry: we'll help you figure out which one (or combination) is right for you! And we'll make it quick and easy for you, too!

    Learn more about EMAP.

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  • What is rebalancing and why is it important?

    Over time, investment values fluctuate. This can cause your asset allocation to deviate from the model we recommended for you. If left unchecked, your portfolio's composition could drift (perhaps dramatically) from the target allocation we've designed for you.

    To prevent this from happening, we continuously monitor your portfolio, and if we determine that your account is out of balance, we will automatically execute trades to restore your portfolio back to its target allocation. We accomplish this by selling some assets that have moved higher in price and buying other assets that are lower in price. This can help with your long-term returns while still managing your risk level.

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  • Will you notify me when you rebalance my portfolio or make other changes?

    Yes. Whenever any change occurs in your account, you will receive notification (called a confirmation statement) in a few days from your account custodian, TD Ameritrade. These confirmations will give you complete details of each trade in your account.

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  • Do you have to call me before you rebalance my portfolio?

    Fortunately, no. Your life is busy enough as it is, and due to the speed of today's financial markets, it would not be in your best interest to have important rebalancing and other changes delayed.

    That's why our clients give us permission to make such changes to their accounts on their behalf, without having to contact them beforehand. This advance permission is very limited, and allows us to only conduct periodic rebalancing or replace an investment with another that we believe to be a superior alternative.

    By allowing us to move with speed and agility and eliminating the need to obtain approvals with each administrative action, you avoid extensive delays.

    You won’t incur a fee when we rebalance your account or make other changes in your portfolio. These services are included in our investment advisory fee. Please note that, for taxable accounts, rebalancing and other changes might have tax implications. Be sure to consult with a qualified tax or legal professional regarding the best options for your particular circumstances.

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  • What is the EMAP fee?

    Our clients pay no commissions, trading costs, brokerage fees or any administrative charges. Instead, EMAP features a single annual fee. It is calculated quarterly and debited from your account in arrears, based on the beginning and ending values of all the accounts in your household (adjusted for any money you deposit or withdraw during the quarter). Your quarterly statement will show the management fee for the quarter; you will also receive a year-end summary.

    The fee is based on the value of your account. So the more you invest, and the higher your account value grows, the lower your rate – potentially providing valuable savings to you.

    The fee schedule for Traditional EMAP is:

    • First $150,000 2.00%
    • Next $250,000 1.65%
    • Next $350,000 1.25%
    • Next $250,000 1.00%
    • Next $2 million 0.75%
    • Next $7 million 0.60%
    • Next $15 million 0.50%
    • Amounts above $25 million are negotiable

    Clients pay a wrap fee, which covers brokerage execution costs, without regard to the number of transactions executed during the billing period.  EFS has negotiated fees with TD Ameritrade, Fidelity, and Pershing Advisor Solutions (“PAS”) for clearing and execution services.  Transaction costs imposed by these brokerage firms are covered as part of the wrap fee. The wrap fee does not include certain account and securities-related costs, including the fees embedded in the mutual funds, ETFs or annuities in which wrap fee accounts invest. In addition, the fee does not include debit balances, related margin interest, IRA and retirement plan fees, transfer fees, SEC fees, 12b-1 fees for certain money market funds, wire transfer fees, overnight check fees, account closing fees, paper statement delivery fees, non-standard asset fees, insufficient fund fees, returned check fees, transaction charges for fund level asset allocation model trades, expenses charged by the mutual funds (including management fees, transaction charges incurred for fund-level asset allocation model trades, custody of fund assets and other fund expenses), expenses charged by the variable annuities and exchange-traded funds, or other fees or taxes that are required by law.  EFS may from time to time, at its sole discretion reimburse clients for certain fees or charges which are not due to the client’s error. 

    As noted above, we anticipate that transactions placed in your account will be executed through either TD Ameritrade, Fidelity, or PAS, however, in the limited circumstances described below, EFS may choose to execute trades with another broker-dealer if we reasonably believe that another broker-dealer can obtain a more favorable execution under the circumstances.  Specifically, occasionally, (typically less than 5% of the time), EFS will utilize broker-dealers other than TD Ameritrade, Fidelity, or PAS to execute large transactions when we determine it is in our clients' best interest. This occurs when the size of the transaction in any one security is so large that it could cause the price of the security to fluctuate, up or down, resulting in an unfavorable execution price for our clients.  We will typically execute such trades with a broker-dealer other than TD Ameritrade, Fidelity, or PAS if a different broker-dealer has the capability to handle such large transactions and to reduce or eliminate the potential negative price fluctuation.  In these instances, the wrap fee does not include the compensation that is paid to the broker-dealer.  This compensation is embedded into the price of the security which is paid by the client.  These additional costs are in addition to the wrap fee paid by the client.

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  • What are EMAP's returns?

    To see all our performance numbers, just call us at (888) PLAN-RIC and speak to a financial advisor.

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