Process
Client Engagement Process
Discovery
The main objective of the initial client interview is discovery. It is the prospective client’s opportunity to get to know our firm, our philosophies and our methodologies. More importantly, it is our opportunity to begin the listening process that we hold sacred at Foundation . It is our firm belief that a relationship based on listening will lead to a successful relationship as it will allow us to clearly understand the goals and objectives of the prospective client.
During this initial meeting we attain an understanding of what the client seeks to achieve from their investment portfolio. We will also collect all relevant documentation and complete a risk tolerance questionnaire. We will subsequently review all documents and questionnaires and then begin the process of constructing a client specific Investment Policy Statement, which will be reviewed and discussed during our second meeting.
Investment Policy Statement
The second meeting will focus on the Investment Policy Statement. Foundation will customize an investor policy statement for each client that will define the clients risk and return objectives. The Investment Policy Statement will detail all constraints in managing the portfolio including investment time horizons, liquidity requirements, tax considerations, legal and regulatory requirements and unique circumstances. The initial asset allocation will be defined along with the suitable performance benchmarks they will ultimately be compared against.
As part of the overall process, we will review all current holdings to determine how they should integrate into the overall plan. We will also ensure that the client’s investment objectives are consistent with their risk tolerance. For example, if it becomes evident that a client would like to generate a greater return than the investment risk they are willing to tolerate (as per their risk tolerance questionnaire), one of the following outcomes must occur:
- The client adjusts their return expectations (likely outcome).
- The client accepts more investment risk (unlikely outcome).
- It is agreed that Foundation will not manage their investment portfolio.
Upon completion of the Investment Policy Statement, we will begin the process of selecting the investment funds that will be discussed and finalized in the third meeting.
Investment Allocation
During the third meeting, we will allocate the specific investments according to the strategic asset allocation model as defined within the Investment Policy Statement. Each investment will be carefully chosen based on the risk tolerances and long-term investment objectives of the client. For example, we may place even more emphasis on value style managers if our client’s risk tolerance questionnaire reflects a higher sensitivity to short and medium-term market fluctuations. Investments will also be reviewed with respect to how they correlate to the other holdings within the identified portfolio. This is of particular importance in managing overall portfolio risk.
Once the investments have been made, we will prepare a summary document for our client detailing each transaction and investment position.
Review
We meet with our clients twice a year to conduct a full portfolio review. We also send out regular broadcasts on a variety of timely and informative investment topics. In addition, we encourage our clients to contact us should they have any questions or if they feel that there have been changes in their lives that may warrant a review of their investment portfolio. Once the portfolio has been allocated, we regularly monitor the initial asset allocation to confirm that it remains within the thresholds established within the Investment Policy Statement.