What is an RIA?
A Registered Investment Advisor (An RIA) manages the assets of high net-worth individuals and institutional investors. He or she must register with the Securities and Exchange Commission (SEC) and any states in which he or she operates. Most RIAs are partnerships or corporations but individuals can also register as an RIA.
What is a Separately Managed Account (SMA)?
An SMA is an individually managed investment account typically offered by brokerage firms. They are usually managed by independent investment management firms (often called money managers or portfolio managers) and have varying fee structures. With such a broad definition, many types of accounts might fit the definition of an SMA. There is no official designation for SMAs but there are common characteristics that are represented in all SMA programs. These characteristics include an open structure or flexible investment security choices; multiple money managers; and a customized investment portfolio formulated for a client's specific investment objectives or desired restrictions.
What is a Fiduciary?
A fiduciary is someone that manages money for the benefit of another. A fiduciary is bound by law to place the interest of its beneficiary first - before the fiduciary's own interest. An RIA, subject to the Investment Advisors Act of 1940, is a fiduciary. The legal investment advising standards that govern a non-fiduciary stockbroker and a fiduciary RIA are very different. A non-fiduciary advisor only has to follow a "suitability" standard, which doesn't require the advisor to place the interest of the client above his/her own. The advisor only has to provide "suitable advice". An RIA, on the other hand, must follow the highest known standard in law which is the "trust" standard. An RIA is required by law to place the interests of its clients before its own and fulfill critical fiduciary duties of trust and confidence. An RIA must provide its "best advice".
What is Covestor?
Covestor is an online trading platform with offices and investment professionals in New York City and London. Covestor provides Split Rock with an easy distribution channel for our SMA portfolios and allows investors from all over the world to access and invest in our equity SMAs. To see our most current Separately Managed Accounts on Covestor, please click here
What is Interactive Brokers?
Interactive Brokers is an online clearing firm used by financial professionals. Split Rock uses Interactive Brokers as a distribution channel for its clients. Through Interactive Brokers, investors can have their financial professional allocate funds to be invested in one of our 100% - equity models (Equity & Commodity Rotation Model, Bakken & U.S. Energy Shale Model, Equity Income Model).
How do you make your Decisions?
What most people don’t know/see/understand is that by the time we actually make a decision to put a stock in our models, it has been under the microscope for months. We begin by looking at different trends and through analysis...identify which market cycle we are currently in. Once we identify which sectors have acted appropriately in the respective market cycle, we continue to drill down to find the best stocks in each sector. We look at the "fundamentals" and "technicals" of these stocks and cross-reference them with a wide array of other research tools.
How is the Fee Based approach more cost effective than the other choices?
It is hard to say if we are more cost-effective than the next person; I would imagine that we aren't any more costly than our competitors due to the amount of individual stocks we use. What you will find with the average money manager is that they mostly use mutual funds/UIT’s. Those type of investments have much much higher internal costs than stocks (stocks have zero internal costs). At the end of the day, I have to believe we are competitive and probably less expensive than others because of our individual stock exposure.