Client Assets and Data
All of our firm’s investments are held by Charles Schwab & Co. Inc., headquartered in San Francisco. Schwab is our firm’s custodian. Schwab maintains records regarding client holdings, including buy/sell transactions, deposits, withdrawals, dividends and interest and other historical information. Using this information, Schwab produces and distributes our clients monthly and year-end account statements. Schwab also reports required information to the IRS and other government entities. Schwab safeguards our client’s assets. The first $500,000 in assets is insured by the Securities Investor Protection Corporation (SIPC) in the event of Schwab’s failure. Schwab provides additional insurance through Lloyd’s of London up to $600 million.
All of our reports to clients are based on the Schwab data. If there is ever a conflict between Schwab data and data from another source, we always defer to the Schwab data. Our clients also have 24/7 access to their accounts via the SchwabAlliance service.
Schwab customer service is located in call centers throughout the United States. As part of our firm’s due diligence, we have personally visited their Phoenix facility (pictured below) and met a number of Schwab’s outstanding customer service team members.
Our Equity Investments Partner
For over 10 years, we have had a close working relationship with Morningstar, Inc., headquartered in Chicago, Illinois. Morningstar is our primary equity investments partner. Morningstar develops high-quality, diversified portfolios for many of our clients. These portfolios are the result of rigorous quantitative analysis. Recently, Morningstar Investment Services received 13 top-three finishes in their sectors in The Wall Street Journal’s “Best on the Street” survey. That means nearly one out of every 10 finalist in the survey is employed by Morningstar, about twice as many as for the second-place firm. Morningstar has been in business since 1984 and is recognized as a leading provider of independent research to individual and institutional investors. As part of our firm’s due diligence, we have met with Morningstar senior management four separate times in Chicago.
Client Statements and Reports
We also use Morningstar’s client portfolio accounting software and Morningstar Back Office Services. Client quarterly billing statements and performance reports are generated by the Morningstar Office portfolio management system software. Every day, Morningstar Back Office Services in Cumberland, Maryland imports client transactional data from Schwab, reconciles all of the daily transactions and updates client information on the Morningstar Office system.
Community First Credit Union
Our firm has the privilege to serve as the exclusive investment resource for Community First Credit Union, headquartered in Santa Rosa, California. Community First is the second-largest financial cooperative in the SF North Bay with more than 18,000 local co-op Members and assets of $175 million. Their motto is “Here For Good” and our firm shares their goal and admires their 53 years of service to their Members and the greater North Bay community.
The McBride Group works with Community First Credit Union Members to develop, implement, maintain and monitor conservative investment strategies that focus on capital preservation, growth at a reasonable price with an emphasis on dividend and interest income. Our primary investment partner is Morningstar Investment Services and the custodian for all Community First Members’ assets is Charles Schwab & Co.
Our Fixed-Income Partner
Similar to our relationship with Morningstar on the equity side, we work with Advisors Asset Management of Monument, Colorado for fixed-income investments. In the current environment of historically low interest rates, fixed-income investments can be dangerous. The reason is that, cyclically, interest rates will rise and the market value of fixed income holdings will decline. For example, ten years ago we were buying California municipal bonds. When we started our firm, over 40% of our assets were municipal bonds, almost all of which had coupons greater than 4%. Those days are over. Today, we see value in corporate bonds, Agency CMOs, Agency IOs and POs, accrual notes and even some taxable municipal bonds. Advisors Asset Management only selects fixed-income investments that conform to each of our client’s risk profile and investment goals.
Our Client Services Partner
Nakamoto Consulting, located in Oakland, California, manages all of our client administrative services and databases. They produce all of our client’s quarterly billing statements. Nakamoto Consulting also designed our well received “Anniversary Report” at our request.
Our Regulatory Compliance Partner
We take compliance very seriously. We comply with all state and federal rules and regulations regarding investments. Our partner for the last four years has been National Compliance Services, Inc. (NCS). NCS is a leader in the compliance and regulatory services industry. Their strength is providing reliable and efficient products and services for investment professionals. As part of our firm’s due diligence, we have visited with NCS President, Rita Dew, in Del Rey Beach, Florida.