Frequently Asked Questions
Our Client Hospitality team handles the setup and transfer process and all associated paperwork. Account setup takes place in two steps:
- You review and sign the Client Agreement and provide basic personal information in the New Client Info form.
- Our Client Hospitality teams completes all the TD Ameritrade paperwork for you so all you have to do is review and sign.
We manage the entire process for you and update you every step along the way.
No way. We do not charge for Client Hospitality services, transference of funds, time with an advisor, or even a termination fee. Starting with LotusGroup doesn’t cost you anything and in many cases, we actually save you money.
Absolutely not. Your investments don’t know what you paid for them so there is no reason they would recover simply because you are waiting. Cashing out completely would be foolish but by transferring your accounts to us, we will position your money into investments with higher probabilities of success – putting your money in the best position to recover.
Our minimum client asset size is $500,000 for business owners and working professionals. For retirees our minimum is $1,000,000 to allow for accredited private investing.
At these asset levels, clients enjoy a dedicated private client advisor, unlimited financial planning and scenario analysis, one-on-one and individualized client events, and our most attractive pricing levels. Accredited clients are also offered private investment opportunities.
We also accept a select few business owner and working professional clients with a minimum of $250,000 in assets, if they exhibit the behaviors required to get to $500,000 in the years ahead. Services are similar, with the exception of a slightly higher pricing model in order for us to successfully provide services at a lower asset level.
There is no average client. Average underperforms. Average runs out of money. Average is unfulfilled. We don’t do average. We help you earn real returns that outperform the average investor return, while making sure you receive advice based on your lifestyle. Our clients are nationwide and fit one of these lifestyles: cash-flowing business owners, successful corporate executives, or retirees with at least $1 million of investable assets.
A broker works in an old-school model in which an individual make trades on your behalf, earning commissions from these trades. They have no legal responsibility to you but rather to their firm. Financial advisors, financial planners, and insurance reps fit this model and sell products for a fee as well as charge hourly for advice and planning. This model may work for someone who has the time, energy, and expertise to manage investments themselves but is not for those looking to outsource or who wants an unbiased fiduciary.
A hedge fund is reserved for high net worth individuals who pay a 2-20 fee for the possibility of increasing their wealth. A 2-20 fee is a 2% charge on the assets managed in addition to a 20% charge on gains. Hedge funds are supposed to offer alternative investments to truly diversify money in uncorrelated asset classes that protect against a US downturn. This model may work for those with well over $1MM in investable assets and who are looking to hedge a more traditional portfolio, but it is a pooled asset and one-size-fits-all approach regardless of your needs.
LotusGroup is an RIA (Registered Investment Advisor) that has the highest fiduciary standard of all financial professionals. This means that we are paid only by you and have highly objective advice. On the investment side, LGA offers investment strategies that run the gamut from more traditional buy-and-hold strategies to much more active hedge fund type of strategies (without the 2-20 fee). Most importantly, our fiduciary responsibility results in us assessing your behaviors and only recommending the best strategy for your situation. Additionally, we manage your individual accounts so that they are custom to you and your needs, rather than pooled in a one-size-fits-all.
We get paid in one way only: as a percent of assets under management. When you make money, we make money; when you lose money, so do we. We do not sell products, insurance or mutual funds and we don’t charge hourly for our time and plans. We hold ourselves to the highest legal standard and moral obligation to do what is best for you. You never have to worry if the advice you’re receiving from us is tainted with a pitch. It’s 100% objective.
Our fees range from 0.75% to 1.75% per annum based on assets under management and portfolio strategy selected. For our emerging client base (less than $500K in assets), we charge between 1.25 – 2.5%. This is the only way we make money, as a percent of assets under management so there are no hidden fees. Each quarterly statement comes with an invoice to show you how much we’re charging and the fee is automatically deducted from your portfolio.
You could choose to do anything on your own, so why aren’t you? Would you perform your own heart surgery if you could? Our value is that you will earn real returns greater than the average investor return. We achieve this by matched you to the most appropriate strategy and then offering coaching and support along the way. We also help with critical decision making and taking care of all the tedious implementation details. Essentially, your probability for greater success increases by working with us versus doing it on your own.
As it pertains to our private investments, in most cases you could not do what we do on your own. We professionally source income-producing deals on a quarterly basis, and then provide you with access. But what does that mean? That means that many of these investments require a fiduciary like us to sit in between them and you, so you would not be able to work directly with them. Additionally, most have $250-500K minimums for a single deal, which would make it prohibitive for many clients. At LGA, we aggregate all our client’s investments for an opportunity, pulling together $2-5 million, and in return, they let some of our smaller clients participate at the $50-100K level…which allows access for these clients, and allows them to spread their funds across more opportunities to diversify better.
Yes, and that’s a promise. We annually spend tens of thousands of dollars, along with a heavy dose of time, investing in training, process and technology. In fact, we were featured in a Wall Street & Technology article highlighting 5 top firms and their use of operations and technology. Four of the firms were billion dollar companies and we were the fifth so we’re serious about scale. You also have our commitment to always getting the “A Team”. You have our direct lines with no operators or machines answering your calls. We established ourselves as a boutique firm where advisors serve a maximum of 75-100 clients versus the industry average of 300+. We’ll come to your home day or night hop on a conference call or Skype video, communicate via email or text, or send smoke signals and pigeon couriers. We are built to last.
We dedicate 1/3 of our internal staff towards quality control – how many firms do that? All of our operations and investment strategies are built using Six Sigma methodologies, with quality control systems and people in place in order to check data and reconcile every single day. This means that each day before the markets open, our systems are 100% reconciled so that all data is collected and verified before a trade is ever made. This level of accuracy does not exist in our industry and ultimately costs the investor in returns.
We are proudly 100% electronic. Being green is good business and good for the planet. Our industry is riddled with paperwork so part of our grander mission is to revolutionize the industry, embracing and leveraging technology as much as possible. All documents and signatures are done online and stored electronically. We consume less of the earth while delivering more to our clients.
Which one? Each of our clients has a different return since their money is managed in a way that is best for them. Each client’s portfolio is handcrafted based on behavior, strategy selection, risk, volatility tolerance, liquidity, size of accounts, and ongoing savings contributions or withdrawals.
The best indicator we have of our performance is our high client retention rate. This figure demonstrates our commitment to clients and their commitment to our services in return.
We philosophically believe that the “efficient market theory” or “buy-and-hold” approach to investing is sub-optimal. We believe that markets are inefficient, that people behave irrationally, and that we can take advantage of that using a data-driven approach.
The most important step is in selecting an investment strategy that meets your behavioral tendencies, as this improves your likelihood of sticking to the program. For example, should you be invested in public markets or private, in trend following strategies or contrarian ones, etc. Based on our online and offline assessments, we help clients decide the best approach that fits their personality.
For public investments, we do four things you won’t find anywhere else:
- Quarterly allocation changes. We rebuild your portfolio from the ground up to put your money into the best probability investments to meet your goals.
- Diversify with uncorrelated asset classes. While most investors have pretty pie charts, the majority of standard asset classes all go down when markets hit crisis. Not exactly well diversified if it all goes down together. We use public market alternatives that are truly uncorrelated, such as long/short funds, merger-arbitrage approaches, and volatility hedging strategies.
- Weekly rebalancing. The average investor doesn’t rebalance across their entire portfolio because of the work involved. At best, they rebalance once a year but they miss out on all the opportunities due to fluctuations. We only rebalance if the cost/benefit works in your favor, but we run the process to check every week and execute trades where it makes sense.
- Active trading. We use value stops, trailing stops, swaps, buying targets, and trading strategies to take advantage of market inefficiencies. We aren’t a “me-too” shop that copies others strategies or follows what is written in the newspapers. Instead, we use a combination of our own primary research on curated data, along with proprietary purchased analysis. We’re in the markets daily, working hard for you.
On the private side, we professionally source, analyze, select, and manage income-producing opportunities for our accredited clients. With nearly two decades of strategic sourcing experience, and a developed private deal flow network, we are consistently bringing our clients opportunities to review and participate in. Furthermore, we provide access to exclusive opportunities that require a fiduciary like us to attest for a client’s accreditation and appropriateness. Finally, we aggregate our client’s investments so that we can negotiate the $250-500K minimum investment levels down to $50-100K, offering smaller clients earlier access and an ability to diversify their funds across many more funds to better spread risk.
In most cases no, and certainly only if you have greater than $5 million, along with significant interest in sourcing, analyzing, and monitoring the various managers and performance. People use different money managers in an attempt to profit from different strategies. With less than this minimum amount of money, you are doing yourself a disservice by splitting it up into smaller portions that are more expensive to manage. Your best interest is to leverage all your money together, getting the maximum returns based on a strategy that matches your behavioral and risk profile….other strategies just won’t fit you as well.
We selected TD Ameritrade to actually hold your money so that it eliminates any conflicts of interest. They physically hold your money, stocks and certificates of the investments, we only have the rights to trade your money. We cannot physically move any of your money, in or out, unless it is directed to an account in your name.
An important requirement for us is that the company holding your money does not leverage it for some other line of the business, which TD Ameritrade does not. This means that unlike companies such as Bank of America / Merrill Lynch, TD Ameritrade’s business model is based exclusively on being the custodian to your assets (instead of trying to cross sell you on insurance, banking, etc). TD Ameritrade met the many guidelines set and operates in a way that protects the money we invest with them on your behalf.