Frequently Asked Questions
(FAQ)
Click on the questions below
to find the answers.
What exactly is Parlan Financial Corporation?
What do you mean by “fee-only?”
What do you mean by “individually
managed?”
What is your investment philosophy?
Do you guarantee performance or
rates of return?
Why do you report performance in “one
year or more, and one year or less?”
What type of accounts are used in
your performance figures?
What is the “dollar cost-averaging
method?”
What makes Parlan different from other
money managers?
What about your fees - how do they compare
to other types of firms?
If I retain your firm, who controls my
money?
What safeguards do I have with Parlan?
Do you keep in touch with your clients?
What if my financial circumstances
change?
What if I change my mind about retaining Parlan?
Q. What exactly is Parlan Financial Corporation?
A. We are a
fee-only financial advisory firm that provides financial planning,
individual investment management, and corporate seminars for
employees. Top
Q. What
do you mean by “fee-only?”
A. We charge a
specific fee for providing our clients with information or advice
and for managing their portfolios. We have no vested interest in,
and we do not receive commissions from any firm selling financial
products. We are objective consultants whose only interest is in
providing clients with the most appropriate responses to their financial
situation. Top
Q.
What do you mean by “individually managed?”
A. We don’t
design one-size-fits-all portfolios. We work with clients to develop
an “asset allocation model,” which is like a blueprint
for structuring their investments. It’s based on their individual
circumstances, the range of returns required, the limits of acceptable
risk and the timing of contributions and withdrawals. Plus, we limit
the number of accounts for each of our client service managers so
that they can provide the right amount of attention to the individual
portfolios under their administration. Top
Q.
What is your investment philosophy?
A. Preservation
of capital through: • proper asset allocation • adequate
diversification • avoidance of excessive risk
To accomplish this, we use our
own proprietary research and technology in selecting the right mix
of investments for a client’s portfolio. The combination puts
our expertise to work for each client. Top
Q.
Do you guarantee performance or rates of return?
A. No, the world
of investments doesn’t operate that way and there are legal
restrictions against making performance guarantees. Markets fluctuate.
We project probabilities, not certainties. The good news is Parlan
has a performance record we can point to with pride. Top
Q.
Why do you report performance in “one year or more, and
one year or less?”
A. The process
of fully investing your initial contributions could take many months.
For at least some of the first year, a portion of your assets will
be in the interest-bearing money market, where returns are normally
lower than investment returns. To take prudent advantage of market
fluctuations, we stagger the purchase of your initial investments
according to our dollar cost-averaging method.
Top
Q.
What type of accounts are used in your performance figures?
A. The return encompasses
all of Parlan Financial Corporation accounts; including 100% tax-free
accounts, Charitable Trusts, and 100% fixed income.
Top
Q.
What is the “dollar cost-averaging method?”
A. It’s disciplined
purchasing of your investments at value prices when the opportunities
arise. Because we are not commission-based, we have no reason to
invest your money in its entirety on one day. We buy your investments
in pre-determined increments over time. Top
Q.
What makes Parlan different from other money managers?
A. Two things:
fee-only services and individual attention to client portfolios.
Top
Q.
What about your fees - how do they compare to other types of
firms?
A. 1) We do not
charge you a fee every time an investment is bought or sold, so
you do not have to worry about our “churning” an excessive
amount of activity.
2) Commission-based firms can cost clients between 1.5% to 8% of assets under management. This is payable either as an up-front commission when you buy, or a back-end commission when you sell, or maybe both.
3) Investment advisory firms generally charge between 1% to 3% annually.
4) Parlan charges annual management
fees determined by the following schedule: 2.10% for $0 - $500,000;
1.75% for $500,001 - $1,000,000; 1.50% for $1,000,001 - $4,000,000;
1.15%
for $4,000,001 - $6,000,000; 0.80% for $6,000,001 - $10,000,000, and;
0.45%
for accounts over $10,000,000. Top
Q.
If I retain your firm, who controls my money?
A. You do. You
are giving discretionary control to Parlan to manage your portfolio.
We can only perform the tasks you allow us to do, such as transacting
trades on your behalf and receiving duplicate statements.
Top
Q.
What safeguards do I have with Parlan?
A. Parlan never
takes possession of your money. A third-party custodian, such as
a brokerage or bank trust department, holds your funds at all times.
This provides a shield of protection between your funds and Parlan.
Top
Q.
Do you keep in touch with your clients?
A. You bet we do.
Keeping you well informed is part of our service. We provide written
reports every 90 days and review them with you in quarterly meetings.
The reports show the value of your account and all activity that
occurred during the quarter, as well as performance measurements.
Also, your client service manager will update you on general market
conditions and the direction we recommend pursuing. Top
Q.
What if my financial circumstances change?
A. We’re prepared
for that and will redesign your portfolio accordingly. We have structured
Parlan with individually managed portfolios and a quarterly review
process to give us an efficient way of responding to your changing
needs. Top
Q.
What if I change my mind about retaining Parlan?
A. We’ll be
sorry, of course, but your contractual agreement with Parlan contains
a 90-day renewal option. If for any reason you choose not to automatically
renew with us, you leave with no financial obligation. You have
no long-term commitment to us and we charge no exit fees.
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