Aspiriant, LLC | December 1, 2022
11100 Santa Monica Blvd, Suite 600, Los Angeles, CA 90025
This Brochure provides information about the qualifications and business practices of Aspiriant, LLC (“Aspiriant”). If you have any questions about the contents of this Brochure, please contact your client service team or our Compliance Department at email@example.com. The information in this Brochure has not been approved or verified by the United States Securities and Exchange Commission or by any state securities authority.
Aspiriant is a registered investment adviser. Registration of an Investment Adviser does not imply any level of skill or training. The oral and written communications of an Investment Adviser provide you with information from which you determine whether to hire or retain an Investment Adviser.
Additional information about Aspiriant also is available on the SEC’s website at www.adviserinfo.sec.gov/. You can search this site using a unique identifying number, known as a CRD number. The CRD number for Aspiriant is 146720. You can also simply search for the firm Aspiriant.
The date of our last Brochure was March 31, 2022. This revised Brochure contains updates regarding the following items:
Pursuant to SEC Rules, we will ensure that you receive a summary of any material changes to this and subsequent Brochures within 120 days of the close of our business’ fiscal year. We may further provide other ongoing disclosure information about material changes as necessary.
We will further provide you with a new Brochure as necessary based on changes or new information, at any time, without charge.
Currently, our Brochure may be requested by contacting firstname.lastname@example.org. Our Brochure is also available free of charge on our website www.aspiriant.com.
Additional information about Aspiriant is available via the SEC’s web site www.adviserinfo.sec.gov. The SEC’s web site also provides information about any persons affiliated with Aspiriant who are registered, or are required to be registered, as investment adviser representatives of Aspiriant.
Since the formation of Aspiriant in 2008, we have brought together several firms whose client relationships and business operations go back many years if not decades. We currently provide a full suite of sophisticated and integrated investment management, wealth planning and family office services. As of March 31, 2022, we have approximately 2,100 clients and manage $12,334,571,000 on a discretionary basis and $3,142,461,000 on a non-discretionary basis.
We are owned by holding companies with the sole purpose of holding Aspiriant, LLC and its affiliates’ shares. The holding companies themselves do not have any operations. Approximately 1/3 of our employee’s own shares in one or more of the holding companies. From time to time, we may have minority owners who are former employees but otherwise we have no passive owners. This ownership structure is a key part of our firm – it creates client service stability and drives our future by maintaining a strong, executable plan for ownership succession.
We are fiduciaries under the Investment Advisers Act of 1940 and when we provide investment advice to you regarding your retirement plan account or individual retirement account, we are also fiduciaries within the meaning of Title I of the Employee Retirement Income Security Act and/or the Internal Revenue Code, as applicable, which are laws governing retirement accounts. We have to act in your best interest and not put our interest ahead of yours.
Our service offerings for your families include planning and investment management (both discretionary and non-discretionary), plus comprehensive wealth management and family office services. We also provide investment management services to institutions. The services provided to you beyond investment advice are further described in Item 10, Other Financial Industry Activities and Affiliations.
We offer complete wealth management services primarily to high net-worth individuals and families as well as professional fiduciaries. This work includes advising on trusts, estates, private foundations, retirement plans, and business entities, as appropriate. To perform our services well, we meet with you and work to outline your financial circumstances and investment objectives. We then offer an investment management program tailored to your needs.
Once you choose an overall investment mix (referred to as an “asset allocation”), we select the specific securities to fulfill the desired mix of assets. In this version of discretionary management, we use selected separate account managers, mutual funds including interval funds, exchange-traded funds, exchange-traded notes, private partnerships, bonds, cash-equivalents, and other instruments. The “private partnerships” used in client portfolios (usually “limited partnership” interests) are managed by third parties. Some of the mutual funds including interval funds, that may be utilized in client portfolios are also managed by us (see more below on the Aspiriant Affiliated Mutual Funds). This is described in more detail below in both Item 6, Methods of Analysis, Investment Strategies and Risk of Loss, and Item 8, Other Financial Industry Activities and Affiliations.
Investment advisory services include some or all of the following:
When providing investment advisory services, we consider your personal situation, and/or that of the beneficial owners such as trust beneficiaries, income and liquidity needs, time horizon, legal and tax constraints, risk tolerance, inter-generational issues, and special circumstances. We also provide advice on matters beyond investments when overseeing the complex financial lives of families with substantial assets including educating multi-generations within families about living with their wealth. We sometimes make recommendations with respect to the purchase or sale of specific securities as appropriate to address tax or estate planning objectives. For example, we may compare the consequences of selling a security in the market versus gifting a security to charity, and we may make other recommendations for tax and financial planning reasons. Alternatively, we may analyze the purchase or sale of employer securities as part of the development of an employee client stock- option exercise program. Our recommendations are determined primarily from tax, cash flow, and estate planning considerations rather than the intrinsic merits of the specific security as an investment. When we make a recommendation that you rollover a retirement account to an account that we manage and provide investment advice, we benefit financially because the assets increase our assets under management and, in turn, our advisory fees. As a fiduciary, we only recommend a rollover when we believe it is in your best interest at the time of the recommendation. At the same time, the way we make money creates some conflicts with your interests.
The wealth planning services we provide can include assistance in defining and quantifying your goals and priorities and the evaluation of needs with respect to cash flow, tax and retirement planning, education funding alternatives, risk management, and compensation. In this regard, we will often prepare financial plans and analyses as well as financial statements reflecting net worth, cash flow, and income tax projections. And we develop models that test how well your desired expenses match your projected financial resources including a depletion analysis to assist -professional fiduciaries.
In addition, we provide divorce financial consulting with on-staff Certified Divorce Financial Analysts (“CDFA”). The CDFA works with you and your attorney through the divorce process by providing an understanding of the financial ramifications of the divorce settlement. We help you develop financial analysis and budgets considering such things as immediate family needs, tax liabilities, life/health insurance and retirement needs. We provide special needs financial consulting with an on-staff Chartered Special Needs Consultant® (ChSNC®). The ChSNC helps you navigate the financial challenges related to disabilities and other medical conditions including special needs trusts, life insurance, government benefits, and long-term care. We also provide advice business owners looking to successfully sell or transition their businesses with an on-staff Certified Exit Planning Advisor (CEPA).
The scope of the services we provide to you specifically is outlined in our written agreement or other documents.
It is your responsibility to promptly notify us if there is ever any change in your financial situation or investment objectives. It is necessary that you keep us promptly informed about changes in your financial or personal circumstances for the purpose of reviewing, evaluating, and/or revising our previous recommendations to you in relation to either investment advisory or wealth planning services.
We have an ethical and legal responsibility to be in periodic contact with our clients therefore if we are unable to contact, and receive a response from you, for over a year it is generally our policy to cease serving you and terminate the relationship.
We charge fees based on one of several standard fee schedules, as described below, that we believe are reasonable, market-based and competitive. Our standard fee schedule for high net worth individuals, families and their entities, ranges from 0.85% to 0.2% of the value of your portfolio, per annum, with a minimum annual fee of $14,000.
Our standard fee schedule for clients with emerging wealth is 0.70% of the value of your portfolio, per annum, and an annual wealth planning retainer of $2,400 to cover core wealth planning services. Refer to the section entitled Fees for Wealth Planning & Specialty Services below for additional information about wealth planning services.
Professional fiduciaries are defined differently by each state law but generally include compensated individuals acting as a guardian, conservator, representative, or trustee for two or more unrelated persons or estates. Our standard fee schedule for professional fiduciaries ranges from 0.85% – 0.45% of the value of each of the portfolios served by the professional fiduciary. The specific fee for the portfolios served by the professional fiduciary is determined annually based on the total fiduciary assets that we manage as of December 31st of the previous calendar year and is applied consistently to all assets of the professional fiduciary that we manage.
At our discretion, we may discount or waive minimum fees for clients as an alternative to aggregating household assets or based on other relevant factors and circumstances.
The way we charge investment management fees is established in your written agreement with us. We bill our investment management fees quarterly, in arrears. Investment management fees are calculated as one quarter of the percentage outlined in the agreed-upon fee schedule. Fees are based upon the average daily value during the calendar quarter of all assets in your account (excluding any self-managed accounts or securities) without reduction for margin borrowing and regardless of whether the assets are in cash or other securities. You authorize us to directly debit the fees from specific client accounts designated by you. The investment management fee accrues daily and is payable on the last day of the calendar quarter or on the effective date of termination.
Depending on your existing agreement, you may be charged fees in advance, or could have investment management fees calculated based on the value of the managed portfolio on the last day of the calendar quarter. These agreements will designate that if you terminate your engagement agreement during a calendar quarter, you will be charged a prorated fee, which is due and payable on the day the agreement terminates. If you have prepaid fees, any prepaid, unearned fees will be promptly refunded upon termination.
We do not receive any fees or compensation related to the sale or purchase of securities or other investment products. Neither we nor any of our employees or partners receives any commissions from sponsors of investments products.
Our fees are exclusive of brokerage commissions, transaction fees, and other related costs and expenses charged by others, and which are paid by you. You may incur certain charges imposed by custodians, brokers, third party investments and other third-party activities such as fees charged by managers or custodians, deferred sales charges, odd-lot differentials, transfer taxes, wire transfer and electronic fund fees, and other fees and taxes on brokerage accounts and securities transactions. Mutual funds and exchange traded funds also charge internal management fees, which are disclosed in each fund’s prospectus. Such charges, fees and commissions are exclusive of and in addition to our fees, and we shall not receive any portion of these commissions, fees, and costs.
Item 10, Brokerage Practices, further describes the factors that we consider in selecting or recommending broker-dealers for client transactions and determining the reasonableness of their compensation (e.g., their commissions).
We are the investment advisor to the Aspiriant Affiliated Mutual Funds (“Funds”), publicly traded mutual funds (both open-end funds as well as interval funds that are closed end) made available to our clients and employees. The primary purpose of these Funds is to aggregate our clients’ assets in order to access investment opportunities that would otherwise not be available to you as an individual investor as well as to improve our ability to negotiate the underlying managers’ fees. Fund investors may also benefit from cost efficiencies.
The value of any Funds you own is included in your overall portfolio value for purposes of calculating our quarterly fees. The Funds pay us a management fee, in our capacity as investment advisor to the Funds. Because it is not our intention to profit from these “aggregation vehicles”, we will rebate to you (investment management clients) a portion of the management fees paid to us by the Funds to the extent you are invested in one or more of the Funds. This rebate represents the fees received that exceed our costs to operate the Funds, calculated quarterly. The rebate is based on your weighted average Fund holdings during the quarter and is processed via a credit on the quarterly invoice for investment management fees. Investment management clients who terminate our services are no longer eligible for such rebates. To the extent non-clients, such as our employees and their families, are investors in the funds, Aspiriant may have a de minimis amount of net profit from that portion of the fund activity since those investors do not pay fees upon which a rebate can be provided.
The intent of the rebate arrangement is to ensure that each Fund shareholder pays only his/her/its pro rata share of the Fund’s costs and expenses. These include but are not limited to, sub-advisor fees, fees for making the Funds available on various broker-dealer networks and costs to communicate with existing and prospective investors. Costs and expenses may also include administration, accounting, bookkeeping, tax, audit, legal and other professional, expert and consulting fees arising in connection with sponsoring and operating the fund. This rebate calculation is done by our Finance Department and determined quarterly on a one-month lag in order to provide sufficient processing time. The effect of the one-month lag does not have a material impact on the amount of the rebate. The total rebate is calculated independently for each individual fund within the Aspiriant Affiliated Mutual Fund family.
We do not independently value the securities held in your accounts, the value of which determines our fees. Usually, the periodic financial and performance information provided by the Funds underlying managers and direct investment managers held by clients will be used as the basis for performance reporting and fee billing where you pay an asset-based fee, as is generally the case. For marketable securities (those that are traded in public exchanges), the prices provided to us by custodians and/or third-party pricing services are used for reporting performance to you, and for calculating our fees. In a few cases we determine the value of certain underlying holdings of the Funds. Certain investments held in the Funds advised by us require analysis and judgment on our part to determine their value using third-party information as the basis for such valuation.
The value of alternative investments will be based on the last reported market value of your alternative investments, as provided by the manager of the alternative investment, plus a sum equal to the amount of your contributions to the alternative investment less distributions. However, if the manager of the alternative investment has never provided you with a market value of the alternative investment, then the fee for the alternative investment shall be determined on the last day of the calendar quarter and based on the total amount of your contributions to the alternative investment less distributions over the life of the investment. Other securities or investments in your accounts will be valued in a manner determined in good faith by us to reflect fair market value, where appropriate. We generally do not perform security valuations, rather we rely on third parties to provide this data.
The value of securities in Funds for which there is no public market or daily value available are valued based on information received from the underlying third-party managers, however, they are subject to more testing by us as to the reasonableness of the valuation methods used by such managers. The interval funds may hold direct or “co-investments” in companies or other such ventures for which we are not provided a valuation by an independent third party at the time of valuation. In such cases, we determine the valuation based on the best information available to us from independent sources and using our own analysis to determine a fair market value at which to carry the investment on the fund’s books. We extend our best efforts to gather all information determined relevant by our valuation team in determining the value of the direct or “co-investments”, and such valuations are reviewed by a valuation committee for approval. As with all investments, there is no guarantee that the fair value determined by us will in fact be realized upon disposition or maturity of the investment. However, it is our good faith determination that it represents what an independent third party might pay for such an investment given all the facts and circumstances known to us at the valuation date.
Please see additional information below regarding Valuation in Item 10.
In some instances, precise account balances are unavailable to us on a timely basis. Billing in those situations is therefore based on the most current information available when fees are calculated, or as otherwise outlined in our valuation procedures.
While we make every effort to obtain account balances directly from custodians, for reporting purposes we may request that you regularly provide us with copies of account statements.
The specific way wealth planning and similar fees are charged is established in your written agreement with us. Case-by-case retainer fees are negotiated to respond to the volume and complexity of predictable and recurring work based on hourly billing rates and the expected amount of time our staff will spend on the work being performed. Retainers typically range from $5,000 to $50,000 but can be far greater than this for highly complex family office engagements. Retainers are billed quarterly, in advance. Depending on your written agreement and the services you utilize; you may be charged wealth planning & specialty services fees in addition to your annual retainer. For special projects and/or ongoing consulting on wealth planning issues, fees are based on expected service time and hourly fees depending on the professionals providing the service. While we have standard hourly billing rates for wealth planning, all fees are open to negotiation. Upon termination of the Retainer Agreement, any unused retainer credit is refunded based on either the passage of time or utilization of hours, depending on the terms of the engagement.
“Wealth Planning & Specialty services” may include but are not limited to financial planning, estate planning, tax planning, tax return preparation, expense management and bill payment services, retirement planning, risk management, and philanthropy.
Either we or you can terminate the agreement at any time. Notice of termination should be given to the other party in accordance with the terms of our engagement agreement. You are responsible for payment for services rendered until the termination of your agreement.
Item 10 further describes the factors that we consider in selecting or recommending broker-dealers for our clients’ transactions and determining the reasonableness of their compensation (e.g., their commissions).
We don’t charge any performance-based fees (fees based on a share of capital gains on or capital appreciation of your assets) nor do we offer side-by-side management (charging performance-based fees and another type of fee such as hourly or asset based).
We provide investment advisory and wealth planning services primarily to individuals with substantial wealth, including corporate executives, business owners, affluent individuals, foundations, family partnerships, limited partnerships, the Aspiriant Affiliated Mutual Funds and other individuals. We also provide investment management and consulting services to pension plans, trusts, and charitable institutions, such as foundations that are often connected to, and created by individual clients or administered by a -professional fiduciary, but not in all cases. We do not have an absolute minimum for investment portfolios or a minimum account size. We typically provide investment management services to clients with investment portfolios of $1,500,000 or more. We may provide investment management and wealth planning services for individuals with smaller investment portfolios. These less complex engagements have an alternative investment implementation. For more complex or higher scope engagements, we may have higher expected relationship levels.
When we begin our work together, we will first quantify your financial goals to ensure we have a mutual understanding of what you want to accomplish with your investments. We then suggest an investment management program personalized to your needs and your ability to endure market changes. Your portfolio allocations outlined in the investment management program that we develop with you is the result of two major steps:
Our investment advice is generally based on our market-cycle CMEs which include returns for, and risks to, various types of investments (asset classes): fixed income (taxable and municipal bonds); real estate; global public equity (stocks, of both large and small, and domestic and overseas companies that are traded on an exchange); private assets[investments in companies or real assets that are not traded on an exchange] and diversifying strategies [sophisticated investment strategies usually implemented by hedge funds]. We believe that worldwide investments can provide positive portfolio growth over the long term. We expect your portfolio’s returns to compare favorably to the return produced by a portfolio of relevant benchmarks, and each investment’s benchmark will be the return of a recognized investment index such as the US Aggregate Bond Index or the All Country World Index (ACWI) or a 60% ACWI and 40% US Aggregate Bond Index. This comparison to benchmarks is referred to as “relative performance.”
We develop and then periodically update our CMEs by using both internal analysis and research from third parties, including financial services firms, governments and quasi-governmental entities, academics, and non- governmental institutions. These CMEs represent our expectations for returns and risks to various asset classes (large company domestic stocks, small company, international, real estate, and so forth) and then build investment portfolios which aim to have the lowest possible overall risk for a given level of expected return. This portfolio design considers how the various asset classes are expected to perform relative to each other, their correlations, as well as how a particular asset classes’ risk relates to the other asset classes. It also includes an ongoing analysis of market conditions such as current and historical valuations.
The investment advice given to you is based on many factors, including your investment objectives and financial goals, risk tolerance, asset class choices, investment time horizon, cash needs, taxes, historical returns, expected returns, and general economic conditions. We use various types of reviews pertaining to capital markets, investment strategies, and individual investments when providing investment advice. Those reviews usually include historic, current, and anticipated: economic, sector (e.g., energy or technology), industry, company, financial market and investment return information. Regardless of the methods we use in providing investment advice, investing in securities involves risk of loss that you should be prepared to bear.
Our standard portfolios that target the lowest risk will generally be more heavily weighted in fixed income (bonds), while portfolios that target higher risk/return profile will generally focus on stocks and other asset classes which tend to have a higher expected return over our forecasted horizon. Within each asset class, the allocations and implementation (the money managers; the specific securities) are generally the same for portfolios with different risk and return targets; it is the overall asset allocations that differ. We may recommend an implementation using one or more Aspiriant Affiliated Mutual Funds which in turn hire underlying investment managers to execute various strategies. The administrative expenses associated with these funds may cause the funds to underperform an implementation which uses the underlying managers directly.
Our approach for generating asset allocation recommendations is based on extensive capital market research and may also involve the use of third-party experts and consultants. Nevertheless, perhaps the largest material risk for clients would be forecasting errors in our expectations for long-term capital market performance. In the event our expectations are significantly different than actual long-term experiences, you could be substantially disadvantaged as these estimates help to guide our portfolio construction recommendations and wealth planning efforts.
Additionally, there are material risks involved in our manager selection process. Although our selection methodology is thorough, there are general business and operational risks associated with firms that manage money on your behalf that could lead to unexpected and unfavorable developments including but not limited to: unethical or unlawful behavior by the manager, staff turnover which disrupts the investment decision making process at the manager, and/or a change in control of the manager including sale or dissolution. Other materials risks include returns being significantly different than a corresponding benchmark as well as the risk of underperforming the benchmark in any time period and currency risk.
We often use Morningstar Direct developed by Morningstar, Inc. Morningstar Direct is a software package which facilitates the comparison of investment performance of mutual funds, exchange traded funds and individual securities to standard market benchmarks. Morningstar Direct facilitates asset allocation by computing the risk and return characteristics of portfolios of securities or indexes, given our assumptions about the risk and return of those portfolio elements. We also use numerous sources of information both public and private, including but not limited Bloomberg, Interactive Data Corp, Morgan Stanley, JP Morgan Asset Management, the Wall Street Journal, Thompson Reuters, the Financial Times, the US Federal Reserve, International Monetary Fund and the US Bureau of Labor Statistics.
We utilize economic, financial and market data from third-party sources we believe to be reliable, but we generally do not seek to independently confirm the accuracy of such information. Similarly, we rely on a variety of third-party financial applications to perform numerous financial calculations related to asset allocation, wealth planning projections, and investment manager evaluations. Although we review the quality of these services there can be no guarantee the calculations will be performed correctly going forward.
Investments are made across a wide range of markets and strategies. You should carefully read the prospectus, statement of additional information and periodic shareholder reports for further detail on specific risks associated with investing in any of these securities.
We divide the design and implementation of our investment program into three steps:
We actively review and monitor the investments chosen for you to make sure they are meeting our performance objectives. The majority of the investments are made using third party sub-advisors, including mutual funds, exchange traded funds, hedge funds, separate account managers, and other private investment partnerships. We also invest in or make recommendations regarding certain individual securities.
We periodically rebalance or recommend rebalancing our clients’ portfolios because studies show that this increases returns and/or lowers risk over the long-term. Rebalancing involves trading securities – buying some and selling others—to bring your portfolio back to your original asset mix. This is necessary because, over time, the distribution of your portfolio may become out of alignment with your investment goals. And, in the near term, you’ll find that some of your investments will grow faster than others. You may experience some additional transaction costs due to this rebalancing. You also may suffer some lower returns if the assets sold have higher returns in the future than those being purchased.
Aspiriant also serves as investment advisor for the Aspiriant Affiliated Mutual Funds which are open-end funds as well as interval funds (a version of a closed-end mutual fund). As investment advisor, Aspiriant chooses sub- advisors or pooled vehicles to execute many strategies within the fund. All investments can lose value and certain asset classes and/or specific securities which we choose could have poor returns for an extended period. A focus on long-term returns could cause us to ignore or be less concerned with near-term economic or market events. The investment managers we choose could underperform their benchmarks, resulting in a worse return than investing in a single index fund or a portfolio of index funds.
Potential Risks of Investing in Interval Funds
One or more of the Aspiriant Affiliated Mutual Funds are interval funds, an illiquid, closed-end version of a mutual fund. There are particular risks with investing in interval funds that you don’t generally find in open ended mutual funds.
Interval funds are illiquid, long term investments
Interval funds do not provide daily liquidity. Redemption requests are accepted quarterly, and in the event of a full redemption, a portion of the value may be retained pending completion of the fund’s annual audit. Additionally, a substantial portion of the fund’s investments are illiquid and therefore the fund itself imposes limitations on investor withdrawals. The fund will only allow a limited number of shares to be redeemed through the share repurchase program, which is subject to the discretion of the Board of Directors of the interval fund. Due to this illiquidity these types of investments are intended for investors who are able to hold these investments for the long term.
Interval funds may invest in private securities
Investing in private securities carries a variety of risks that are embedded in the interval fund when it makes such private investments. Please refer to the section below Potential Risks Associated with Investing in Private Equity and Private Real Estate Funds for a discussion of these risks.
Interval funds can hold investments that are difficult to value
A portion of the portfolio holdings in our funds may be difficult to value because they are not quoted daily or traded on any financial market or exchange. As such, valuation adjustments only occur quarterly and are generally not available until six weeks after the quarter close. Additionally, due to the nature of interim valuation methods employed by investment managers, the realized value of an underlying holding may differ from its carrying value at the time the investment is sold.
Interval funds often employ leverage
Our interval funds are permitted to use leverage (i.e., debt) in connection with certain investments or participate in investments with highly leveraged capital structures. Although the use of leverage may enhance returns and increase the number of investments that can be made, leverage also involves a high degree of financial risk and increases the exposure of such investments to factors such as rising interest rates, downturns in the economy or deterioration in the condition of the assets underlying such investments. Leverage can also amplify losses.
Interval funds are only available to accredited investors
Our interval funds require that you be an “accredited investor” at the time of your investment, including subsequent purchases. You will be required to complete a subscription agreement with the fund itself, pursuant to which you will establish that you are qualified to invest in the fund and acknowledge and accept the various risk factors that are associated with investing in an interval fund.
Sustainable investing is the practice of incorporating environmental, social and/or governance considerations into the portfolio construction and monitoring process. Sustainable Investing or Sustainability are terms that are often used synonymously with ESG investing, socially responsible investing, mission-related investing, or impact investing and screening. “Environment” focuses on themes including but not limited to climate impact and greenhouse gas emissions, energy efficiency, air and water pollution, water scarcity, biodiversity, sustainability practices, and site restoration issues. “Social” focuses on themes including but not limited to human rights, local community impact and employment, child labor, working conditions, health and safety, and anti-corruption issues. “Governance” focuses on themes including but not limited to the alignment of stakeholders’ interests, executive compensation, board independence and composition, and other shareholder rights issues. There are multiple approaches to Sustainable investing that may involve the exclusion, integration, and/or engagement of particular companies, countries, municipalities, factors, trends or other investment opportunities meeting certain criteria.
Incorporating such screening criteria in portfolios can result in the exclusion of securities that would otherwise align with the portfolio objectives. This could lead to economic sector over/under weights which may negatively affect performance compared to portfolio objectives and/or applicable benchmarks. Sustainable investing screening is by its nature imperfect and variable over time, and therefore you risk owning securities of companies (directly or in a fund) that are inconsistent with your personal objectives. This is due to the varying Sustainable investing standards across fund managers, lack of detailed company data, or changing company practices.
Mutual funds and exchange-traded funds themselves are not necessarily classified as Sustainable securities. Each fund manager determines the classification based on their own analysis of the securities employed in a particular strategy. When we implement our model portfolios for clients who desire Sustainable exposures, we begin by remaining aligned with our capital market expectations and asset allocation strategies. Not all asset classes will include Sustainable exposures due to the limited availability of managers or strategies that meet our due diligence criteria when selecting specific securities. As a result, when clients desire Sustainable exposures, our portfolios constructed will include investments that do not necessarily meet Sustainable screening criteria. If you choose to invest using one of these portfolios, you should ensure you understand the minimum and maximum Sustainable -classified exposure that your portfolio may have.
Private investment funds generally involve various risk factors and liquidity constraints, a complete discussion of which is set forth in each fund’s offering documents, which will be provided to you by the fund sponsor for review and consideration. Investing in private investment funds is intended for experienced and sophisticated investors only who are willing to bear the high economic risks of the investment. You should carefully review and consider potential risks before investing in private funds. Certain of these risks include loss of all or a substantial portion of the investment due to leveraging, short-selling, or other speculative practices, lack of liquidity because of redemption terms and conditions and that there may not and will not be a secondary market for the fund, volatility of returns, restrictions on transferring interests in the fund, a potential lack of diversification, higher fees than mutual funds, lack of information regarding valuations and pricing, and advisor risk. You will be required to complete a subscription agreement with the private investment fund itself, pursuant to which you will establish that you are qualified for investment in the fund and acknowledge and accept the various risk factors that are associated with such an investment. Private investment funds have liquidity risk and investors may not be able to redeem their investment per the offering document’s disclosures.
There are particular risks associated with investing in private equity and private real -asset funds that generally do not hold publicly traded securities.
They are Long-Term Investments
Unlike mutual funds, which generally invest in publicly traded securities that are relatively liquid, private equity funds generally invest in large amounts of illiquid securities from private companies. Depending on the strategy used, private real asset funds will have illiquid underlying investments that may not be easily sold, and investors may have to wait for improvements or development before any redemption. Given the illiquid nature of the underlying purchases made by private equity and private real -asset managers, private equity and private real -asset funds are considered long-term investments. Private equity funds and private real asset funds are generally set up as 10- to 15-year investments with little or no provision for investor redemptions. With long-term investments, you should consider your financial ability to bear large fluctuations in value and hold these investments over a number of years.
They are Difficult to Value
The portfolio holdings in private equity and private real -asset funds may be difficult to value, because they are not usually quoted or traded on any financial market or exchange. As such, no easily available market prices for most of a fund’s holdings are available. Additionally, it may be hard to quantify the impact a manager has had on underlying investments until those investments are sold.
They are Illiquid Investments
Private equity and private real asset funds are not “liquid” (they cannot be sold or exchanged for cash quickly or easily), and the interests are typically nontransferable without the consent of a fund’s general partner. As a result, private equity and private real asset funds are generally only suitable for sophisticated investors who have carefully considered their financial capability to hold these investments for the long term.
Default on Capital Calls has Consequences
Answering capital calls to provide managers with the pledged capital is a contractual obligation of each investor. Failure to meet this requirement in a timely manner could elicit significant adverse consequences, including, without limitation, the forfeiture of the defaulting investor’s interest in the fund.
They Often Employ Leverage
Private equity and private real-asset funds may use leverage (i.e., debt) in connection with certain investments or participate in investments with highly leveraged capital structures. Although the use of leverage may enhance returns and increase the number of investments that can be made, leverage also involves a high degree of financial risk and can increase the exposure of such investments to factors such as rising interest rates, downturns in the economy or deterioration in the condition of the assets underlying such investments. Leverage can also amplify losses.
Investing in stocks, bonds, and other types of investments inherently involves a certain level of risk. No matter how well designed a portfolio is, it contains some potential for losing value. We therefore employ certain techniques in assisting clients to manage that risk, such as:
Despite these techniques to reduce risk investing in securities involves risk of loss that clients should be prepared to bear.
Registered investment advisers are required to disclose all material facts regarding any legal or disciplinary events that would be material to your evaluation of us, or the integrity of our management. We have no information applicable to this Item.
Neither we as a firm nor any of our Investment Adviser Representatives has been subject to any disciplinary action as of the date of this brochure.
In addition to providing the investment advisory services described in Item 2 above, we also provide non- investment advisory services commonly referred to as wealth planning and family office services. These services may include personal tax and cash flow planning, tax compliance, estate planning, retirement planning, educational funding, insurance planning, compensation and benefits planning and the preparation of financial analyses, expense management, bill paying and personal financial statements reflecting net worth, cash flow and income tax projections.
Neither we, nor our affiliates, nor any of our employees or partners are registered as a broker dealer or has any plans to register. Additionally, none of these parties is registered or plans to register as a futures commission merchant, commodity pool operator, or a commodity trading advisor.
We have a rather complex corporate structure and therefore have inter-company relationships that are material to providing advisory services to clients. Our primary operations are conducted by Aspiriant, LLC. There are four “parent” companies that are holding companies, as described in Item 2. Additional information about our corporate structure is available in our ADV Part 1 via the SEC’s website www.adviserinfo.sec.gov.
Primiani, Stevens, & Punim, PC is a law firm owned by Marc Primiani, Clay Stevens, & Melissa Punim, who are also partners of Aspiriant. The law firm and Aspiriant share many clients, however Primiani, Stevens, & Punim has many clients who are not clients of Aspiriant. The firms may be engaged independently of each other by you. While there may appear to be a conflict-of-interest present in this relationship, Aspiriant is prevented from soliciting services on behalf of the law firm due to American Bar Association rules and regulations. Aspiriant does not receive any compensation from other advisers in return for recommending the advisers to or selecting them for our clients.
Aspiriant serves as the investment advisor to the Aspiriant Affiliated Mutual Funds (“Funds”). As the adviser Aspiriant manages and supervises the Fund’s assets on a discretionary basis. Aspiriant oversees the sub-advisers to the Funds to ensure their compliance with investment strategies and policies of the Funds. The Funds have a Board of Trustees that includes independent members and oversees Aspiriant in its role as investment adviser to the Fund. The interval funds have a separate Board from the open-ended funds.
We have adopted a Code of Ethics for all employees of the firm describing our high standard of business conduct, and fiduciary duty to our clients. The Code of Ethics includes provisions relating to the confidentiality of client information, prohibition of insider trading, restrictions on the acceptance of significant gifts and the reporting of certain gifts and business entertainment items, and personal securities trading procedures, among other things. All our employees must acknowledge the terms of the Code of Ethics (COE) annually, or as amended.
Our COE requires, among other things, that employees:
Our COE also requires employees to: 1) pre-clear certain personal securities transactions, 2) report personal securities transactions on at least a quarterly basis, and 3) provide the firm with a detailed summary of certain holdings and securities accounts (both initially upon commencement of employment and annually thereafter) over which such employees have a direct or indirect beneficial interest.
A complete copy of our COE is available to any client or prospective client upon request.
We may include in our recommended investments certain funds in which clients of ours may have an indirect financial interest. This could include but is not limited to funds where the issuer also employs clients of ours, or a mutual fund where a client is a member of the mutual fund board of trustees. We apply the same rigorous approach to the due diligence and analysis of such securities as we would any other investment recommendations.
Our employees and persons associated with us are required to follow our Code of Ethics. Subject to satisfying this policy and applicable laws, our officers, directors and employees and affiliates may trade for their own accounts in securities which are recommended to and/or purchased for our clients. The COE is designed to assure that the personal securities transactions, activities and interests of our employees will not interfere with (i) making decisions in the best interest of advisory clients and (ii) implementing such decisions while, at the same time, allowing employees to invest for their own accounts. Under the COE certain classes of securities have been designated as exempt transactions, based upon a determination that these would not materially interfere with the best interest of our clients. In addition, the COE requires pre-clearance of many transactions, and restricts trading ahead of client trading activity. Nonetheless, because the COE permits employees to invest in the same securities as clients, there is a possibility that employees might benefit from market activity by a client in a security held by an employee. Employee trading is regularly monitored under the COE, to reasonably prevent conflicts of interest between us and our clients.
We may invest your assets in the Aspiriant Affiliated Mutual Funds, which we also act as investment adviser to. Individuals who have access to non-public information regarding the Aspiriant Affiliated Mutual Fund investments or strategies are subject to additional oversight and restrictions by the Firm as outlined in our Code of Ethics.
Certain affiliated accounts (such as some of our employees’ accounts) may trade in the same securities with client accounts on an aggregated basis when consistent with our obligation of adhering to the principle of “best execution.” In such circumstances, the affiliated and client accounts will share commission costs equally and receive securities at a total average price. We will retain records of the trade order (specifying each participating account) and its allocation, which will be completed prior to the entry of the aggregated order. Completed orders will be allocated as specified in the initial trade order. Partially filled orders will be allocated on a pro rata basis. Any exceptions will be explained on the order.
It is our policy that the firm will not do any “agency cross securities transactions” (defined below) for client accounts. In this circumstance, the client receives an interest in the private partnership equal to the fair value of the contributed investment. We will not do cross trades of securities between client accounts. “Principal transactions” are generally defined as transactions where an adviser, acting as principal for its own account or the account of an affiliated broker-dealer, buys from or sells any security to any advisory client. A principal transaction may also be deemed to have occurred if a security is crossed between an affiliated hedge fund and another client account. An “agency cross transaction” is defined as a transaction where a person acts as an investment adviser in relation to a transaction in which the investment adviser, or any person controlled by or under common control with the investment adviser, acts as broker for both the advisory client and for another person on the other side of the transaction.
In the normal course of business, Aspiriant and its officers, manager and employees may provide gifts and gratuities to various individuals or entities such as clients, vendors, consultants, and service providers. These gifts, gratuities and contributions are not premised upon any specific client referrals or any expectation of any other type of benefit to Aspiriant. Aspiriant has adopted detailed procedures requiring preapproval and recordkeeping of gifts and gratuities.
In certain circumstances we may engage one of our clients to provide a business service to Aspiriant. In these situations, when analyzing the use of a client for business services, we will consider whether they are a qualified provider and if their fees are competitive rather than the fact that they are a client. These clients will not receive additional benefits, above being compensated for services provided.
We do not maintain physical custody of your assets that we manage or advise on. However, we may be deemed to have custody of your assets if you give us authority to withdraw assets from your account other than debiting fees (see Item 13 – Custody, below), or we possess similar control with respect to your assets. When we are deemed to have custody over an account because of this authority, we are required to have an independent third-party accounting firm conduct a “surprise audit” of those accounts, no less than annually, to verify the assets and activity in such accounts. Regardless of whether we are deemed to have custody, your assets must be maintained in an account at a qualified custodian, generally a broker-dealer or bank unless they are directly held private investments.
We recommend that our clients use one of the -two following custodian/broker-dealers (collectively referred to as “Recommended Custodians” or “Custodian”) as the qualified custodian: Charles Schwab and Co., Inc., (Schwab Advisor Services® division of Charles Schwab & Co., Inc. [Schwab], a FINRA-registered broker-dealer, member SIPC); Fidelity Brokerage Services, LLC and/or National Financial Services LLC (together called, “Fidelity”).).
We are independently owned and operated and are not affiliated with any custodian. The custodian will hold your assets in a brokerage account and buy and sell securities when we instruct them to. While we suggest that you use one of the previously mentioned custodians/brokers, you will decide whether to do so and will open your account by entering into an account agreement directly with them. We do not open the account for you, although we may assist you in doing so. Even though your account is maintained at a particular custodian, we can still use other brokers to execute trades for your account as described under Your Brokerage and Custody Costs below.
We seek to recommend a custodian/broker who will hold your assets and execute transactions on terms that are, overall, most advantageous when compared to other available providers and their services. We consider a wide range of factors, some of which include the:
Because we consider all the above factors in our selection of Recommended Custodians, you may not receive the lowest possible commission rate or fee for a particular transaction on a particular day. Our annual “best execution” review considers many factors as noted above and seeks to ensure the best overall arrangement for the cost of brokers’ services and trade execution – over many trades and over time – for the majority of clients. As a fiduciary, Aspiriant is required to act in its clients’ best interests, however Aspiriant’s recommendation that clients maintain their assets in accounts at one of three preferred custodians may be based in part on the benefit to Aspiriant of the availability of some products and services and not solely on the nature, cost or quality of custody and brokerage services provided by the custodian, which can create a potential conflict of interest.
For client accounts maintained by a Recommended Custodian, the Custodian generally does not charge you separately for custody services but is compensated by charging you commissions or other transaction- related fees for securities trades that it executes or that settle into your account. For some accounts, the Custodian may charge you a percentage of the dollar amount of assets in the account in lieu of commissions. Commission rates and asset-based fees applicable to our client accounts at Recommended Custodians were negotiated on behalf of our clients collectively and are reviewed no less than annually as part of our review of custodians and broker dealer services (“best execution review”). In addition to commissions and asset-based fees, our Recommended Custodians generally charge you an additional dollar amount as a “prime broker” or “trade away” fee for each trade that we have executed by a different broker-dealer but where the securities bought or the funds from the securities sold are deposited (settled) into your account at the Custodian. These fees are in addition to the commissions or other compensation you pay the executing broker-dealer. Consequently, to minimize your trading costs, we have the Custodian where your account is held execute most trades for your account. We have determined that having the Custodian where your accounts are held execute most trades is consistent with our duty to seek “best execution” of your trades. Best execution means the most favorable terms for a transaction based on all relevant factors, including those listed above (see How We Select Brokers/Custodians).
The following is a more detailed description of support services we receive from one or all Recommended Custodians:
Services That Benefit You
Our Recommended Custodian’s institutional brokerage services include access to a broad range of investment products, execution of securities transactions, and custody of client assets. The investment products available through the Custodians include some to which we might not otherwise have access or that would require a significantly higher minimum initial investment by our clients. The services described in this paragraph generally benefit you and your account.
Services That May Not Directly Benefit You
Our Recommended Custodians make available to us other products and services that benefit us but may not directly benefit you or your account. These products and services assist us in managing and administering our clients’ accounts. They include investment research, both the Custodian’s own and that of third parties. We may use this research to service all or a substantial number of our clients’ accounts, including accounts not maintained at a Recommended Custodian or the specific Custodian with the research. In addition to investment research, our Recommended Custodians will make software and other technology available that:
Services That Generally Benefit Only Us
Our Recommended Custodians offer other services intended to help us manage and further develop our business enterprise. These services include:
The Custodian may provide some of these services itself. In other cases, it will arrange for third-party vendors to provide the services to us. Custodians may also discount or waive fees for some of these services or pay all or a part of a third party’s fees. Custodians may also provide us with other benefits, such as occasional business entertainment of our personnel, and may make occasional contributions to charitable organizations with which we, our employees and/or their families have a relationship. Please refer to the Soft Dollars section below for further information regarding these non-safe harbor soft dollars along with our Soft Dollar arrangements.
Schwab Advisor ServicesTM (formerly called Schwab Institutional®) is Schwab’s department that serves independent investment advisory firms like us. They provide us and our clients with access to its institutional brokerage—trading, custody, reporting, and related services—many of which are not typically available to Schwab retail customers. Schwab also makes available various support services. Some of those services help us manage or administer your accounts; while others help us manage and grow our business. Schwab’s support services generally are available on an unsolicited basis (we don’t have to request them) and at no charge to us if our clients collectively maintain a total of at least $10 million of their assets in accounts at Schwab. This agreement can create a conflict of interest to recommend assets be held at Schwab however currently our assets maintained at Schwab are approximately $13 billion.
The availability of these services from Schwab benefits us because we do not have to produce or purchase them. We don’t have to pay for Schwab’s services so long as our clients collectively keep a total of at least $10 million of their assets in accounts at Schwab. Beyond that, these services are not contingent upon us committing any specific amount of business to Schwab in trading commissions or assets in custody. The benefits we receive, that you may also benefit from, can give us an incentive to recommend that you maintain your account with Schwab, based on our interest in receiving Schwab’s services that benefit our business rather than based solely on your interest in receiving the best value in custody services and the most favorable execution of your transactions. This is a potential conflict of interest. We believe, however, that our recommendation of Schwab as custodian and broker is in the best interests of our clients. Our selection is primarily supported by the scope, quality, and price of Schwab’s services (see How We Select Brokers/Custodians above) and not Schwab’s services that benefit only us. We have over $12 billion dollars in client assets under management with Schwab, and we do not believe that recommending our clients to collectively maintain at least $10 million of those assets at Schwab to avoid paying Schwab quarterly service fees presents a material conflict of interest.
Section 28(e) of the Securities Exchange Act of 1934 provides a “safe harbor” to investment advisers who use “commission dollars” of their advised accounts to obtain investment research and brokerage services that provide lawful and appropriate assistance to the adviser in performing investment decision-making responsibilities. Conduct outside of the safe harbor of section 28(e) is subject to the traditional standards of fiduciary duty under state and federal law. As we note above in our Brokerage Practices section, we occasionally receive services provided free of charge from custodians and/or investment providers that are generally used to further our business enterprise. We can also receive modest cost reimbursements related to our company events from custodians and/or investment providers. The non-cash items we receive could take the form of guest speakers at client events, fee waivers at conferences, consulting services provided by employees of those firms and other similar items more fully described in the Brokerage Practices section above. These types of “soft dollars” do not fall within the safe harbor provisions of 28(e). We use commission dollars to pay only for products and services we reasonably believe fall within the safe harbor of 28(e).
We may receive allocations of soft dollar credits from broker-dealers and/or asset custodians that may be used to offset the cost of research provided by them. You do not incur higher costs because of these allocations, and such allocations are not a material consideration when a particular broker-dealer or asset custodian is selected or recommended to you. While we generally recommend a specific custodian or broker/dealer, clients may choose to use service providers other than those recommended by us. See additional information regarding Directed Brokerage (below) and How We Select or Recommend Brokers (above).
Our relationships with broker/dealers that provide soft dollar services could influence our judgment and create conflicts of interest in allocating brokerage business between firms that provide soft dollar services and firms that do not. We therefore may have an incentive to select or recommend a broker based on our interest in receiving soft dollar services. These conflicts of interest are particularly influential to the extent that we use soft dollars to pay expenses we would otherwise be required to pay ourselves.
We acknowledge these conflicts of interest and have instituted controls to manage them. We address the conflicts by evaluating, at least annually, the trade execution and other services that we and our clients receive from the broker/dealers that are used to custody assets and execute trades (our “Best Execution” review, discussed above). We also compare the pricing of various services, such as commissions and margin rates, amongst all our recommended custodians to ensure the best combination of pricing and services for our clients irrespective of any soft dollar allocations. Additionally, the negotiation of soft dollars is managed within the corporate function of Aspiriant; Client service teams and others providing investment advice do not participate in such negotiations, thereby disconnecting the people driving recommendations from the receipt of soft dollars.
Soft dollar benefits are utilized across Aspiriant for the benefit of all clients and are not limited to our clients who may have generated a particular benefit; that is, certain soft dollar credits may be disproportionately generated by particular clients or groups of clients.
We will value securities in your accounts that are listed on a national securities exchange or on NASDAQ at the last quoted sales price on the principal market where the securities are traded. We receive this information from custodians and/or independent third-party pricing services. Please see additional information regarding the Aspiriant Affiliated Mutual Funds in Item 3.
We are not a broker-dealer. We rely on the custodian of your securities to execute transactions on your behalf. Because of this fact we must instruct the custodian of the securities to execute any transactions you provide to us. We will only accept verbal instructions given to a live person, not via voicemail or email. We will follow up with a confirmation via a phone call or email. We cannot ensure and do not warrant the timing of receipt of such directions or the timeliness of execution of such transactions by the custodian. As a result, you may receive less favorable prices for the transaction than if you had given the instructions directly to the custodial broker-dealer.
From time to time, we may make an error in submitting a trade order. When this occurs, we will correct the trade in one of two ways, described more fully below, depending on the facts and circumstances associated with the error itself and at the time we discover the error. We attempt to minimize the impact of trade errors by promptly performing daily electronic reconciliation procedures with order tickets and intended orders, and by reviewing past trade errors to understand whether internal control breakdowns, if any, caused them. Trading errors will be corrected at no cost to you.
Broker-dealers are not permitted to assume responsibility for trade error losses caused by us. Nor may there be any reciprocal arrangements with respect to the trade in question or any subsequent trade to encourage the broker to assume responsibility for such losses.
In most cases, we will correct trade errors via the executing broker-dealer’s trade error desk. This process effectively cancels the original trade and replaces it with the correct trade by moving the original trade into our omnibus account and putting the correct trade into your account. In other words, the original trade is removed from your account and has no impact on you. If there is a cost associated with this correction, such cost is borne by us. Note that we do not credit accounts for market losses unrelated to our error. Occasionally, this method of correcting an error results in a gain when the cost of the correct trade is lower at the time of correction than it would have been when originally placed. Because this gain occurs in our omnibus account, we do not credit such gains to your account. Depending on the rules and procedures at the executing broker-dealer, the gains and losses are either reconciled by the custodian within our trade error settlement accounts, or the gross amount of the gains are donated to charity and the losses entirely borne by us.
Depending on the facts and circumstances, we may correct an error by placing a new trade rather than cancelling the original trade. If this method of correction results in a gain, such gain is retained by you since the error correction occurs directly in your account. You will then be responsible for any taxes and/or trading costs associated with this additional trade. Since any trade error losses are covered by us, we generally do not correct errors that would result in a loss by placing an additional trade but rather we would cancel the original trade as described above. In the event that we must reimburse you (as opposed to cancelling a trade) for a trade error costing more than $5,000, prior to disbursing funds or crediting fees, we will obtain your written approval of the proposed resolution.
If you restrict us to using a specific broker-dealer (or direct us to use a specific broker-dealer) for executing transactions, you will generally be unable to participate in aggregated orders and will be precluded from receiving the benefits, if any, of an aggregation which other clients receive. In addition, our clients that direct brokerage transactions to a specific broker-dealer may be disadvantaged because they may not obtain allocations of new issues of securities purchased by us through other brokers-dealers. We will generally execute aggregated orders for “non-directed” clients (those who use our recommended custodians noted above) before we execute orders for clients that direct brokerage. We may also execute trades for non-directed clients through the same broker-dealer that other clients use for directed brokerage. In most cases, clients who direct brokerage will receive a different price for the same security trading on the same day compared to clients who do not direct brokerage.
We extend our best efforts to provide aggregated execution across offices as well as within the same office so that our clients receive the same price for the same security trading on the same day. However, many client circumstances differ, and/or the trade approval and execution process may not always allow for that to occur. Under certain circumstances, you may receive different pricing for the same security on the same day compared to pricing received by another client in order to accommodate your needs or another client’s specific needs or instructions to us. Additionally, clients being served primarily from one office, particularly those under a non- discretionary advisory agreement, could receive a different price for the same security on the same day as a client being served from another office.
We currently have a legacy client referral arrangement, with a third-party money manager, for which we continue to receive an account fee. This account fee is rebated back to you (if you were referred) as part of your investment advisory fee calculation. It was not our intention to profit from this arrangement by referring you to this third-party money manager and has only been done when it was determined to be appropriate for the client. This service is not currently offered to new clients.
We review your accounts regularly based on our review of market conditions and your specific situation. We continually monitor general conditions in the stock and bond markets. Factors triggering a review of your accounts include a change in your specific situation of which we are made aware, a change in the general conditions of the stock and bond markets and a change to an investment you own, such as a mutual fund or separate account manager. Accounts are reviewed by the wealth managers and/or the investment advisory personnel responsible for your account. There are no set minimums or maximum number of accounts that a wealth manager or investment advisor may be responsible for.
As a matter of course, investment performance and holdings information will be made available to you through our client portal, which provides you with on-demand portfolio information as of the previous market close. You may also receive a report (electronically in most cases) that includes investment performance and holdings information either quarterly or annually. Investors in private investment funds will receive quarterly capital account statements directly from the fund manager. It is your responsibility to review these reports when they are made available to you, and we encourage you to bring any questions about the reports and/or your fees to our attention. You will also receive a statement directly from the broker dealer, bank or other qualified custodian holding your assets, we encourage you to review this statement and compare it to our reports. If you notice any discrepancies, it is important to promptly bring those to our attention.
More in-depth reviews are triggered by events such as material changes in your financial circumstances and significant events in the stock and bond markets (e.g. large price movements, big economic surprises, and abnormal or unusual trading volumes). Reviews of your accounts are also triggered by significant changes in the management or policies of other investment vehicles such as mutual funds, separate account managers, or individual securities. These in-depth reviews can also be triggered by a request for cash from your account, a large deposit of cash to your account, or an adjustment to your portfolio recommended during certain market conditions. To properly execute this type of a request our normal and expected procedure is to consider tax, estate planning, and trading issues amongst other factors prior to executing transactions. This careful consideration may take a few days and there is a risk of markets rising or falling during this time.
Financial plans may be reviewed at various times in your relationship with us. The exact review process will depend upon the nature and terms of the specific relationship with us. Reports are prepared for you for wealth planning services on an “as needed” basis or when requested by you.
Your accounts are reviewed to confirm that the recommendations we provide, and your investment plans are consistent with your financial goals and are appropriately designed to help you achieve your objectives. Periodic on-going reviews are conducted depending on your needs and the nature of the financial issue. We expect to meet with you at least once annually, but often quarterly, as well as have other contact by voice or email frequently throughout the year.
We often receive referrals from our existing clients, as well as from other professional service providers, such as lawyers and accountants. While this can provide an incentive for us to discount fees for clients who refer business to us or provide other compensation such as gifts or gratuities in exchange for the referrals, it is our strict policy not to do so. Referrals from other professional service providers can cause us to want to return the referrals, however we are careful to refer our business, and that of our clients, in as unbiased a way as possible. We therefore frequently provide multiple names when asked for referrals to professional service providers. Clients have no obligation to engage the services of any such introduced professionals, however, these individuals or firms may benefit financially if the referrals result in additional client engagements.
Some existing clients may have been recommended by, or to, other Registered Investment Advisors, however, we have no mutual understanding with these other Registered Investment Advisors regarding client referrals.
You will receive statements, at least quarterly, from the broker dealer, bank or other qualified custodian that holds and maintains your investment assets, or directly from the administrators for private equity investments. We urge you to carefully review such statements and compare such official custodial records to the information that we may provide to you such as quarterly performance reports. Our statements may vary from custodial statements based on accounting procedures, reporting dates, or valuation methodologies of certain securities. We encourage you to ask questions about any discrepancies that you identify.
We prefer to receive discretionary authority from our clients at the outset of an advisory relationship. This authority makes us responsible for selecting the identity and amount of securities to be bought or sold in your accounts. In all cases, however, such discretion is exercised in a manner consistent with your stated investment objectives as outlined in your investment policy statement or the fund prospectus in the case of the Aspiriant Affiliated Mutual Funds. You will need to execute a limited power of attorney to permit us to trade in your accounts.
When selecting securities and determining amounts to buy or sell, we observe the investment policies, limitations and restrictions that you and we have discussed and agreed upon. We document those policies and investment guidelines in an investment policy statement for you to review and agree to, and which we both sign.
It is your responsibility to promptly notify us if there is ever any change in your financial situation or investment objectives. It is necessary that you keep us promptly informed about changes in your financial circumstances for the purpose of reviewing, evaluating, and/or revising our previous recommendations to you.
Because we manage more than one account and have many clients with varying circumstances, there may be conflicts of interest over time devoted to managing any one account and allocating investment opportunities among all the accounts we manage. For example, we may select investments for a particular client based solely on the investment strategy being pursued for that client. Different clients may have differing investment strategies and expected levels of trading. We may buy or sell a security for you but not for another client or may buy (or sell) a security for one type of client while simultaneously selling (or buying) the same security for another type of client. We attempt to resolve all such conflicts in a manner that is generally fair to all of our clients. We may give advice to, and take action on behalf of, any of our clients that differs from the advice given to another client so long as it is our policy, to the extent practicable, to allocate investment opportunities to our clients fairly and equitably over time. We are not obligated to acquire for any account any security that we, our partners, or our employees may acquire for their own accounts or for any other client, if in our absolute discretion, it is not practical or desirable to acquire a position in such security for that account.
We may provide investment management services with respect to assets held in your 401(k), deferred compensation, and/or 529 Plan accounts with various mutual fund companies. Because we will be responsible for effecting the transactions in these accounts and/or reporting their investment performance, we may request your username and password that permits online access to the account for informational purposes only. We may also use third-party data aggregators to obtain this information. Appropriate physical and procedural safeguards have been adopted by us to control access to the usernames and passwords.
Non-Discretionary investment management is similar to discretionary management in many respects, except that we are not given a limited power of attorney by you that permits us to trade securities on your behalf. This will impact the timing and logistics of implementing any advice we may give you in as much as you will be responsible for effecting the transaction with the custodian and/or broker, and this could therefore result in adverse pricing in comparison to a discretionary client trading the same security(ies) on the same day.
It is your responsibility to promptly notify us if there is ever any change in your financial situation or investment objectives. It is necessary that you keep us promptly informed about changes in your financial circumstances for the purpose of reviewing, evaluating, and/or revising our previous recommendations to you.
Because we manage more than one account and have many clients with varying circumstances, there may be conflicts of interest over time devoted to managing any one account and allocating investment opportunities among all the accounts we manage. For example, we may select investments for a particular client based solely on the investment strategy being pursued for that client. Different clients may have differing investment strategies and expected levels of trading. We may buy or sell a security for you but not for another client or may buy (or sell) a security for one type of client while simultaneously selling (or buying) the same security for another type of client. We attempt to resolve all such conflicts in a manner that is generally fair to all of our clients. We may give advice to, and take action on behalf of, any of our clients that differs from the advice given to another client so long as it is our policy, to the extent practicable, to allocate investment opportunities to our clients fairly and equitably over time. We are not obligated to acquire for any account any security that we, our partners, or our employees may acquire for their own accounts or for any other client, if in our absolute discretion; it is not practical or desirable to acquire a position in such security for that account.
Whether we are engaged to provide discretionary or non-discretionary investment management, we are never given authority to change or amend your investment policy statement, nor your selected asset allocation. You will always retain control over such critical decisions that guide our advice to you.
Registered investment advisers are required, under certain conditions, to provide you with financial information or disclosures about our financial condition. While we do not meet the required conditions for disclosure, we are happy to provide financial information about us upon request. Note that we have no financial commitment that impairs our ability to meet contractual and fiduciary commitments to our clients and have not been the subject of a bankruptcy proceeding.