QUESTION: Why do you need an investment adviser? All individual investors want to preserve their capital and make it grow, and many especially need to prepare for education expenses and retirement. However, few investors have the time, expertise or discipline necessary to achieve their financial goals on their own.
As a result, most investors seek professional assistance, but many have found conventional sources to be unsatisfactory due to conflicts of interest, inadequate focus or lack of true professionalism. Yet historically, the services of high-quality investment advisers were available only to the very rich. Today the options for individual investors have expanded to the point where they can invest like large institutions by employing a portfolio approach to the management of their capital. A portfolio approach protects the individual investor from volatility in the capital markets through asset allocation, diversification and varied investment strategies within their portfolio. ANSWER As an investment adviser, Boston Investment Advisers provides institutional investment management to individual investors by utilizing a lower risk, portfolio approach to the management of their capital.
PROFESSIONALISM
As a registered investment adviser, BIA engages in no other business but managing money for individuals and small institutions. Its chief investment officer has more than 37 years experience on Wall Street and in the investment management business.
FIDUCIARY RESPONSIBILITY
In contrast to securities brokers, insurance agents and many financial planners, BIA acts as its clients’ agent, not as a principal, which means that it owes them the highest fiduciary duty to serve their interests alone. BIA is compensated only on the basis of the current value of client accounts, and it receives no commissions or other payments from third parties. BIA’s investment decisions are unbiased, and its only goal is to build client wealth.
ACTIVE MANAGEMENT
BIA provides continuous management of client accounts, exercising its discretion to make changes as investment opportunities arise and as client circumstances warrant.
COST SENSITIVITY
BIA’s investment management service comes at a low cost relative to alternatives. The firm’s own fees are moderate by industry standards, and it uses only no-load mutual funds or Exchange-Traded Funds whose own fees and expenses are low. The result is that the clients’ capital works for them and not for others.
SAFETY AND LIQUIDITY
BIA generally uses only mutual funds or Exchange-Traded Funds for portfolio holdings, which assures clients of maximum liquidity and safety for their portfolios. Client accounts are never commingled but rather are managed separately. All client assets are held by a large third-party custodian, again to ensure client safety. Clients can withdraw funds on notice at any time without delay or charge of any kind.
COMMUNICATION
BIA emphasizes frequent and full communication with clients in order to maximize the client experience. At the outset and throughout any client relationship, BIA seeks to understand the client’s needs and objectives. In turn, BIA reports to clients on a quarterly basis, providing them with complete information about the account’s holdings, activity, performance and fees. BIA’s staff is always available to respond to client questions or special requests. As an investment adviser, Boston Investment Advisers provides institutional investment management to individual investors by utilizing a lower risk, portfolio approach to the management of their capital.
OUR INVESTMENT APPROACH
The philosophical premise of our approach to managing client portfolios is that individuals can benefit from the same precepts and strategies employed by very large, sophisticated institutions through the use of no-load mutual funds and Exchange-Traded Funds instead of individual stocks and bonds in order to achieve efficient diversification in each relevant asset class and sector. The objective is to use risk management, cost control and the power of compounding to build and maintain wealth.
The strategy that follows this philosophy emphasizes asset allocation as the first priority and seeks wide diversification, including non-traditional asset classes such as international securities, commercial real estate, merger arbitrage and high-yield fixed-income. Because risk management is paramount, most accounts also include an allocation to traditional fixed-income strategies.
The investment process begins with a thorough understanding of the client’s risk tolerance, financial goals and time horizon. Once an asset allocation is decided upon, the portfolio is then rebalanced from time to time to reduce allocations to outperforming asset classes and sectors and to add to underperforming ones. Portfolio asset allocations may also change based on significant trends or events in the global economy or capital markets.
Individual fund selection emphasizes a number of factors. First, we utilize funds that have low operating expense ratios and have shown a willingness to lower fees as assets under management grow. Second, we select funds whose managers have extensive fund management experience over different market cycles with solid long-term performance. Third, we prefer funds whose managers are also equity owners in their investment management firms, and have substantial investments in their own funds. These characteristics tend to align the manager’s interests with their shareholders’ interests and to create a climate and culture that is conducive to investment success rather than marketing prowess. Finally, there is a bias towards stock funds that display a “value” orientation as opposed to a “growth” orientation, which tends to dampen portfolio volatility. | 
