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» Topic: FOLIO Institutional question re: cash
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bearnaked  | |
Quote:Originally Posted by johnrothe Hi John, Thank you for your reply. 1) I understand that Folio sweeps ALL cash into a money market vehicle. When I say "plain old cash" I don't mean that it is not earning an interest. It is. I just mean cash that is outside of any Folios for the purpose of maintaining some liquidity to make it easier to debit fees, re-balance Folios without Folio crapping out, etc. 2) Cash kept in Folio is still earning an interest since it is swept into a money market vehicle. I also believe that one can be a fiduciary and keep a portion of client portfolios in cash. Being fully invested at all times is not necessarily a good thing. For example, if part of the investment strategy is to hold an allocation in cash based on a belief the market will go down in the near future, to me, that is still perfectly legitimate. Not sure if you use Folio yourself, but Folio itself recommends advisors keep about 5% in cash for liquidity purposes. From Folio's website: "If a client owns a subscribed Folio, it is important that you keep some extra cash in the client's account. We recommend that you keep at least 5% of the value of the subscribed Folio in cash." "Here's why: When the model manager creates orders to sync subscribed Folios to the model, the client may end up with a debit balance if the value of the sells are less than the value of the buys. This can happen due to the drift in the price of the securities between the time the order is entered and the time the order is executed. In order to avoid Regulation T violations, we would have to contact you to ask that more funds be deposited by settlement date, or we will be required sell a sufficient dollar amount of the securities purchased to satisfy the debit balance." Which leads me back to my original question: Money market rates and fiduciary responsibility aside, is there an "easy" way to maintain a target cash allocation across client accounts? Or do we have to manually create individual buy/sell orders for each client when we want to re-balance client accounts to this 5% cash target? Seems odd that Folio itself would recommend keeping clients in about 5% cash, but make it very difficult to manage that cash allocation. Thanks again. |
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» Topic: FOLIO Institutional question re: cash
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johnrothe | |
| Couple of thoughts.... 1) Money Market is meant to be liquid. We all use it the way you are planning to use cash. Folio automatically buys/sells the money market for you. 2) As an RIA, you have a fiducary responsibilty to the client. Keeping 5% cash that is not earning interest may get you in trouble. You will need a good reason and probably should state it in your client agreement that you will be doing this (speak with a lawyer on this) Congrats on join us! John |
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» Topic: FOLIO Institutional question re: cash
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bearnaked | |
| Hi Cale (and anybody else using Folio that might be able to answer this question/concern of mine) I recently got my RIA setup with Folio as well. For each client account, my plan is to keep about 5% of each client's value in plain old cash. (Not the FDIC.CASH or FDIC.PLUS option that Folio has,...just regular cash). This would be for liquidity purposes, fee debiting, subsequent client deposits/withdrawals, etc. However, over time, as fees are debited, dividends are paid, etc., the % of that cash as a % of total account value will deviate. Say 6 months later, Client A's cash is 3% of his account, Client B's cash is 7% of his account, etc. Folio's Allocation tool doesn't let you set a percent target for the cash balance itself, which would make things really easy. If I wanted to re-balance client accounts such that cash represented 5% again, is there a way to do this easily/automatically with Folio? I've looked, but it seems like the only way to do this is to go into each client's account individually and manually calculate and buy/sell the appropriate amount to bring the cash balance back to the correct target. Am I missing something here? Seems like a no-brainer that cash itself should be able to be added as part of an Allocation, but it isn't. Otherwise, if one day my RIA has hundreds of clients, individually having to go into each one to manually generate buy/sell orders to bring cash in-line with a 5% account value target seems incredibly impractical and time consuming. Thoughts anybody? Thanks in advance. |
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» Topic: CRM
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TFI | |
| I started using Highrise. It seems to be simple to use. I like its integration with Dropbox. Cheers, Gopal |
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» Topic: CRM
| trond24 | ||
| Hi guys, Want to pick the brains of all as pertains to CRM. I know Cale uses Highrise, and I've seen Redtail mentioned also. Hoping some others might weigh in if they have experience with Zoho? Any others that have been considered or are in use? Thanks, Trond |
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» Topic: QR codes
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TFI | |
| Interesting idea. I have seen my friends put QR codes on their iPhones as background/screensaver image. I am not sure how effective it is on a business card. If you put QR code on the business card, probably you should make sure that your website is optimized for viewing on mobile. Cheers, Gopal |
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» Topic: QR codes
| trond24 | ||
| Hi folks, Wondering how many people use a QR on the back of their business card (or other media)? These are those funky little squares of random pixels that you see, encouraging one to scan them with their smart phones - leading them to their website. I plan on using one on my business card, directing them to the sign-up section for my newsletter. Any other thoughts? http://en.wikipedia.org/wiki/QR_code (about) http://qrcode.kaywa.com/ (QR generator) -Trond |
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» Topic: Happy Holidays
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TFI | |
| Congratulations ! One more hurdle cleared. | ||
» Topic: Happy Holidays
| trond24 | ||
| Well, it wasn't a breeze, nerves-wise, but I passed with a 90%. Life is good! -Trond |
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» Topic: Happy Holidays
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TFI | |
| Good luck Trond ! I am sure you will breeze through S65. Cheers, Gopal |
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» Topic: Happy Holidays
| trond24 | ||
| I'll add holiday wishes to all. I'm (finally!!) taking the S65 on Friday - wish me luck! -Trond |
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» Topic: Happy Holidays
| kporeilly7 | ||
| Happy Holidays, Gopal! Kevin |
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» Topic: Happy Holidays
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TFI | |
| Hi All, Till recently, I didn't realize that there is an active board on this site... D'oh!  Anyway, just wanted to wish everyone a happy holiday season and year closing (hopefully with good numbers!). Cheers, Gopal |
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» Topic: Incentives etc
| trond24 | ||
| Hi Mike, If you really want to go that route, I'd suggest their very first dinner at your annual investor's meeting is on you. All the "newbies" get to have a private dinner with you where they can ask questions, etc. I think that ties in with your "exclusive club" feel? I'd like to hear from other Spokes on their feelings about incentives. -Trond |
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» Topic: Incentives etc
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plandfreedom | |
| I am looking for ideas about what incentives to give to new clients to join. I know that keeping it under $100 will be reasonable. So - what should it be? A book? A subscription to Forbes or Business Week? A free share of BRK.B so they can save on car insurance? A free T-shirt with firm logo? I would like to foster a feeling that my investors are a part of exclusive club. Any help would be appreciated. -Mike |
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» Topic: New blog site - The Interloper
| trond24 | ||
| Saw a mention on The Reformed Broker... This new one is really good. http://interloping.com/2011/10/25/has-wall-street-abstracted-itself-from-america/ Maybe some lessons for us, or at least another salvo against Wall Street? Regards, Trond |
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» Topic: Measuring performance
| trond24 | ||
| Great point about risk adjusted... but I'd prefer to just beat it outright. :-) I'm kind of obsessing about the benchmark, probably because I'm in the last week of studying all the S-65 crap and they hammer on disclosure. I'm probably going to compare to S&P 500 and the Russell 2000 Value Index. I like the 2000 because it includes a relatively big segment of smaller and mid caps. |
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» Topic: Measuring performance
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plandfreedom | |
| I feel that SPY is a benchmark that most people are familiar with and is not a bad gauge for performance, even if your securities mix is different. One thing I will throw in is that sometimes you can underperform SPY but outperform on a risk-adjusted basis (relative to Beta)... |
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» Topic: More FOLIOfn notes
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plandfreedom | |
| Trond, that's my Folio rate too. Yes, I am having to subsidize smaller accounts. Hopefully, through your quarterly communications, clients will be convinced to invest more. I wish Folio got rid of the silly minimum fee. -Mike |
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» Topic: More FOLIOfn notes
| trond24 | ||
| I finally (finally!!!) have gotten started! RIA-In-A-Box is working with me. So I had contacted FOLIOfn, he (Ken L) said to let him know when I had my ADV and we would figure out the fee schedule. I told him that I needed to get that decided *before* I could do my ADV, lol.. I finally got him to commit this AM to the 25 bp / $150 minimum structure. Not really happy since I am willing to take on smaller accounts, even if I'm only making a few cents on them.... and of course this will raise the minimum (without subsidizing) to around $12K. I have quite a few friends who for some reason all seem to have exactly $10K or so for early placement with me! I guess I'll be subsidizing for a year or so, just to get some extra assets started. Anyhow, thought I'd share that I'm finally getting started and my experience with Folio's rep. Regards, Trond |
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» Topic: Measuring performance
| trond24 | ||
| Hi guys, Something occurred to me on the flight home. We spoke in passing at FundLaunch about benchmarks, and it seemed like the S&P 500 was the group choice #1. I had asked about perhaps using other indices in combination with the S&P 500, butupon reflection I'm not sure any of these are really a good choice. Why? Because they are each a passive index. Since we are typically much more focused / less diversified AND actively managed, it seems to me like we are not AT ALL truly measuring ourselves against a benchmark that makes sense. Besides using the wrong target, I wonder if this would lead to any disclosure-related problems? If a small cap tech fund used the S&P 500 as it's benchmark, I think we'd all feel that was "odd". I get the same odd feeling here. Any thoughts? Thanks! (and once again, Cale, thanks for putting on the Spoke Fund Conference! GREAT to meet you all.) Regards, Trond |
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» Topic: Folio questions
| aab | ||
| Follow-up after talking to someone at Folio. It looks like they are not set up to have non-interest bearing cash accounts. I plan on talking to the sales rep in my area to see if there's any other way to satisfy the "no interest" requirement for my clients. Also, they said that the limit on the number of stocks in a folio is negotiable. (That sounds kind of strange to me.) Will keep you updated as I find out more. |
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» Topic: Folio questions
| aab | ||
| First, I just wanted to say thanks for setting up such a fantastic site with an emphasis on sharing ideas and experiences. Usually, people want to keep this info proprietary and aren't willing to share. I'm looking at setting up an RIA business with Folio but had a few questions that I was hoping someone with more experience with Folio can answer for me. I know you can setup different model portfolios and then also a model "asset allocation" with specific percentages for each model. Exactly how many stocks can one have in each model portfolio. I know that on the retail side each model portfolio is limited to 100 securities per "folio." Is the limit for RIA accounts the same? This may seem like a silly question because 100 stocks seems like more than enough, but I'm looking into some models that may require that many stocks or more. Also, due to religious requirements, most of my clients would prefer not to collect interest on their cash balances. Can you leave uninvested cash in a Folio account simply as a cash balance that doesn't accrue interest? Or is all unused cash automatically swept into a money market fund? Thanks for your help. I'm sure I'll have many, many more questions in the future |
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» Topic: Folio set up
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plandfreedom | |
| I just signed up with Folio per Cale's rec. I got them down to 25 bps or $150, whichever is greater. My fee will be 75 bps, so no more than 1% for the folks who... ...Have at least 60k to invest! Still wondering whether to subsidize or not, and how to do it in Folio. Cale, I hope you cover this in your conference. |
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» Topic: Ideas on Spoke Fund Conference for 2011
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plandfreedom | |
| I'm in. I wonder how many people will be there... | ||