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Efficient Portfolio Theory

In this booklet you'll learn:

How the seven pillars of investing maximize returns • How planning is the road map, while portfolio efficiency is the engine that gets you there

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Frequently Asked Questions

Over the last 30 years our founder, Stephen Thomas, has seen a lot of changes take place within the investment industry. As big firms have moved to a more commodified approach, Thomas and his team have continued to develop more efficient ways to build tailored portfolios for their private clients in a way that meets each client's needs. Because many of our clients come by referral from other investment firms we are often asked: How are we different from the competition? How do we work? What's the benefit of having a team? For your convenience, we have constructed a list of the most common questions. Please feel free to contact us at Linden Thomas & Company if you have any other questions.

Below are some of the top questions:

Most industry advisors charge a fee and then put investor's money in other products that are pooled with other investors. These products often carry hidden costs like trading costs, expense ratios, and have internal pricing disadvantages which negatively impact results. At Linden Thomas & Company, we manage the assets directly for our private client group. This means stocks and bonds are directly bought for and held by each client. Cost is minimized and each portfolio is managed directly which gives clients direct ownership (not pooled), total control, and transparency. And because Linden Thomas & Company has a team of financial planners, financial advisors, financial analysts, and other industry experts, our clients get access to the team without paying a third-party advisor. Our team has over 100 years of combined experience and more than 30 years of putting clients first.

Each of our new clients is guided through a needs review with our financial planning team. This review consists of long and short-term goals, a risk assessment, and identifying income and growth needs. Once we have finished the comprehensive review, we then formally present 3 to 4 allocations. We will review each with the clients to determine which fits best with the client's needs. If other reviews or outside assets need to be reviewed, our team will consider those as well. Once a formal allocation is chosen, we will then work with the client to build the portfolio. Because education and transparency are important to our beliefs, each holding is purchased in the client's portfolio, and all holdings are reviewed.

Institutional Direct is a lot different than a mutual fund. First, mutual funds pool investors. When investors are pooled, clients are invested in a portfolio that they have no control over, and there is no transparency. Other investors in the pool may have different needs and behavior. This may negatively impact you, but you never know because there is no transparency. Additionally, cost and pricing disadvantages of mutual funds all play a role in hurting investor results. So, between cost, no control, pooled ownership, and no transparency investors are left with poor results and a very inefficient portfolio.

Many retail advisors may say they are institutional or may say that they use institutional mutual funds. Because "institutional" is a popular term in today's marketplace, most advisors use the term without delivering. True institutional asset management is when investor's portfolios are managed directly through individual securities. It takes a team to achieve direct portfolio management with different portfolios styles giving investors the benefit of directly hiring the money manager. Most advisors don't have the team, the technology, or the skill to manage assets directly.

There are five reasons why many advisors cannot offer direct access to institutional asset management.

Background and Licensing
Resources
Team
Desire and commitment
Regulatory requirements

In order to build an asset management firm and broker-dealer, which is fully registered under the regulatory authorities and provides direct access to institutional asset management, an advisor would need the experience and license to own an independent firm (along with the desire, time, resources, and commitment). Our founder, Stephen Thomas' career got started in Washington, D.C., where he gained the knowledge and insight about the benefits that investors would get by having their assets managed directly. Once he gained insight into institutional direct benefits, he then spent 20 years committing himself to a world-class asset management firm.

One way to compare is to look at the results of our individually managed fixed-income portfolios and our earnings-focused index. The other way investors can make additional comparisons is to look at company's longevity and experience and the specialties of its team. Linden Thomas & Company is celebrating over 30 years of putting clients first, 27 national awards, with an investment team of 20 professionals.

Below is a table that might help:

Facts about Linden Thomas & Company Investments to Compare with your Advisor

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Efficient Portfolio Theory

In this booklet you'll learn:

How the seven pillars of investing maximize returns • How planning is the road map, while portfolio efficiency is the engine that gets you there

Read Our Guide