As many of our clients are already aware, FJY is currently taking steps to move toward sharing discretion on investment portfolios with our clients. This poses several important questions. The goal of this article is to address those questions and provide insight into why we are making this change.
What is discretion? Discretion can be defined as the “freedom to decide what should be done in a particular situation”. FJY’s discretion will be limited to trading decisions. Sharing trade discretion with our clients will allow FJY the freedom and flexibility to act on existing instructions, invest new cash or rebalance a portfolio should it be necessary, make cash available if needed (for withdrawals or fees), and make investment changes – all without having to get prior approval from the client.
Sharing discretion does NOT allow FJY to change investment strategy or asset allocation for clients, nor does it change FJY’s goal of continuing to focus on educating our clients.
What is the benefit to our clients? Shared discretion will allow FJY to have more flexibility and improve our ability to act quickly on our clients’ behalf with regard to investment portfolio decisions. With any decision we make, FJY’s goal is to maintain the quality of service our clients deserve and have come to expect. Our enhanced ability to act for our clients will enable us to implement investment changes, tax planning, and other portfolio service issues quickly, without need to first gain approval from our clients.
Sometimes this ability to act quickly can be of great importance and value to clients. However, in no way will this change our fundamental goal of having clients educated and informed regarding how we are managing their portfolios.
Why did we do this? The change toward sharing discretion with clients was not made without significant discussion and internal debate. In the end, we decided that this change is in the best interest of our clients, which is always our primary concern. We encourage you to give us a call to discuss this matter if you have concerns or additional questions about discretion.