Sparrow Wealth Management, headquartered in Las Vegas, Nevada, offers low-cost investment management services for clients nationwide. Our investment management approach is based on our investment philosophy. Our investment management services include our investment process, monthly account reviews, quarterly performance reports, and year-end tax reporting. As a convenience for our clients, we also offer management fee billing.
First, our process for providing investment management begins with the establishment of your personal and financial goals, investment objectives, investment time horizon, and risk tolerance.
Next, we will work with you to develop a written Investment Policy Statement, which clearly shows how your money will be allocated across the various asset classes. The most important asset allocation decision that you will make is how much of your money to invest in fixed income (or bonds) and how much to put in equity (or stocks). Once you have completed and signed a written Investment Policy Statement, we help you to put your policy into action.
Third, we will help you to open new accounts at a discount brokerage firm and to transfer your investments and retirement accounts to this new custodian. We will fill out most of the paperwork for you so that this lengthy and time-consuming process will be as simple and easy as possible.
Finally, we invest and manage your assets on a discretionary basis, which means that we have your permission to made trades without consulting you prior to each transaction. As it states in our Investment Advisory Agreement, we will always make investment decisions that are consistent with your Investment Policy Statement.
Monthly Account Reviews
We will conduct monthly account reviews to determine if your investment portfolio is significantly out of tolerance with your desired asset allocation (as indicated in your Investment Policy Statement). If your portfolio is out of tolerance, we may rebalance the portfolio to your desired asset allocation. Our decision to rebalance is based on many factors, including your cash flow needs, the degree to which your portfolio is out of tolerance, tax consequences, and trading expenses. Portfolio rebalancing (as discussed in our key investment principles) has the effect of reducing the risk of your portfolio and increasing your long-term rate of return.
Quarterly Performance Reports
Sparrow Wealth Management will send you quarterly performance reports. These reports will show an activity summary, the portfolio performance over a variety of time periods, and your current account holdings by asset class. These reports will show all of your accounts as one portfolio group, which help you to see how all of your accounts are doing. In addition, you will receive monthly account statements and trade confirmations directly from your brokerage firm.
Year-end Tax Reporting
Following the end of the year, we will provide you with a report showing your prior year fees that were paid directly or from your taxable brokerage account(s). Your custodian will track the cost basis of your taxable securities and include that information in their Form 1099.
Management Fee Billing
We offer you the option of having your quarterly fees deducted directly from one or more of your brokerage accounts. Most of our clients prefer this payment method because it saves them from having to write a check every quarter. Whether you pay us directly or have your fees deducted from your brokerage account(s), you will receive a quarterly bill (or statement) that shows how our fee was calculated.