New Accounts:

Each year we accept a small number of new accounts based on the fit between a client’s goals and our strengths. We take time to determine whether we can offer the kinds of support that the client needs, and if everything fits we establish an account, or family of accounts, and move forward. In general, we expect a new client will bring three to five million dollars into the firm to start the relationship. This threshold is not hard and fast and it may be met by a group of related accounts arriving together, or a smaller account related to that of an existing client or one for which additional assets are anticipated in future. In a family group there are good reasons to maintain smaller satellite accounts for grandchildren or others, so we do not charge punitive minimum fees. Regarding investment, we handle small accounts with care and attention, selecting exchange traded funds when account size does not permit a full range of individual stock holdings. Please contact us if you would like to explore the opening of an account or accounts.

Account Types:

We host a number of account types including:

• Agency accounts: standard investment accounts owned by an individual and managed by us on a discretionary basis or with the client retaining final decision-making authority

• Trust accounts: investment accounts administered by a trustee following instructions in a trust document on behalf of beneficiaries

• Retirement accounts: qualified tax-advantaged accounts managed for distribution during retirement

• Custodial accounts: accounts held for minor children with a custodian acting until the child reaches 21 years of age

• Private foundations: non-taxable investment accounts which, like trusts, are managed by trustees for purposes specified in the founding document

• Endowment accounts: investment accounts which are managed by trustees for the benefit of the endowed institution

Often a client will establish accounts of several different types to meet a range of needs.

Statements and Electronic Account Information:

Real-time account information is accessible through this website by clicking on “Client Login” in the menu list or at the bottom of the homepage.  Follow instructions there to obtain a username and password to access the secure server and generate reports regarding your account holdings and transactions.  In addition, all account holders receive four quarterly and one annual statement in paper form, unless the recipient opts to receive these in electronic form.

Charges:

Our Basic Fee: We charge a fee to every client covering our investment and fiduciary activity on their behalf.  Depending upon account size, the fee works out to between 0.40% and 1% of the assets invested by us per year.  Fees act as a drag on investment returns, so we work to keep our fee reasonable and transparent in an industry not known for either.  Please request our fee schedule to understand the components of the basic fee, and to see our fees for tax preparation and executor services.

Avoiding fund charges and “loads”: We typically purchase individual securities rather than mutual funds for our clients, avoiding fund charges for management and administration.  When we find that a fund offers an important benefit that we cannot get elsewhere, like index exposure to the Chinese stock market, we select the best fund for the purpose at the lowest expense charge.  In today’s competitive markets more and more low-cost options exist for careful buyers.  Also, as a professional buyer we qualify for institutional grade fund shares which don’t carry the entry and exit “loads” that can impose as much as a 5% one-time cost on retail customers.

Brokerage commissions: The purchase or sale of shares must generally be executed by a registered broker-dealer with a seat on one of the exchanges.  We negotiate competitive rates with the broker-dealers we use based on share volume.  As an institutional buyer/seller we pay a very low per-share fee, whereas retail and broker-dealer customers pay a per-trade commission which often costs many times as much.  Commissions are deducted in computing prices paid and sale proceeds received.   J.M. Forbes & Co. receives security analysis services from the brokerages we use but no share of commission payments.