A Small Firm with Big Resources
Insight Wealth Management (IWM) is an independent, small business but is backed by some of the most respected names in the investment management industry.
Schwab Advisor Services
As an independent Registered Investment Advisor (RIA), IWM must use a third party as the custodian and broker of our clients’ accounts. IWM has used Schwab Advisor Services for over a decade and has been very pleased with them. IWM clients have access to their Schwab accounts online at any time through Schwab Alliance. This is a web portal dedicated to clients working with independent advisors affiliated with Schwab Advisor Services. Schwab provides monthly account statements directly to clients. This arrangement provides an extra level of transparency and security for IWM clients.
Through the Schwab Advisor Services platform, IWM performs trading, account management and a variety of other services for clients. IWM does not have authority to disburse or move funds from client accounts unless the client specifically authorizes such authority.
Schwab charges no account set-up or maintenance fees to IWM clients. IWM receives no commission sharing, referral or any other sort of fees or compensation from Schwab. Schwab earns their income from trading commissions related to IWM’s management of client portfolios. Schwab charges $4.95 per equity or ETF trade, and $1.00 for each $1,000 par value corporate bond with a maximum of $50.00 per bond trade. Schwab charges nominal fees also for services such as wire transfers, etc. A full list of all fees and commissions is available from Schwab or IWM.
IWM licenses Morningstar’s Office software for advisors, and contracts with Morningstar’s Back Office Services to perform our portfolio accounting, including daily downloads and reconciliation of client account data from Schwab. This service allows IWM to perform robust, industry best practice portfolio performance reporting, asset allocation analysis, investment analysis, fixed-income maturity and cash flow analysis, pro-forma tax reporting and much more. These reporting and analytical services are included in the base fee clients pay IWM, and clients never pay Morningstar any fees.
Clients have access also through Morningstar to a secure web portal that provides analytical information on their investment portfolios that is updated daily and beyond what is available through Schwab Alliance. In addition, the Morningstar web portal provides a secure facility for IWM and clients to share sensitive documents with each other.
Investment and Economic Research
IWM bases investment decisions on its own research, including proprietary screening models and selection criteria, and buy-side research from respected firms with reputations for acting in investors' best interests. Our approach is value-oriented, fundamental research, as opposed to charting, market-timing or other methods that we consider dubious. This includes equity, fixed-income and other types of securities, and asset allocation decisions.
IWM does not use sell-side research. This is material prepared by brokerage or banking firms that have a financial interest in client trading decisions. Many of these large firms have extensive staffs of qualified analysts but their recommendations are tainted by the inherent conflict of interest that arises from their desire to sell securities from their inventories or that they have underwritten.
Firms providing buy-side research do not engage in selling any form of investments. They, also, have large staffs of qualified analysts but do not have the conflict of interest inherent in the process when brokerages and banks provide investment recommendations. IWM’s license for the Morningstar products includes their industry-leading buy-side investment analysis. We have access to other buy-side analyses available through Schwab Advisor Services, such as Standard & Poors stock reports.
Moreover, IWM President, Bob Pugh, CFA, CFP®, has been a member of the National Association for Business Economics (NABE) since 1991 and has access to all of the NABE economic and industry research. As a trained, experienced economist with two graduate degrees in economics, Bob is able to apply this research to serve his clients’ interests, as opposed to many or most “financial advisors” who focus on selling products such as annuities and mutual funds, and at best read research reports from their headquarters they do not understand.
IWM pays in full for all research, such as Morningstar and NABE membership fees, used in our investment management process. We accept no research or anything else through “soft dollar” arrangements. Even though legal in many cases, we believe that soft dollar deals with brokers, custodians and other third parties would taint our independence and impair our ability to assure clients that all of our investment decisions are objective with no conflicts of interest.
All final investment decisions are made based on our own investment selection and asset allocation criteria, which require a broad review of relevant data and information rather than a single source, and our own judgment as to whether an investment is suitable for a client's portfolio on a case-by-case basis.