Some clients may prefer to have some or all of their investment portfolio professionally managed by Reason Financial Advisors, Inc., (RFA) a Registered Investment Advisor with the State of Illinois.
Under this service:
- RFA arranges for the client’s investments to be transferred to an agreed upon custodian.
- RFA performs a review of the client’s risk tolerance and designs an Investment Policy Statement (IPS) to serve as a roadmap in helping to achieve their goal.
- RFA presents client with a Recommended Securities Listing identifying all suggested investments prior to implementation.
- RFA initiates all investment transactions on a fee-only basis with no commissions.
- The custodian forwards all Trade Confirmation directly to client.
- The custodian mails account statement(s) directly to the client.
- RFA provides client with various reports each quarter including performance information
Fee Schedule
Fees are calculated and billed in advance each quarter based on assets under management at the beginning of the quarter. Our standard default is to deduct fees from a discretionary account, but in certain situations we can forward an invoice for payment by check. RFA employs a tiered fee schedule that reduces fees on larger accounts. A current fee schedule is printed in our ADV Part II and may be requested by contacting our office.
Custodian
All accounts are maintained in the client’s name at the custodian to facilitate record keeping. Any check that will be deposited to your account should be made payable directly to the custodian. Transaction fees do apply on certain trades.
Cash Distributions
Most accounts can be set up with check writing privileges. You may also call us to have funds sent to you directly by the custodian in the form of a check, ACH transfer or a wire transfer.
Income Tax Considerations
On a personal income tax return, fees paid for investment advice may qualify as a miscellaneous itemized deduction under Section 212 of the Internal Revenue Code, subject to a 2% limit on adjusted gross income.
Cost Basis Information
Due to the importance of accurate records for taxes, we track the cost basis on all investments we purchase or sell for accounts we manage. When a security is already owned it is important for the client to provide us the original trade date, quantity and value for each asset transferred to us so we can continue to maintain the cost basis information. As the default, the cost basis will be the quantity and value as of the day an asset is received into your account. We encourage you to discuss your current cost basis information with your tax accountant, attorney or tax preparer.
Year-End Tax Reporting
Reason Financial Advisors, Inc. will prepare a “Realized Gain/Loss Report” to help you with your income tax preparation that indicates the long or short-term gains or losses realized from any sales occurring during the year.