Services

Portfolio Management

ERISA Plans | Individual Investors

Individual Investors: Reporting

Strategy Investment Process Reporting

Our clients have 24 hour web access to their accounts as well as monthly brokerage statements and transaction reports in electronic or paper format.

In addition, we provide quarterly Client reports that include the following information:

• End of period balances (including cost basis)
  
  
• Purchase, sale, and income activity for the period
  
  
• Computation and total amount of all advisory fees
  
  
• Comparative fund performance with index benchmarks

On-Going Communications
As market's change and our client's needs change, so does our services. We strive to deliver the information and guidance our clients need to understand the actions that we take on their behalf, and the choices that they must make as part of this life process.

Most important, we deliver investment information as it relates to their personal circumstances, financial security, and quality of life. Not all conversations are easy and not all choices are easy to make. That is why we have an open architecture in our communication methods. At the onset of every client relationship, we develop a method of interaction that best meets the clients needs – whether that be by periodic face to face meetings, phone, or email.

Investment Risk: A Personal Issue
Unlike investment in a single security, diversified portfolios consisting of a wider variety of stocks, bonds and/or mutual funds that contain diversified portfolios of those securities helps prevent against losses due to the failure of an individual company or the troubles of a specific industry or segment. The appropriate amount of diversification can practically eliminate the risk of ultimate loss – the complete loss of portfolio principal.

Therefore, it is standard practice to define risk in terms of investment volatility or "standard deviation" – the expected price swings above or below the average return for an investment category. This approach tends to work fine for our ERISA Plan clients where the often non-specific needs of groups of individuals are being addressed. But defining risk in for an Individual investor is different. For an individual client, risk can only be discussed as it relates to the chance that the client will not meet their goals. Risk cannot be talked about in terms of fluctuations on a chart – but instead in terms of what that person wants to do with their life.

After as much risk as possible has been diversified away, Fortress helps its individual clients address the remaining risks that each client must balance with respect to their own goals and personal comfort levels.

For individuals far from retirement, the choice is fairly simple. They can choose the relative stability of cash and fixed income returns in exchange for the risk of not meeting their retirement goals due to sub-standard returns. Or put another way: they can obtain the higher long-term returns of stocks in exchange for putting up with the short term undependability (risk) of the stock market and resulting effect of those periodic down cycles on their account balances.

For clients at or near retirement, the risks become more complex. These investors face a variety of risks which Fortress helps them manage and choose between. These include:

Lifespan Risk
The 20th century has brought about incredible medical advances that have caused typical life expectancy figures to become misleading. For most people, there is a real possibility of living 30 or even 40 years past retirement age. The table below lists the probabilities of expanded lifespans for a 65 years olds per the Society of Actuaries 2000 Mortality Table:

Inflation Risk
Inflation causes savings to lose purchasing power. Even at a 3% rate of inflation, a retiree will need twice as many dollars in 25 years to purchase the same amount of goods or services as today. Health care costs are expected to continue to increase at even higher rates.

Depletion Risk
For any distribution rates higher than approximately 3% of the portfolio per year, the risk of exhausting the account must be addressed and play a part in setting a portfolio investment strategy. The higher the withdrawal rate, the higher the probability that the account will run out of money prior to the passing of the clients.