FAQ

  1. How do I get started with Chesme Capital Management?
  2. Who does Chesme Capital Management use as the custodian of client accounts?
  3. Does Chesme receive any form of compensation from Schwab or Fidelity?
  4. Does anyone at Chesme Capital Management have access to my money?
  5. What reports will I receive?
  6. Will I have internet access to my account(s)?
  7. How often does Chesme Capital Management Rebalance my Portfolio?
  8. How does Chesme Capital Management minimize the impact of taxes?
  9. How am I involved in portfolio decisions?

1. How do I get started with Chesme Capital Management?

We encourage all of our clients to be familiar with the benefits of goals-based, passive investment management.  Our Library contains a great deal of information on the topic, and our advisors are always happy to answer any questions prospective clients may have about our process (and, we promise, there will be no sales pressure).  Once you are comfortable with our people and our process, we will schedule a one-to-two hour meeting (either in person or via telephone) that will give us the opportunity to understand your current financial situation, your financial goals, and your attitude towards risk, among other things.  We will then prepare a draft investment plan, which we’ll review with you in a follow-up meeting.  During that meeting, we will fine tune the investment plan based on your input and, if you decide to hire us to manage your portfolio, we will ask that you sign our Client Services Agreement.  At this point, we will finalize your investment plan, develop your Investment Policy Statement, and begin the process of transferring your assets to one of our custodians.

2. Who does Chesme Capital Management use as the custodian of client accounts?

We use Charles Schwab Institutional (Schwab) and Fidelity Investments Institutional Wealth Management (Fidelity) as custodians for our clients’ accounts. Schwab and Fidelity have very low trading costs and a proven commitment to client service.
Back to top

3. Does Chesme receive any form of compensation from Schwab or Fidelity?

Chesme is not compensated by Schwab or Fidelity in any way through fees or commissions. We are, however, provided with software necessary to communicate efficiently with their operations and trading teams.
Back to top

4. Does anyone at Chesme Capital Management have access to my money?

No.  Your money is held in an account in your name at Schwab or Fidelity.  Chesme employees do not have access to your money.  Chesme only has limited authorization to trade securities on your behalf (and in accordance with your Investment Policy Statement), and to deduct its quarterly management fees from the account(s) that it manages.
Back to top

5. What reports will I receive?

Fidelity or Schwab will provide you with monthly account statements (by regular mail or by email), trade confirmations, prospectuses, and all required tax forms.  Chesme will provide you with quarterly performance reports and account invoices.
Back to top

6. Will I have internet access to my account(s)?

Yes.  Both Fidelity and Schwab provide access 24 hours per day, 7 days a week.  You will also have access to additional account-related information via the “ClientView” portal on Chesme’s website.
Back to top

7. How often does Chesme Capital Management Rebalance my Portfolio?

In general, we will rebalance your portfolio at least annually, or when you have made significant deposits to (or withdrawals from) your account.  On rare occasion, we may rebalance your portfolio when a significant market event causes your account to deviate significantly from its target allocation.  “Significantly” usually means a deviation of about 15% to 25% on a relative basis, but it is also subject to your particular tax and risk circumstances.
Back to top

8. How does Chesme Capital Management minimize the impact of taxes?

The first step is to locate assets in a logical fashion. This generally means holding tax-inefficient funds (such as taxable bond funds, REITs, and TIPS) in tax-deferred accounts, and holding tax-efficient funds (such as municipal bond funds, or broad “Core” equity funds) in taxable accounts. This also might mean holding high-expected-return funds in your Roth IRA to maximize permanent tax free growth.  We will also avoid trades that trigger short-term capital gains, cultivate losses for tax purposes when the benefits appear to significantly outweigh the costs, and often hold non-U.S. funds in taxable accounts to benefit from the foreign tax credit.
Back to top

9. How am I involved in portfolio decisions?

You hire Chesme to manage your portfolio in accordance with an Investment Policy Statement (IPS) that we agree to in advance of any trading decisions. Once you fully understand and agree to your IPS, Chesme will manage your portfolio strictly within the context of your Policy.
Back to top