CSG believes, when appropriate, the most effective way to allocate a client's
assets is through the use of Individually Managed Accounts (IMA). An IMA
is a portfolio of investments, in which the investor has direct ownership of
each equity (stock) or bond in the portfolio, but delegates authority to make
decisions about which securities to buy or sell to a professional money manager.
An IMA has several distinct advantages that are important to investors.
1. Individual Ownership of Stocks. Unlike a mutual fund, the client owns
the stocks directly. This allows clients to see exactly what companies
they own and how many shares of each company. Additionally, CSG and the
client can monitor the overall diversification of the portfolio, making sure
the appropriate level of risk is achieved for the individual investment strategy.
2. Customization. Whether your investment strategy is aggressive, moderate,
or conservative, CSG can customize a portfolio of stocks tailored to your
appropriate style. Furthermore, we can seek out or avoid certain stocks
that meet or violate a client's personal standards.
3. Cost Basis Control. There are always tax implications when a stock is
sold from an account funded with taxable dollars. A client must pay capital
gains taxes when a stock appreciates in value. If a stock declines in value,
the difference between the purchase price and the sale price can often be used
to offset other investment gains, thus enhancing your after-tax return. In
an IMA, a client always knows the cost basis for each individual position.
Therefore, a client benefits from 100% of any gain that occurs, and can
establish a basis for using 100% of any loss to offset other gains.
4. Tax Minimization. Because, in an IMA, the timing of stock sales can be
controlled, more of a portfolio's growth can be protected each year.
5. Fees & Expenses. Annual fees range from .75% to 2.5% based on types of
securities and total assets under management.
6. Risk Factors. Although allocating assets over multiple managers and strategies is
intended to diversify risk, there is no assurance such goals and objectives can be accomplished.