Question: The Dow Jones Industrial Average (DJIA) is down again and I am worried about my portfolio. What are you doing to protect it against loss?

Answer: Our Privately Managed Portfolios and STAR portfolios do not move in lockstep with the DJIA, so when you hear that the DJIA is up or down it does not necessarily translate into the same positive or negative return in your portfolio. This is because our client portfolios have more diversification than the 30-stock DJIA. Client portfolios generally have exposure to value and growth stocks in the large, mid and small cap sectors. They also may have exposure to international stocks, commodities and real estate.

Our invested position varies with our exposure indicators, which aid us in deciding how to proceed in volatile markets. The broad diversification across asset classes and market sectors combined with our fundamental and technical analysis of the market seek to provide lower volatility in our portfolios.

Question: Who is managing my money?

Answer: There are several people involved in the process. Our Investment Committee (Michael Leonetti, Deborah Feldman, Craig Johnson, Matt Varner) determines the strategic allocation (i.e. what the asset allocation targets of all managed portfolios will be). The Committee determines how the equities in a portfolio will be invested, first by cap size - large cap, mid cap, small cap; then by breaking down cap size by value and growth stocks. The Committee also decides if alternative investments will be utilized in the allocation (e.g. commodities, gold, real estate, etc.) and the percentage allocated to international stock.

If you have a Privately Managed Portfolio, Craig Johnson and Matt Varner are the portfolio managers primarily responsible for the research and selection of the individual stocks and bonds that appear in the strategic portfolio allocations created by the Investment Committee. The portfolio managers also provide technical analysis and daily execution of investment strategies.

If you have a STAR portfolio, the Investment Committee performs the due diligence on the mutual funds, exchange traded funds and fixed income investments that appear in the strategic portfolio allocation. 

Question: Do you work with our accountant, attorney, banker, insurance people, etc?
Answer: With your permission, we will always work with your other advisors. In fact, we strongly advise permitting us to work as a team on your behalf. Allowing us to speak with your advisors directly and/or provide data and information assists in seamless handling of your financial needs. If you are in need of another advisor specialist, we will be happy to refer you to someone. Let us stress again we initiate these relationships specifically upon permission from you.
Question: Can I trade in my investment account with you?
Answer: We do not recommend that you trade in your managed investment account. We will, however, be happy to open a trading account for you to make your own investment selections and trades. We can even arrange for this service to be conducted on-line, if desired.
Question: With whom will I be working?
Answer: You work directly with our financial planning professionals. You will be assigned to a Wealth Management Team consisting of a Wealth Manager and a Client Service Representative. Our professionals keep detailed notes on all conversations and meetings, and all paperwork sent to you or received is saved in our system. Should you need to speak to someone right away and your team is unavailable, any other professional should be able to access enough information to help you.
Question: I am worried about privacy and confidentiality. What can I expect from you?
Answer: You can expect our firm to be equally concerned. We have instituted a privacy policy, listed on this Website, that directs our actions on a daily basis. Our recommended custodians and technology partners are equally committed to maintaining this confidentiality. We will not divulge any information to a third party unless you have given us express consent.
Question: Will you hold my money?
Answer: No. We are registered investment advisors, not brokers. We hold no client assets. The only funds we receive from you are management fees. We recommend the establishment of accounts at major, low-expense brokerage firms. We have negotiated institutional pricing for you at these firms.
Question: How are you compensated?

Answer: Leonetti & Associates is a fee-only investment advisor. We are compensated solely by fees paid by our clients directly to our firm. We receive no commissions or referral fees. As an independent, fee-only advisor, L&A stands apart in an industry where conflicts of interest are the norm - not the exception. Our independent status allows our advisors to remain impartial with their advice. We accrue no benefits for brokerage services, commissions, finder fees, or product sales of any kind. Thus, our advisors are free to focus strictly on developing and implementing financial plans and disciplined investment strategies.

We charge an initial deposit fee when financial planning services are desired, with $500 due upon the execution of the contract. The remainder is due as invoiced.

We charge an annual fee based on Assets Under Management, billed quarterly in advance. These fees are 1.25% for the first $500,000 of assets and decline on amounts over that amount. You can elect to terminate the relationship at any point in the future and have the fees for the remainder of the quarter refunded back. As a result, we have to prove our value every day.

Question: How often do you review my investments and my account?
Answer: We review holdings in your account on a daily basis and allocations on a monthly cycle.
Question: How often will you meet with me?
Answer: We will meet with you as often as necessary, but recommend that we meet at least annually. We ask for you to contact us if there are any changes in your financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you want to add or modify any reasonable restriction to our investment advisory services. We also provide you with comprehensive customized quarterly reports. Finally, we send out frequent emails and letters with news and investment thoughts. The goal is to educate you and provide you with complete information so that you can make informed decisions.
Question: How often will I get reports from you?
Answer: Although custodians send reports with transactions and other information on a monthly basis, we provide a comprehensive customized quarterly report, along with updated reports at anytime subject to your request.
Question: What do you provide for me at year-end for tax purposes?
Answer: Our firm downloads daily complete data regarding all of the accounts under our discretionary management. Utilizing sophisticated, professional portfolio management software enables us to continually monitor your transactions and tax basis. Consequently, we can provide you, and/or your tax preparer, detailed tax-related information (e.g. realized and unrealized short-and long-term gains and/or losses, tax lot accounting, taxable and tax free income) at any time. However, please refer to your 1099 forms for accurate tax return reporting.  The information contained in the summary report we provide is prepared from records Leonetti & Associates, LLC considers to be reliable. It is not intended to be, and should not be used as, a substitute for monthly transaction statements that you receive on a regular basis from your custodian.  Please compare the data on this document carefully with your monthly statements to verify its accuracy.  We encourage you to consult your own accountants or other advisors with respect to any tax questions.  However, the custodian of the assets is the official record keeper.
Question: How is wealth management different from money management?

Answer: Money managers are typically unaware of one’s individual financial planning goals and objectives. Money management usually involves managing a portfolio to a specific investment style with a suitable benchmark for whatever style the money manager specializes in. Most investors would allocate only a portion of their wealth to any single money manager and typically retain the responsibility for decisions about overall asset allocation and manager selection.

By contrast, wealth management is the process of coordinating your financial planning goals and objectives with a portfolio strategy best suited for you to achieve them. You typically allocate the majority of your assets to a wealth manager and delegate the responsibility of ongoing asset allocation and manager selection decisions to the wealth manager. In addition, wealth managers typically advise on all aspects of your financial plan.

Question: What is personal financial planning?

Answer: Personal financial planning is the process of making decisions about all areas of your financial life. The process includes gathering information about your assets, liabilities, spending and income; discussing and identifying goals and objectives; modeling and presenting financial solutions; then implementing the plan using either tax and legal strategies or investment and risk management recommendations.

The financial planning process is an art and a science where a good planner can literally lead a client through a process of self-discovery about how they feel about money and what they want to accomplish with their lives. We believe that excellent financial planning is just as much about people and families as it is about computer modeling and the latest tax strategies.

Question: Why should I use a financial planner?
Answer: A financial planner is a trusted counselor who can help guide you through making good decisions in what can be a complicated financial world. Excellent planners can help you to be more objective and less emotional in your decision-making process. They can also help educate you about tax and legal issues that can be difficult to understand. A comprehensive financial plan involves expertise in a variety of disciplines that most individuals probably do not have the time to properly research.
Question: What can I expect from my relationship with Leonetti & Associates?

Answer: First, you can expect us to get to know you well. We strive to learn as much as possible about you because it helps us to guide you toward better financial decisions.

Second, you can expect attention to detail, prompt response to letters, calls and emails, clear reasoning for our recommendations, diligent execution of the tasks at hand, and confidentiality in all matters.

Finally, you can expect absolute honesty and integrity in every meeting, every observation, and every recommendation we make. You can and should expect us to adhere to the highest ethical and professional standards in every aspect of our relationship.

Question: What are the benefits of wealth management?
Answer: Wealth management is a comprehensive, ongoing service that provides you with the best chance of achieving your goals. Some of the benefits that clients have described are a greater sense of control over their finances, avoidance of financial mistakes, increased confidence that they will reach their goals, peace of mind and more time to do what is important to them. By delegating financial details to a financial planner, clients have more time for doing those things that only they can do – pursuing hobbies, spending time with their children, developing a career, volunteering, playing sports, and many other activities.
Question: How do I get started?
Answer: To get started, please contact L&A by phone or email. You may also print and complete the Client Profile and Risk Profile questionnaires and fax or mail them to us. There is no charge for the initial meeting.

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