At Barnett & Company we
do not pool client funds. Portfolios are individually
crafted to address the goals, time horizon,
risk tolerance and tax circumstances of each
unique client. If we were a clothing company
instead of an investment firm, we would be a
custom tailor as opposed to a mass merchandiser.
We assign to each of our clients a specific
portfolio manager who is also that individual’s
primary contact with our firm, thereby avoiding
any confusion over where the responsibility
lies for a portfolio’s management and
performance. While our staff does screen, research
and distill potential investments into a current
list of recommended buys, only the manager of
each client’s account has the authority
to make a decision on what investments are made.
Barnett & Company’s focus is on marketable
securities such as stocks, bonds, and real estate
investment trusts, and for smaller accounts
and unique situations, exchange traded funds
and mutual funds. We generally shy away from
investments that cannot be priced by the marketplace,
since marketplace pricing implies the ability
to sell an investment, if need be, with minimal
transaction costs. Far higher costs are associated
with the sale of less liquid investments, such
as hedge funds partnerships and insurance products.
Lack of access to information about sales can
also jeopardize the objectivity of the valuation
of a potential investment.
Rather than taking custody of our clients’
assets, Barnett & Company works with third-party
brokerage firms and trust companies that hold
the assets and value them independently. We
will work with any firm our client chooses.
If he or she has no preference, we will provide
a list of firms with their relative costs and
attributes.
Separating custody from management and making
them independent of each other helps further
safeguard the clients’ assets. Asset custodians
send out their own monthly or, in some cases,
quarterly statements, which the client can use
to reconcile an account with the firm’s
own reports. In contrast, a company that performs
both investment and custody functions fails
to provide its clients with such an external
check in verifying account information.
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