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. As 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.