The Validea Legends Advisor is an automated advisory service that utilizes technology to build a custom portfolio for you using a variety of different investment classes including stocks, bonds, real assets, real estate and private equity (via publicly traded private equity firms). Upon opening an account with us, you will be asked a series of questions to help us identify your goals and tolerance for risk. The answers to those questions will be used to build a portfolio that fit your specific needs. The equity portion of all our allocations is built using a combination of our proprietary guru-based system, which selects stocks using the proven strategies of Market Legends, and actual guru holdings, via a position in Berkshire Hathaway.
Upon opening your account, you will complete an online questionnaire that analyzes your investment goals and your tolerance for risk. Our computerized allocation system will then calculate a score based on your responses and assign you to one of our five portfolios, which range from Conservative to Ultra Aggressive. Before your portfolio is invested, one of our consultants will manually review your answers to ensure that the portfolio that our computerized system has assigned you to is appropriate given your goals and risk tolerance. If we would like to suggest any changes as a result of that review, we will contact you directly and schedule a personalized investment consultation. If you require additional assistance in building your investment allocation or do not feel the portfolio selected by our computerized system is appropriate, you can always speak to one of our financial advisors free of charge.
The holdings in each of our 5 investment allocations were selected by our investment advisors and not via a computerized system. Your personal account allocation is initially determined by a computerized system using the responses you provide to our risk questionnaire. That allocation is also reviewed by one of our consultants prior to your money being invested to ensure its suitability.
No, we believe that adhering to an investment strategy through the ups and downs of the market is the key to producing the best long-term returns. So we will not change our allocations or move away from risky asset classes during market downturns. That is why it is essential to setup an initial allocation that meets your risk tolerance and that you can adhere to during adverse periods. All our allocations do have exposure to our market rotation system. This system will bring a portion of the equity exposure in your portfolio to cash when certain technical market conditions are met. The goal of this system is to limit losses during major bear markets, however, it does not work in all bear market periods.
Over time, allocations among asset classes in your accounts will move away from their target weights based on market movement. Eventually, this will require a portfolio rebalancing to bring each asset class back to its target weight. We review all our accounts periodically to determine whether rebalancing is appropriate. In deciding when to rebalance each account, we use a variety of factors, including how far each asset class has moved from its target allocation, the relative value of each asset class at the current time, and the tax implications of rebalancing (for taxable accounts). Asset class rebalancing is not performed on a preset schedule, but is instead performed as needed based on these factors.
On an infrequent basis, we may change the ETFs used within accounts if we believe that the change will allow us to more optimally achieve our investment goals. Some potential reasons for a change include risks and return potential, costs and fees, or the optimization of our investment strategy.
Our market rotation system will slowly reduce exposure to various asset classes when our technical criteria indicate that further losses may be likely. When the system's rules are trigerred, we will slowly reduce exposure to that asset class and raise cash. When the asset class begins to exhibit positive momentum again, we will return it to its target exposure. The goal of the system is not to avoid losses, but instead it seeks to limit losses during periods of significant decline. In our historical testing, the system has helped to limit volatility within our portfolios. The market rotation system is applied to a portion of the equity positions in our accounts (the portion labeled market rotation) as well as our positions in real estate, private equity and real assets.
The management fee for the Validea Legends Advisor is 0.25%. Total fees (including commissions and fees for the ETFs we invest in) range from 0.52% for our conservative option to 0.80% for our most aggressive option. When selecting ETFs to use for the Validea Legends Advisor, we have focused on funds that we believe deliver the best value at a reasonable fee level. We have also incorporated individual stocks, including Berkshire Hathaway, into our investment allocation to help limit fees.
Validea Capital is the advisor to the Validea Market Legends ETF. This ETF is utilized in the Validea Legends Advisor allocations at various weights. The ETF charges a management fee, which in turn is payable to Validea Capital. This management fee is included in the total cost estimates for the Validea Legends Advisor listed above. Validea Capital does not receive any other compensation from any of the other funds or individual stocks held in the allocations.
All accounts are held at a third party custodian, FOLIOfn Investments. We have worked with FOLIOfn since 2005 and they also house all our high net worth client managed accounts. When you open your account with the Validea Legends Advisor, you will be transferred to FOLIOfn's website to complete the account opening process and your risk assessment. You will then be allocated to one of our investment models based on your goals and risk tolerance. After opening your account, you will have real-time access to your holdings and performance via the FOLIOfn website.
Validea Capital has been managing money for high net worth clients since 2005. We launched the Validea Legends Advisor in 2017.
We manage any type of account that is typically accepted by online brokers. These include taxable and retirement accounts, including regular IRAs, rollover IRAs and SEP IRAs, as well as trusts and other account types.
Our minimum initial account size is $25,000. Multiple accounts can be combined to reach the minimum.
As part of the account opening process, you will be provided with instructions to fund your account. This can be done via EFT, wire, check or the transfer of an existing brokerage account. You will also have the ability to withdraw funds from your account via the same methods (wire, ETF, check or transfer).
Yes, unlike other Robo Advisors that charge a fee to speak to one of their investment consultants, access to our advisors is always free. Once you begin the account opening process, you will be assigned a representative and provided with their direct contact information. If you have any questions during the process or once you become a client, you can always pick up the phone and speak to one of our representatives.
All the personal information you provide to open your account is sent by you directly to our custodian, FOLIOfn Investments. FOLIOfn uses the latest technology to ensure your information is safe, including secure web transmission and the latest encryption standards.
Our 0.25% management fee is directly deducted from your account at the end of each quarter. The fees for the etfs we use within the account are deducted daily from the fund's net asset value.
Yes, you can change your allocation at any time by contacting us directly. Upon request, we are always happy to re-review your risk tolerance and investment goals to make sure that your current investment allocation is still suitable for you. As part of our communication schedule, we also will reach out to you on a regular basis to ensure nothing has changed in your personal circumstances that would necessitate an account allocation change. If anything in your personal or financial situation (i.e. the loss of a job, a health related emergency) changes and you feel that your allocation should be reviewed, please contact us as soon as possible.
No, you can close your account at any time by contacting FOLIOfn Investments or Validea Capital.
You will receive monthly statements from our account custodian, FOLIOfn Investments.
You can track your performance at any time by logging into your account at FOLIOfn. Performance tracking is provided since inception and over a variety of other periods and performance can be compared to major indices.
Yes, you will receive a year-end 1099 and will also be able to view and download detailed gain and loss data directly from your account.
When you initially open your account, you will be invested in exact accordance with the target percentages of the model you are allocated to. Over time, your account will stray from these allocations based on market movement and you will be brought back to target allocations when those deviations reach a large enough level.
All of our holdings are in highly liquid stocks and ETFs.
As a client, you will receive our quarterly client letter and performance update. If you require more frequent communication, you can reach out to your investment consultant at any time.
Yes, our private equity model invests in publicly traded private equity companies, most of which provide annual K1 tax forms. If you do not wish to receive these forms, let us know and we can remove the private equity model from your investment allocation.