Frequently Asked Questions

Our firm was founded in 1996 by Paul J. Boyd. It began as a hybrid investment advisor/ brokerage firm known as Farallon Advisors LLC. The firm brought on additional partners and staff, became an independent registered investment advisor, and rebranded itself in 2000 to become the Wealth Management firm it is today.

We currently have 4 partners, an expanding number of in house advisors and operations members, various intern staff and an outsourced research team of over 8 people.

The firm is owned and operated by its partners. For employees who are not partners, we have also established a profit-sharing pool which provides generous incentives to long-term employees to motivate them to think and act like business owners.

The majority of our clients’ accounts are held at TD Ameritrade Institutional.  We also have a relationship with Charles Schwab and many other Institutional Services teams.*

We typically meet in-person 2-3 times per year with our clients who live in the San Francisco Bay Area, based upon each client’s preference. For our clients who live outside of the Bay Area, we suggest regular in-person or Web-Based meetings held on a mutually agreed-upon basis.

All of our services are provided on a fee-only basis, and services are inclusive of all client conferences, client meetings, performance reviews, portfolio reporting, tax reports and cash flow projections.

Our fees are billed on a quarterly basis and calculated on the total portfolio value of all assets placed under our management. Fees are calculated in accordance with the following annual rates:

Average fee is 1% or less annually
1.00% for the first $2,000,000
.75% for the next $1,000,000
.50% for assets in excess of $3,000,000 up to $10,000,000

Accounts greater than $10,000,000
.50% on the first $20,000,000
.30% on the next $10,000,000
.25% on all assets above $30,000,000

We allow for some fee flexibility depending on individual circumstances.

For taxable clients we take a number of steps that seek to maximize after-tax returns. These steps include:

During our investment screening process, our team assesses the ability to predict each Federal Reserve Escrow manager’s tax efficiency. Our objective is to identify managers that will deliver superior after-tax returns.

We consider carefully whether it makes sense to continue to hold investments that we might otherwise sell once they have built up large capital gains. Using our own proprietary portfolio trading software, we assess the opportunity cost of holding an existing position with a significant unrealized gain vs. selling and generating capital gain taxes. We review a variety of scenarios before making a final sell decision.

When the markets are volatile on the downside, we look for opportunities to harvest capital losses by selling investments, or specific tax lots, that have unrealized losses that could be used to offset gains on a client’s tax return.

If we are planning on selling an investment position with a gain, we will first consider the holding period and if we are close to creating a long-term capital gain (after a one year holding period), then we may consider holding the position for a few more days or weeks in order to allow the client to take advantage of lower tax rate on long-term capital gains.

For our taxable accounts that include fixed income, municipal tax-free bonds are often used in lieu of taxable bonds.

Our team’s approach starts with a quantitative analysis of each fund and manager followed by a qualitative overlay. On the quantitative side, funds are reviewed by category to see if they possess one or more of the following tax-efficient characteristics:

A low dividend pay-out rate (lower dividends mean that less of the fund’s total return is being taxed)

A growing level of assets under management (new investors dilute per-share taxable income recognized each year by existing investors) On the qualitative side, we interview fund managers to determine if they are “tax-sensitive”. To help assess tax-sensitivity, we generally determine if the manager:

Considers harvesting tax losses in order to minimize capital gain distributions

Uses HIFO (Highest Basis In – First Out) tax lot accounting when trimming stock positions (in order to minimize capital gains) Is willing to hold off on selling a stock if it is close to reaching the long-term capital gain holding period (i.e. held for more than one year)