Cela Advisors | Our President

FREQUENTLY ASKED QUESTIONS

GETTING STARTED

What is the minimum size portfolio needed to get started?
Will you give me advice on all my assets even if you are not managing them?
Will you accept stocks, bonds, and mutual funds that I transfer in?
Is Charles Schwab & Co., Inc. the only custodian available to Clients for managed accounts?
Is Cela Advisors affiliated with Charles Schwab & Co., Inc.?
Will I have Internet access to my account?
How often do I receive statements and reports?
Does anyone at Cela Advisors have access to my money?
Are my accounts insured from theft, fraud, errors, omissions and insolvency?
How is my privacy protected?
What does it mean to be a Registered Investment Advisor (RIA)?
What does it mean to be a Certified Financial Planner®
How does an RIA differ from a brokerage firm?
Is there a cost to terminate the agreement if I am not satisfied with your services?

INVESTMENT STRATEGY FOR MANAGED ACCOUNTS:

Am I involved in the day-to-day management decisions?
Can I receive regular periodic withdrawals from my portfolio?
How will I know a trade has occurred in my account?
Do investments differ from Client to Client?
How do you select one fund over another?
Do you practice good tax management in taxable portfolios?
What does Cela Advisor’s investment performance look like? Do you publish the past performance of your strategies?

What is the minimum size portfolio needed to get started?

We have no minimum portfolio size for financial planning services. Financial planning services may be charged on a per-project basis, or monthly retainer. Such services may include reviewing and selecting investments in your employer’s 401k plan, insurance review, estate planning (wills and trusts), asset protection (maximizing use of creditor exemptions), etc. For Investment Management services, however, there is a $500 per quarter minimum fee per relationship. As such, $200,000 is the minimum client relationship to achieve the $500 fee at 1% per annum.

Will you give me advice on all my assets even if you are not managing them?

Yes, if our agreement is for Financial Planning services rather than Investment Management Services, we will advise you regarding your management of your assets, including advising on corporate stock purchase and stock option plans, 529 college savings plans, variable and fixed annuities, or any type of insurance. For our Investment Management Services, your company-sponsored 401(k), pension, profit sharing, 403(b), deferred compensation, and other plans administered by present employers will be incorporated into the overall portfolio design and considered in arriving at your Investment Policy Statement. For plans held with former employers, it is usually more beneficial to roll those assets to an IRA where they can be more fully diversified, managed, and monitored.

What do I do if I have mutual funds or other securities that I want to keep?

Any investment that you currently own and want to keep can be noted and included on your quarterly statement, but it will be listed separately under non-managed assets. You can maintain those assets with their current custodian, or we can help you set up a non-managed account at Charles Schwab & Co., Inc.; however we will not take responsibility for the account or oversee the assets in the account.

4) Is Charles Schwab & Co., Inc. the only custodian available to Clients?

Yes. Charles Schwab & Co., Inc. has been selected by Cela Advisors as Cela Advisors’ primary custodian for managed accounts. (Clients are free to select another brokerage firm for assets not managed by Cela Advisors). A custodian holds the securities and cash and facilitates trading activities. Cela Advisors has selected Charles Schwab & Co., Inc. as custodian because of their commitment to client service, low trading cost, and a dedication to operational efficiency. Our management fees are kept low because of the operational efficiency created by having only one custodian for managed accounts.

Is Cela Advisors affiliated with Charles Schwab & Co., Inc.?

No. Cela Advisors is not affiliated with Charles Schwab & Co., Inc., nor are we compensated by that company in any way through fees, commission, or incentives. In the spirit of full disclosure, our firm is supplied necessary software that allows our in-house portfolio management system to work efficiently and cleanly with Charles Schwab & Co., Inc.’s back-office operations and trading desks. The same software is available to all investment advisors that custody at Charles Schwab & Co., Inc.

Will I have Internet access to my account?

Yes. Free Internet access is available to Clients through a special Charles Schwab & Co., Inc. website 24 hours per day, 7 days per week, which can be accessed separately or through the Cela Advisor’s website. The website also is the source for immediate information on account activity and provides you with many reports including year-end tax information.

How often do I receive statements and reports?

Charles Schwab & Co., Inc. sends monthly statements to all clients for all accounts. These statements show account balances, trades, cash flows, and unrealized gains. Statements are available in paper as well as through email. In addition, Cela Advisors will send a detailed performance report each quarter that compare your portfolio’s performance to a series of relevant market indexes.

Is there a cost to terminate the agreement if I am not satisfied with your services?

No, either party can terminate the Agreement at any time and for any reason. There are no termination charges. A final invoice will be drafted based on the services provided to date if the agreement was for Financial Planning, or based on the number of days during the current quarter that the account was under management for Investment Management services.

Does anyone at Cela Advisors have access to my money?

No one at Cela Advisors has access to the money in your account. We have limited power of attorney to do three things in a Client account; 1) trade securities with discretion, 2) request that Charles Schwab & Co., Inc. send a check to a Client directly or to a Client's bank, and 3) be paid a quarterly management fee from the account based on the contract rate. We have no other access or authority.

Are my accounts insured from theft, fraud, errors, omissions and insolvency?

All accounts are insured on multiple levels. Charles Schwab & Co., Inc. coverage is extensive and is explained in a public brochure that is available to all investors. Cela Advisors also carries Errors and Omissions insurance.

How is my privacy protected?

Cela Advisors complies with all privacy laws affecting financial institutions, and you will receive a copy of our written Privacy Statement that outlines this responsibility in detail. Those standards are reviewed regularly to ensure they cover all forms of communication. Briefly, we will not release any information to any person who is not directly named on your account unless we have your permission to do so, with the exception of legal and regulatory authorities. Furthermore, as a Registered Investment Advisor (RIA), we work with tight professional disciplines within a well-defined regulatory environment.

What does it mean to be a Registered Investment Advisor (RIA)?

Cela Advisors, LLC is a SEC registered advisory firm. All professional investment management companies are required to register with the U.S. Securities and Exchange Commission (SEC) and/or the State(s) in which the firm conducts business activities. That registration is called an ADV, and it is available in two parts. ADV Part I is basic information about the advisory business and ADV Part II explains our services and fees. Both of these documents are available by requesting a copy from us or from the SEC website www.adviserinfo.sec.gov.

How does an RIA differ from a brokerage firm?

RIAs are in the investment management business and we are regulated by the Investment Advisors Act of 1940. In contrast, brokerage firms are primarily in the financial product sales and distribution business and they are regulated by the Securities Act of 1933 as well as other laws. As an RIA under the 1940s Act, we have a higher level of fiduciary responsibility than brokerage firms. We are required by law to work in our client’s best interest. Our fee is based on assets under management (AUM) rather than the brokerage model that is tied to the sale and distribution of financial products.

What does it mean to be a Certified Financial Planner™ (CFP®)?

The Certified Financial Planner Board of Standards, Inc. (CFP Board) is a non-profit organization acting in the public interest by fostering professional standards in personal financial planning through its setting and enforcement of the education, examination, experience, ethics and other requirements for CFP® certification. CFP Board awards individuals who successfully complete initial and ongoing certification requirements the right to use the CFP® and CERTIFIED FINANCIAL PLANNER™marks. Attaining CFP® certification is a highly respected professional achievement for those who work within the financial services industry and an achievement with meaningful benefits for a CFP® certificant’s practice and clients. More information is available at www.cfp-board.org.

Am I involved in the day-to-day management decisions?

Your input is vital during the investment planning phase and will determine your risk tolerance and investment time horizon. Our recommendations will be based on your preferences and specific needs. Your portfolio will follow an individual asset allocation that is decided by us, jointly, in advance, and outlined in a written Investment Policy Statement. If you wish to change the asset allocation because of a change in your situation, an amendment to the Investment Policy will be initiated. On a day-to-day basis, however, Cela Advisors has discretion over all accounts and manages the portfolios in accordance with each Client’s Investment Policy Statement, so that the Clients are not involved in the day-to-day decision making.

How will I know a trade has occurred in my account?

Charles Schwab & Co., Inc. will notify you by mail or email each time Cela Advisors makes a trade in your account. All trades are conducted in accordance with your written Investment Policy Statement. You do not need to contact anyone when you see a trade has been made.

Can I receive regular periodic withdrawals from my portfolio?

Yes. A goal of many clients is to receive consistent income from their investments throughout retirement, while maintaining the growth of their portfolio. Another is to plan for occasional distributions from funds obtained through windfalls or inheritances. These amounts can be transferred from your managed accounts directly to your checking account.

Do investments differ from Client to Client?

Many mutual funds, index funds and ETFs are used in all portfolios although the percentage allocated to an asset class may differ depending on the needs of each client. In addition, taxes may affect which investments are selected for taxable accounts. If a portfolio is made up of several different accounts, such as multiple trust accounts, then there will likely be different funds allocated to the different accounts. That reduces transaction costs and increases the long-term return.

How do you select one fund over another?

We specialize in employing boutique best-of-breed portfolio managers in U.S. and foreign securities, bonds, and alternative asset classes. No two mutual funds are created equal and no two index funds or ETFs are managed in exactly the same way. We analyze the underlying structure of each fund to find the ones that best represent each asset class in a portfolio.

Do you practice good tax management in taxable portfolios?

Taxes are an investing expense and we use several techniques to help control taxable events. First, the fixed income securities selected for a high tax bracket Client consist of tax-free bonds rather than taxable bonds. Second, there are no REIT funds in a taxable account because they distribute a large amount of ordinary income each year. Third, we practice tax-loss harvesting through tax-swapping. This practice generates tax losses that can be used to offset gains and other income.

What does Cela Advisor’s investment performance look like? Do you publish your past performance of your strategies?

Since every client has different goals and time horizons, we do not have a “typical” client portfolio. Instead, each portfolio reflects the time horizon, return objectives, risk tolerance and personal goals of the owner. Each Client receives a detailed quarterly report outlining their performance. We do not publish that past performance on our website because there are many different strategies used in Client portfolios.