Our management fees are subject to discounts for sizable investments in any of our
investment programs, or when our investment strategies and programs are combined.
Please Inquire.
8) How does Weiss Capital Management, Inc. differ from a traditional stockbroker?
What is the difference between a registered investment advisor and a broker/dealer?
Weiss Capital Management, Inc., is a "fee-only" registered investment advisor. As
an asset management firm, we are concerned with the growth of your portfolio and
the protection of your assets. We are not a sales organization. We work directly
for you, the client, and receive no compensation from any other source. A stockbroker
is a sales person, who is generally compensated by commissions relating to trading
activity by generating the sale/purchase of a security through their firm.
9) If I come over to Weiss Capital Management, Inc. and open a managed account,
will I be able to trade a portion of my own account?
No. When you hire us to manage your assets, we make all the trades on your behalf.
We are a registered investment advisor, not a brokerage firm. Your account is managed
by us according to the program we have mutually agreed upon, and according to any
specific modifications you have requested. Should you wish to personally trade a
portion of your assets, you may wish to retain that portion at a brokerage firm,
or establish an outside account at a discount broker to make any self-directed transactions.
10) What about my existing portfolio? What will you do with it?
We will review your current holdings with you prior to transferring any securities
over to the custodian (who holds your assets) for safekeeping. Our portfolio managers
will determine which securities or mutual funds we may wish to hold or sell. If
you own securities that you wish to specifically keep for tax, income or other purposes,
you must let us know. We will make every effort to accommodate your request. Keep
in mind that many securities and mutual funds are not transferable between custodians
and must be liquidated beforehand. This especially applies to proprietary products
and funds. We will discuss these holdings with you and give you our firm’s recommendation.
The fee associated with this review and monitoring for this type of account is 1%.
11) Will you pay any account termination and/or transfer fees charged by my
existing firm if I decide to move my account to Weiss?
Those fees (if levied) would be your responsibility but, typically, they are nominal.
12) Weiss Capital Management, Inc. is known as a professional and conservative
money manager that is concerned with keeping its clients' money "safe." Can I lose
money investing with you?
Yes, you can. Investing is not an exact science. All investing – no matter how conservative
- involves predicting the future and risk of loss. Sometimes you win and sometimes
you lose. Winning is never a problem for any investor, but losses certainly can
be. That's why we encourage all investors to honestly and realistically examine
their personal tolerance for loss and communicate that to their Weiss financial
advisor before embarking on any investment strategy, because losses can and do occur.
13) Will I be adversely affected if my Weiss investment account falls below
the minimum amount?
Generally, no. Our account minimums are established as strategy entry levels that
allow us to adequately pursue a particular investment strategy. If the balance of
your account drops below the minimum as a result of a change in market value or
because of a normal withdrawal of investment funds, this will not generally affect
the way your account is handled. Of course, if you make a sizable account withdrawal
that brings your account balance substantially below the minimum, this may indeed
impact our ability to properly pursue a particular strategy. Please speak with your
personal financial advisor regarding the details.
14) How long does it take to open or transfer my account to you?
If you wire transfer funds in to us, it's usually only a day or two. If you are
opening your account with a check, it usually takes about a week. If you are transferring
your account(s) in from another firm, that can take typically anywhere from 1 to
6 weeks, depending on your accounts' complexity and the method of transfer chosen.
If you are funding your account with the proceeds of a 401(k) or other retirement
plan and need to first request and obtain a plan distribution, these situations
may take as long as a month or more, depending on the requirements and the efficiency
of the plan administrator.
15) What is the fastest, most efficient way for me to “fund” my new account
with you?
Funding is different than “opening” your account. Opening your account is the accurate
completion and timely submission of the new account paperwork and other related
documents to your account custodian. Funding is actually getting your money and/or
securities moved into your new account. There are many different ways to “fund”
your account. Depending on the method you choose determines how long this process
takes. The most common methods are listed here in order of the fastest to the slowest:
1. Client wires funds directly to us.
2. Client sends a personal check to us, made payable to
the custodian, “Fidelity Investments”.
3. Client requests current broker to liquidate and wire
proceeds to us.
4. We initiate (instruct your current broker) with your
permission, to transfer your entire account in Kind (just the way it is) to us,
or to either fully or partially liquidate your account or specific holdings and
transfer the proceeds to us, or to transfer specific securities without selling
them (partial transfer) to us. The exception: Proprietary products (private labeled)
can NOT transfer.
Your Weiss financial advisor will suggest the method that most quickly accomplishes
this for you based on your current situation.
16) What are the fees for your services?
Our income is derived from individual client account management fees. However, as
a by-product of actively managing your portfolio, and thereby engaging in securities
transactions in your account, you may, in addition to our fee, pay transaction commissions
to brokers to facilitate these trades. Through negotiation, and by virtue of our
volume of business, we have arranged reduced commission rates and institutional
trading privileges for our clients' accounts. Weiss Capital Management, Inc. does
not share in or receive any portion of these commissions. Our management fees range
from 0.50% to 2.00%, depending on the type of program selected and the amount invested,
and can be lower for larger accounts and/or the investment program selected. At
this time, Weiss Capital Management, Inc. does not take any action or charge higher
or special fees for accounts that fall below their respective minimum requirements.
We do, however, reserve the right to modify this current policy going forward, should
we find it necessary to do so.
17) If I need my assets for other purposes, is there a cancellation fee?
No. Weiss Capital Management, Inc. never loses sight of the fact that the assets
entrusted to our care are yours. If you have other pressing needs for the money
in your account we will help you get the money out of the account as quickly as
possible. There are no cancellation or redemption fees. We look forward to you re-opening
your account when circumstances have changed.
18) Will you notify me before you make trades in my account?
No, we will not. We make trades in each account according to the strategy on which
we agreed upon. Weiss Capital Management, Inc. is a discretionary money manager,
not a sales organization. It is our job to manage your investment portfolio based
upon information contained in the risk tolerance section of the Investment Advisory
Agreement. We seek to make the necessary moves to protect your assets and to achieve
an attractive return on your investment. We take the decision making out of your
hands, thereby alleviating you from this burden. You will, of course, receive trade
confirmations a few days after each transaction occurs.
19) Will I be advised as to the current market outlook and the performance of
my account?
Without a doubt. We believe communication is key to a long-term, successful relationship
with our clients. Consolidated statements showing all your account activity will
be sent to you monthly from the custodian. These statements will show the current
holdings, transactions in the previous month, and the value of your account. On
a timely basis we will also send you our newsletter, which will comment on current
market activity and offer some insight as to our outlook for the next few months.
And every January our custodian will send your 1099 tax reports to help facilitate
your tax filing.
20) If I would like to wire-transfer funds into, or to fund, my managed investment
account, what are the wiring instructions?
If your account custodian is Fidelity:
Chase Manhattan Bank (J. P. Morgan Chase & Co.)
One Chase Manhattan Plaza, New York City, NY 10004
ABA 021000021
For the Account at NFSC
Account # 066 196-221
FBO: Client Name
Client Account Number (Letters included, if applicable)
NOTE: All Wires Must Be In U.S. Dollars
21) Who maintains possession of my assets and what protection do I have?
Weiss Capital Management, Inc. will supervise and manage your account held by our
custodian firm, Fidelity Investments. Your assets are held in an account registered
and accessible by you. In fact, we will not even accept checks made payable to Weiss
Capital Management, Inc. All checks must be made payable to Fidelity Investments.
The Limited Power of Attorney extended to us as an investment advisor allows trading
authorization only, but at no time do we ever have possession or custody of your
investments. Your account at Fidelity Investments is protected through the Security
Investors Protection Corporation ("SIPC"). SIPC protects your assets, up to: $100,000
in cash, $400,000 in securities, for a total of $500,000 maximum. You also have
excess SIPC insurance coverage, provided by Customer Asset Protection Company (CAPCO),
a licensed New York insurance company that has received an A+ credit and financial
strength rating from Standard & Poor's®, to provide you with total net
equity protection on the remainder of your assets. It does not protect against losses
from the rise and fall in the market value of investments.
22) What other rights, laws, or protection do I have as an investor?
Besides the standard SIPC protection and the additional supplemental insurance coverage
provided by Fidelity Investments, there are a number of federal, regulatory, self-regulatory
and state securities agencies that serve and protect the interest of investors.
"Insurance" per se for investment fraud does not exist in the U.S. but, as an investor
you have many rights and recourses provided to you by the Federal Trade Commission,
Federal Bureau of Investigation, U.S. Securities and Exchange Commission, NASD Regulation,
Inc. Stock Exchanges, and State securities regulators. Additionally there are many
consumer groups and other concerned parties that help and educate investors such
as the National Fraud Information Center, Investor Protection Trust, Alliance for
Investor Education, and the Securities Industry Association, to name a few.
23) Can I have multiple investment accounts with you?
Yes, that is quite common. Many of our clients have an individual account, a joint
account with their spouse, and IRA's as well. We can also set up UGMA or UTMA custodial
accounts for children, college education funds, and trust accounts. On some of the
smaller sized accounts, however, the investment choices are limited. We do require
a minimum account size before an account is open, so at least one of the accounts
needs to satisfy the minimum.
24) When determining my holding period for sales, do I use trade date or settlement
date?
The IRS requires you to use trade date to determine your holding period. The "Date
of Sale" on Form 1099-B is the trade date for each sale. Your monthly account statement
however reports trades by settlement date, which is the date payment is due.
25) How am I taxed on mutual fund distributions?
Unlike dividends from individual securities, which are typically taxable in the
year the dividends are paid, mutual fund distributions are taxable based on the
record date of the distribution. For example, mutual fund distributions declared
as payable to shareholders of record in December 2002, and actually paid in January
2003, are taxable as 2002 distributions and reported on Form 1099-DIV (See below).
26) Why is there a difference between my Fidelity statements and what is reported
to the IRS?
Fidelity must adhere to IRS requirements when reporting on Forms 1099, which may
result in differences between what is on your monthly and quarterly statements and
what is reported to the IRS. For example, the IRS requires that transactions on
Form 1099-B be reported on a trade-date basis even though your statements reflect
sales on a settlement-date basis. Additionally, mutual fund distributions declared
as payable to shareholders of record in December 2002, and paid in January 2003,
are taxable as 2002 distributions and reported on Form 1099-DIV for the 2002 reporting
year (See above).
27) On my monthly statement from Fidelity, certain transactions are occasionally
foot-noted as “disallowed short-term loss”. What does that mean?
A disallowed short term loss refers to the sale of a security which was bought within
the last 30-days. A sale within 30-days of a purchase that resulted in a loss cannot
be used as a loss for offsetting taxes. Transactions of this nature are often referred
to as "wash sales". Fidelity puts this notation on their statements as a courtesy
reporting issue for clients. Clients may use alternate sale methods which may allow
these losses. Consult your tax advisor for specifics.
28) Who regulates Weiss Capital Management, Inc.?
WCM is an SEC Registered Investment Adviser, and as such must abide by all applicable
rules under the SEC Investment Advisers Act of 1940.
29) Do any of your investment trading strategies take into consideration either
the wash sale rules that disallow the deduction of short-term trading losses, the
declaration of and payment of income dividends or capital gains distributions, or
any tax consequences associated with buying and selling mutual fund or other shares?
No, they do not. In pursuing our technical trading strategies, like the
Weiss Bear Strategy or the Weiss Dynamic strategies, our Investment Team does NOT
take the following into consideration: (1) the potential for the generation of current
income through declaration of and payment of income dividends or capital gains distributions;
(2) the tax consequences of buying and selling shares; (3.) any IRS wash sale rules.
This is because these particular investment strategies strictly operate as purely price sensitive models – not tax efficient models - and operate independent
from, and without regard to, any incidental or resulting tax implications that may
occur, or may be generated by following a particular strategy.
30) Will I have to pay a penalty if I want to close my account?
No, there aren't any penalties assessed to your account upon closing. When you open
an account with us, we will enter into an Investment Advisory Agreement to actively
manage your account. This agreement will continue until terminated by either party.
However, if the request to close your account is received prior to the end of the
calendar quarter, our management fees will be based on a pro-rated basis after the
settlement of all transactions.
31) I subscribe to some of the option services and various newsletters that
are offered or published by your affiliate company, Weiss Research, Inc. Do you
pursue the same strategies and recommendations in my account at Weiss Capital Management,
Inc.?
No, we do not. Although we are both part of the Weiss Group, Inc., we are completely
separate companies. We do subscribe to the same general philosophy of money management,
but the actual techniques and investments employed in our strategies are different
from those set forth in the newsletters and options services.
32) How have your various investment strategies performed?
Performance history is available on all our managed investment programs. Each of
our investment program’s or strategy’s performance is tracked from the program's
inception, annually, quarterly, and year-to-date. Just ask your personal financial
advisor and they will provide you with the details.
33) What happens to my account when overall broad market conditions
change – bear/bull – inflation/deflation, etc.? Will you automatically adjust my
investment strategy?
Yes, we will - unless you advise us to do otherwise. One of the keys to investment
success is to be in the right type, or “class”, of assets and investment vehicles
in any particular market environment. Simply stated, certain investments perform
differently during different market conditions. Often, the very same investments
and techniques that made you money in a bull market will lose you money in a bear
market, and vice versa. Different markets, as well as developing deflationary or
inflationary conditions, require different strategies to be successful. Our investment
strategies are designed to function under certain broad market conditions and, when
those conditions change, the appropriate investment strategy (or mix) will need
to be changed or adjusted. When we feel that a change is appropriate, we will adjust
your investment strategy accordingly – no charge. However, the strategy or mix we
move you into may result in a higher or lower management fee, depending on the new
strategy or combination employed. Rest assured, any strategy change that may take
place in your account will always be done within your personal stated risk tolerance
parameters.
34) Do you offer financial planning, estate planning, or tax advice?
No. We are professional money managers. We understand the major issues involved
in financial planning, tax and estate planning, and we can give you general guidance,
however, we are not attorneys or licensed to give tax advice in those areas. It
is wise to seek specific licensed professional counsel in those subjects.
35) I'm thinking of opening accounts in several of your investment strategies.
How are those fees calculated?
Our fees vary, depending on the specific investment strategy chosen. Each of our
strategies has its own fee. The fees charged for each of our strategies generally
depend on the amount and type of work involved in managing the particular strategy.
There are also fee discounts available for large personal or institutional accounts.
The amount of the discount depends on the size of those accounts and the strategy
selected.
36) Are your investment management fees tax deductible?
In some cases our fees may be tax deductible, however, you should consult with your
tax advisor for the details.
37) What is a registered investment advisor?
Under the Investment Advisors Act of 1940, an Investment Adviser means any person
who, for compensation, engages in the business of advising others, either directly
or through publications or writings, as to the value of securities or as to the
advisability of investing in, purchasing, or selling securities, or who, for compensation
and as part of a regular business, issues or promulgates analyses or reports concerning
securities. A Registered Investment Advisor is an entity that is registered with
the state and/or with the United States Securities and Exchange Commission as an
Investment Advisor under the Act of 1940, and must abide by the rules of the Act.
Weiss Capital Management, Inc. is an SEC registered investment adviser.
38) How, and when, is Weiss Capital Management, Inc. compensated?
Clients are assessed a management fee, in advance of each calendar quarter, that
is based on the market value of each program in their account at the end of the
previous calendar quarter. For example, an account invested in a program that is
valued at $100,000 on December 31, with a 1% management fee, would be charged $250
(1/4 of 1%) for the first quarter. The account will be charged the next quarter’s
fee based on the value of the account at the end of the previous quarter. The management
fee is deducted directly from your account and, as a courtesy, prior to debiting
your account for the fees due, you will receive a fee deduction notice in the mail.
The fee deduction will appear on your monthly statement in the month it is deducted.
39) Can my management fee be deducted from my account, even though it is an
IRA?
Yes. Management fees paid directly from an IRA are not treated as distributions,
according to the IRS. Most clients prefer the convenience of having our fees deducted
directly from their IRA accounts. Again, the option of making payment by personal
check is available by request, if you prefer.
40) What if my financial or investment needs or objectives change?
If you feel that your investment objectives or your risk preferences have changed,
please notify us and we will make the appropriate adjustments to your portfolio
strategy. Also, it is important that you do let us know right away about any major
changes in your life that might affect your investments or financial needs, such
as divorce, change or loss of your job, a health crisis, or a new major financial
obligation of some sort.
41) How much money does Weiss Capital Management, Inc. currently manage?
As of mid-year 2005, we manage in excess of $400 million in assets.
42) One of my needs is for monthly income and/or to satisfy my IRS minimum required
IRA distributions (MRD's). Can you send a check to me or wire money to my bank account
as needed?
Yes. We can easily set that up for you monthly, quarterly or annually, whichever
interval you prefer. We can also arrange systematic minimum required distributions
(MRD's) from your Regular IRA's under IRS Regulation 72(t). In most cases, except
in the case of a wire transfer, there will be no cost to you for this service.
43) Do I have to pay you even if my investments lose money?
Yes you do. That's the way investment advisory and management works. We know some
investors would like to pay our fees only if they make money, but federal law prohibits
us from working on an incentive basis. It is actually illegal for investment advisors
to participate either in the losses or the profits of their clients. Of course,
we endeavor to see that your investments do not lose money, but in fact losses can,
and do, occur. Investing is unpredictable and although nobody likes the idea of
losing money, it goes along with the territory. Losses are no respecter of persons
– they happen every day to both amateur and professional investors alike. Consequently
paying investment advisory fees are not contingent on your account's investment
performance. Keep in mind though that our interests are the same as yours, because
as your assets grow, our fee grows along with them too.
44) I live thousands of miles away from your office in Florida. Can I still
do business with you?
Absolutely! We have clients all over the United States and internationally as well.
In fact, the majority of our clients live outside our area, and many of them have
never visited our offices. You can still get all the benefits of our services through
interaction by telephone, fax, regular mail, e-mail, and our website www.weisscapitalmanagement.net. Virtually all the forms
and applications you need to open or change an existing account are on our website
for your convenience.
45) Do you offer any aggressive money management strategies?
Yes, indeed. We offer several programs that seek above-market returns. Such returns
cannot be assured, of course, and we do our best to make sure each investor is aware
of the incremental risks inherent in seeking extraordinary returns. We have programs
available in several levels of aggressiveness, and after consulting with you we
will identify which one, if any, would be appropriate. We do not recommend that
any of these strategies make up the majority of any investor's portfolio. Issues
like tax efficiency, turnover, price volatility, and general suitability will be
discussed with you. Additionally, these investment strategies are best used in a
tax-deferred vehicle such as a Regular IRA, and even some of these can't be used
in IRA's because a margin account is required as a component of the strategy. Margin
accounts are not allowed in IRA's. The fact that any particular investment strategy
may be considered aggressive does not necessarily mean that it will be the most
productive for an investor. In fact, depending on market conditions, it may significantly
under perform a more conservative strategy.
46) Can I have duplicate statements sent to my accountant, trustees or other
interested parties?
Yes, we'll be glad to arrange that. We can also make sure your accountant gets any
year-end statements with tax information as well.
47) May I make withdrawals from my account(s), or may I be able to get money
out of my account quickly in case of an emergency?
Yes, of course. We can usually wire transfer money directly into your bank account
or issue you a check within 72 hours - excluding holidays, or barring some unforeseen
occurrence. Ideally, if you need to make a withdrawal, it would be very helpful
if you would notify us in advance so the requisite amount of cash is available.
Also, it is important to keep in mind that making unplanned withdrawals from your
account may hamper the ability of the portfolio manager in making investment decisions.
As a contingency, we recommend that you maintain a separate emergency fund, so that
we don't have to unexpectedly sell long-term investments that may create an unnecessary
loss in your account.
48) I own some stock and other investments that I would like to retain and I
don’t need you to manage it. Please explain how you would hold these assets?
We can manage these assets for you. However, effective January 1, 2004, all non-standard
assets will be billed at a flat rate of 1% annually. Non-standard assets are those
assets a client brings into Weiss Capital Management, Inc. – such as stocks, bonds
or mutual funds – that are not part of our specific investment programs.
49) How often do you review my investments?
We monitor your investments each and every business day. Then, when market conditions
warrant, we adjust your portfolio according to your investment strategy objectives.
Whether we have an occasion to speak with you or not, you can always be sure that
at Weiss Capital Management, Inc., your investment portfolio receives the daily
attention it deserves.
50) How will I know what you are doing with my investments?
First, we start you out in a specific investment strategy. Then each time a trade
is processed in your account in the pursuit of that particular strategy, Fidelity
will mail you an account trade confirmation. At the end of the month, Fidelity mails
out a consolidated account statement recapping all your account's activity for that
month, and will detail your complete portfolio holdings. Our management fees deducted
from your account will be outlined and detailed quarterly for your reference.
51) Will my Weiss Capital Management, Inc. account be actively traded?
It depends on the investment program employed in the management of your account.
Some of our investment strategies are more active than others. Your Weiss Financial
Advisor can review with you the level of activity you should expect in any particular
program. This activity is normal in the pursuit of a particular investment strategy,
and does not increase the risk level of your account. Any trading activity in your
account will always take place within your stated personal risk tolerance profile.
52) Can I access my Weiss Capital Management, Inc., investment account on the
Internet?
You sure can! To get your online account access set up, just click on "My Weiss Account" tab on our home page and follow the instructions
provided for your specific custodian. Unfortunately, MAC users cannot access their
accounts online.
53) I would like to add more money to my Weiss Capital Management account at
Fidelity Investments. What is the best, most efficient way to do this?
The quickest way is to send the money directly to Fidelity. You may choose either
overnight mail or courier, regular mail, or wire transfer. Regardless of which method
you prefer, there are three important things to remember when sending money directly
to Fidelity:
- Tell your Weiss Financial Advisor that you're sending in more money to your account.
That way we know to expect it.
- Make everything payable to Fidelity Investments.
- Put your Fidelity account number on everything you send or wire.
Please use the following instructions:
Overnight Mail/Courier
Fidelity Investments
2300 Litton Lane
Department 8008
Mail Zone KH 2H
Hebron, KY 41048-8008
1-800-523-7166
Regular Mail
Fidelity Investments
PO Box 5000 Department 8008
Cincinnati, OH 45273-8008
Wire Transfer
Chase Manhattan Bank (J. P. Morgan Chase & Co.)
One Chase Manhattan Plaza, New York City, NY 10004
ABA 021000021
For the Account at NFSC
Account # 066 196-221
FBO: Client Name
Client Account Number (Letters included, if applicable)
NOTE: All Wires Must Be In U.S. Dollars