In 2000, after 18 years of working with brokerage firms, Larry Sabin became a Registered Investment Adviser because he believes it is a much better way to serve clients. Below are some of the advantages Sabin Investment Management offers its clients over a traditional brokerage relationship.
Typical Brokerage Firms
Sabin Investment Management
What is the primary difference between brokerage firms and investment advisers?
The principal business of brokerage firms is to execute securities transactions to generate commissions.
Investment advisers provide expert investment advice suitable for the client, in accordance with a higher legal duty to act for their benefit.
Is your advice objective?
No; the way brokers are compensated can lead to conflicts of interest.
Yes, as fiduciaries, Registered Investment Advisers are legally required to put their client’s interests first.
What investment products do
you offer?
Brokers often are paid more for recommending certain funds, and especially more for recommending risky illiquid investments, such as limited partnerships and expensive insurance products.
We use our institutional
status to select from a
broad menu of
investment options,
including both
no-load funds and
loaded funds, free
of the standard retail
commissions.
How will your fees and expenses affect my account?
Unless you know what to look for, you may not be aware of all the commissions, fees, and markups that can reduce your performance.
Since our income is based upon your performance, we have an incentive to keep your expenses as low as possible.
How do you get paid?
Brokers earn income mostly from commissions when you buy and sell. This gives them an incentive to trade.
Our only income is a fee based on the value of client's accounts. This aligns our incentive with yours: to make your account grow.
How much experience do you have?
The average broker's career lasts about five years.
Sabin client advisers average over 18 years of experience.
How do you spend most of
your time?
By virtue of how they are compensated, brokers spend much of their time persuading people to buy or sell in order to generate commissions.
We spend most of our time researching investments and providing useful advice to our clients.
If you find a great investment opportunity, will you buy some
for me?
Larger accounts tend to get
preferential treatment, so
if your account is big you
you may be in luck. If not,
you may miss out.
We can quickly buy in large blocks so every client gets in at the same time - at the same price.
Do you ever sell an investment if it starts dropping?
It’s very difficult for brokers
to react quickly, because they
need to contact every client.
That can take a lot of time,
and who would they call
first?
We can sell an investment quickly, for every client, as a group.
How can I know how my investments are doing?
Brokers do not typically report on their performance.
Knowing where you
stand is vital to your
success. We give our
clients a report every
three months that
clearly shows the gain
or loss in dollars and
percentage for the
quarter and year-to-date.
It also shows our fee.
