FinArc: Independent Management Team

FinArc Investments, Inc. is not affiliated with any brokerage house or mutual fund company. This independence allows us to manage our clients' accounts without commitment to provide a level of business or commissions to another party. The significance of this fact is that we invest in securities and mutual funds based entirely on their investment worthiness. Potential conflicts of interest might arise for some of our competitors as pointed out in the following two examples.

What is a broker? A broker is someone who serves as an intermediary between two parties, a seller and a buyer. Brokerage houses may perform this function by raising money for corporations, governments, and non-profit organizations so that those organizations can expand. As you might expect, the organizations issuing securities through the broker hope to get the highest price possible and pay the brokerage houses substantial fees for this service. On the other side of the transaction, the buyer (investor) hopes to purchase the security for the lowest price possible so that they can realize the greatest return on their investment. The potential conflict for the broker is how to serve both parties at the same time and provide the best price. The disadvantage to investors is that the fee they pay to invest in a security is relatively small versus the fee that brokerage houses receive from corporations.
FinArc is compensated solely by our clients and our fee is based on a percentage of the assets that we manage. Our financial incentive is to deliver strong investment returns that grow our clients' portfolios and their trust. While the fee percentage remains the same, our firm's income will grow as your portfolios grow. We both want you to succeed with your investments. Many brokerages charge commissions on a transaction basis. These brokers make money regardless of how the investment performs.
Many brokers are not investment experts but are highly-trained salespeople. When an investment bank agrees to raise money for a company, it must sell the company's stock to an investor to accomplish its goal. This alone may be the reason that a broker recommends a stock to a client, and it may have nothing to do with a conviction that the investor could make money on their investment.
Brokerage houses typically employ analysts to assess the investment worthiness of stocks and bonds that they sell. The analysts inform the brokers of their opinion on a security and the broker relays this information to the investor. Investors typically do not have access to the individual who has actually researched the security when they use a broker. At FinArc, our research and portfolio management team is available to speak with clients directly about investment decisions.

Many investment advisors that manage client accounts containing mutual funds have strong relationships with specific fund families. In exchange for research and technology support, some of these advisors limit their recommended funds to those of that fund family. FinArc draws its recommendations from over 11,000 mutual funds offered by an ever increasing number of fund families. We only place clients in funds that have no load, competitive operating expenses, strong performance records, and fit the strategy we have developed with our client.