There is no minimum investment size to become a Prime Quadrant client. That being said, Prime Quadrant charges a minimum annual fee which tends to make sense for clients who have investable assets of at least a few million dollars. As well, since we only work with families or individuals who are Permitted Clients, from a regulatory point of view, we are not able to work with individuals whose net worth is under $5 million
Since every client relationship is unique, there is no set fee for Prime Quadrant clients. Fees are determined by the client’s needs, the breadth of services that they require and the amount of time it will take to provide those services. That being said, fees are always pre-specified, so the clients are never surprised when they are charged. Our fees are fully transparent and in flat-dollar amounts (i.e. not subject to variables like assets under management and/or how much investing one actually does).
No, we do not. Prime Quadrant does not have any proprietary investment products either. Why not? Because no one fund can cater to the individual needs of our clients. Instead, to create a tailor-made portfolio, our clients invest entirely with external investment managers or direct opportunities, which are selected solely on the basis of whether they will give the client the highest probability of meeting their goals. In addition, every external manager and opportunity had to have gone through Prime Quadrant’s rigorous due diligence process, and confirmed as a best-in-class opportunity.
Prime Quadrant provides non-discretionary advice, meaning that we do not make investment decisions on behalf of our clients. Rather, our clients make the final decisions on which opportunities to invest in. Our role is to provide thorough guidance, clear direction and education to our clients so that they are both comfortable and confident with their decisions. We have found that clients are significantly more fulfilled and successful when they take control over their investment decisions.
Prime Quadrant is an investment research and consulting firm, which is very different than a brokerage firm. Prime Quadrant provides a host of different services for clients, none of which involve the brokerage practice of buying and selling individual stocks and bonds.
Brokers are incentivized to sell products to clients and profit from either the transaction or the ability to transact on the clients behalf. Prime Quadrant has no proprietary products and all our clients’ money is managed by external managers who are only selected based on their proven expertise.
In addition, brokers typically have an incentive to sell specific financial products to clients that pay commissions or trailers. Since Prime Quadrant receives a flat, pre-determined fee based on time, our only incentive is to put our clients together with investments that have the greatest risk-adjusted returns.
Lastly, brokers typically do not provide on-demand research when clients want a second opinion on an investment that someone else has shown them. This is because brokers are only compensated for assets held in the brokerage account at their specific financial institution, and do not necessarily have expertise across the range of asset classes and investment opportunities. Prime Quadrant spends significant time and energy analyzing investments across all asset classes and structures, with the aim of objectively helping investors make better investment decisions.
Prime Quadrant is absolutely agnostic about whether an investor invests in any particular asset class or strategy. Since our job is to make sure every client is doing as well as they can, and invested with the best people in the business, we have no economic incentive for clients to transact, unless it is of definitive benefit to them.
Most money managers, on the other hand, will only benefit if and when you invest in their fund or in the strategy they are employing.
Traditional financial advisors operate with a scalable toolkit – i.e. stocks, bonds, options, mutual funds, etc. Whereas asset classes or investments that are not scalable across thousands of clients, tend to be ignored.
While this limitation may be the only option for ordinary retail investors, who cannot afford nor access other asset classes, such as Real Estate, Infrastructure, Credit, and Private Equity, it is insufficient for affluent or institutional investors, who can achieve more with their investment portfolios.
Besides the limitations of investment vehicles, traditional advisors usually charge on the basis of assets under management (AUM), which we fundamentally disagree with. In our view, the industry’s infatuation with AUM-based compensation unwarranted for a number of reasons.
- For no other service are you asked to step on the scale to ascertain the cost. Imagine your doctor telling you that your surgery will cost more because you are heavier or taller.
- No other service can one’s compensation increase in line with an increase in the risk (i.e. attempting to increase the AUM by taking greater risk).
- There could be many scenarios where the interests of clients and those of the advisor diverge. One example is the utilization and retention of cash. AUM-compensated advisors are typically not paid on the cash they hold. Cash, however, is one of the most robust risk-mitigating and return-enhancing tools. Yet, those who are compensated on the basis of how much is invested are incentivized to limit the benefit of cash.
We are not asset-gatherers. We are advice-givers. For all our services, whether we are doing Investment Planning, Portfolio Diagnostics, Investor Education, On-Demand Research and Due Diligence or starting work with a Full Service client, it is possible that there will be no investment transactions whatsoever. Each services involves pure advice.
Charging based on time rather than assets allows us to focus on many important parts of the investment process that get neglected in the typical percentage-of-assets model, such as planning and education. We are never incentivized to push our clients into new investments or transactions.
Prime Quadrant is very fee conscious. We can get discounted institutional pricing for our clients by virtue of our large asset base. When analyzing investment opportunities on behalf of clients, we are able to use our extensive experience in sourcing deals to notify clients when fees are excessive. In cases where Prime Quadrant actually structures fee terms on a new investment, we make sure that clients are properly compensated before the investment manager is able to earn significant fees.
For starters, we do not know of many (or perhaps even any) direct competitors to Prime Quadrant because of our unique model in the industry. We do, however, expect this to change over time as investors learn more about the pitfalls in the traditional financial “advisory” models.
Unlike most “advisors” today, we are paid only by the client and only for truly unbiased advice. We charge based on time, rather than assets under management or commissions, so our compensation is not based on whether clients invest in any particular investment product. Not only that, but we provide our clients with internal research on, and access to, exclusive deal flow across all asset classes and investment strategies – opportunities that would otherwise be virtually inaccessible to non-institutional investors.
We are the only firm that we know to use this business model, and as such, we are hard pressed to find those that are similar to us. In fact, even our well-heeled clients, who have been around the financial block, have said that our approach is radically different from anything else that they have ever encountered in the industry.
In the course of helping Full Service clients make better investment decisions, we are often asked questions about taxes and estate planning, and often find a great deal of value in having those conversations with our clients.
While our consultants are not tax experts, and therefore do not offer tax opinions, we are investment experts and understand how tax and estate planning interacts with our clients investment decisions. As such, we work with clients’ existing advisors to identify the best-fitting, most efficient and effective solutions for our clients. In cases where clients do not have existing tax or estate planning advisors, we are happy to introduce them to our network of trusted professionals that we have worked with in the past.