Frequently Asked Questions
Q: What is the minimum asset size for Narwhal’s wealth management services?
A: $4 million
Q: What type of clients does Narwhal have?
A: Individuals, joint accounts, corporations and trusts.
Q: What is the average of Narwhal’s client portfolios?
A: Our average client portfolio is $14 million.
Q: What is your target asset allocation?
A: Our target asset allocation for balanced accounts is typically 60 percent equity, 30 percent fixed income and 10 percent cash. This allocation will be tactically adjusted as the markets and client circumstances dictate.
Q: What do you charge for asset management?
A: The fee varies depending on the asset allocation of the account, size of the account, investment policy and financial planning. We are willing to discuss our fee structure in detail with any interested party. You will find our fees very reasonable compared to the industry norms (mutual funds and hedge funds).
Q: Do you take custody of the assets?
A: No. The client signs a Client Agreement and executes a Limited Letter of Authorization (LLOA) that allows us to act on your behalf and place trades with your broker.
Q: What different conditions will affect asset allocation?
A: Although all accounts have a strategic long-term asset allocation target set for them in their Investment Policy Statement, over the short-term this allocation will vary depending on a variety of reasons, including, but not limited to, market conditions, client liquidity needs, client requests, and geo-political reasons.
Q: How can I use my investment profile to determine an allocation for my portfolio?
A: One of our guiding principles at Narwhal Capital Management is that every client is unique. We can use your profile to help us determine your asset allocation, but there is much more that goes into it than can be captured in a one-page document. In fact, Investment Policy Statements, risk tolerances, and appropriate asset allocation levels are dynamic items that tend to change over time.
Q: What is diversification and why is it important?
A: For clients who have already achieved significant levels of net worth, diversification might be the most important aspect of portfolio management. The largest collapses in wealth tend to come from over-concentration in single securities, specific asset classes, and illiquid assets (such as real estate), that have debt attached to them.
Q: What’s the danger of using a market timing strategy?
A: Market timing is a strategy that needs to be employed to over-weight and under-weight asset classes and specific sectors, but within reason. For instance, we don’t usually eliminate an entire sector from our equity portfolios, rather we over- and under-weight attractive/unattractive sectors. This is a true market timing approach and not the “all or nothing” approach most commonly associated with the term “market timing.”
Q: How do I calculate my return?
A: Calculating returns is perhaps one of the most complicated and convoluted topics within the money management industry. In short, there is no simple answer. To be as concise as possible, the industry standard is to use the geometrical-linked time weighted Dietz approach to calculating returns.
