Frequently Asked Questions (FAQ)
Our Obligation
Does your firm adhere to the fiduciary standard?
Little House Capital follows a strict fiduciary standard in everything we do. Our duty is to forever act in our clients’ best interests – no-exceptions. Working closely with our clients gives them the peace-of-mind that our service and solutions serve their best interest.
What is Little House Capital’s Fee Structure?
As SEC registered investment advisors, we do not earn commission on trades. Rather, Little House uses a tiered fee structure based on the overall size of the relationship. Our clients gain access, free of charge, to our priority investment strategies, products, and research designed to minimize indirect investment money management fees often charged by other Advisors. Simply stated, we’d rather pass these savings onto you.
How is Little House Capital Different from other Investment Advisors?
Little House Capital recognizes the importance of in-house investment expertise. Our team formulates proprietary strategies and products tailored to each client’s specific goals and risk profiles. We aim to leverage our advanced portfolio management capabilities and research to ensure our best thinking is reflected instantly and simultaneously in each clients’ account when trading decisions are made.
Firm Basics
Does Little House Capital offer financial/ estate planning services?
For some firms, estate and financial planning is considered their primary function. Conversely, larger asset management firms generally focus on investment management with little access to key decision makers. Little House Capital believes it’s important to blend these separate and distinct functions together giving our clients access to an institutionally driven investment operation while offering transparency into a fully integrated financial plan focused on your specific needs.
What access do clients have to Little House’s professional network?
Our team is comprised of Certified Financial Planners (CFP™), Certified Public Accountant (CPA), Estate Attorneys, and seasoned Investment Professionals. These individuals often collaborate with, and coordinate, the many outside professional firms offering specialized services. Our professional staff, at no additional cost, provides valuable insight based on practical experience, saving you both time and money.
Is Little House Capital regulated by the SEC?
Little House Capital, LLC is a Registered Investment Advisor (RIA) and regulated by the Securities and Exchange Commission (SEC). Form ADV is a required submission to the SEC by our firm which specifies the investment style, assets under management (AUM), and key officers of an advisory firm. Form ADV must be updated annually and made available as public record for companies managing more than $25 million. You can search for an advisor’s ADV at www.advisorinfo.sec.gov.
Where does the name Little House Capital come from?
We devised the name Little House Capital after working at larger, well-established companies that appeared to focus on maintaining the corporate status quo. Spending time with clients is our number one priority. Our hope is that Little House becomes your home supported by a culture of excellence, professionalism, and curiosity to best serve your needs — all under one roof.
Who owns the firm?
Little House Capital is owned by its principals. This independence allows us tremendous flexibility to focus our resources on each client’s longer-term goals and objectives.
Investments
Do you offer a wide variety of investment strategies and products?
Little House offers a variety of strategies and products tailored to your specific risks, goals, and time horizon. Whether you’re seeking global or US allocation, current income, capital preservation, or a custom solution, we have proven solutions to achieve your investment objectives.
What is static versus dynamic investment modeling?
Static. Approximately 95% of advisors use static models to manage your investment – we believe this approach is wrong. Let’s assume on day 1 Investor X gives the Advisor $1,000,000 and 50% is invested in “Stock A” while the other 50% gets invested in “Stock B.” Overnight, “Stock A” doubles, now representing 66.67% of the portfolio while “stock B” represents 33.33%. Then on day 2, another Investor Y gives the Advisor $1,000,000 and yes, 50% is invested in “Stock A” and the other 50% gets invested in “Stock B.” [The static model] So now Investor X and Y own 66.67% and 50% of “Stock A,” respectively. Now assume the Portfolio Manager modifies the model so “Stock A” represents 60% of the portfolio. When the trades are executed for Investor X and Y, Investor X sells (6.67%) of Stock A while Investor Y purchases 10% of “Stock A.” The net result, both Investor X and Y hold 60% of “Stock A.” Imagine that this static model is applied to thousands of accounts holding many instruments sensitive to the market’s price action. The net result – at any given time it would be impossible to know the actual percentage (%) each instrument represents in your account. This makes research driven activities obsolete since accounts are buying and selling the same instrument at one time.
Dynamic. Dynamic modeling is hard to implement and requires expensive portfolio management systems to capture pricing actions that automatically update investment models. Little House believes the investment is justified to ensure uniformity in and among our clients’ accounts. Let us again assume Day 1 from above, then overnight our dynamic portfolio management systems automatically adjust the model for “Stock A” to 66.67%. Then on Day 2 when Investor Y invests $1,000,000, 66.67% (not 50%) is invested in “Stock A” while the other 33.33% (not 50%) gets invested in “Stock B.” [the dynamic model] Now Investor X and Y holds 66.67% of “Stock A” and 33.33% of “Stock B.” Why is this so important? This standardization provides a real-time portfolio dashboard that tracks pricing actions impacting our portfolio management trading actions across the account base. Without a framework that synchronizes accounts across the platform it would be impossible to know how to adjust for over/under sized positions in the accounts and adjust for risk.
Is a third-party custodian used?
This is a critical question that should always be asked of an advisor. Most independent firms like Little House Capital will use a third-party custodian such as Charles Schwab or Fidelity. This provides you as the client an independent way to verify your assets outside of reports from your advisor.
Is performance reporting included in your offering?
Our standardized investment reporting package offers flexibility and aggregates nightly automated feeds from our custodian(s). Additionally, we offer our clients the ability to attach outside investment accounts to our reporting framework to create a holistic view of all your investments. Our system tracks performance at a granular level across multiple asset classes and then compares these results to preestablished benchmarks.
The Relationship
How does Little House assess my needs?
Little House Capital begins with a critical assessment review. Topics often include investments, retirement, estate plans, tax, disability, insurance, gifting, debt management, executive compensation, exit strategies, and corporate actions. Often this is accompanied by a formal proposal outlining a detailed project plan to achieve your desired outcome.
Is client communication an ongoing process?
We believe in proactive and standardized communication with our clients. Managing expectations, leverage our Scope Statements, and providing easy to understand reporting is how we measure progress.
Does the firm offer tools that complement its services?
Little House understands that our clients’ financial needs and goals are constantly evolving, so we offer the eMoney financial platform to our clients free of charge. With this consolidated end-to-end planning tool, you can simulate different planning scenarios and collaborate with your Advisor to coordinate a plan of action.
Do I get access to Little House published research and content?
We offer, through a secure system, access to our content library that contains proprietary market analysis and company specific research. Depending on the strategies and products you select, we can target our research to ensure actions that impact you are communicated in the right format.
Can the firm meet my changing needs over time?
Little House offers individuals and institutions a wide variety of services. Little House serves clients from under $1 million in assets to well over $50 million. We can handle your needs regardless of where you fall on that spectrum.