What else should I know about Falcons Rock?

Falcons Rock Impact Investments, LLC will donate 5% of company revenues to certain charitable organizations, including the World Wildlife Fund, which is an international non-governmental organization (NGO) founded in 1961. The mission of the WWF is to conserve nature and reduce the most pressing threats to the diversity of life on Earth, and organizes their work around six key areas: Food, Climate, Fresh Water, Wildlife, Forests, and Oceans. The mission of the WWF aligns closely with the mission of Falcons Rock and the investment funds utilized in Falcons Rock client portfolios.

Falcons Rock believes strongly in the basic tenets of the United Nations Principals of Responsible Investment, which begins with the commitment: “As institutional investors, we have a duty to act in the best long-term interests of our beneficiaries. In this fiduciary role, we believe that environmental, social, and corporate governance (ESG) issues can affect the performance of investment portfolios (to varying degrees across companies, sectors, regions, asset classes and through time). We also recognize that applying these Principles may better align investors with broader objectives of society. Therefore, where consistent with our fiduciary responsibilities, we commit to the following:

Principle 1 We will incorporate ESG issues into investment analysis and decision-making processes.

Principle 2 We will be active owners and incorporate ESG issues into our ownership policies and practices.

Principle 3 We will seek appropriate disclosure on ESG issues by the entities in which we invest.

Principle 4 We will promote acceptance and implementation of the principles within the investment industry.

Principle 5 We will work together to enhance our effectiveness in implementing the principles.

Principle 6 We will each report on our activities and progress towards implementing the principles.

Are additional services offered to Falcons Rock clients?

Yes. Falcons Rock clients can receive additional services such as financial planning, retirement planning and other customized consulting services. These services are offered to Falcons Rock clients through its sister company, Falcons Rock Investment Counsel, LLC. Learn more.

Can I personally speak with an advisor?

Yes. An initial consultation with an advisor is available at no charge to all Falcons Rock clients. Submit your initial question via the contact form on this site, which can be accessed by clicking here. Once the question is processed, an advisor will call you upon request. You may also call us directly at 262-250-3100

How are my assets and personal information protected with Falcons Rock?

This is a great question, as digital security and asset protection are on the minds of many people these days. First of all, Falcons Rock Impact Investments, LLC serves as the investment advisor to our clients and our primary duty is to prudently manage the investments in our model portfolios. Falcons Rock does not assume custody of any client accounts.

Client accounts are held at TD Ameritrade Institutional (TDAI), one of the strongest financial institutions in North America. TDAI is committed to the highest levels of security in the industry, and offers an Asset Protection Guarantee, whereby you will be reimbursed for any cash or securities lost as a result of unauthorized activity. In keeping with the Falcons Rock approach to corporate and social responsibility, TD is ranked among the 100 Most Sustainable Corporations in the World by Corporate Knights, was named the Best Green Bank-North America 2015 by Finance International, has achieved a perfect score on the Human Rights Campaign’s Equality Index for 7 straight years, and is a signatory to the United Nations Principals for Responsible Investment.

All client data entered on the Falcons Rock website is secured by Fiserv, the industry’s leading data aggregation service and account opening documents are protected by DocuSign, the most trusted eSignature provider around the world. Multiple authentication processes and options verify each signer’s identity. We believe that client information and accounts will be highly secured and protected.

Will I receive statements about my account?

Yes, you will be able to view your account activity and progress via the Falcons Rock website or via the TD Ameritrade Institutional client site. TD Ameritrade will provide electronic custodial account statements on a regular basis.

Can I make changes to the investments my account?

In general, Falcons Rock assumes “discretion” of all client portfolios. That means that we make all decisions regarding the investment strategies and mutual funds selected for our strategies. We monitor your portfolio and make all trades necessary to “rebalance” your account to the appropriate strategy. You do not have the ability to substitute other investments for those in the Falcons Rock portfolios. However, if, at any time, your objectives or risk tolerance changes, you may change your client profile. That change might lead to a different Falcons Rock investment strategy.

Is Falcons Rock considered a “fiduciary” of client accounts?

Yes, Falcons Rock Impact Investments, LLC is a Registered Investment Advisor (RIA) with the Securities & Exchange Commission (SEC). As such, it is our duty to oversee investment portfolios solely in the best interests of our clients. We do not accept commissions or any other form of compensation from the mutual funds or custodians we select, so as to avoid any conflicts of interest.

What is the expected return of Falcons Rock portfolios?

Nobody can predict the future, and anyone that suggests he or she knows what any investment will return in the near term is misguided. There are a myriad of factors that influence the stock and bond markets, such as global economic growth, interest rates, inflation rates, demographics, government policies, speculation and the herd mentality, corporate earnings, price-to-earnings (PE) ratios, bond yield curves, global currency fluctuations, commodity prices, etc. JPMorgan recently released its 2017 Long-Term Capital Market Assumptions, and they suggest that, over the next 10-15 years, global GDP growth will be 1.5% in developed markets, we will have an inflation rate of 2.25%, a weakening of the U.S. Dollar relative to foreign currencies, an average annual return for global developed market stocks of 6.0%, an average annual return for emerging markets stocks of 8.75%, an average return for U.S. investment-grade corporate bonds of 3.25%, and an average annual return for cash of 2.0%. Market volatility will increase and will vary based on asset class. Our objective is to build portfolios that perform relatively well on a risk-adjusted basis, given economic and market conditions.

What is the proper time frame for these investments?

The Falcons Rock portfolio that will be recommended to you is, in part, based on your time horizon as described to us during the goal-setting process. The element of time is extremely important when investing, and we expect that all Falcons Rock clients have money set aside in bank checking or savings accounts for expected and unexpected short-term expenses.

Falcons Rock portfolios will be invested in stock and bond mutual funds, all of which can and will fluctuate in value on a daily basis. Stocks and bonds can lose value over shorter time periods, and those relatively short time periods sometimes seem like they last forever, but over the long-term these investments should provide greater returns than bank savings and money market accounts. The longer an investor stays with a sound investment strategy that is based on his or her financial objectives, the greater the likelihood of achieving the desired results.

So, what is short-term and what is long-term? For most people, we would consider bank checking and savings accounts to be good places to hold cash for about a year’s worth of expected or unexpected expenses. For any investment strategy, like Falcons Rock’s, funded with stock or bond funds, we would encourage investors to stick with it for at least five to ten years. That would be enough time to ride out the volatility of short-term “paper losses” (remember, when market values are down, you don’t actually lose any money unless you sell your stock or bond funds), and give your portfolio a good chance of generating the expected returns.

Our greatest fear with online investing is that clients will panic when markets are down and sell their holdings at the wrong time. We will try to regularly communicate about market conditions and the reasons to “stay the course.”

Why not just purchase a SRI mutual fund directly?

There are some good SRI mutual funds available for direct purchase by investors. However, our research shows that no single fund family performs consistently well in all asset classes necessary for a well-diversified portfolio. For example, one firm might offer an awesome stock fund, but their bond funds consistently underperform. We incorporate sophisticated methods of building optimal risk-adjusted model portfolios, and use a disciplined approach for the selection of top SRI funds. The “off the shelf” approach to purchasing mutual funds on your own does not insure that your investment objectives will be met. Please see Our Investment Process page for details.

Are the mutual funds in Falcons Rock portfolios actively-managed or indexed?

Falcons Rock portfolios would typically include mutual funds that are actively-managed, as well as indexed mutual funds. Index funds track a published stock or bond index, such as the S&P 500 Index or the Bloomberg Barclays Aggregate Bond Index. The primary advantage to an index fund is its low expense ratio, as they merely duplicate the securities found in the index they track. The primary disadvantage to an index fund is that it will rise or fall strictly based on the market it tracks, with no form of downside protection. Actively-managed funds utilize various strategies in an attempt to either perform better (net of fees) than the respective indexes, or to reduce risk relative to an index. Because of the active strategies employed, these funds tend to have higher expense ratios than index funds. Many SRI funds are actively managed as they believe in the return enhancement or risk reduction attributes of evaluating securities based on environmental, social or governance factors, and there is additional work required to conduct this extra level of research.

We believe that an optimal portfolio should include both actively-managed funds and index funds.

What is the minimum investment with Falcons Rock?

The minimum account size is currently $5,000. This is the lowest dollar amount for which we can implement a well-diversified portfolio for our clients. We believe this is among the lowest account minimums in the industry. For people with less than $5,000 to invest with Falcons Rock, we suggest that you begin an automatic savings plan whereby you direct a portion of your regular paycheck into a bank or credit union savings account. You’ll be surprised to see how quickly a $50 or $100 deposit per paycheck can grow. Once you reach $5,000 in savings, plus a cash cushion for emergencies, we would love to have you come back and visit us!

What are the fees associated with Falcons Rock portfolios?

Our goal is to be completely transparent with fees associated with your accounts at Falcons Rock Impact Investments.

  • Falcons Rock charges a monthly advisory fee equal to 0.05% (0.6% annually) of client account balances.

  • We anticipate that the net expense ratios for the mutual funds in Falcons Rock portfolios will range from 0.81% to 0.98% annually.

  • All Falcons Rock portfolios will be funded with no-load mutual funds, meaning you will not incur front-end sales charges or back-end surrender charges.

  • All mutual funds selected for Falcons Rock portfolios are No Transaction Fee (NTF) funds on the TD Ameritrade Institutional platform, meaning that you will not incur additional fees when we make trades in your account. However, it is possible that transaction fees could apply to securities that you transfer into your new Falcons Rock account.

To put these fees in some perspective:

  • Our advisory fee is substantially less than the typical annual advisory fee of 1.0% (and up to 1.25%), according to the 2016 RIA Benchmarking Study by Schwab Institutional.

  • A mutual fund “expense ratio” covers the costs of operating the fund, including investment management, administrative and distribution costs, and other expenses. Fund returns to shareholders are ‘net’ of these expenses. Part of the Falcons Rock investment process is to seek funds for our portfolios that have below-average expense ratios. Morningstar, a well-respected mutual fund research organization, indicates that the average mutual fund expense ratio is 1.19% (2015 Fee Study). We believe that the net expense ratios for Falcons Rock portfolios are below average, resulting in greater net returns for our clients.

  • Mutual funds that charge front-end or back-end sales loads are not in the best interests of our clients. Falcons Rock Impact Investments does not accept commissions or any other form of compensation from the funds we select for our portfolios.

  • Based on a study of online brokerages by ValuePenguin, the average cost to purchase a mutual fund is $30. For Falcons Rock clients, we believe that the use of NTF funds are most beneficial.

What type of investment accounts are eligible for Falcons Rock portfolios?

We think our service is ideal for IRA accounts, Roth IRA accounts and Rollover IRAs from 401(k) and other qualified retirement plans. We equally welcome all other accounts, such as individual, joint or trust accounts.