Client Relationship Summary
Introduction: Anodos Advisors LLC (“Anodos”) is registered with the Securities and Exchange Commission as an investment adviser. The services offered and fees charged by an investment adviser differ from those of broker-dealers, and it is important that you understand the differences. Free and simple tools are available to research investment advisory firms, broker-dealers, and their financial professionals at www.Investor.gov/CRS. This site also provides educational materials about broker-dealers, investment advisers, and investing.
The Anodos Investment Monitoring and Reporting Service: Anodos conducts independent investment monitoring and reporting on behalf of our clients. This service is designed for those clients who have chosen to use multiple investment managers, accounts, securities, and products. Anodos tracks all this data, on our clients’ behalf, each day so that a consolidated investment monitoring report is perpetually maintained. This report includes tracking of each client’s total portfolio value and its component parts, against various risk expectations, return objectives, and allocation parameters the client has established.
Unlike most SEC-registered investment advisers, Anodos DOES NOT manage clients’ portfolios of assets or investment accounts. To protect the objectivity of our service Anodos is prohibited by contract from ever (1) managing clients’ assets or (2) making recommendations about which investment managers, investment products or securities clients should use. We do NOT have any discretion or authority over our clients’ accounts or investment capital. We cannot direct trades, make changes to the asset allocation, or direct distributions from the accounts. These prohibitions make our observations truly independent because we do not provide a competitive advisory offering to the investment managers we are monitoring and reporting upon.
Our Monitoring Process: Our monitoring process begins by helping our clients define the return objectives and risk expectations for their total portfolio of assets. Next, we help our clients define various investment policies that their investment managers are to follow. We then establish procedures to test that the policies are being complied with. Anodos develops and administers this investment governance process on behalf of the client – whether an individual investor or a fiduciary who has a legal duty of care. While the scope may vary depending upon the client’s needs, our services typically incorporate the following components:
1. We establish and review annually an “Investment Governance Statement” which documents the client’s financial objectives, investment policies, risk expectations and other key performance indicators.
2. We establish a “Compliance Calendar” that defines the frequency and due date of our ongoing review activities.
3. On a quarterly basis we provide each client a consolidated roll-up report which documents the performance of their total portfolio – across advisors and custodians – to the documented return objective, risk expectation, and independently set benchmarks.
4. Each year we conduct a diversification analysis of the portfolio’s total holdings at the security, sector, and asset class levels to see that it confirms with the client’s expectations.
5. Each year we conduct a fee analysis to determine whether fees paid to the investment advisor are reasonable and customary given the portfolio’s size and complexity.
6. Each year we investigate the advisor’s standing with the regulatory bodies.
7. Each year we investigate if there are any conflicts of interest that may influence the advisor’s activities.
Fees and Costs: Anodos charges a fixed monthly retainer which is typically between $2,000-$5,000 for our investment monitoring and reporting service. This monthly retainer varies based upon the portfolio size and the number of investment managers or accounts being monitored. Besides the Anodos monthly retainer our clients continue to pay fees for their various investment managers, custodians, and products that they have selected.
Conflicts of Interest: The firm’s revenue is derived from the investment monitoring retainer we charge each month. Anodos receives no compensation from any investment advisor, custodians, or product provider or any other third-party.
Additional Information: You can find additional information about our firm’s investment monitoring services on the SEC’s website at www.adviserinfo.sec.gov by clicking on the FIRM tab and then searching CRD #140825. If you would like additional, up-to-date information or a copy of this disclosure, please call (805) 899-1245.
Key Questions to Ask: Ask our financial professionals these key questions about our investment services and accounts.
1. Does my portfolio’s size and complexity justify hiring Anodos to provide their Investment Monitoring and Reporting Service?
2. Will Anodos direct the actions of the investment advisor(s) I have selected?
3. Will Anodos help me pick investment advisors?
4. If I need to fire Anodos, will my portfolio or relationship with my investment advisor(s) stay in place?
5. How do I know if Anodos is doing good job?