Frequently Asked Questions About Privately Managed Accounts

How does a client open a privately managed account with Fortress?
Fortress will aid a new client in determining their risk tolerance and financial goals. We will then assist in completing and processing all documents needed to establish an account for that client with a third party custodian. We have all the forms available and will assist our new client in this process. If a client wishes to transfer an existing account, we will aid in that transfer.

How often will Fortress meet with clients regarding their portfolios?
Fortress recommends an annual performance review. Interim reviews at client's request are available at any time. Clients’ access to our team is never limited.

Where are clients’ portfolios held?
We use a third-party custodian, Charles Schwab & Co., for cost savings, convenience, and safety. Fortress cannot and will not take custody of clients’ funds. A monthly report is issued to Fortress by the third party custodian detailing any transactions taking place during the month. The report also details total market value and the value for each security held in the portfolio.

How are clients’ assets protected?
We currently use Charles Schwab & Co. as a third party custodian. Schwab protects the client’s account for the full value of the portfolio. As a member of SIPC (which safeguards investors’ assets in the event that a broker/dealer fails), accounts are covered up to $500,000 in assets. Additional coverage for the customer’s total net equity for securities and $900,000 cash for each account has been arranged through private insurance companies. In addition, Fortress carries a Fiduciary Dishonesty Bond policy as well as a Professional Liability policy.

Will Fortress have direct access to a client’s account?
No. An account will always remain in the client’s name. Neither Fortress nor its employees will have access to a client’s account. We have discretionary authority to make trades on the client’s behalf. Our management fee is deducted quarterly. The custodian will require written authorization for any transfer of funds or funds wired from a client’s account.

Is money pooled with that of other clients?
No. Each client has a separate securities portfolio tailored to his or her special needs.

May a client withdraw from his account?
A client may withdraw all or a portion of his account any time he wishes. Some clients take regular income withdrawals from their account. If a client wishes to establish this type of an arrangement, we will administer the details.

Is the management fee a tax deduction?
We are advised that the management fee paid with after tax dollars is an itemized deduction for tax purposes. Depending on the client’s tax bracket this may cut the overall cost. We suggest that the client consult his CPA.

Are there any extra charges?
Fortress does not charge initiation or termination fees. A modest termination fee may be imposed by the third-party custodian. Unlike many firms that charge for services in advance, Fortress assesses its management fees in arrears, after services have been provided. The client will not incur any penalties for terminating the account. However, the client’s account may be subject to market risk should he sell his securities at a price lower than his purchase price.