SCM Associates, Inc. was founded on four basic principles of professionalism, and the firm is committed to these principles in its relationship with each client.
Integrity: Investment counsel must exemplify the highest moral and ethical standards in the fiduciary relationship and must earn the respect and trust of the client. Uncompromised honesty and unmitigated forthrightness are the firm's pledge in all our dealings.
Confidentiality: Client assets and financial standing are highly personal matters that must remain in complete confidence. SCM Associates, Inc. pledges absolute confidentiality in all matters conducted with the firm.
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Our Services
SCM Associates, Inc. invests money for its clients on a discretionary basis, whereby the client authorizes us to engage in continuous supervisory services of the client's portfolio. Therefore, we make purchases and sales for each client and conduct the administrative services associated with portfolio management.
Many individuals and corporate officers, trustees and other institutional representatives simply do not have the time, interest or in some cases the expertise to make the investment selections and do the timely purchases and sales required in overseeing their investments. SCM Associates, Inc. provides all the services associated with professional portfolio management.
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Investment Strategy
SCM Associates, Inc. investment strategy is to invest mainly in the common stocks of widely-recognized, well-managed companies that have earned positions of leadership in their individual market sector by providing outstanding products or services over decades. SCM Associates, Inc. seeks to purchase stock in these franchise companies at or below their calculated fair value according to a proprietary analysis system. SCM Associates, Inc. holds these stocks as long as they maintain their financial strength, superior management, and dominance in the marketplace. On the other hand, SCM Associates, Inc. will sell all or a portion of a stock position when the stock price far exceeds the earnings support, earnings growth stalls, or the company no longer maintains its position of dominance in its industry.
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Management Fees
The question of cost of services usually is discussed in the initial interview. Nevertheless, for introductory purposes, the amount of quarterly fees that are charged is based on the assets under management. Typically, money managers require high minimum assets to manage an account, but SCM Associates, Inc. does not have an absolute minimum. However, we use a variable rate: the more the assets the lower the percentage.
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Opening An Account
The first step in opening an account is an initial discussion with you regarding your investment objectives and risk level. We also discuss with you your preferences regarding types of corporations or countries in which you do not want to invest. We discuss with you how to manage your portfolio in view of income tax considerations.
Next, we review with you our Asset Management Agreement form, which states the Limited Power of Attorney that we request in order to trade your account. It also sets forth the management fees and compensation arrangement. The Asset Management Agreement is not a contract for services, which obligates you for any length of time or for any total guaranteed fee. It simply is a statement that you sign certifying that we have discussed with you the nature and practices of our management of your portfolio(s).
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Trade Confirmations and Reports
After your account is established, the custodian will send you a confirmation statement on each trade in your account by SCM Associates, Inc. and a monthly statement which lists all assets in your account with the month-ending valuation and a chronological report of every activity in the account, including dividends received.
SCM Associates, Inc. will send you a quarterly statement of management fees, and then we will invoice your account with the custodian after you will have time to review your invoice. The management fee is deducted automatically from your account. SCM Associates, Inc. also will send you a performance report semi-annually which will indicate the total return net of management fees.
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