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 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).
Finally, we complete for your signature an application for a discount brokerage account with an institutional brokerage firm that provides custody of our accounts and conducts trading orders from Southern Capital Management. The account is established in your name and tax identification number. You own the account, and the institutional broker allows only you to withdraw money or securities from the account.
If your money is invested with another broker or mutual fund(s), you can authorize our custodian/institutional broker to request the account to be transferred electronically with no income tax consequences. If you have a check for deposit, it should be made payable to the custodian and sent with the application. Initial cash is deposited into an interest-bearing money market account from which Southern Capital Management purchases securities. The money market account is a permanent repository for any dividends paid on the securities held in your account.