How Are We Different

I heard over and over again that they admire and appreciate that our founder, Randall Mauro has literally 100% of his portfolio (401k, IRA’s and Taxable accounts) trading the exact same way as we trade our client portfolios. They liked the idea that if their portfolio was down, then he would be feeling the pain right next to them.

“I believe strongly that there is no safer and better way to invest than the way Resnn does and as a result I comfortably invest right alongside our clients. In fact, I think EVERY investment advisor / financial planner in the world should believe in their investing style enough that they are willing to put their money where their mouth is, so to speak. I find this concept troubling that there are not more Advisors out there that invest the same way as they invest their clients.”

Many of those questioned like the idea of a NO management fee structure, that we literally do not get paid unless your portfolio is growing. This is unheard of in Wall Street … in fact … I don’t know of another Money Manager that charges this way.

It’s black and white – no performance, no charge. Ironically this is something that we felt was important to introduce when we started Resnn Investments, because of our own frustration years ago, watching our portfolios shrink in bad times while still paying the managers that were supposedly overseeing it.  If your portfolio had sizable losses in the last correction, then you need to question whether your current advisor is actually earning the salary you are paying him.

This one really had me confused … isnt that the job of every Investment Advisor / Money Manager / Broker?? Apparently our clients felt that their previous Advisors weren’t watching out for them as markets declined.

Markets correct on average two to three times a year, and sitting through these declines just means loss of capital, which doesn’t work for us. As Registered Investment Advisors (RIA), we have a fiduciary responsibility to our clients, which means by law we are required to act in their best interest. To us, this means many things, but mostly it means protecting their hard-earned money from declines in the market. Financial Planners, Money Managers and Brokers do not have this same stringent responsibility.

When we created Resnn, we started with two rules and built the company around those two rules …

Rule #1 – Always, always, always minimize risk, preserving your investment is the most important

Rule #2 – let’s make money

With that said, you can’t get to rule 2, without abiding by rule #1 first. We take a very defensive approach to investing in the market.  In fact, we believe the market needs to prove to us every single day why we should be invested in it. ‘Passive’ Buy and Hold strategies do not work in our opinion. There is a smarter and safer way to invest. To prove my point …

In 2008, while we only lost 3.3%, the S&P500 lost 38.4%.

In 2000-2002 while the Nasdaq lost over 78.4%, our model (using back testing) lost only 13.4%.

In October 1987 when the Nasdaq lost 27.23% in one month, we (using back testing) lost only 1.55%.

Your financial situation is unique, and a one-size fits all approach just won’t work.  Your understanding of our investment strategy and how it fits into your overall investing style is important and we realize this process takes time.  Our meetings are done when YOU say they are, after YOU decide YOU have all the information YOU need to make an informed decision.  We never try to push or speed up the process no matter how long it takes.  From 3 hour ‘discovery’ calls to multi-month due diligence … we are happy to work at YOUR pace.

Some of those surveyed are with us strictly for the outperformance we have been able to achieve. From 2008 through 2012 (5 years), Resnn earned over 153.3%, while the S&P500 earned 8.59%. And looking in our historical tests, the results are equally as impressive, beating the Nasdaq 34 out of the past 40 years, and closing the year positive in 33 out of 40 years.

Wall Street has rightfully gotten a bad rap for being dishonest and greedy, and while most advisors are honest … they may not be totally forthcoming with their performance AFTER FEES. We have found time and time again that most of our clients have made little to nothing over the past decade AFTER Advisor fees are removed.

We challenge you to look at your own Advisor / Broker statements and make sure to remove any contributions you made along the way to see how much the account has grown AFTER fees. We openly share our AFTER FEE performance with everyone.

We have nothing to hide, and feel the industry should embrace this open approach. It is time to clean up our industry … ask for REAL performance numbers. It doesn’t matter what your advisor’s performance has been if none of it trickles down into your bottom line. If interviewing a potential advisor ask to see AFTER FEE performance results … they have them and shouldn’t resist showing you them if they have any credence.

The flip side of this is true as well. a higher fee structure isn’t necessarily bad. Who cares if the fee structure is higher than average if the return is also higher than average. The bottom line is AFTER FEES how is YOUR performance. To use our firms’ example, we have almost doubled our clients’ investments over the past 5 years (after fees) while the average mutual fund and investment advisor has only added 5% (after fees) to their clients’ portfolio. That’s a sizable difference … after fees. Focus on the bottom line, and don’t get hung up on a higher fee structure just because. In our case, our fees go to significantly more research and time spent analyzing the market, while the typical Investment Advisor uses a Buy and Hold approach … spending only a few hours a month on your portfolio. We spend hours every trading day making certain we are investing your money properly.

This is something we take very seriously at Resnn.  We speak to our customers in a non-technical, ‘just plain English’ style when explaining investment options, eliminating the all too common “Tech Talk” found in the industry.  Many advisors try to dazzle a potential customer with technical jargon, we won’t allow it.  There is simply no need.  We want our customers to fully understand and appreciate our unique investing style and how it fits into their overall strategy.  And as a result, we encourage our customers to ask questions … oh, and … there is no such thing as a dumb question, or too many questions, please … ask away!