Frequently Asked Questions

How does Cambridge Capital Management, LLC differ from a stockbroker?

Cambridge Capital Management, LLC is a registered investment advisory firm (RIA). We are fee-only, and neither do we sell products nor receive commissions. We work solely for our clients and they pay us for the services rendered. Cambridge Capital Management, LLC does not accept compensation from any outside sources. When working with a stockbroker, you are often working with a salesperson. They receive commissions on the securities they sell to you.

Aren't all brokers fiduciaries?

As a matter of fact, not all brokers are fiduciaries. Fiduciaries must act solely in the best interest of their client. A broker can't truly have a fiduciary relationship with their client when their pay depends on which security they can sell to their client.

"Fiduciaries must always act in complete fairness and may never exert any influence or pressure, take selfish advantage, or deal with the client in such a way that it benefits themselves or prejudices the client. Business shrewdness, hard bargaining, and taking advantage of the forgetfulness or negligence of the client are totally prohibited by a fiduciary."
– Black's Law Dictionary

How do you minimize the tax liability within the management of your clients' taxable accounts?

In investing it is not just about what you have, it is about what you can keep. With this in mind, we strategically allocate assets to specific account types based on their projected tax liability. For example, for clients in high tax brackets, we might utilize tax-exempt bonds or positions that pay qualified dividends to optimize their after tax return. We also monitor your capital gain exposure and constantly work to offset gains with paper losses when applicable.

How are you compensated and when do you get paid?

As a fee-only registered investment advisory firm (RIA), Cambridge Capital Management, LLC is paid directly by our clients. Our fee is calculated as a percentage of our clients' assets under management. This percentage ranges from 1.25% to .40%. The larger the assets under management; the smaller the fee is to be paid. We feel this offers transparency to our clients, because they know exactly what they are paying at all times with no hidden charges.

What if I have never had to deal with finances and don't even know where to begin?

Here at Cambridge Capital Management, LLC we have many different types of clients, and some have never had to deal with their finances until coming to us. We take the time to get to know each of our clients and their unique situations. Furthermore, we continually educate our clients so they can make informed decisions and feel confident about their financial goals. At Cambridge, you don't just get another advisor, you get a partner.

How do I begin?

Whether you're looking to hire a planner for a specific purpose or would like us to be your ongoing investment management team, the process is very easy. Simply call our office and set an appointment to come in and meet a member of our team. We will provide you with a no cost, no obligation consultation so you can determine if we are the right fit for you. Our contact information can be found under the “Contact Us” tab.

What is wealth management and why is it important?

"Wealth management is a type of financial service that combines personal investments, tax planning strategies, estate planning, and legal counsel. It is designed to provide a broad array of services within the confines of one office."
- Investorwords.com

Wealth management is important because every financial decision a person makes is going to affect other parts of their financial being. It is our job to inform you of what outcomes your choices can lead to. It is critical to work with a firm who takes care of your overall financial health and isn't solely concentrated on your investments. Investments are simply a vehicle to reach your financial goals. The groundwork and ongoing maintenance it takes to make those goals a reality is one of the ways your wealth management team can add great value.

What is a good age to start planning for retirement?

Like most things in life, the earlier you start, the better off you will be. Albert Einstein once called the power of compounding interest the eighth wonder of the world and we would agree. The more time your investments have to grow, the larger your assets could be at retirement. The following hypothetical shows you how time horizon and the power of compounding interest can help grow your assets for retirement.

Mr. Smith, age 30, puts away $415 a month ($5,000/year) into an account every year for the next 40 years. Assuming he earns 8% annually on his investments, his account would look as follows in 40 years.

The final balances speak for themselves. The earlier you start planning for retirement, the better chance you'll have at meeting your retirement needs.

Will my assets be held directly with your firm?

No, your assets will be held by a qualified custodian at all times. We currently utilize Charles Schwab and Company, Inc. to hold our clients assets. This arrangement provides our clients the confidence in knowing that their assets are held with one of the largest financial institutions in the world. Schwab provides our clients with online access, monthly statements and daily valuation of their accounts.

Why should I choose an independent advisory firm instead of a large financial institution?

A major focus of our firm is providing our clients with highly personalized financial advice. We specifically tailor our recommendations to meet each client's unique goals and objectives. We believe that this customized approach is not attainable in a large financial institution, where efficiency concerns often lead to a "cookie-cutter" approach.

As a client, would I be able to view my accounts on-line?

Yes, the custodian, Charles Schwab provides secure web access that will allow you to view your accounts online. We provide a link to Schwab in the client account access area on our website. Schwab's site also provides account transaction history, historical account statements and trade confirmations, among other things.

What is a CERTIFIED FINANCIAL PLANNER™ Professional?

A CERTIFIED FINANCIAL PLANNER™ or a CFP® is a financial professional who meets the requirements established by the Certified Financial Planner Board of Standards, Inc. While others may call themselves financial planners, only those who demonstrate the requisite experience, education, and ethical standards are awarded the CFP® mark.

• In order to obtain this mark, an applicant must:
• Hold a bachelor’s degree from an accredited college or university
• Complete a CFP® Board-registered education program
• Pass the 10-hour CFP® certification exam
• Have at least three years of qualifying full-time work experience in financial planning
• Pass a professional fitness standards and background check

Once appointed, a CFP® professional must meet continuing education requirements every other year in order to maintain the certification.