FAQs
Where is my money held?
Your money is held at Charles Schwab or Interactive Brokers. These financial institutions are known as "custodians". Using a custodian is common practice in the field of finance. A custodian is a third-party company that holds and safeguards your money keeping your assets in your name. We will manage your accounts but your assets will always be in your name, not ours.
Do we have your best interest?
Yes. There is wide array of financial advisors that do not have to be fiduciaries or have your best interest. This is because they are operating as an advisor using a brokerage license under a brokerage. Brokerage firms will often be hybrids blurring the lines between which part of the business must be done under suitability standards vs fiduciary standards. This is very confusing to clients. Cordero Capital operates as registered investment advisor without a investment brokerage relationship meaning we must always be a fiduciary to you.
How can I see my account(s)
You have the ability to log in online and view your accounts at anytime. You will view your account on Schwab Alliance. For step by step instructions view this PDF.
Hedge fund vs financial advisor what is the difference?
A hedge fund is an investment pool that manages money with a specific strategy. A financial advisor is a much broader role. It's someone that helps people manage their money in a personalized way considering saving for retirement, reducing taxes, and other personal goals. A financial advisor can invest a clients money in a hedge fund. A hedge fund is not considering a specific investors tax situation as they are managing a pool of money.
What if Charles Schwab goes bankrupt?
Segregation of Assets: Your money is not part of Charles Schwab's business assets. Your assets are kept in separate accounts under your name. This mean if Schwab had financial troubles your assets can't be used to cover their debts.
SIPC Protection: Your assets are SIPC insured up to $500,000 and on top of that Schwab has Lloyd's of London insurance to cover assets in excess of this threshold
Size of institution: Schwab is one of the largest and most financially stable institutions in the country with billions in assets.
How are we paid
For investment accounts we charge a small percentage of the account managed. This cost is fully disclosed before your investments are managed. Clients typically pay this directly from the investment account managed so there is no need to pay from an outside account.
We do not receive any additional payment then what is outlined above. That means there is no commissions for the investments we recommend or hidden kickbacks from investment companies or custodians like Schwab. We are only paid by the client on the terms agreed upon. All payment agreements are discussed and agreed upon before a client is ever charged.