YieldQuest Select® FAQ’s
How did YieldQuest Select® come about?
How does YQ Select benefit my clients?
How does YQ Select give our firm a competitive advantage?
What kind of marketing assistance can you provide me?
What are the geographic restrictions you speak of?
Does YQ Select inhibit YieldQuest’s overall growth potential?
Do we need to utilize all of your platforms and services to be part of YQ Select?
Why have a membership process that requires a fair amount of upfront work and information gathering?
What if our partnership doesn’t go as planned?
How did YieldQuest Select® come about?
Just like many of our advisor clients have transformed their business over the years to one of closer relationships with fewer clients, we believe we can best serve our advisor base and grow our business by taking a similar approach. By partnering with select advisors and with certain geographic restrictions, we are offering our clients a unique way of distinguishing themselves from their competition. This should also allow us to make better use of our internal resources and greatly expand the suite of services we can offer to the select account base.
How does YQ Select benefit my clients?
As part of our YieldQuest Select® launch, we are developing many new tools that may be available on the YieldQuest Select® Portal section of our website. Included in this portal are many tools that will be available for you to use with your clients – to better help them understand their investments, the strategies we are employing, etc. We believe these additions will go a long way in increasing your clients’ knowledge and understanding of their investments. In addition, by limiting the distribution of YieldQuest strategies, we can take more care in doing our part to keep the inefficient markets we navigate just that, to the benefit of your clients.
How does YQ Select give our firm a competitive advantage?
Being a partner of YieldQuest and a YieldQuest Select® member firm means you may be one of a limited number of advisors in your geographic region to have access to YieldQuest products and ideas, including the ability to purchase YieldQuest Funds. If we can continue to deliver value to clients as we have for the past decade, this should give your firm a distinctive advantage and unique story to tell your clients and prospects. Our goal is to help you grow your business as a direct result of us growing ours.
I have traditionally been uncomfortable giving up control of any portion of my assets or strategies to outside firms. How can I or why should I take such a step?
Many advisors view YieldQuest as an in-house resource for investment ideas and strategy implementation. We want to partner with RIAs in very much a "50/50" type of arrangement. We do not view ourselves as simply a vendor and would not partner with a firm who was looking for such an arrangement. We view ourselves as a virtual sub-account manager when working through our Private Account model, or an investment manager in the very real sense if utilizing our separate account management services or our mutual fund offerings. We offer a turn key service for a piece of your AUM – and a piece that has typically grown to substantial levels with advisors who have been with us for a number of years. Whether you utilize us for fixed-income, equities, and either for all or a portion of the assets therein, we encourage you to view us an investment arm of your own business.
What kind of marketing assistance can you provide me?
We hope to be offering a suite of new materials that may add significant value to your prospecting efforts. These include tools that can be either printed or used directly from our Portal during prospect meetings. In addition, as we grow and our performance track record hopefully remains attractive, this should allow us to co-market our services to other institutions in your region, such as pension plans, endowments, etc. We feel we can be a valuable partner in aiding you in this effort.
This sounds like a marketing gimmick – similar to what other mutual funds or firms are doing. How is this different?
No gimmick – we have developed an "approval process" which new firms must go through in order to be part of YieldQuest Select®. Ultimately, only YQ Select member firms will have any access to YieldQuest ideas or products. Many firms offer special membership programs and the like, but ours is truly a limited access program – one that only a small number of firms in our industry employ.
What are the geographic restrictions you speak of?
Part of the limited distribution we speak of may also entail a set number of YQ Select member firms in any specific state. This would help our clients in having the maximum ability to use their affiliation with YieldQuest to their advantage in their community.
Does YQ Select inhibit YieldQuest’s overall growth potential?
While we may in fact be leaving some assets "on the table", we feel this is the best direction we can move in for long term growth, with the type of partnerships we want to foster. Overall, we feel this could be a win/win/win situation - for your clients, your firm, and YieldQuest.
Does my firm need to "buy in" to all of your ideas? What if we disagree with your approach from time to time?
Depending on the way you are utilizing our services, there may be times where our macro views and strategic allocations within the fixed-income and equity markets differ from yours. We manage these portfolios within the given risk tolerances that are set up when we commence a relationship. For the piece of the portfolios we are managing, we require our clients to allow us to manage that piece as we see fit, assuming we are within the prearranged tolerances and strategies. Of course, the decision is ultimately yours – and we will work with you to develop the best course of action. However, if we are constantly finding ourselves on the opposite side of the fence, then there may not be a good strategic fit between our firms. This is one reason for our somewhat methodical and detailed 2-way due diligence process.
Do we need to utilize all of your platforms and services to be part of YQ Select?
No, you do not need to utilize all of our service platforms. We have advisor clients who use all the platforms, some who just buy our mutual funds, others utilize the transactional arrangement through the private accounts, while some simply use us to construct individual bond ladders. The way you use us is not as important as the relationship we can foster, and how well we work together.
Why have a membership process that requires a fair amount of upfront work and information gathering?
Just as you may have discovered in your business, there are types of clients who just "fit" with the way you operate your practice, while others are either problem clients from the start, or have the potential to one day become one. We have had similar experiences. We have found that these types of situations typically end badly for both parties. Therefore, we have attempted to develop a process by which we can both determine if there is a strategic fit worth pursuing. We do not feel this up front work is particularly onerous given the type of long term relationship that may come from it – we hope you will appreciate this point as much as we do and embrace it.
We already have extensive in-house research and idea generating capabilities. Given that, how can we work together knowing that most of our ideas come from in-house?
To be perfectly candid, this is one of the most difficult aspects of forming a close partnership with some firms. Some firms have developed extensive in-house research and strategy departments wherein all of the firm’s investment ideas and implementation are borne out. In addition, many firms are skeptical that outside money managers like us can add value beyond what is already brought to bear by in-house research. A problem can also arise if in-house staff members feel threatened by the possibility of their strategies taking a second seat to ours. As is often the case, some of these analysts are assigned to do the initial investigation of our firm, and may discount some of our strategies out of hand for this reason. To summarize, we work best with firms who would welcome a new and potentially better approach to managing money, and would feel comfortable, over time, turning more assets over to us to manage should we perform well. If your firm might resemble the "not invented here" scenario described above, its probably best that we discuss this point before commencing a relationship.
What if our partnership doesn’t go as planned?
As with any partnership, there is the possibility that some day down the road it may end prematurely. Regardless of the situation or confluence of events that might end our relationship, rest assured we will do whatever necessary to make sure your clients will transitioned away from YieldQuest ideas and strategies in a relatively seamless way.