Direct or Through an Advisor
The Difference
Direct access, without the extra layer
Tax-aware long/short strategies are typically run by quantitative hedge funds that reach individual investors through advisors and platforms, with a fee at each layer. NinePointTwo works with you directly.
What Changes
Three things a direct relationship changes
01
One fee, not two
A single management fee for the strategy, instead of an advisory fee layered on top of the manager's fee.
02
You talk to the team running the strategy
No relationship layer in between. You deal directly with the people who build the models and manage the book.
03
Your account, customized to you
Leverage, tracking error, tax modeling, and benchmarks are set around your circumstances, not chosen from a standard menu.
Fee levels vary by firm and by mandate, so the point here is the number of layers charged against the assets rather than the total cost of either arrangement. Custody, execution, and financing costs arise in both. Our fee terms are set out in our Form ADV.
Choosing a Manager
How to evaluate a tax-aware long/short manager
Investors comparing tax-aware long/short managers tend to ask the same questions. These are the ones we would ask of any manager, ourselves included.
Who builds the models
Ask whether the manager researches its alpha and tax models in-house or licenses them from someone else. Then ask whether the people who built them are the ones running your account.
How many layers sit between you and the manager
Some investors go direct and some invest through an advisor they trust. Both work. The question is how many fees sit against the assets, and who picks up the phone when you have a question about your account.
The goal of the strategy
The long/short extensions should seek pre-tax alpha and be something you would want to hold regardless of any potential tax benefit. Ask how the manager forecasts returns, and how it sets benchmarks, tracking error, and leverage around your situation.
Who does the ongoing work
These are not simple accounts to run on your own. Wash sales, leverage and financing, coordination with the rest of your portfolio, and the eventual unwind of the strategy all need ongoing attention. Ask how much of that work the manager takes on, and how much stays with you.
Minimums
Minimums in this category run from six figures to eight. Ask what you get at your asset level, and whether it includes time with the people who manage the strategy.
FAQ
Common Questions
Does this replace a financial advisor?
It can. We provide wealth management and financial planning alongside the strategies we run, as a fee-only fiduciary. Some clients consolidate everything with us, and others keep an advisor they already work with.
Is going direct always cheaper?
Not automatically. Fee levels vary on both sides, so any comparison depends on the specific terms. The structural difference is that a direct relationship carries one fee against the assets rather than two.
Why do most managers require an advisor?
It reflects how those firms are built rather than any rule. A quantitative hedge fund is set up for a small number of very large relationships, not for serving individual clients, so it distributes through advisors and platforms instead.
Can my existing advisor stay involved?
Yes, and many clients prefer it. We work alongside an advisor, accountant, or estate attorney already in place.
Get in Touch
Request a meeting
Tell us which approach interests you and we will follow up to arrange a conversation.
Disclosures
This page is a general comparison of two ways of accessing investment strategies and is provided for informational purposes only. It does not describe any specific advisor, platform, or manager, and arrangements vary. Nothing here is investment, tax, or legal advice, and nothing here is a recommendation to end an advisory relationship. Investing involves substantial risk, including the possible loss of principal. Tax-aware long/short strategies involve unique risks, including short selling and leverage, and may not be suitable for all investors. The effectiveness of tax management strategies depends on individual taxpayer circumstances and may vary. Past performance is not indicative of future results. See our Disclosures page for additional important information.
Contact
Talk directly with the team
A conversation with NinePointTwo is a conversation with the people who design and run the strategies. An existing advisor is welcome in it.