WHY TISCH

Types of Investments

We invest in stocks, bonds, and mutual funds. We do not invest in derivatives, commodities, or employ margin, unless specifically authorized by the client. The minimum investment needed to adequately diversify a stock and bond portfolio on a cost-effective basis is about $150,000. Accounts smaller than $150,000 are normally invested in mutual funds, while larger accounts frequently utilize the full range of options.

WHY WE INVEST IN INDIVIDUAL STOCKS AND BONDS

There are four key advantages to holding individual stocks and bonds in a portfolio: control over the concentration of investment in any one company and industry, control of the timing of purchases and sales, implementation of tax strategies, and effecting long-term buy and hold positions in core holdings. In addition, overall costs are lower when compared to similar mutual fund portfolios under our management.

We manage five core portfolios ranging from conservative to aggressive. These portfolios are tax efficient, diversified, low cost, and have earned an excellent performance history. Portfolios which invest in individual securities are appropriate for individuals having $150,000 or more, and can be combined with mutual funds to provide greater diversification and specialized management in key sectors.

WHY WE INVEST IN MUTUAL FUNDS

There are two principle advantages to mutual funds: diversification and specialized management. Today there are more than twelve thousand mutual funds available to investors. Some funds are directed toward aggressive growth, investing in newer and/or smaller companies with great potential, as well as companies in volatile business sectors. Others are designed to provide current income by investing in larger companies with a history of regular dividend payments and dividend increases. In addition, there are sector funds that focus on one particular asset class such as technology, finance, health care, etc. Neither the fund's name nor its historical performance reveals much information about its propensity for future growth. Researching these funds is a full-time job and we evaluate and select the right funds to fulfill our asset allocation model. We meet with fund managers to understand their strategies and market expectations, and we track their portfolios in a separate real time database. We use only no-load mutual funds.

OUR TOOLS

Investment management is highly dependent upon computer and Internet software and the people who operate them. We continuously invest to upgrade our system and train our personnel. During the last two years we have invested in a completely new network and computer system, new portfolio management software, upgraded our website, and purchased state-of-the-art analytical software. Yet we answer our phones in person, and we will make ourselves available to talk with you anytime you call because we are committed to you.

OUTSIDE PROFESSIONAL REVIEW

Very few investment management firms can meet the high standards required to obtain errors and omissions insurance. After rigorous audit and review of our history, practices, and procedures, we have been underwritten by the Hartford Insurance Company for errors and omissions insurance and we carry it for your protection.

CUSTODY OF ASSETS

We do not have custody of your funds. We will assist you in opening an account with an independent custodian such as the Charles Schwab & Co., Inc., Fidelity Investments, or a trust department. You retain ownership and control. However, you authorize us to make investment decisions for your account. The account is in your name. You will receive a monthly statement from the custodian listing the assets held in your account and the transactions during the month. You will also receive a quarterly report from us which will calculate the rate of return earned during the quarter.

SCOPE OF SERVICES

Investment management or consulting services are available independent of financial planning. Our fees are based on assets under management, a schedule of which will be provided to you upon request.

PERSONAL FINANCIAL PLANNING SERVICES

We offer the following specialized financial planning reports:

Investment Planning

We evaluate your current holdings for competitive cost, performance, and risk, and make recommendations to improve returns and reduce risk. We provide this as a complimentary service to our investment management clients. However, if you do not anticipate having us manage your money, then we will provide portfolio analysis on a fee basis.

Retirement Planning Using Monte Carlo Simulation (MCS)

Monte Carlo Simulation is the best technique to dynamically model portfolio performance. It allows us to use statistical data to project the probable interrelated effects of expected return, risk, inflation, and income withdrawal over your lifetime on the value of your portfolio. By using MCS, we can estimate the probability that your retirement assets will be adequate and that you will be able to maintain your standard of living. In a sense, it creates a prescription for the appropriate investment mix.

Traditional retirement planning uses an average of past inflation and investment returns to project the future. Averages represent the middle of a data series, with half the experience below and half above the average. Since only half the data falls above the average, you have a 50% chance of under-performing the average at any time. Since you are withdrawing money from your portfolio during retirement, the order in which investment returns are earned can make a big difference in your financial security. That is why MCS is the most accurate method of developing a retirement plan.

In addition to a report regarding the adequacy of your savings and the appropriateness of your investments, we will:

Help you with the selection of corporate retirement plan options.
Retain, at your option, existing investments and manage the balance of your portfolio.
Help you create an ownership and beneficiary strategy that is consistent with your financial and estate plan.

IRA Planning

Taxes can reduce IRA distributions to your family by as much as 80%. Proper planning can increase the distribution to your spouse, children, and grandchildren by millions of dollars. We can develop a strategy to maximize your assets.

College Funding

This report establishes the savings and assets needed to meet college funding requirements. We develop the investment strategy including evaluation of tax shelter and children`s accounts and trusts.

Estate Planning

The Estate Planning Report is intended to address three goals: adequacy of survivor income, tax minimization, and testamentary distribution. We consider the following issues when planning an estate:

Survivor income needs
Trust ownership of property
Investment planning
Gifts
Grantor Retained Interest Trusts
Life Insurance
Testamentary strategies
Family Partnerships
Charitable Trusts
Business Planning
Retirement Plan Strategies

We coordinate the Estate Plan findings with the Business Plan, Retirement Plan, Insurance Plan, Income Tax and Investment Plans.

Risk Management

We evaluate all forms of insurance including property, liability, auto, professional liability, health, life, and disability. If appropriate, we discuss how property may be titled to protect it from potential legal settlements, and we examine the use of Off Shore Trusts. This report is coordinated with Cash Flow, Estate Planning, and Business Organization reports.

Income Tax Planning

This report projects state and federal income tax. Results are reflected in the Cash Flow and Net Worth report. It is used to assess planning opportunities.

Business Planning

If you own a business, we evaluate different organizational forms of doing business and various capitalization strategies for minimizing personal liability, income, and estate taxes. We evaluate and design fringe benefit plans. We also design business buy out agreements. This report is coordinated with the Tax, Cash Flow, Estate, and Insurance reports.

Cash Flow, Financial Statement, Net Worth

Used for forecast survivor income needs and a retirement budget, and to help demonstrate the impact of planning opportunities.

COMMUNICATION

Quarterly you will receive:

Statement of Current Holdings - all assets held in different accounts are consolidated in one report so that you can easily oversee your wealth
Performance Report - we will calculate the rate of return on each portfolio and on your consolidated portfolio
Quarterly Newsletter and access to etisch.com - we will provide you with our analysis of current market conditions. We would like to review your account with you annually.

FEES FOR SERVICES

Fees are based on an hourly rate and are estimated in advance of our engagement. We will be happy to provide you with a sample investment management contract and an estimate of our fees upon request.

*Determinants of Portfolio Performance, Financial Analysts Journal, (July/August 1986):39-44; Determinants of Portfolio Performance II: An Update, Financial Analysts Journal (May/June 1991):40-48.