I want to take a minute to describe the structure that we have here at RBJ Financial Group, which is very different than you would expect to see in a traditional investing environment.
This is just another value that we are able to bring to the folks that we work with that creates a very different customer experience.
The best way to explain this structure is to start with a question:
Consider the following scenario:
There are two money managers…
Money manger “A”
Money manager “B”
The first money manager works on a salary, has a primary loyalty to the firm that employs him/her, and this manager knows that he/she is going to get a paycheck either way…If the fund wins or loses, if good or bad investment decisions are made, because the primary driver for their continued compensation is to please the firm. This puts them in a bind as their incentives are conflicted between doing what’s best for you and your money and the firm’s agendas.
The firm’s motives are to keep their customer base stable, to keep the flow of fees growing and uninterrupted.
This is because most big investment firm’s primary source of revenue from their investment management divisions comes not from any performance incentives, but from fixed fees that are charged to you no matter how well or how poorly the manager performs.
Now, let’s contrast that with a different style of money manager.
This is a person who is independent.
It’s likely that they will have created and developed their own edge in the markets, the advantage that allows them to go into the markets and deliver a consistent stream of profits over and over again.
They will have spent a great deal of time and money making sure that their edge works consistently and is robust enough to continue to produce profits no matter the market condition or direction.
They will have put their own money at risk, and will be working their edge in the markets each and every day…Doing the research it takes to find these opportunities and when they make great investment decisions, they get paid (And when they make bad decisions, they eat the sour fruits of that decision).
These are people who are on the front lines, and are the most focused…Bringing a level of lethal competence to their daily operations.
So that covers the investment manager. The person who’s boots are on the ground, and who is actually getting the work done.
Let’s take a step back now and look at the firm that supports that investment manager…
In a traditional Wall Street way, you would wire the firm your money or send them a check. They would take custody of your money and put it into an account in their possession with your name on it.
Now, there are laws against what is called “co-mingling”, where they would literally mix your money in with their own money, and we have seen some flagrant violations of that trust in recent years that have caused a lot of destruction.
Even if the firm you are working with is above board and has the highest levels of integrity, it’s still not your money anymore, it’s under their control and their custody.
If you want it back, you have to liaison with them to get it back, and this can take some time going through the corporate red tape and perhaps create frustration if you have to make calls or fill out a bunch of forms…The bottom line is that you have given your money and it’s control over to somebody else.
Plus, that does not take into consideration fees or penalties for early withdrawal, in some cases there will be a “lock-up” period where you give over your money for a set period of time and you literally can’t pull it out even if you need or want to until that lock-up period has ended.
Now, let’s contrast that with what we do here at RBJ Financial Group.
Under our structure, you open up an account with an international broker, that does business all over the world and who provides direct access to the world’s financial markets.
This gives us peer level access to interact with the markets just the same as any of the big name investment banks or Wall Street firms.
You go through a simple process to open an account in your name. This can be done online and is the same as opening an account at a bank. And like a bank, you have access to your funds at the push of a button online, and can withdraw or transfer your money just as you would with any personal banking account.
Now, the next step is that you link your trading account at the broker with the trading operations of RBJ Financial Group.
So what happens next is when we are working on trading our own money, going through the research and analysis process as we do each and every day, and find an opportunity that is attractive, we will take that trade for our firm’s proprietary account.
When we do this, because of the arrangement that we will have set up, your account will “mirror” ours, and will literally have the same entries and exits taken for you by the broker so that your account experiences a similar profit or loss.
This structure gives you all the benefits of the traditional I’m-going-to-write-you-a-check-and-give-you-my-money-to-manage type arrangement, but you retain 100% transparency, so that you are seeing everything that is happening throughout this process, and with 100% control…So that you can terminate the relationship, pull your money out, do anything you want to…
It’s YOUR MONEY…
It’s YOUR ACCOUNT…
We are simply offering you the opportunity to link with us, and essentially just ride our coat-tails…
You will be able to harness the work that we are already doing for our proprietary trading operations, which continue at exactly the same pace and with the same levels of consistency and quality whether you choose to participate or not.
We are going to be out there each and every day trading our money, when we see an opportunity that has extremely high odds for success and extremely low risk of failure…we are going to take that trade, and we are going to offer you the opportunity to join us and mirror in your account that performance.