In response to the early stage investing conundrum, IV Lions, a low cost financial advisor, has announced the launch of a new service called "Seedlings" for those with small investible assets.
For a flat fee of US$150 per year the company will construct a simple, low cost, and tax efficient portfolio using exchange traded funds. IV Lions’ advisors will review the portfolio with Seedling clients on an annual basis and rebalance where necessary.
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In addition, the company’s advisors will be available to answer any questions Seedling clients might have about their financial well-being.
Most investors with a small asset base are constrained in their ability to receive good investment advice. If attainable at all, the cost of advice is usually punitively high as a percentage of investible assets.
John Shearman, CEO, IV Lions, said: "that’s a shame because, due to the almost magical effect of cumulative growth, making sound financial choices in the early years pays off handsomely in the latter years."
In response to this conundrum, swaths of investors that don’t have the net worth for a dedicated wealth manager have headed to the shelves for pre-packaged low cost online portfolio builders.
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By GlobalDataShearman added: "Those solutions are good, but having an actual human being on your team opens the door to a more personalized, proactive and holistic approach, that can in many ways out-flank black box software solutions."
For IV Lions, Seedling clients are not a profit center. However, Mr. Shearman believes that "just as we help our Seedlings lay solid foundations for their future; Seedlings help us lay solid foundations for ours."
Whilst under no obligation to stay with IV Lions, the company hopes that Seedling clients will slowly evolve into its second generation of fully fledged clients.
Shearman added: "If we do a good job, considering our regular fee is just 0.4% of assets under advisement, we think that’s a realistic expectation."
