We are an independent, academically-oriented advisory and consulting firm. “Independent” means that we are owned entirely by the Principals of the firm, and are not therefore subject to any demands except those of our clients, and of our own convictions about the correct and prudent way to supervise a portfolio. Because our revenues come directly from clients, our interests and theirs are aligned.

“Academically-oriented” means that our investment philosophy and methods are derived, not from the latest buzz on Wall Street, or the deal of the day, or from the underwriting requirements of a parent corporation’s investment banking division, but from research in the field of economics known as financial economics, which deals with the behavior of capital markets. Our advice is not, therefore, predicated upon a guess as to what the future may hold, but rather, on the best known methods for controlling the inherent risk of investing, which derive entirely from an inescapable uncertainty about that future.

An “advisory and consulting firm” has no product to sell other than the intellectual work-product and services of its employees. Technically, we are a special kind of investment advisor, called “investment counsel.”

It may also help to clarify what we are not. We are not investment managers who tell you to invest in XYZ stock or fund. Nor are we a marketing organization. We do not sell financial products. We do not enter into revenue-sharing agreements with other financial firms. Nor do we maintain proprietary portfolios into which clients must fit. Finally, we do not take discretion over client accounts. Any of these activities could put our interests in conflict with those of our clients, and detract from investment performance.

For more information on what distinguishes us from other financial firms, you might want to read our Investment Quarterly for the fourth quarter of 2006, which discusses regulatory compliance for Registered Investment Advisers as a way to understand the key differences among different kinds of financial advisers.