Investment Brokerage services are designed to offer maximum flexibility, tailoring, and cost efficiency to a broad spectrum of investor types and investment strategies.
Conceptually, one of the most common ways investment brokerage services are used by investors are in a “core and satellite” investment approach.
In this approach, investors will place a portion of their total investments in an Advisor run, institutional quality, discretionarily managed investment account that serves as the core portfolio for total investible assets. In some cases, this core account might also be either an Individual Retirement Account (IRA) or an employer sponsored retirement account such as a 401K, 403b, or TSP account.
Then using an investment brokerage account as a complimentary satellite component will augment the core account to exercise a view or combination of views around thematic, opportunistic, specific target, or specialty investment convictions.
It is common for the core portfolio to have anywhere from 65% to 100% of investible assets and the complimentary satellite portfolio to have 5% to 35% of investible assets. Specific mixes, allocations, and investment selections depend on each investor’s specific objectives, situation, financial disposition, risk tolerance, and other factors.
Most strategies can be executed in either a taxable brokerage account or in a brokerage account inside an Individual Retirement Account, depending on each investor’s profile, objectives, eligibility, and other factors.
