1. Tell me about your firm. Why CFI?

CFI is a fixed income (bond) specialist with specific expertise in the area of municipal bonds. Although we are employee-owned and not affiliated with any broker/dealer, we have a very close working relationship with dozens of municipal securities dealers across the country. We take full advantage of these relationships to ensure that our clients benefit from the very best bids available and the most compelling offerings. All of our portfolio managers have over 20 years of experience and are dedicated to maximizing the after-tax return on each tailored portfolio in a manner that is entirely consistent with the risk parameters and strategic objectives of each account. Our record speaks for itself.

2. Can’t I do this myself with my broker?

No, you can’t. You can certainly invest in municipal bonds through your broker, but you can't duplicate CFI’s capabilities. Even if your broker is a municipal bond specialist, he only represents one firm. Individuals lack time, knowledge and resources to manage a municipal bond portfolio effectively and relying on only a limited number of sources for bids and offerings will prove very detrimental to one’s portfolio over time. Successful portfolio management requires constant vigilance and a working relationship with many, many dealers.

3. Do you have a minimum account size?

Yes, $2,000,000. Odd lots (blocks of bonds with less than $100,000 in face value) have poor liquidity so we try not to go below that amount. We also want to diversify a portfolio so that no single holding represents more than 5% of the portfolio. This means that at a minimum, we would have to have twenty $100,000 positions, hence the requirement of $2,000,000.

4. Will you also manage my stocks?

No, CFI does not solicit equity (stock) funds to manage. If asked, we will gladly refer you to investment managers specializing in that area of expertise.

5. Will you be investing any of my money in mutual funds?

Absolutely not. To do so would throw away all the advantages of having a tailored individual portfolio and incorporate all the pitfalls and additional expenses of mutual funds. We consider them counter-cyclical investors. As interest rates rise, for example, you may wish to purchase municipals, but as a shareholder in a mutual fund, you could quite likely be an unwilling seller as the fund is forced to sell securities in order to redeem shares.

6. Who will hold the securities?

CFI does not hold or have access to client funds or securities. This is the role of the third party custodians or safekeeping agents (usually the trust department of a major bank) selected by each client. CFI is happy to assist in the selection process to ensure that your agent is cost effective, competent and properly insured.

7. Will I be able to access my account on-line?

Generally the answer is yes. The custodian the client selects to safe keep their assets should be able to provide each client with on-line access. Some paperwork is required to meet standards of safety and confidentiality.

8. How are my fees calculated?

Your contract with CFI will include a specific annual rate. At the close on the last business day of every quarter, each client portfolio is appraised. This total value is multiplied by the contract rate and 1/4 of that amount is billed to your account for the services to be provided during the ensuing quarter. Most clients prefer that the third party custodian pay this bill as it is operationally simple and provides a permanent record through the custodian’s statements.

9. What level of risk will be involved?

There are many types of risk: credit risks, interest rate risks, liquidity risks, concentration risks, reinvestment risks and event risks to name a few. CFI employs numerous strategies to mitigate all of these, but most especially, those strategies that protect the client from the risk factors most important to them. Remember, every client’s portfolio is a tailored one and their specific goals, objectives and risk tolerances are all addressed individually.

10. Can I take the income from the portfolio?

The custodian, in almost every case, is happy to provide you with a monthly allowance. Without charging you any additional fees, they will see that a specific amount of money is forwarded to the demand account of your choice. We generally recommend that the amount of the allowance not exceed 80% of the actual income generated by your securities in order to allow some of the funds to be added to the portfolio's principal, thereby offsetting the effects of inflation. Portfolios that are highly income dependent should be managed with a unique set of parameters tailored to their specific objectives.

11. How do I get started?

Simply contact us yourself or have your agent do so. We will ask a few questions to make sure we are on the right track. This is followed by us sending you a brochure and arranging a meeting in person. This will give you the opportunity to speak directly with one of our portfolio managers. If you decide to become a client, you will be asked to sign one contract with CFI and a second separate agreement with the custodian you have chosen. No fees will be charged until the funds and/or securities are actually in the hands of your custodian and available to CFI for management.