A. We have managed portfolios for private foundations and nonprofit organizations for nearly two decades (since 1993) and as a result are intimately familiar with their requisite issues. We bring our experience, scale and the views of true fiduciaries to advance the important work of our tax-exempt clients.
Our experience in building and managing portfolios for multiple generations of affluent families also provides us with a rare perspective on managing long-term, legacy assets for endowments and exclusive insights into donor motivations.
We understand your organization's need for balance between prudently growing capital for the long-term while at the same time ensuring alignment with your organization's day-to-day spending needs; these are our priorities too.
In direct response to our ability to steward the assets for our client families and their affiliated organizations through the financial crisis of 2008, we were asked to create a new suite of services so that other organizations could benefit from our perspective and experience. In 2011, we dedicated additional corporate resources and personnel to expand our management of tax-exempt assets.
We have a proven track record that demonstrates we know how to design, build and manage significant pools of permanent capital for families, charitable foundations and trusts. We bring a fresh perspective to the management of endowments, and back it up with our reputation for high touch client service and nearly three decades of experience in portfolio management.
A. We offer a wide range of investment services for tax-exempt organizations, including:
| • | Comprehensive portfolio oversight |
| • | Investment policy formulation |
| • | Strategic asset allocation design |
| • | Portfolio management |
| • | Mission-related investing |
| • | Investment administration |
| • | Donor-related communications |
| • | Major gift planning support |
At Cornerstone, we recognize that the impact of spending and investment accumulation on investment strategies is THE KEY ISSUE for organizations looking to retain their capital into perpetuity.
We partner with you to ensure that your investment goals are translated into effective, sustainable and measurable investment policies and strategies designed to further your objectives. As fiduciaries to our clients, you can also be also assured that our advice is objective, nonconflicted and absolute in its transparency.
In addition to portfolio management, our team manages complex and time-consuming investment administrative tasks including cash management, securities gift processing and codifying a sustainable spending policy for your organization. We also offer experience in major gift planning and can assist your organization with endowment communications for major donors so that your supporters are always confident their assets are being well stewarded.
A. Yes. Cornerstone is an SEC-registered investment advisor and is a fiduciary under the Investment Advisors Act of 1940.
We acknowledge and accept our complete fiduciary duty to you, unlike many consultants and brokerage firms who decline to be considered a fiduciary. As your steward, this means that we are duty bound to put our clients' interests above our own, so you can be assured that the strategies we recommend are independent of any self-serving bias and based on completely objective research and analysis.
A. We are locally owned and operated by our employees who live in our community, which provides stability and independence for our clients. Founded in Bellevue, Washington in 1984, we are identified by Forbes as one of the top 50 Registered Investment Advisors (RIAs) in the nation in terms of assets under management and one of the world's Top Family Offices by Bloomberg News*.
We understand the challenges organizations face in balancing public interest activities with the preservation, growth and distribution of your investment assets. We believe we can add value to your organization and to your various stakeholder groups in three distinct ways:
| • | By providing clear investment strategies that support your mission |
| • | By operating with clear, understandable and reasonable fee schedules |
| • | By delivering clear, transparent reports that enhance the efficiency of your board and/or finance committee and increase donor and stakeholder confidence. |
We have deep personal ties to our community. Many of our employees serve on the boards of local organizations and give their time and expertise in support of charitable organizations.
Learn more about our community philanthropy and volunteerism.
We firmly believe our long-standing local presence, our centralized leadership/decision making, our independent business model, and our role as an investment fiduciary are compelling differentiators in terms of service, access to competitive investment solutions, focus and fees.
*"Top 50 Fee-Only Advisors" Forbes and "Top 50 Family Offices" Bloomberg Markets Magazine
A. Cornerstone clients benefit from working alongside a firm with extensive financial experience and expertise as well as a passion for improving our community. Our team of 50 employees is organized into four major business divisions — client management, investments, operations and business development — working collaboratively together serving the needs of our clients.
We embrace your organization's goals and help to unravel your challenges in a customized way. We have intentionally structured our client offerings with keen attention to detail, execution, and quality controls to ensure that all of our clients have a consistent high touch, high service experience throughout all parts of our organization.
Each client is served by a team of three professionals, plus company leadership:
| • | Client Manager — primary client contact, coordinates development of strategy and portfolio management |
| • | Associate Client Manager — ongoing logistics and asset allocation analysis |
| • | Client Management Assistant — account support |
| • | Chief Executive Officer, Chief Client Relationship Manager, Chief Investment Officer and Chief Operating Officer oversee strategy, client service and implementation, and are available to all clients. |
A. Cornerstone's investment philosophy is to design, build and maintain investment portfolios that preserve capital, produce distributable net income in keeping with spending policy goals, and appreciate over the long term in accordance with each organization's unique needs, objectives and constraints.
We blend asset classes, strategies and managers with complementary styles into broadly diversified portfolios that span a wide spectrum of global investment classes. Our traditional stock and bond investment allocations include a variety of top-notch institutional funds.
We deliver customized portfolios, take on day-to-day management of your investments, willingly accept fiduciary responsibility and enhance the efficiency of your board and/or finance committee. Clients benefit from how our firm has chosen to organize our investment process to select and vet investment choices, as well as the internal and external checks and balances that are built into our process.
Our Investment Policy Committee is organized to provide structure and oversight to the investment team and to review investments selected for client portfolios. In addition, our Operational Due Diligence department conducts rigorous operational due diligence — an analysis of non-investment risks — such as site visits and independent personal background checks on managers used in client portfolios to ensure managers can execute on strategies as described, verify assets, and authenticate systems and operations.
Our simple fee structure and customized reporting offer complete transparency in all of our work. The result is a strategic partner who is actively engaged in your success and acts as an extension of your staff.
A. When your investment philosophy is mission-driven, your organization can generate both financial and social returns. When appropriate, we work closely with our clients to determine how investments fit with the organization's mission, how they can best advance social change, and how to craft an effective, sustainable and measurable investment policy that achieves their objectives. Socially responsible or mission investing can be complicated, and the measurement of its impact can be challenging, but we know it is often a critical factor in an organization's success and credibility.
Particularly for the traditional public equity and fixed income building blocks of a client's portfolio design, Cornerstone can offer manager/strategy solutions that are tailored for the socially responsible investor.
A. Cornerstone does not select individual securities in-house. Instead, we are committed to offering our clients the best available global investment opportunities from the array of outside managers. Our genuine "open architecture" and fee-only compensation structure ensures that our interests are fully aligned with our clients' interests. Additionally, the benefits of our buying power are conveyed to our clients in the form of improved access to institutional-caliber managers at reduced fees.
A. We are experienced in transitioning assets during a new client "on-boarding" process, and whenever possible we reduce the friction associated with transaction costs and price variability. Once the Investment Policy Statement drafting process is completed in conjunction with your Trustees, Cornerstone will review the current investments to determine which assets should be maintained, adjusted or sold. Concurrently, a chosen third-party custodian will work directly with your current custodian to seamlessly transfer positions and associated data over to their platform.
A. We believe comparative value comes down to three different components — what is being paid to the investment advisor for management of your organization's endowment, what is being paid to the underlying asset managers used as components of the strategy (including custody and transaction costs), and ultimately what performance is being achieved.
In contrast to many brokerage firms and banks, all of our fees are explicit and clearly disclosed. Cornerstone Advisors is paid as a percentage of assets under management. We do not accept compensation of any other kind. There are no custody fees. There are no transfer fees. There are no hidden management fees or hidden trading commissions. The underlying institutional managers and investments we select do not have sales loads, or front-end or back-end loads.
By maintaining local independence, conducting our own proprietary research, and fully aligning our firm's interests with those of our clients, Cornerstone is your partner to help you rise to and exceed your expectations.
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