Frequently asked questions
Who is Three Bearings Fiduciary Advisors?
We are fee-only financial planners and investment advisors with extensive experience serving as fiduciaries. Our experience both as professional investment advisors and as trustees has provided many towns and cities in NH with prudent investment management services. We monitor the investment markets and make changes to your portfolio as necessary to maintain consistency with your investment objectives and Investment Policy.
In addition to providing investment management services, Three Bearings Fiduciary Advisors provides municipalities with full bookkeeping services and annual trust funds and capital reserve funds reporting (MS-9 & MS-10).
Do you make trades in my account?
Yes. We will make trades when it is necessary to adjust your asset allocation to maintain consistency with your Investment Policy, to provide additional diversification, to add or replace mutual funds or exchange-traded funds due to market conditions or performance, or to raise and invest cash as needed by your town or city. You will see these trades, which are infrequent, on your next monthly statement.
How do we make our initial deposits?
After your accounts are open, funds can be transferred to National Advisors Trust Company (NATC) via check, Automated Clearing House (ACH), or wire transfer. Three Bearings Fiduciary Advisors will assist the trustees throughout this process to ensure that the transition is completed smoothly.
How can funds be added to the accounts?
The trustees may make additional deposits in U.S. currency at any time. Deposits are accepted by check, ACH, or wire transfer. Checks should be made payable to the Trustees of Trust Funds and endorsed over to Fidelity Investments or made payable directly to Fidelity Investments. Checks should be delivered or mailed to Three Bearings Fiduciary Advisors for deposit. We will forward the check to Fidelity with appropriate deposit instructions.
How do we make withdrawals?
Trustees may withdraw income and principal at any time by contacting the Investment Advisor. The distribution will be linked electronically through the trustees’ or the municipality’s local checking account. Up to four business days may be required for processing to allow for trades to settle (trade date plus three days) prior to the funds becoming available.
Withdrawal requests are accepted by telephone and fax during regular business hours, as well as in person. Voice mail and email withdrawal requests are not accepted. Your withdrawal request should include the amount that you want to withdraw and the fund that you are debiting. Three Bearings Fiduciary Advisors provides paper receipts to the Trustees for withdrawal requests. If securities need to be sold to raise cash for the withdrawal, we will initiate the required trades. Once the sales have settled, we will initiate a transfer to your bank account.
Withdrawals made within 90 days of deposits may incur short-term trading or redemption fees if mutual fund and/or exchange-traded fund holdings must be sold to meet the withdrawal request. These fees are imposed by the mutual funds, not the Investment Advisor.
What kind of account statements will I received?
You will receive a monthly statement either by mail or email notification directly from Fidelity Investments. Fidelity provides a discount on trade commissions when statements are delivered electronically.
Will my monthly electronic statements be sent securely?
Absolutely. Each trustee can sign on to Fidelity's secure website to obtain the electronic statements. Electronic statements may be saved locally as permanent trustee records under the electronic info act in NH.
May I see the trust fund and capital reserve fund accounts online?
Yes, both through Fidelity Investments and the Three Bearings Fiduciary Advisors electronic client portal You may also call our office during regular business hours and speak with any of our employees to obtain current balances or to initiate a withdrawal.
You may also visit our office and see your account balances in our portfolio management system at any time.
Is there a premature withdrawal penalty if we take money out?
Funds are generally not invested in CDs, so premature withdrawal penalties do not pertain. Certain mutual funds and exchange-traded funds will charge an early redemption fee of 1% or less for withdrawals made within 90 days of investing in the fund. Municipal portfolios are invested in securities that will fluctuate in value so the amount received may be higher or lower than the amount originally deposited.
Does the account require collateral?
No. Accounts are held by a broker-dealer, and are not deposits in a bank that offers loans or mortgages. Consequently, collateral is NOT required. Each municipality common fund is in a segregated account in the name of the municipality.
Are the accounts guaranteed?
Except for certain bank deposit vehicles available through Fidelity Brokerage Services that may be utilized for cash management, securities held in the municipal portfolio accounts are not guaranteed. There is no guaranteed annual percentage yield.
How does Three Bearings Fiduciary Advisors get paid?
We charge an annual investment management fee based on a percentage of assets as follows:
0.50% on the first $5,000,000;
0.40% on the next $5,000,000 (from 5,000,001 to 10,000,000);
0.30% on the next $5,000,000 (from 10,000,001 to 15,000,000); and
0.20% on the assets above $15,000,000.
For trust funds, we debit your account quarterly for our management fee. The fee comes from your portfolio's income, not principal.
For capital reserve funds and expendable trust funds, fees can be debited from the common investment account if the governing body has authorized trustees to pay fees in this manner. Otherwise, fees must be paid as an incedental expense of the town per RSA 31:24 with regard to capital reserves and per RSA 31:19-a, III with regard to expendable trusts. For cities, this fee must be paid as incidental city charges per RSA 34:6.
Towns with less than $200,000 of trust funds and capital reserve funds (combined) are charged a fixed bookkeeping fee of $1,000 per year, which includes asset management and bookkeeping services. The bookkeeping fee is payable at the rate of $250 per quarter, and should be charged by the trustees to the town as an incidental expense of the town, per RSA 31:24.
How often is income posted?
Income is posted to your account when the underlying investments make income distributions, which may be monthly, quarterly, semi-annually or annually.
Are performance reports provided?
Yes. You will receive a quarterly performance report by mail detailing performance of your accounts along with performance of appropriate benchmarks for reference. Past performance of your portfolio is not a guarantee of future results.
How does the Prudent Investor Rule differ from the Prudent Man Rule?
The Prudent Man Rule, under RSA 31:25-b, defines a prudent investment as “one in which a prudent man would purchase for his own investment having primarily in view the preservation of principal and the amount and regularity of the income to be derived therefrom.”
Under the Prudent Man Rule, each investment is considered and judged on its individual merits and must be of the highest investment quality with little or no risk to the preservation of principal.
Trustees may manage and invest town funds in accordance with The Prudent Investor Rule under RSA 564-B:9-901 – RSA 564-B:9-906. This rule states that:
- Growing the principal is allowed
- No category or type of investment is deemed inherently imprudent
- Suitability to the overall portfolio’s goals and objectives is the determining factor
- Portfolio is managed as a whole, as opposed to managing each individual security in the portfolio
- Trustees have greater flexibility in portfolio management
- Speculation or outright risk-taking is not sanctioned by the Prudent Investor Rule
- Portfolio diversification is required unless reasonably determined otherwise
How often will you meet with us?
We will make ourselves available to meet with you as frequently as once per quarter through electronic means, such as GoToMeeting or other remote meeting software. To facilitate these meetings, you will need to arrange for a meeting facility equipped with a computer and telephone. Face-to-face meetings can be arranged annually. We recommend holding this meeting during the second calendar quarter after annual municipal meetings have been held. This will facilitate planning and provide an opportunity for introductions to any newly-elected trustees.
How do I open an account?
Call our office at 380 Lafayette Road, Unit D in Hampton for an appointment
(603-926-1775). We will fill out the paperwork with you. We will need the Tax ID of the municipality.
Whom should I call if I have questions?
Call our office at 603-926-1775 or toll-free 800-927-7365. We will have one of our portfolio managers answer your questions.
