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"Marshfield also advises three SMAs". In Dennis' review the word SMA is used. What is the meaning of that term. He also says that the fund will not be offered @ wire houses. I presume he means Fidelity, Schwab etc. the places cited as available appear to be advisor sites.
"SMA" is shorthand for "separately managed account." Often an adviser will have a strategy (EM small cap value) that will manifest itself in a bunch of places; it might be the basis of their mutual fund but they might, separate from that, have some rich guy for whom they manage $10 million. They could offer to invest the $10 million for him in EM small cap value stocks, using the same discipline that's in the mutual fund but not the same investments. The m.f. might have invested in some Brazilian microcap in 2000 that's now worth $10 billion; the fund is letting a winning investment ride but would not consider buying it today. So the new separately managed account would have the same strategy and discipline, different fee structures and some but not all of the same investments.
Wirehouses (an antiquated term from the days when a brokerage would have a private, direct phone line - or wire - to a major bank) are the huge, integrated financial firms like Morgan Stanley Smith Barney, Merrill Lynch, UBS, and Wells Fargo. Many of the online brokerages are, technically, clearing firms.
For now, at least, it looks like Marshfield is available only by directly investing through Marshfield.
That's an interesting fund, indeed. Too new for my tastes, as I recall from when I read David's piece, but it's intriguing ... and local for me, which is kind of neat.
I received the following reply from the fund today after messaging some information to them yesterday. It reads:
"It is good to hear from you as it provides a wonderful opportunity to tell you that since your article was posted, we’ve seen an uptick of interest in our fund. So thank you again, you captured us well and it seems to resonate so it’s great to have a larger audience."
Also, I have the green light from them to do a fund update in a year, provided David agrees.
Many of the online brokerages are, technically, clearing firms.
I thought that it was the other way around. That online brokerages are introducing firms. Some use independent clearing firms like Pershing, Apex, etc., while larger ones tend to be self clearing. Maybe that's what you meant - that in addition to being introducing firms, many brokerages also act as clearing firms.
That page looks okay as far as it goes, but it's about as clear as mud if you don't already have an idea of how the industry is organized.
For example:
"The Dual Registered channel includes RIAs who are dually licensed as both a registered investment advisor and a registered representative". While it describes RIAs, nowhere else does it give a clue what a registered rep is. https://www.investopedia.com/terms/r/registeredrepresentative.asp
"RIA[s] ... access[] mutual funds ... via supermarket platforms such as Schwab, Fidelity ..." What's a supermarket platform and how does it differ from the Discount Channel it describes elsewhere? (I think they're the same thing, though discount brokerages will cut different deals for individual investors and for RIAs.)
"First Clearing ... Clearing Firm (categorized under Wirehouse due to affiliation with Wells Fargo)". Yet National Financial Services LLC, which is not merely affiliated with Fidelity Brokerage, but is a wholly owned subsidiary of FMR, is not categorized as a Wirehouse. (Nor is Schwab, which it also classifies as a clearing firm.)
It's not easy to sort out the pieces, so it's not surprising to see sites get tangled up in trying to classify interrelated firms. (I claim only the most basic and incomplete sense of what the pieces are.)
Comments
"SMA" is shorthand for "separately managed account." Often an adviser will have a strategy (EM small cap value) that will manifest itself in a bunch of places; it might be the basis of their mutual fund but they might, separate from that, have some rich guy for whom they manage $10 million. They could offer to invest the $10 million for him in EM small cap value stocks, using the same discipline that's in the mutual fund but not the same investments. The m.f. might have invested in some Brazilian microcap in 2000 that's now worth $10 billion; the fund is letting a winning investment ride but would not consider buying it today. So the new separately managed account would have the same strategy and discipline, different fee structures and some but not all of the same investments.
Wirehouses (an antiquated term from the days when a brokerage would have a private, direct phone line - or wire - to a major bank) are the huge, integrated financial firms like Morgan Stanley Smith Barney, Merrill Lynch, UBS, and Wells Fargo. Many of the online brokerages are, technically, clearing firms.
For now, at least, it looks like Marshfield is available only by directly investing through Marshfield.
Does that help?
That's an interesting fund, indeed. Too new for my tastes, as I recall from when I read David's piece, but it's intriguing ... and local for me, which is kind of neat.
David
"It is good to hear from you as it provides a wonderful opportunity to tell you that since your article was posted, we’ve seen an uptick of interest in our fund. So thank you again, you captured us well and it seems to resonate so it’s great to have a larger audience."
Also, I have the green light from them to do a fund update in a year, provided David agrees.
Dennis Baran
https://www.finra.org/arbitration-and-mediation/faq-clearing-firms-faq
https://investorjunkie.com/14437/broker-clearing-firms/
I have to admit that I mostly ignore (a/k/a am ignorant of) the distinctions among flavors of firms. As I was poking around yesterday on golub's behalf, I can across this list and categorization: sionline.com/simresources/simfund7/Simfund7-Distribution-Channel-Top-Distributor.pdf. Might well be wrong, as soon much of the interweb is.
Cheers,
David
For example:
"The Dual Registered channel includes RIAs who are dually licensed as both a registered investment advisor and a registered representative". While it describes RIAs, nowhere else does it give a clue what a registered rep is.
https://www.investopedia.com/terms/r/registeredrepresentative.asp
"RIA[s] ... access[] mutual funds ... via supermarket platforms such as Schwab, Fidelity ..." What's a supermarket platform and how does it differ from the Discount Channel it describes elsewhere? (I think they're the same thing, though discount brokerages will cut different deals for individual investors and for RIAs.)
"First Clearing ... Clearing Firm (categorized under Wirehouse due to affiliation with
Wells Fargo)". Yet National Financial Services LLC, which is not merely affiliated with Fidelity Brokerage, but is a wholly owned subsidiary of FMR, is not categorized as a Wirehouse. (Nor is Schwab, which it also classifies as a clearing firm.)
It's not easy to sort out the pieces, so it's not surprising to see sites get tangled up in trying to classify interrelated firms. (I claim only the most basic and incomplete sense of what the pieces are.)