Precipio Wealth Management LLC
Frequently Asked Questions

A fee-only advisor is in the business of providing advice to clients concerning securities and non-securities matters. Fee-only advisors are different from stockbrokers and fee-based advisors who sell securities and products rather than advising for compensation.

No. Precipio receives no compensation other than advisory fee income. We do not accept things of value from any investment management providers and do not have soft-dollar arrangements.

Unlike fee-only registered investment adviser firms, stockbrokers are both employees and registered representatives of broker-dealers. Stockbrokers are licensed to sell securities and other products, and they are compensated based upon the what they sell and the volume of their sales.

Stockbrokers must adhere to a suitability standard, except when working with ERISA plans or Individual Retirement Accounts (IRAs). In those cases, a stockbroker is required to serve as a fiduciary.

Fee-only RIA firms, such as Precipio, provide advice as part of business practices, and they must always adhere to the fiduciary standard when engaged by clients.

“A fiduciary standard is a professional standard that requires placing the clients’ best interests first, avoidance or mitigation of conflicts of interest, thorough due diligence on products and services, full transparency, and careful monitoring and reporting.“

--Blaine F. Aiken, President, Fiduciary360, LP, Investment News, March 16, 2009

Precipio Wealth Management is registered with and regulated by the Securities & Exchange Commission. However, registration does not imply any SEC approval of its advice or strategies.

Neither Precipio nor any of its principals or employees have ever been disciplined by any regulatory authority.

For years, many institutional investors have arranged to hold their investment assets in custody away from both registered investment adviser firms and broker-dealers. In the wake of the infamous Madoff scandal, better practices were closely examined. “Kiplinger’s Personal Finance” wrote in its March 2009 issue, “How to Spot the Next Bernie Madoff,” “Make sure there’s a third-party custodian.”

Schwab Institutional serves Precipio as Qualified Custodian of its client accounts. Schwab is the largest custodian for approximately 10,000 Registered Investment Adviser firms safeguarding assets in custody in excess of $4.04 trillion.*

*December 31, 2019

Aside from internal audit procedures, Deloitte & Touche LLP has served as auditor to Schwab since 1976. Schwab has been a publicly held company since 1987 and its common shares are listed on the New York Stock Exchange.

No. All portfolio assets are held by the third-party Custodian. Checks for deposit are properly made payable to the account and transmitted to the custodian, and checks to you are mailed by the custodian.

Securities in Schwab accounts — including fully paid securities for stocks and bonds and excess margin securities—are segregated in compliance with the U.S. Securities and Exchange Commission's Customer Protection Rule. This is the legal requirement for all U.S. broker-dealers. Segregated assets are not available to general creditors and are protected against creditors' claims in the unlikely event that a broker-dealer becomes insolvent.

As a member of the Securities Investor Protection Corporation (SIPC), securities of custody customers of Schwab are covered up to US$500,000 (including US$250,000 for claims for cash). Besides the SIPC protection, Schwab provides additional brokerage insurance through an agreement with Lloyd's of London and other London insurers.

The combined total of SIPC coverage and its "excess SIPC" coverage means Schwab provides protection up to an aggregate of US$600 million, limited to a combined return of US$150 million per customer, up to US$1.15 million of which may be in cash. This protection becomes available in the event SIPC limits are exhausted.

Yes. Precipio Wealth Management has contracted with an independent, third-party performance measurement firm that prepares robust, analyses of the progress of your portfolio.


Precipio [prĕ-cĭpˊ-ĭ-ō]
Latin for:
To anticipate, instruct, advise, warn

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