Client assets at Woodard & Company are held in direct custody with Fidelity Institutional, an independent, qualified custodian. You retain direct access to your accounts and direct accountability from a third party.
Every Registered Investment AdvisorRegistered Investment AdvisorAn investment firm registered with the United States Securities and Exchange Commission and held to a fiduciary standard. Registered Investment Advisors file a disclosure document called Form ADV that describes services, fees, and any conflicts of interest.Close × in the United States is legally required to use an independent, third-party qualified custodian.
Under the Investment Advisers Act of 1940Investment Advisers Act of 1940The federal statute governing investment advisors in the United States. It establishes fiduciary duty, requires registration and disclosure, and mandates independent third-party custody of client assets.Close ×, and the custody rule that developed from it, a Registered Investment Advisor managing client assets is required to have those assets held by a qualified custodian, a separate institution licensed to hold securities on a client’s behalf. The rule exists because of hard lessons. The most infamous of the modern era is Bernard Madoff, who custodied client assets within his own firm and used that proximity to fabricate statements and steal billions of dollars over decades. The lesson, however, is older than Madoff.
In 1973, the financier Robert Vesco was charged by the Securities and Exchange Commission with looting roughly $220 million from Investors Overseas Services, the mutual fund complex he had taken control of. Rather than face prosecution, Vesco fled the United States with the money. He spent the rest of his life as a fugitive in Cuba, the Bahamas, Costa Rica, and Nicaragua, dying in 2007 without ever standing trial. The episode is one of the canonical reasons American securities law requires that client assets sit at an independent custodian, beyond the advisor’s direct reach.
The structure is sometimes called the three-party arrangement: the client (you), the advisor (Woodard & Company), and the custodian (Fidelity Institutional). Each of the three has a distinct role. We make the investment decisions; the custodian holds the assets and produces the statements; you own the accounts and verify the reporting. The separation is the protection. Woodard & Company pays custodial expenses, trading charges, etc. on behalf of our clients.
You can perform due diligence, confirming the status of any firm, including Woodard & Company, by going to the website of the U.S. Securities and Exchange Commission at www.sec.gov. At the initial website page, at the top, click “Investors.” Then, on that page, click “Check your Investment Professional.” The box gives you the choice “Individual” or “Firm”; click “Firm” and type in “Woodard & Company” for SEC information.
We use Fidelity Institutional as our custodian because we believe it to be among the strongest, most reliable platforms available for the custody of client assets. Fidelity holds trillions of dollars under custody for institutional clients, maintains SIPCSIPCThe Securities Investor Protection Corporation. A nonprofit, member-funded organization that protects clients of brokerage firms against the failure of the brokerage, up to defined limits.Close × coverage on eligible accounts, and provides the direct statements, online access, and independent verification that protect you as a client.
Fidelity is our custodian. That is the entire extent of the relationship. We are an independent Registered Investment Advisor; Fidelity is an independent custodian; the two firms are not affiliated, commonly owned, or related in any other way.
More specifically: we do not receive any compensation, rebates, revenue-sharing, soft-dollarSoft-Dollar ArrangementsAn arrangement under which a brokerage firm provides research or services to an advisor in exchange for directed trading. This can create conflicts of interest. Woodard & Company pays for its research directly.Close × arrangements, or incentives of any kind from Fidelity for placing client assets there for custody or for selecting any particular investment. When we evaluate stocks, mutual funds or exchange-traded funds, and other securities such as bonds and CDs for client portfolios, we screen independently across the entire universe, using established information providers such as FactSet, Valueline, Morningstar, many others, and our own analysis, and we select on the merits of the investment. We frequently hold funds from Vanguard, BlackRock, T. Rowe Price, PIMCO, and many other managers. Fidelity-branded funds are considered on the same basis as every other manager, never favored by the custodial relationship.
If at any point the Investment CommitteeInvestment CommitteeThe group of advisors at the firm responsible for collective investment decisions. Our committee meets twice weekly, and more often as market conditions warrant.Close × concluded that Fidelity was no longer the best custodian for our clients, we would utilize a different platform. The only thing that holds our custody business at Fidelity is the quality of the service and the strength of the platform, not any financial arrangement between our firms.
Clients may access their Fidelity accounts directly at any time.
We work best with clients who value discipline over drama, judgment over noise, and relationships that extend across generations. If that describes you, we would be glad to make your acquaintance.
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