How to Invest
Becoming a Private Client of Kennon-Green & Co.
If we are a good fit for each other, becoming a private client of Kennon-Green & Co. can be accomplished in six easy steps. This list is meant to serve as a roadmap, spelling out each step chronologically to make the process transparent, predictable, and easy to follow.
Step 1 – The Introductory Telephone Call
Ordinarily, the first point of contact will occur when, or shortly after, you reach out to Kennon-Green & Co. At that time, or during a scheduled follow-up phone call, you will speak with one or more of our Managing Directors who will learn more about you, your needs, your goals, and other relevant considerations. This call will also give you the opportunity to ask questions.
Step 2 – You Review Important Documents and Disclosures
Kennon-Green & Co. will provide you with several important documents that you should read. These documents include:
1. An Introduction to Kennon-Green & Co. – This letter highlights eight things about the firm that we feel new and potential clients should know.
2. The Kennon-Green & Co. Form ADV Part 2A and 2B – This is what is known as our official “brochure”, which we file with our regulators. It explains everything from our various investment strategies to our fee structure and follows a specific format required by the government. A significant majority of our clients have a simple, straight-forward arrangement: We provide pure fiduciary asset management services for a flat 1.25% per annum based upon a minimum relationship size that ranges from $500,000 to $10,000,000 depending upon strategy. Client assets are held in segregated accounts at an independent third-party custodian, usually Charles Schwab & Co., in the name/title specified by the client. For many of our clients, we manage multiple accounts as part of an overall portfolio. For example, we might manage several Roth IRAs, a revocable trust, an LLC account, a Rollover IRA, etc., all as part of a client’s relationship with the firm. As a true asset management firm, we build client portfolios from the ground-up so that the client owns the underlying individual securities in nearly all cases; e.g., the client sees their ownership in companies such as Coca-Cola, Disney, or Berkshire Hathaway (note these particular companies are simply for illustrative purposes) rather than owning high-fee funds or other pooled securities. This is how we manage our own family’s wealth – we want to own wonderful businesses over long periods of time, participating in the success or failure of the enterprise as shareholders – and, thus, the only way we are comfortable running the firm.
3. The Kennon-Green & Co. Form ADV Part 3 (Form CRS) – Known as the Client Relationship Summary, the Form CRS is a two-page document that highlights some of the key points found in our more detailed Form ADV Part 2A and 2B. It is intended for retail investors.
4. A Copy of the Kennon-Green & Co. Credo – One of the first things we did when we established the firm was sit down and write an expression of its core values. These core values are meant to serve as the moral and ethical heart and soul of our operations. Essentially, we wanted something put down in proverbial stone that we could point to when we expand, telling the people who ultimately end up working for and with us, “This is how we behave. If you don’t live up to these standards, you don’t belong here.” This is included in our Form ADV but we provide it as a separate document for your convenience.
5. The Kennon-Green & Co. Privacy Notice Form – Among the many regulations we are required to follow, we must provide our clients with an overview of our privacy policies. The short version: We don’t sell or share your personally identifiable information with anyone unless it is necessary for us to do our jobs, to comply with the law or other regulations, or to inform you about our services. We take discretion seriously. The idea that we would ever violate that trust is abhorrent to us. We wouldn’t want people to treat us this way. It seems like common courtesy to treat others with the same respect.
Step 3 – You Provide Information About the Account(s) You Want Kennon-Green & Co. to Manage
Once you are ready to move forward and become a private client of the firm, it’s as easy as sending us a quick bullet point list that includes the following information for each account you would like Kennon-Green & Co. to manage:
- The full legal name or names of the owner/owners on the account
- A mailing address (cannot be a P.O. Box) for each owner on the account
- A cell phone number (for two-part authentication) for each owner on the account
- An e-mail address for each owner on the account
- The type of account (e.g., taxable brokerage, Roth IRA, Rollover IRA, Traditional IRA, etc.)
- The estimated initial funding amount (a rough, good-faith estimate of the total amount you ultimately plan on depositing or transferring into the account at or shortly after establishment) as well as the source of those funds (e.g., a transfer from PNC, Vanguard, Fidelity, or another institution).
- Confirm that the account holder(s) is/are a U.S. Citizen(s). If one or more owners are not a U.S. Citizen, provide details about citizenship, immigration status, etc.
- Confirm the investment mandate (Global Value, Bespoke, etc.)
- Confirm that there are no requested moral or ethical restrictions you would like us to consider, such as avoiding securities issued by tobacco manufacturers or oil companies. Very few of our clients have such restrictions and Kennon-Green & Co. may not agree to manage an account depending upon the specific restrictions that are requested so please discuss this with us in advance.
This information is required because it is the list we will use to prepare the necessary paperwork for each account in order to 1.) establish the fiduciary relationship between you and Kennon-Green & Co., and 2.) help you spin-up the account(s) that will hold your assets at the independent third-party custodian.
Please note that we offer relationship pricing to help clients save money. This means that if a given investment strategy has a minimum size (e.g., $500,000), the firm, at its discretion, may allow a client to aggregate multiple smaller accounts towards meeting that requirement. To illustrate: A client that had Kennon-Green & Co. manage $350,000 in a Rollover IRA, $25,000 in a Roth IRA, and $125,000 in a taxable brokerage account would be considered as having met the $500,000 minimum provided all accounts employed the same investment strategy. As with most of our policies and practices, we offer this accommodation because we feel it is the right thing to do. It makes it easier for clients to consolidate, simplify, and streamline their investments. It also allows the firm to more comprehensively manage the bigger picture, including taking advantage of asset placement strategies if and when appropriate.
Step 4 – The Fiduciary Relationship Is Established
After you send us the information listed in Step 3, the next step is for Kennon-Green & Co. to prepare the fiduciary documents. These are sent through a DocuSign link, typically within a few business days. You can review and sign them electronically. Once signed by all parties, you will be, officially, a private client of the firm.
Step 5 – The Account(s) at the Independent Third-Party Custodian Are Created, Linked, and Funded
Next, we will 1.) help you spin-up the account(s) at the independent third-party custodian, usually Charles Schwab & Co., and 2.) explain how to submit incoming transfer instructions or make the deposits necessary to fund the account(s). Logistically, this step will differ based upon the specifics of each client and each account.
The process usually takes a few business days, though it can run longer especially during periods of heightened economic disruption. We strive to make the experience as smooth as possible for you. Depending upon the specifics of each required action item, Kennon-Green & Co., and/or Schwab can assist you in guiding incoming deposits and transfers, answer any questions you have, and get you fully brought on-board. During this time, Kennon-Green & Co. may begin planning the initial portfolio build-out of the account(s). That way, when the assets appear at the custodian, the firm may begin deploying capital in accordance with the investment mandate as spelled out in those earlier fiduciary agreement(s).
Step 6 – Kennon-Green & Co. Grants You Access to the Private Client Portal
Around the time the accounts are being established and funded at the custodian, Kennon-Green & Co. will issue a separate set of credentials to you. These credentials are used to access the Kennon-Green & Co. Private Client Portal and are in addition to the credentials you receive from the independent third-party custodian. The portal allows you to see your portfolio as we like to monitor it, including breakdowns of holdings by sector, industry, projected income, and a host of other data points such as historical performance calculations. It also includes a way to securely share documents, as well as a private blog that we update from time to time.
We Hope to Hear from You Soon
Rest assured that at Kennon-Green & Co., we are devoted to making the process of becoming a private client simple, easy, and transparent. At any point along the way, and after you become a client, you can call our office during regular operating hours.