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| | Hoover Capital, L.L.C. is an independent Registered Investment Advisor (RIA). Shane Hoover is the Registered Representative and Investment Advisor for Hoover Capital. Unlike most traditional Wall Street brokerage firms, who are usually both an RIA and a broker/dealer, Hoover Capital acts only as an RIA, and is not also a broker/dealer.
The distinction lies in the fact that Hoover Capital obtains fees solely from investment advice. We do not house or otherwise act as the custodian for any assets of our clients. Specifically, all of Hoover Capital's client assets are segregated in the client's own name and held in their own account at the most appropriate outside financial institution or brokerage firm. This helps protect the client's assets, as the client still maintains all the security and safeguards of the custodial firm where their account is held. The only difference to the client is that the client has hired Hoover Capital as their advisor, and has not hired an advisor at the same firm or broker/dealer where the account is held.
Once the proper paperwork and contract agreements are signed, the client would otherwise see little difference between the two. Shane Hoover and Hoover Capital now act as the client’s contact and advisor, and Hoover Capital can facilitate transactions on behalf of the client at the custodial firm(s) where the account(s) is held. Of course, should the client choose, they are still free to facilitate their own transactions, withdrawals, etc.
A traditional full service Wall Street brokerage firm or financial institution usually has an advisor for the client that facilitates transactions on their behalf only at their affiliated company. Conversely, Hoover Capital is not affiliated with any custodial firm or broker/dealer. Shane Hoover and Hoover Capital acts solely as the client’s advisor, and facilitates transactions on behalf of the client at whichever financial institution is most appropriate for the client (where the account is then held).
This provides Hoover Capital with the distinct advantage of being able to utilize any financial institution or brokerage firm that is in the best interest of the client (usually the least expensive option available or the financial institution that offers a unique investment suitable to the client). In the rare event that it benefits the client to have accounts held at more than one custodial firm (perhaps one is less expensive but the other offers a unique investment product), the client would then have statements generated from each custodial firm, rather than one consolidated statement. In our opinion, potentially having statements generated from more than one custodial institution is a small price to pay for the flexibility of having the choice to utilize any or all custodial firms that would be in the client's best interest.
In either scenario, clients who wish to utilize an investment advisor can choose any advisor they feel is most suitable for their needs. However, advisors that are only affiliated with a specific brokerage firm or financial institution are often unable to provide the lowest cost alternative, or access to investments in some unique securities only available outside of their affiliated company. These are not drawbacks to an independent RIA like Hoover Capital. In those times when the added flexibility is beneficial, there is a distinct advantage to having an advisor at an independent RIA.
Please feel free to contact us with any questions regarding this, or any other financial topic. |
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