Broker Check

The questions and answers below are designed to help you understand why Mark Schmerge is a very different investment adviser than many you may have encountered and to answer some common questions you may have.

What are your education, training and experience in the investment field?
I graduated in 1979 from the University of Michigan with a Bachelor of General Studies, and have worked in the financial services industry since 1981, when I acquired my first insurance and securities licenses. I have provided insurance and investment advice to clients for in excess of 30 years, including estate and financial planning for business owners, retirees, and high net worth individuals. In 1985, I achieved the Chartered Financial Consultant (ChFC) designation. This required completing an educational program offered by The American College, passing 10 exams covering financial planning, investments and insurance, meeting experience and ethical standards and achieving continuing education requirements of 15 hours yearly.

How do you get paid?
I am compensated on a fee-only basis for assets under management that are held outside an insurance product structure. This includes client portfolios held at independent, national custodians. Fees are charged quarterly, in arrears, for investment supervisory services in accordance with an advisory agreement with the client. Active investment management of client assets held variable annuity accounts is compensated on a level commission basis through the annuity provider. There are no additional Schmerge management fees imposed on assets within an annuity structure. The compensation structure is deliberately designed to assure that investment decisions are made on the basis of what is best for the client. There is no incentive to sell specific products or to engage in excessive trading.

What is your investment strategy?
I strive to build diversified portfolios of actively managed strategies for clients. Strategy diversification goes beyond Modern Portfolio Theory or traditional asset allocation where one adds assets with low correlation, which also tends to reduce the return potential of the portfolio. With actively managed investment strategies, our goal is to optimize return in the up market while still minimizing losses in down market. Part of my investment approach is to diversify by strategy because there is no one strategy that performs well in all market environments. My firm actively seeks out and performs due diligence on technical analysis and active managers and subscribes to those services that I believe demonstrate the greatest potential for accurate signals. 

How long have you used your investment strategy?
I began studying and researching active investment management in the aftermath of the 2000-2002 market decline. In 2005, I began implementing active management on a limited scale and by 2007 was applying active management to all my client portfolios.

What are the performance results and volatility of your investment strategy?
Due to disclosure requirements, performance results are not published on the web site. I would be delighted to meet with you and review those results in person. Please use our CONTACT page to request a personal conversation.

What resources do you use to manage money?
I use various security analysis methods including but not limited to Fundamental, Technical, Cyclical, and Charting analysis. 

  • Charting is a technique that attempts to forecast future market moves by studying historical data on charts.
  • Fundamental Analysis attempts to determine a security’s value by focusing on underlying factors that affect a company’s actual business and its future prospects. The term refers to the analysis of the economic well-being of a financial entity as opposed to only its price movements.
  • Technical Analysis relies on the assumption that current market data (such as charts of price, volume, relative strength, momentum, etc.) can help predict future market trends, at least in the short term. It assumes that market psychology influences trading and can predict when stocks will rise or fall.
  • Cyclical Analysis is a technique that looks at cycles, specifically analyzing the way prices follow certain patterns and trends.

This information is derived from financial newspapers and magazines, television, websites, research materials prepared by other investment firms, corporate rating services, mutual fund rating services, annual reports, prospectuses, filings with the Securities and Exchange Commission and company press releases.

What information do you provide your clients?
The advisory firm provides each client with a quarterly report providing information regarding the portfolio’s Current Holdings by Registration, Asset Allocation, Portfolio Performance, Asset Class Performance and Position Performance over multiple time frames, Summary of Portfolio’s Net Investment, Net Gain/Loss and Values since inception and a Fee Report. Accounts under $100,000 may obtain this report from our website. Accounts over $100,000 have option of receiving report by mail or in person on paper. In addition, clients will receive independent quarterly reports from the custodian and may request trade confirmations and other reports.

How do you work with clients?
A typical client relationship begins with a complimentary meeting. This is very much an educational session. My goal is to explain how I manage client assets and to make certain this is an approach you are comfortable with and that makes sense to you. From that initial meeting, we establish your risk tolerance, which will be used to develop your portfolio allocation. The minimum initial investment is $100,000. We will accept lesser amounts, but only if the amount represents 100% of your investable assets. 

Your portfolio is held in your name at the custodian. At no time are your assets mingled with other accounts, nor does my firm have any access to your funds other than an automatic quarterly fee payment authorized in the investment agreement.

At least annually, the portfolio and its suitability are reviewed with each client. If there are changes in the client’s financial situation or life that might impact investment suitability, I ask that they notify the office as soon as possible. Clients are welcome to call me at any time.

Can you help me with other financial issues, such as taxes or estate planning?
My focus is on the investment decisions and growing your portfolio. Realizing that clients often need help with other aspects of their financial lives, however, I have built a referral team of attorneys, accountants, financial planners and other professional advisers that I work with to bring a comprehensive approach to your financial situation. I also have a number of tradespeople and other resources that you may find useful referrals. 

View my list of referral professions.