A custodian is a firm that holds (takes custody of) your assets, and provides regular statements about your holdings and transactions. Sensible Financial provides asset management services for assets held at many different custodians.

If Sensible Financial has a master account with a custodian, we have simultaneous electronic access to all of our clients’ accounts there. In addition, we receive direct daily downloads of transaction, position and price information from every one of those accounts. This affords us the greatest possible efficiency in monitoring, reporting and rebalancing. In these situations, we can offer our full asset management service at our lowest fee. We currently have master accounts with:

• TD Ameritrade (the former Ameritrade, and as of March, 2007, the former TD Waterhouse)
• Fidelity
• iShares Arkansas 529 plan
• TIAA-CREF (no rebalancing efficiencies here, unfortunately)

Because of these efficiencies, we strongly recommend that you establish accounts at either TD Ameritrade or Fidelity (and 529 accounts at iShares Arkansas).

We recognize that clients may have no choice but to maintain certain accounts (especially 401(k)s) with other custodians, and we believe that including the assets from these accounts in the allocation is important. If your custodian does not offer electronic downloads of transaction, position, and price information, we cannot report performance efficiently.

We use the ByAllAccounts aggregation service to track transaction and balance information for most 401(k) and 403(b) accounts to include them in our Portfolio Management and Integrated Financial Advisory services. We will help you make the necessary arrangements with ByAllAccounts. Then we will be able to include these accounts in reporting and rebalancing. We will also tell you which trades to make in these accounts.