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
• TIAA-CREF (no rebalancing efficiencies here, unfortunately)

Because of these efficiencies, we strongly recommend that you establish accounts at either TD Ameritrade or Fidelity.

We recognize that clients may have no choice but to maintain certain accounts (e.g., 401(k)s and 529s) 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 may still be able to access quarter-end statements electronically, and report allocation and rebalancing recommendations. Otherwise, we will ask you to send us statements at quarter end. In any case, our required manual processing is expensive, and we charge an extra fee for working with these accounts.