FROM ASSETS TO OUTCOME

Our Services

Investment expertise amplified by comprehensive service.

Built upon our deep investment experience, Ensemble Capital Management also offers a comprehensive and superior range of wealth management services and solutions to our clients to meet their unique financial needs.

Our team of dedicated specialists advances your objectives with a primary focus on efficiency. Our financial recommendations always integrate with your desired lifestyle to solve your financial goals. Our excellent client service, independent advice and experience make our recommendations simple and effective to implement.

Our Services | Portfolio Management

We are DEDICATED to producing the best RISK-ADJUSTED RETURNS possible in a UNIQUE PORTFOLIO that reflects your SPECIFIC SITUATION.

Unlike many advisors who place clients in a “model portfolio” that reflect their generic investment needs – aggressive, conservative, income, etc – we custom build each portfolio from the bottom up to fit each client.

When building your portfolios we take into account both quantitative and qualitative aspects of your personal situation.

Most importantly, every trade we place on your behalf will be made with your particular situation in mind. Rather than trying to make you conform to a cookie-cutter investment model, we spend the time and energy needed to customize a portfolio built just for you.

TAX CONSEQUENCES

Before liquidating your existing portfolio, we examine your tax situation and the implications of any unrealized gains or losses you might have. If warranted, we will continue to hold certain legacy positions in order to defer gains or losses until a more opportune time.


LEGACY HOLDINGS

In addition to tax related motivations for holding legacy positions, occasionally a client will have a holding of special importance. In these cases, we are happy to hold the position on a permanent basis while keeping the client updated on the investment characteristics of the holding.


EMPLOYMENT IMPLICATIONS

Being located mid-way between San Francisco and Silicon Valley, it is not unusual for our clients to work for companies whose prospects are driven by many of the same inputs that drive financial markets. If desired, we can customize your portfolio to help diversify some of the risk embedded in the nature of your work.


INCOME NEEDS

In general, we attempt to maximize the total return, both income and capital appreciation, of our clients’ portfolios. However, if you require a certain level of current income, we will customize both your equity and fixed income holdings to meet this need.

Our Services | Wealth Planning

The PLANNING ADVICE you want, WHEN YOU WANT IT.

Whether you are working and building your portfolio, in retirement or overseeing a complex multigenerational asset base, Ensemble Capital can provide the advice you need. As registered investment advisors our work with clients goes far beyond picking stocks and bonds. When you hire Ensemble Capital, one of our portfolio managers will become your personal financial advisor assisting you in making complex financial decisions.

RETIREMENT PLANNING

If you are working and building your wealth, we’ll help you consider how much you will need to support your lifestyle after you retire and the tools available to help you get there.


INCOME PLANNING

If you are retired, we’ll work with you to understand how much spending your portfolio can support over the long term and advise you on the investment approach that is most likely to meet your goals.


MULTIGENERATIONAL WEALTH

Ensemble Capital is proud of the fact that many of our clients have two or three generations of family wealth under our management. If you are looking to put money into trust for your children or grandchildren or help fund their education, transfer assets to the next generation or otherwise coordinate multigenerational wealth management, we’ll work closely with you to make sure that this complex planning process is managed seamlessly.


ASSET ALLOCATION

After discussing your goals for your various portfolios, we’ll recommend an asset allocation that will best support your plans. Importantly, we’ll discuss the implications of various asset allocations so that you fully understand the basis for our recommendations.


STOCK OPTIONS AND RESTRICTED STOCK

If you have stock options or restricted stock, we will advise you on the best way to diversify your holdings or build a broader portfolio around these core concentrated positions.


MISCELLANEOUS

Our clients rely on us for a variety of financial advice. When we do not have expertise in the specific topic, we make it our job to locate the right person to help.

THE ENSEMBLE WEALTH MANAGEMENT PROCESS

Our 6-step wealth management process is based on the Financial Planning Practice Standards of the CFP® Board. Whether you are focused on a single issue or a more comprehensive and complex plan, we will help you achieve your financial goals:

  • Define Our Planning Relationship

    This first step helps you understand the planning process and determine whether the focus will be
    on one particular planning interest or creating a comprehensive plan.

  • Monitor the Plan and Your Progress

    We will monitor your progress towards your
    goals and help you take into account life events
    that may change your initial situation or goals.

    Refine Your Financial Goals and Gather Data

    We discuss your goals and gather
    the data we needed to create your plan. We
    ask about your financial situation and any
    other relevant information.

  • Implement Recommendations

    Once you decide which recommendations
    you wish to implement, we can help guide
    you through the implementation process and
    coordinate with other professionals, such as
    attorneys, accountants, or insurance agents.

    Our PROCESS

    Analyze Your Financial Situation

    We will perform a comprehensive
    analysis to assess your current situation
    and determine what you must do to
    meet your goals.

  • Present Recommendations

    Based on the analysis of your financial status, we
    will develop and present concrete recommendations that
    address your goals. We will walk you through our recommendations
    and the implications of each particular alternative so you can make
    an informed decision about your action plan.

  • Implement Recommendations

    Once you decide which recommendations
    you wish to implement, we can help guide
    you through the implementation process and
    coordinate with other professionals, such as
    attorneys, accountants, or insurance agents.

  • Monitor the Plan and Your Progress

    We will monitor your progress towards your
    goals and help you take into account life events
    that may change your initial situation or goals.

  • REFINE AND REPEAT
HYPOTHETICAL CASE STUDY

JOHN AND WENDY HAD RECENTLY RETIRED
AND WANTED TO RETHINK THEIR LONG-TERM STRATEGY.

They came to Ensemble Capital looking for help to better understand their overall financial picture and to make sure that their investment strategy was aligned with their long-term goals.

The couple had a living trust, an IRA in John’s name and a large 401k with the employer from which Wendy had recently retired. Their two children are adults and their daughter was expecting her first child.

We sat down with John and Wendy in their home and spoke at length about their plans for the future. They discussed their desire to maintain a relatively modest lifestyle, while also being able to travel extensively. They were also interested in setting aside money to help pay for their soon-to-be-born grandchild’s education. Since they had recently retired, they were also contemplating becoming more involved in some of the nonprofits they had long supported and were interested in understanding how they could best provide financial support.

Our Services | Charitable Planning

About ONE-QUARTER OF ENSEMBLE ASSETS under
management are held in PRIVATE FOUNDATIONS, NONPROFIT ENDOWMENTS,
CHARITABLE TRUSTS and other PHILANTHROPIC ACCOUNTS.

While our main efforts are concentrated on investment research and portfolio management, we also have developed special expertise in philanthropic planning.

Sean Stannard-Stockton, our President and Chief Investment Officer, is well known in the philanthropic community for his popular Tactical Philanthropy blog that he authored from 2006 to 2011 as well as his regular columns in the Financial Times and Chronicle of Philanthropy. If you have an interest in maximizing the charitable impact and tax benefits of your giving, we can work with you to develop a philanthropic plan that meets your needs. We will then coordinate the creation of a private foundation, donor advised fund, charitable trust or other philanthropic account.

  • Private Foundations
  • Donor Advised Fund
  • Charitable Trusts

Private foundations are the MOST FLEXIBLE of
the various charitable vehicles.

They are a distinct legal entity that is controlled by your family. When you make a gift of appreciated stock into your foundation, you avoid paying capital gains taxes, take an income tax deduction for the full market value of the gifted stock, and permanently shield those assets from the estate tax.

Foundations are unique philanthropic entities that can engage in a variety of innovative charitable strategies. We help clients explore concepts such as loaning money to nonprofits, making grants to international organizations or otherwise leveraging the private foundation in ways not available to individual donors.

A donor advised fund is essentially a
“CHARITABLE CHECKING ACCOUNT.”

A donor advised fund allows you to avoid paying capital gains tax on asset transferred in, take an income tax deduction for the fair market value of those assets and then send charitable gifts to nonprofits at whatever time is right for you. Assets in a donor advised fund grow free of taxation, building your giving capacity.

A donor advised fund has the advantage of being incredibly simple and allows you to easily fund your philanthropy with assets you may not have considered in the past. In addition to stock or cash, you can deposit partial or whole interests in real estate, privately held businesses, and other non-publicly traded assets into a donor advised fund. In some cases, donor advised funds may offer larger tax deductions than private foundations to families who make large gifts in relation to their annual income.

Charitable remainder trusts (CRTs) pay income to an individual and, at a later date, pay the principal to a designated nonprofit.

CRTs are excellent vehicles for individuals who plan on leaving a portion of their estate to charity, but need to continue receiving income from their investment portfolios. Charitable lead trusts (CLTs) pay an annual amount to a designated nonprofit and transfer the principal back to the grantor or another person at some future date. These trusts can be structured to pull future tax deductions into the present or to significantly reduce gift and estate taxes on transfers of assets to heirs.

CRTs allow you to deposit highly appreciated assets (often common stock, real estate or privately-held business interests) and defer paying capital gains tax when they are sold. This allows you to tax efficiently exchange non-income producing assets for a diversified portfolio. You also receive an income tax deduction for the present value of your eventual gift to a nonprofit.

HYPOTHETICAL CASE STUDY

LAURA HAS WORKED IN SILICON VALLEY FOR 15 YEARS AND IS TURNING
HER INTEREST TOWARD HER PHILANTHROPIC IMPACT.

After working at a series of unsuccessful startups, she co-founded a company that eventually was acquired by a major consumer web company.

Now in her mid-40’s, Laura consults with new startups and has some significant investments in early stage companies. But her main interest these days is in her philanthropic work. She sits on the board of two nonprofits and has recently been learning more about how donors can achieve the most impact from their investments of time and money.

After spending time learning about Laura’s past work in technology and her current nonprofit work, Ensemble Capital proposed that she launch a private foundation. In addition, we suggested that she open a donor advised fund to receive a donation of her interest in a privately held business, which would receive more favorable tax treatment than if donated to her private foundation.

Our Services | The Financial Advisor Landscape

The financial advisor landscape includes stock brokers, registered investment advisors, wealth managers, financial planners and many other financial professionals, all of whom play different roles and have different responsibilities to their clients.

Although many advisors use different terminology, in general advisors come in some version of the following:

  • Investment managers directly invest in a portfolio of stocks and bonds on behalf of their clients.
  • Asset allocators outsource investment management via mutual funds or other investment vehicles and concentrate instead on which managers to hire on behalf of their clients.
  • Fiduciary advisors have a legal obligation to act in the best interests of their clients and are paid to offer objective advice.

Ensemble Capital is a fiduciary investment manager. We are paid to deliver objective advice.

Investing

Ensemble Capital offers investment management of custom-built portfolios. We invest in individual stocks and bonds based on our independent, objective research.

We manage portfolios on behalf of...
  • families
  • trusts
  • foundations
  • nonprofits
Investing | Philosophy

We use a COMMON-SENSE APPROACH to discovering INTRINSICALLY
VALUABLE COMPANIES.

We believe that investors are best served by owning a portfolio of companies, both emerging and established, that have significant growth opportunities and competitive advantages that allow them to sustain their profitability while returning capital to shareholders over time. Rather than trying to guess which way the market or certain stocks may move in reaction to short-term news, we look to participate in the profitability of companies that will achieve superior long-term corporate performance.

We are business analysts, not stock market pundits. We spend our time learning as much as possible about the industry trends, competitive dynamics and customer demands that give rise to intrinsically valuable companies. Many investors, on the other hand, are nothing more than stock market speculators, analyzing the stock market instead of the actual companies in which they invest. While it is seductive to think that an investor can guess which way the market will turn, sustainable returns are generated through investing capital based on extensive analysis of the specific businesses in which you take a position.

Investing | Portfolio Construction

We CAREFULLY CONSTRUCT CUSTOMIZED PORTFOLIOS of these
companies on behalf of each client.

Original in-house research is at the heart of our investment process. We look for companies that have superior competitive positioning and create real cash earnings on behalf of shareholders at a higher than average rate. These companies achieve above-average returns on the capital they invest into their businesses while growing at sustainable and attractive levels.

  • return on invested capital
  • ability to grow

We understand that any potential investment is far more than a blip on a stock screen; it’s a business. And, ultimately, businesses exist to create value for their owners. To this end, we focus on finding attractive businesses that deliver real and sustainable shareholder value. We believe return on invested capital (ROIC) – that is, the realized cash return on each dollar invested in the business – is the key metric to determine the value-creating ability of any company. We focus on companies that generate high or improving ROIC, as those businesses, all else equal, deliver the greatest shareholder value.

Expectations Matter

Even the most attractive business does not have unlimited value. Frequently, the market will have excessively optimistic or pessimistic expectations about a company’s prospects, which are often reflected in stock valuations. Our objective is to identify companies with outstanding profitability and growth characteristics, at times when the market does not fully appreciate them.

We always seek to pay a compelling price for the businesses in which we invest. A fundamental element of our research process is estimating what a potential investment is worth — that is, its intrinsic value. Alongside our company’s due diligence, we use several methods to derive that estimate. We consider traditional valuation metrics, but we also generate an informed estimate of the economic profits a company can deliver now and into the future. We only invest client capital in companies which trade at a meaningful discount to our intrinsic value estimate, taking great care not to assume that every great company is also a great investment opportunity.

Investing | Portfolio Management

The portfolio management process is a critical aspect of RISK CONTROL.

We believe that there are two key elements of successful portfolio management that are not practiced by the majority of investors. While it is possible to be successful without abiding by these guidelines, not sticking with them makes superior performance much more difficult to achieve.

The True Cost of Diversification

Investment diversification has a SWEET SPOT.
Too much can be costly —
and too little can be much worse.

Over the years, the financial services industry has broadly accepted and promoted the mistaken idea that more diversification is always better. Both academic and real world studies show that for a portfolio of stocks, the risk reduction benefits of additional diversification is minimal beyond 20 to 30 positions. In addition, the cost of diversification beyond this point outweighs the potential benefits — adding a 50th or 100th position to a portfolio requires adding an investor’s 50th or 100th best idea.

At Ensemble Capital, we invest our clients’ equity assets in 15 to 30 securities. This degree of focus provides the benefits of diversification while keeping our clients’ assets in our best ideas. With this level of focus, we are able to know every company in our portfolio inside and out.

PARETO'S DIVERSIFICATION
  • Universe of public domestic stocks (NYSE and Nasdaq) 6,000
  • Universe of S&P 500 index 500
  • Typical actively managed equity mutual fund portfolio 200
  • Optimally diversified portfolio 25
Like the Pareto principle (the majority of the beneficial effect arises from the minority of the causes), Ensemble Capital invests in highly-focused, customized client portfolios of 15 to 30 securities. Selected by our own proprietary research, we believe these positions offer the greatest potential for market performance, as supported by academic research, real-world studies, and our own firm's superior performance over the last 15 years.
Investing vs. Trading

We focus on making MULTIYEAR INVESTMENTS in companies we
think will thrive over the LONG TERM.

Our analysis focuses on the positive and negative developments that are likely to play out over the next 3 to 5 years or longer. Because we seek to benefit from superior long-term corporate performance in excess of market expectations, our holding period is designed to match the multiyear period over which corporate performance unfolds.

Our clients care primarily about the long-term performance of their assets and our investment analysis is focused on meeting those long-term goals. The majority of investors instead focus myopically on the positive and negative developments that are likely to occur in just the next couple of quarters. This short term focus leads investors to pay high prices for what’s hot now or sells at low prices in the face of transitory difficulties.

  • 36-60 monthsEnsemble Capital's average holding time
  • VS
  • 11 monthsWall Street firm's average holding time
Fixed Income

Over long time periods, we believe that stocks will deliver
SUPERIOR INVESTMENT RETURNS compared to bonds and cash.

The price of stocks' long-term outperformance is short-term volatility. Therefore, when clients have short-to-medium-term needs for their assets or simply wish to avoid some of the volatility inherent in stocks, we add bonds and cash equivalents to their portfolios.

Rather than seek to take undue risk in this portion of client portfolios in search of slightly higher returns, we focus on building very high-quality portfolios of bonds that we believe fairly compensate investors in light of their reduced level of risk. Our primary concern in fixed income investing is credit risk — that is, the risk the bond issuer will not deliver on its obligation to make timely interest and principal payments. We focus on issuers’ financial health, analyzing their cash flows, leverage and liquidity – but also their operating histories and management strength. In this sense, our bond analysis is not that dissimilar from key elements of our stock analysis – and we perform this research regardless of whether the issuer is a corporation, municipality or other borrower.

Client Relationship

Close contact with our clients is how
Ensemble Capital provides
superior financial advice.

CLIENT RELATIONSHIP | HOW WE WORK TOGETHER

Our client service model is based on the idea
that complexity should always be minimized.

Our client service model is based on the idea that complexity should always be minimized. Our clients feel that they have a clear understanding of their current financial situation and future objectives which leads them to make superior financial decisions.

CLIENTS’ INTERESTS COME FIRST  Icon
CLIENTS’ INTERESTS COME FIRST

Always. We are fiduciary investment advisors. We are legally bound to put our clients’ interest first and foremost at all times.

CLEAR, SIMPLE FINANCIAL ADVICE AND REPORTING Icon
CLEAR, SIMPLE FINANCIAL ADVICE AND REPORTING

Our clients have a clear understanding of the degree of financial independence that their current assets offer and they know the level of assets they want to build up to in order to achieve the level of financial independence they desire.

ADVICE BACKED BY WELL ARTICULATED REASONING Icon
ADVICE BACKED BY WELL ARTICULATED REASONING

Our clients feel confident in the plan designed for them by our team. While they understand that we cannot predict the future, they feel confident, well informed and prepared when market volatility or unexpected events occur.

DIVERSITY AND DEPTH OF EXPERTISE Icon
DIVERSITY AND DEPTH OF EXPERTISE

Our clients value being serviced by a team of specialists, with each member having an advanced expertise in their own area. From in-depth investment questions to holistic wealth management, our clients feel supported by our team of professionals.

PERFECT SIZED FIRM  Icon
PERFECT SIZED FIRM

Our clients appreciate that we are the right size for them. Ensemble Capital is large enough to have all of the resources of a large firm, yet small enough so that each employee knows our clients personally.

When you first engage our services, we have an in-depth conversation about your financial situation and set long-term objectives. But an initial meeting only sets initial goals. Over time, we’ll be in regular contact with you in person, by phone or by video conference.

We think the best financial advice is delivered within the context of a relationship built upon trust. By keeping in close touch with you, we seek to build a more nuanced understanding of your financial life, goals and needs.

  • build a more nuanced understanding
    of your financial life
  • establish strong working relationships
    with your other advisors
  • our investment management team works
    directly with you
Client Relationship | Technology

TOOLS TO SIMPLIFY AND ENHANCE

Ensemble Capital employs every technology that assists our investment process and strengthens our relationship with you. Whether you are partial to online meetings, in-person consultations, or paper communications, our approach to technology is based upon your preferences. Our watchwords are “simplify” and “enhance,” and we employ any or all of the following tools to achieve those for you:

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Interactive, online,
and mobile reporting

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Website with
personal portal

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Online and video
conferences

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E-signature

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Regular updates via
conference calls and blog posts

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Secure and fast
document sharing

However, no technology can replace face-to-face meetings and our preference is to schedule regular in-person meetings while using other forms of communication to augment our relationship with you.

Cybersecurity

The Ensemble team is committed to protecting the firm and our clients from cybersecurity threats. To ensure our program’s effectiveness, we implement the following steps:

DUAL FACTOR AUTHENTICATION Icon
DUAL FACTOR AUTHENTICATION

An extra layer of security above a username and password

VOICE VERIFICATION Icon
VOICE VERIFICATION

Additional verification conducted on transfers to 3rd parties

INNOVATIVE PASSWORD PROTOCOLS Icon
INNOVATIVE PASSWORD PROTOCOLS

Password testing to ensure maximum strength and updating on routine basis

ENCRYPTED DEVICES Icon
ENCRYPTED DEVICES

Disk encryption utilized on mobile devices

VENDOR DUE DILIGENCE Icon
VENDOR DUE DILIGENCE

Analysis and evaluation of the cyber security protocols in place with our partners

PATCH MANAGEMENT Icon
PATCH MANAGEMENT

Automated patch deployment and confirmation reporting

VULNERABILITY SCANNING Icon
VULNERABILITY SCANNING

Quarterly network vulnerability scanning conducted

ONGOING PHISHING TESTING Icon
ONGOING PHISHING TESTING

Continuous simulated phishing attaches sent to all employees

ROUTINE TRAINING Icon
ROUTINE TRAINING

Regular, relevant, and high quality cybersecurity-related training conducted on a continuous basis

ADVANCED THREAT PROTECTION Icon
ADVANCED THREAT PROTECTION

Identifying and blocking malicious files in online libraries with ATP for SharePoint, OneDrive, and Microsoft Teams

PENETRATION TESTING Icon
PENETRATION TESTING

Annual penetration testing conducted by an independent third party

WEB CONTENT FILTERING Icon
WEB CONTENT FILTERING

Active blocking of suspicious DNS queries

MSP MANAGED SECURITY SERVICES Icon
MSP MANAGED SECURITY SERVICES

Continuous threat monitoring performed by an independent third party with deep financial services experience

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