Altruist Financial Advisors LLC
In accordance with SEC Rule 206(4)-6 under the Investment Advisers Act of 1940, this is Altruist's written policy for voting our clients' proxies. Note that, because Altruist NEVER recommends individual stocks, we expect most proxies we ever vote will be proxies of mutual funds and exchange traded funds. This significantly lessens the scope of potential issues which might be submitted to us.
Voting Client Proxies
Altruist only votes proxies on behalf of clients who have specifically requested us to do so. Clients generally do this by making the appropriate selections on their custodial account application form.
General Philosophy Behind Votes
We manage assets in a manner which will typically benefit clients over a span of several decades. Accordingly, our actions must support the long-term interests of those clients.
Mutual fund and exchange traded fund shares held by clients usually carry voting rights. These voting rights are valuable assets and (if the right to vote them is delegated to us) we have an obligation to ensure that shares owned by those clients are voted in a way that supports their long-term interests.
Specifically, we have a duty of loyalty to exercise our proxy voting authority solely in the interests of our clients. We have a duty of prudence to exercise our proxy voting authority with the care, skill, and diligence that a prudent person would exercise in managing the property of others. Failing to vote our clients' shares (when that responsibility has been delegated to us), voting without considering the effects of the proposal's recommendations, or voting arbitrarily with or against management, may violate these duties.
In some cases, however, it may be in the best interest of the client to refrain from voting certain proxies. For example, if a foreign proxy required translation and overseas travel, it may not be in the client's best interest to incur the expenses associated with voting the proxy.
In summary, Altruist will vote proxies in accordance with what we believe to be in our client's best interests.
Application of These Guidelines
Altruist will vote its proxies in accordance with the specific proxy voting guidelines, except as described below. In deciding how to apply the specific guidelines, we will give consideration to the circumstances of each vote, as well as to the general principles described above. If it is not clear how to interpret or apply the specific guidelines for a particular vote, decisions on how to proceed will be based on what we judge to best serve the long-term interests of our client. This may include occasionally deviating from the specific guidelines, if doing so is expected to best serve the client's interests in the long-term.
We will vote in a manner which is consistent with the duties of loyalty and prudence.
Material Conflicts of Interest
There is a small possibility that we might occasionally become aware of a material conflict of interest which might reasonably bring into question our objectivity in voting a client's proxy. In such a case, we will endeavor to inform any affected clients of that potential conflict in advance and mutually agree on an acceptable manner of handling the potential conflict. We will not vote a proxy where we are aware of a material conflict of interest unless the client has approved our actions in advance, after being informed of the potential conflict.
How to Obtain Voting Information
Any client who would like to obtain information regarding how we voted a particular proxy on their behalf should contact Altruist.
The specific guidelines below are just that: guidelines. Altruist will always assess each proxy issue on the basis of its own merits. Therefore, it may occasionally be the case that our votes may seem to violate the specific guidelines below. Such exceptions would occur if (and only if) we believe that it is in the best interest of our client to do so. Note that it is not feasible to fully anticipate all possible proxy issues — thus the below categories do not span the universe of all topics which might be put to a vote.
Approval of Advisory Contracts
Altruist firmly believes that passive management is in the best interest of investors. We also believe that, unless there is a compelling reason to believe otherwise, lower investing fees are almost always better for the investor than higher fees (all else being equal). Accordingly, we will generally vote in favor of passive management and lower investing fees whenever given the opportunity to do so.
Distribution Plans ("12b-1 plans")
Altruist believes that most mutual fund 12b-1 plans serve their shareholders VERY poorly. In general, 12b-1 plans tend to lessen fund returns almost dollar for dollar. Accordingly, we will generally vote in favor of eliminating 12b-1 plans entirely whenever given the opportunity to do so.
Altruist will evaluate any proposed mergers of mutual funds on a case-by-case basis. In general, we've noticed that mutual fund mergers tend to be done for the benefit of mutual fund sponsors, often in order to "bury" the record of a poorly performing fund. We wouldn't recommend that our clients remain in a fund unless we had reason to believe that it was a sensible means of implementing a prudent investment strategy. Accordingly, unless there is an otherwise compelling reason to vote for them, we will generally vote against mutual fund mergers.
This web page contains the current opinions of Eric E. Haas at the time it is written — and such opinions are subject to change without notice. This web page is intended to serve two purposes:
We believe the information provided here to be useful and accurate at the time it is written. Information contained herein has been obtained from sources believed to be reliable, but is not guaranteed.
No investor should invest solely on the basis of information listed here. Before investing, it is important to consult each prospective investment's prospectus and consider both its risk/return characteristics and its effect on your overall portfolio.
This information is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, Altruist recommends consultation with a qualified tax adviser, CPA, financial planner, or investment adviser. If you would like to discuss the rationale or support for any particular idea expressed on this web page, feel free to contact us.
Parts of this policy were taken from the Model Proxy Voting Guidelines published by the Canadian Shareholder Association for Research & Education in 2002.
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