Describe your team, the year it was founded in its present form, location of its headquarters and all offices that would be part of our service team.

The Moran Edwards Asset Management Group was founded in March of 1990 by Thomas M. Moran, a Managing Director – Investments, and Earl Sistrunk, CFA, Financial Consultant in Naples, FL. The Group now consists of twenty four individuals, including three Principals, with a combined experience of over 100 years in the securities industry. The Group has two Portfolio Managers and is headed by Financial Advisors Thomas Moran and Robert Edwards. We are located at 5801 Pelican Bay Blvd, Naples, FL 34108. Wells Fargo Advisors is headquartered in St. Louis, Missouri. As of December, 2016 there are approximately 1,500 Wells Fargo Advisors offices nationwide.


Describe your firm’s general ownership structure if it is not a public company. If you are part of a large firm and operate as an independent advisor team, please provide ownership structure of the group. In addition, describe any plans of which you are aware to change your organization structure or ownership over the next 18 months.

The Moran Edwards Asset Management Group is a registered team name within Wells Fargo Advisors. The group works as Investment Advisor Representatives of Wells Fargo Advisors and manages client funds using investment portfolios independently designed by senior team members. There are no anticipated changes to our team structure over the next 18 months. Wells Fargo Advisors is a non-bank affiliate of Wells Fargo & Company, a publicly traded company listed on the New York Stock Exchange (ticker “WFC”).


Please provide details of your team’s assets under management as follows:
a.    What are your total assets under management?
b.    What are the average assets under management per client?
c.    The largest 10 client accounts represent what percentage of your total assets under management?

a. The Moran Edwards Asset Management Group is responsible for over $3 billion in assets as of 12/31/16 for families and institutional clients.

b. Our average account size is approx. $305,000. Each account is managed to a specific investment portfolio. The number of investment portfolios each client will hold is determined by household size, account types and investor profiles. The average client has roughly 8 accounts with an average household size of $2.4 million.

c. 4% (Our largest 10 accounts are valued at approx. $112.8 million in assets as of 12/31/2016)


Provide an overview of your team’s investment philosophy and underlying core beliefs. Has your investment philosophy evolved over time? If so, please describe.

From the beginning, the Moran Edwards group has focused on quantitative analysis and fundamental research in building diversified equity portfolios for their clients.  The Group's portfolios include strategies focused on capital markets, strategic and tactical asset allocation, and active risk management to attempt to develop and implement optimal portfolios for clients interested in cross asset class strategies to meet their investment needs.  The Portfolios seeks to capture the benefits of diversification and the advantages that come from the dissimilarity in return patterns across different asset classes.  The clients’ portfolio can diversify their allocations designed to make a series of low-correlated investments in a risk-controlled framework, and to deliver consistent added value over a full business cycle.


For a taxable portfolio, what is your team’s income tax mitigation strategy?

Our managers manage portfolios on a tax efficient basis. We harvest losses whenever possible and make every attempt to realize long term versus short term gains.


Describe your team’s methodology for determining a clients’ strategic asset allocation. What sets your asset allocation approach apart from most investment advisors?

Multiple studies have shown that asset allocation is the most important factor in determining the variability of portfolio performance. We believe that a diversified portfolio can help smooth your investment ride while giving you a higher likelihood of meeting your objectives.

The most important step in developing a strategic allocation is to determine which asset classes are appropriate for your portfolio, given your risk and return objectives and our firm’s Capital Market Assumptions.  We would also suggest reasonable constraints in order to ensure that the portfolio is well diversified.  We can then model blends of those asset classes in order to help determine an efficient allocation, that is, the portfolio that we believe would be most likely to offer the best return with the lowest risk in order to meet your goals.

Strategic allocations are determined based on a number of factors including correlation, standard deviation, alpha and macroeconomic considerations. Having direct management capabilities over a number of asset classes and investment styles may allow better portfolio oversight and maximizes tactical allocation decisions.


Does your team’s lean heavily on strategic or tactical asset allocation for major asset classes throughout market cycles? Does your approach differ for sub-asset classes?

Portfolio allocations are managed on both a strategic and tactical basis under strict overall allocation guidelines within each asset class and market cycle.


Please describe the use of cash in your portfolio strategy. Is cash used solely as a liquidity reserve or do you actively switch to cash in adverse market conditions?

A small allocation to cash and cash alternatives will be kept in the portfolio as a liquidity reserve.


Discuss the use of leverage in your portfolio strategy.

The portfolio strategy does not and will never use leverage.


If appropriate, describe your team’s process for determining tactical class adjustments throughout market cycles.

Tactical adjustments to the portfolio are made based on a combination of quantitative and qualitative variables. We use both historical valuation models and a macroeconomic overlay which employs statistically significant variables to determine areas of concern and potential opportunities for reallocation.


If appropriate, describe your formal portfolio rebalancing strategy.

A key aspect of a successful investment solution is to ensure that your portfolio total remains properly allocated.  We strongly encourage clients to remain within their stated risk tolerance in order to help avoid unnecessary surprises, and to accomplish this, accounts should periodically be rebalanced to their targets.  We generally recommend that clients rebalance their portfolios annually, or more frequently if necessary.   If excess cash is available we would generally recommend using it first, and then move assets from higher weighted asset classes to lower weighted asset classes as needed.


Describe the process for implementing your team’s tactical portfolio decisions for clients. Do all clients receive the same trade simultaneously? If so, please describe the internal process that accomplishes this mandate.

We use our firm’s Financial Advisor Directed Platform (Unified Wealth Platform) to automate the order entry process and to enhance the order allocation process for FA Directed client accounts. When entering orders for a strategy, we include all accounts with the same investment strategy in a bunched/block order. After the bunched/block order has been executed, an operational or Administrative Associate in the Sales Location, Home Office or on the trading desk must prepare and enter the allocation entries in the Firm’s systems only for those client accounts listed on the allocation sheet. Average pricing is used to average multiple executions of a single order that was executed at different prices into a single trade. The trades are allocated on a pro-rated basis and all clients in the bunched/block order will receive the same execution price.


Describe the internal structure and organization of your team’s research department.

Within the Moran Edwards Asset Management Group, research is provided by our analyst team headed by Earl Sistrunk, CFA - Senior Vice President Investment Officer and with support provided by Christina Shaw, CIPM – Senior Registered Client Associate and Chelsea Ganey, CFA – Financial Consultant.


Describe the manner in which external resources and sources of information are used in the research process. How does your firm integrate internal and external research?

The Moran Edwards Group currently utilizes over 50 variables from 200 different research firms to arrive at its recommendations.  Our proprietary processes are designed to benefit clients by bringing together our collective experience in diverse markets, such as macro strategy, international strategy, equities (large-, mid- and small-capitalization), closed-end funds/exchange-traded tracking products (CEFs/ETPs), fixed income securities (investment-grade, high-yield and municipal securities) and market analysis.


Do client portfolios with the same objectives look significantly similar in holdings? If not, what contributes to their differences?

All clients with the same portfolio objective do look similar in holdings.  If there are differences it is typically due to either significant additions or withdrawals of cash or client imposed restrictions which could affect the account’s ability to receive certain trades.


Describe a sample report that addresses your team’s standard reporting of returns, volatility and risk adjusted metrics. The purpose of this document is not to measure prior performance, but rather to analyze your current reporting metrics for clients.

Performance reports for advisory program clients include comprehensive quarterly reporting, displaying both time-weighted and dollar-weighted returns.  Reporting is provided on an individual account level and well as on a consolidated basis.  The report consists of market commentary, executive summary, asset allocation, investment growth, performance data and glossary. Performance reports are presented in color and compare the manager or manager blend to benchmarks assigned to each account.  Charts and graphs include data on account growth from inception and at quarter, YTD, 1, 3, 5, and 10 year periods.  You have numerous options on the level of detail you wish to see on the quarterly reports.

Optional graphs can be included that include metrics such as Alpha, Beta, Sharpe ratio, and Treynor ratio.


Please describe in detail all forms of compensation to your team for providing investment advisory services.

Moran Edwards Asset Management Group takes a very disciplined and personal approach to managing your money. We use our knowledge and experience in this discretionary relationship to try and achieve the long-term goals you’ve set for your portfolio. As PIM Portfolio Managers, Tom Moran and Robert Edwards are among a select few financial advisors of Wells Fargo Advisors' who are qualified to manage client portfolios on a discretionary or non-discretionary basis.

Private Investment Management (PIM) Advisory accounts are charged a comprehensive fee instead of commissions. Fees for the PIM program include advisory services, performance measurement, transaction costs, custody services and trading. Fees are based on the assets in the account and are assessed quarterly. Fee-Based accounts are not designed for excessively traded or inactive accounts, and may not be suitable for all investors. During periods of lower trading activity, your costs might be lower if our compensation was based on commissions. A minimum annual fee may apply for this program. Please carefully review the Wells Fargo Advisors advisory disclosure document for a description of our services and information on all fees and expenses. The minimum account size for this program is $50,000.


How would you structure custody of assets?

Custody services are provided through Wells Fargo Clearing Services, LLC (WFCS). WFCS provides safekeeping services and comprehensive accounting of all transaction activity and securities holdings.


Provide applicable insurance coverage maintained with relevant coverage limits, including the name of your primary insurance carrier.

Wells Fargo Advisors currently maintains various insurance coverages that are appropriate for an institution of its size and financial strength.  Current coverage includes but is not limited to Financial Institutions Bond, Professional Liability (Errors & Omissions) Insurance and Security, Privacy and Multi-Media Liability Insurance.

    •    Coverage: Professional Liability ( Errors & Omissions)
    Limits: $100,000,000 per claim
    Insurer: National Union Fire Insurance Company
    •    Coverage: Financial Institutions Bond
    Limits: $100,000,000 per claim
    Insurer: National Union Fire Insurance Company
    •    Coverage: Security, Privacy and Multi-Media Liability
    Limits: $25,000,000 per claim

    Insurer: Old Republic Insurance Company, AIG Specialty Insurance Company, Federal Insurance Company

If proof of insurance is required, an Evidence of Insurance document can be provided.


Describe the “Disaster Recovery” protocol for your firm.

Wells Fargo is committed to safeguarding and protecting customers, team members, cash flow, and long-term market share in the event of an unplanned interruption to the business. In support of this commitment Wells Fargo has established a Business Continuity Planning Program to administer a continuity program that includes all Wells Fargo businesses.

All businesses participate in business continuity planning. Each Wells Fargo business and technology plan unit maintains a business continuity plan(s) designed and maintained according to the Enterprise BCP Program and following the standards described in this policy.

Any plan unit providing securities/investments, clearing, and settlement for members of FINRA (Financial Industry Regulatory Authority) also complies with the guidance on FINRA rules pertaining to disaster.


Describe the investment-related education provided to your clients. How would you keep the client advised of emerging issues, new asset classes, regulatory controls, etc.?

Investing with Moran Edwards Asset Management Group involves an ongoing dialogue to review your portfolio, assess new investment opportunities and reevaluate your strategy as market conditions or your objectives change.  Moran Edwards primarily keeps clients up to date on emerging issues through personal portfolio reviews.  The firm also frequently offers client luncheons and seminars on relevant market topics for clients to attend.  Lastly, we are always available through phone, email or meeting to answer any questions the client may have about their portfolio or the market.


What do you believe sets your team’s services apart from other investment advisors and what unique value-added services could your firm provide?

We believe in long-term relationships and strive to earn your continued trust. A great reputation must be earned and, once earned, can be relied upon by your family for generations. This is not a commitment we take lightly. Doing the right thing is the center of our investment philosophy. Our clients enjoy the personal attention that is the hallmark of Moran Edwards Asset Management Group. We maintain long-term relationships with affluent clients who typically have portfolios of $1 million or more of investable assets. Investing with Moran Edwards Asset Management Group involves an ongoing dialogue to review your portfolio, assess new investment opportunities and reevaluate your strategy as market conditions or your objectives change.

We are performance driven and have been frequently recognized by Lipper’s MarketPlace Best Money Managers list for a number of our investment strategies.

Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns.

Wells Fargo Advisors does not provide tax or legal advice.

As each Private Investment Management (PIM®) program account is individually managed, construction and ongoing management of portfolios may vary from those discussed. Past performance is not indicative of future results, and there is no assurance that any investment strategy will be successful.

Investments and investment strategies contained herein are provided for informational purposes only. We would need to review your individual situation before recommending appropriate strategies to you. All investing involves risk, including the possible loss of principal. Stocks offer long-term growth potential, but may fluctuate more and provide less current income than other investments.