Protecting Client Assets

By Steve Frontczak, Moneta Group Chief Compliance Officer

 The trust our clients place in us is never taken lightly. Moneta Group employs a variety of measures to ensure the assets of our clients are secure. Why are your assets safe with Moneta Group, and how is Moneta Group different from Bernie Madoff, Allen Stanford, Peregrine Financial Group and MF Global? 

  1. Moneta does not commingle client and firm funds or assets. Moneta does not accept any check or deposit made out to Moneta or to a Moneta principal or any other employee. We do not accept stock certificates or other assets directly. In short, Moneta does not take custody of client assets. A common thread in many of the recent financial scandals is that the client gave money directly to the organization, not to a third-party custodian.
  2. Moneta maintains relationships with institutional custodians who are in the business of safeguarding client assets. All of Moneta’s third-party custodians are regulated by either the Securities Exchange Commission/Financial Institution National Regulatory Agency (“FINRA”) in the case of broker/dealers; or the Office of the Comptroller of the Currency (“OCC”) in the case of banks or trust departments. Moneta primarily recommends either Charles Schwab & Co. or Fidelity as client custodians. Both entities custody more than $1 trillion in client assets, have strong balance sheets, well-designed internal controls and maintain appropriate asset protection insurance. Schwab and Fidelity are members of Securities Investor Protection Corporation (“SIPC”) and carry additional Lloyd’s of London supplemental asset protection coverage.
  3. In certain instances, clients may use a custodian of their choosing, typically a bank, trust company or broker/dealer. Moneta would not agree to use a custodian that was not regulated by either the SEC or the OCC. When selecting a specific custodian, the assets of the client are protected by either SIPC or FDIC insurance, depending upon the institution selected. 
  4. Moneta has an excellent working relationship with both Schwab and Fidelity such that all wire transfer and other requests to move funds are reviewed and questioned. We strongly encourage all principal teams to receive verbal authorization from clients when moving assets.
  5. Moneta does not prepare or send portfolio or account statements. All client account statements are received directly from the custodian. In the Bernie Madoff case in particular, Madoff created and sent statements directly to clients. We encourage our clients to review their statements every period to make sure there are not unanticipated or unauthorized transactions.
  6. While Moneta is able to set up Standing Letters of Authorization (“SLOA”) with the custodian of record, each SLOA must have a designated bank account that the transfer is linked to; that may not be a Moneta account.
  7. Since Moneta does not custody your assets, the financial situation of Moneta has no bearing on your assets. Moneta cannot pledge your assets or borrow against them in any manner. All client assets are separate and distinct from Moneta and Moneta principal assets. 
  8. Moneta uses a secure email system to send any message that may contain any of your financial or personal information. 
  9. Moneta shares financial or other information only with individuals or entities you have specifically approved.
  10. Any checks sent directly to Moneta are logged and followed to make sure they are not lost or misplaced. The principal teams are required to update the log when a check is properly forwarded to a client or other payee.
  11. Moneta’s policy requires that all computers be locked at the end of each day and any sensitive, client-related documents stored in locked offices, file drawers or cabinets.

We understand the need to protect your personal and financial information, and we take it seriously.

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