A Few Key Points During This Unprecedented Time

Dear Clients,

As the financial landscape undergoes historic changes, with asset markets under pressure and iconic financial institutions merging or fading away, I want to take the time to touch on a couple of key issues.  At Uhlmann Price we believe that a well diversified portfolio of stocks, bonds, and alternative investments affords the best protection of client assets, particularly during times of high market volatility. We will continue to keep abreast of the many changes in the financial landscape and will make whatever adjustments are necessary.   As detailed below, a strong financial partner and governmental protections can help reduce our clients concerns during these extreme market conditions.

Uhlmann Price and RBC Correspondent Services
Uhlmann Price Securities, LLC, as a boutique Broker/Dealer and Registered Investment Advisor, conducts no proprietary trading, uses no leverage, and does not carry an inventory of fixed income, equity, or derivative securities.  This provides us with insulation from the recent and sometimes severe decline in various asset class market prices. RBC Correspondent Services, a division of RBC Capital Markets Corporation, is custodian for our client assets. RBC Capital Markets is owned by Royal Bank of Canada, the largest bank in Canada and one of the five largest banks in North America (as measured by assets and market capitalization as at March 31, 2008).  RBC’s senior debt is rated Aaa by Moody’s and AA- by S&P, and Tier 1 capital ratio is 9.5%. 

Protection For Brokerage Accounts, SIPC
With names like Bear Stearns and Lehman Brothers disappearing from the landscape it is worth taking a look at what protection is afforded to brokerage account holders.  Brokerage firms are required to segregate client cash and securities and therefore even in the event that the firm fails these assets would be available to be readily transferred to a solvent broker.  In the unlikely event that these assets are missing, due to theft or fraud, the Securities Investor Protection Corp provides additional protection.  For individual accounts, SIPC covers a maximum of $500,000 per customer (including up to $100,000 in cash) at a given brokerage house. Total coverage can be higher for multiple accounts at one institution. For example, a married couple could have two individual accounts with $500,000 of coverage each, plus a joint account that would bring their aggregated coverage for that firm to $1.5 million. Each retirement account at a given firm also is generally eligible for an additional $500,000 of SIPC coverage.  SIPC covers assets such as notes, bonds, stocks and mutual funds. In addition to SIPC coverage, RBC Capital Markets clients’ assets are also protected through a supplemental policy purchased from Lloyd’s of London. This policy provides an additional $99.5 million per client of coverage for securities. This includes protection for cash of up to $900,000 over the $100,000 provided by SIPC. The aggregate coverage limit of this policy is $400 million.

Additional Protection For Money Markets
On September 19 the US Treasury Department announced a plan to provide as much as $50 billion of insurance for money market funds.  Under the program, for the next three months and possibly for up to a year, the Treasury will insure holdings of any publicly offered eligible money market fund – both retail and institutional – that pays a fee to participate in the program.  Investors should check with their fund to determine participation.  Investors in participating funds would be notified if the fund’s asset value fell below $1, triggering the insurance program.  Once triggered, the fund would be liquidated within 30 days and all covered investors would receive $1 per share.  Unlike FDIC and SIPC protection, there is no cap on coverage per investor.   Only funds invested prior to September 19 will be protected by this program. 

At Uhlmann Price Securities we are committed to utilizing our independence to provide unbiased, non-proprietary research, product and custodial services.   Our Corporate Pledge is that “Our client's trust and interest will always come first. Ethical conduct and integrity will not be compromised.”

Uhlmann Price Securities, LLC
Jim Baer, Managing Member
Toll Free: (800) 444-7075
Tel: (312) 264-4400
Fax: (312) 264-4401
Email: jbaer@upsecurities.com