FAQs
What is the overall investment philosophy?
Our goal is to both build and preserve our clients' wealth. To that end, we invest in high-quality, well-managed companies at reasonable valuations and hold them for the long term.
What is the minimum investment to get started?
Due to the personal attention afforded to each portfolio and the time it takes to properly supervise and protect the assets of our clients, we require $250,000 to establish a relationship. Once an account is established at Hendershot Investments, additional accounts may be added, such as IRAs, accounts for children or grandchildren, etc. Subsequent deposits may be made to the account in any amount with no minimum.
What should my time horizon be for an account with your firm?
Because the stock market offers great potential, but at times may be volatile, we suggest that investors opening an account have a time horizon in the range of at least 3 – 5 years or longer.
What are the fees for your services?
Hendershot Investments works on a fee-only basis. While you have to pay transaction commissions to the brokerage firm where your assets are being held, Hendershot Investments does not share in or receive any portion of such commissions. Our management fee schedule is 0.5% to 1.0% annually, depending on the account size. The fee schedule is shown in Account Basics and in the investment advisory agreement.
If I need my assets for other purposes, is there a cancellation fee?
Hendershot Investments never loses sight of the fact that the assets entrusted to our care are yours. If you have needs for the money in your account, we will help you withdraw cash as quickly as possible. Our clients keep us informed regarding their near term cash needs so that we can make certain cash is available for withdrawals. There are no cancellation fees for closed accounts. If you have closed your account and find that your circumstances have changed, we look forward to helping you reopen your account.
How does Hendershot Investments differ from a stockbroker?
Hendershot Investments is a “fee-only” registered investment adviser. As an investment management firm, we are responsible for the growth of your portfolio and the protection of your assets. We work directly for you, the client, and receive no compensation from any other source. A stockbroker is a sales person, who is compensated whenever they can generate the sale of a security through their firm.
Will you notify me before you make changes in my account?
No, we will not. Hendershot Investments is a discretionary investment manager. It is our job to manage the portfolio and make the necessary moves to ensure your assets are protected and have the best possible chance for long-term appreciation. We take the investment decision making out of the equation for you and help alleviate the emotion and pressure of making buy and sell decisions. You will, of course, receive trade confirmations a few days after each transaction.
Will I be advised as to the current assessment of portfolio holdings and the performance of my account?
Communication is one of the most important keys to our relationship with you. You will receive regular monthly statements from the brokerage firm where your assets are held, for most clients this will be Charles Schwab & Co., Inc. These monthly statements will show the current holdings, transactions in the previous month and the value of your account.
On a quarterly basis, you will receive a personal letter and report from Hendershot Investments with more details on your account holdings and performance. You will also receive our Hendershot Investments newsletter which details our thinking on the companies held in your portfolio.
Who maintains possession of my assets and what protection do I have?
Hendershot Investments will supervise your account at a major brokerage firm. Our firm of choice is Charles Schwab & Co., where we have negotiated commission discounts and institutional trading privileges. Charles Schwab is the custodian and holds the assets in an account only accessible by you. Our Limited Power of Attorney allows us to trade the account, but at no time will we ever have possession or custody of your investments. We deal only with major brokerage firms that are insured through the Security Investors Protection Corporation (SIPC). SIPC insures your assets against theft, fraud or even the potential failure of the brokerage firm. In addition, Schwab provides additional insurance protection for securities. However, this protection does not cover you for fluctuations in the market value of your securities.
Who regulates Hendershot Investments, Inc.?
As a registered investment adviser, Hendershot Investments is registered with and regulated by the United States Securities and Exchange Commission (SEC) and the Securities agencies of the States in which our clients reside.