Wealth Management

The Wealth Management Process: Wealth management is a process that integrates Financial Planning and Portfolio Management. Financial Planning is an extremely complex skill. It requires years of training, on-going continuing education, demonstration of skill by the successful passing of board certified exams and experience. Its components are not only complex but also mutually dependent upon one another. The interrelationships of these components are the backbone of our unique wealth management program. This process is intended to keep our clients on track toward achieving their goals. Since all of the planning components are directly interrelated and interdependent upon the overall wealth management process, it is important to keep in mind that other financial professionals who may also be providing guidance with taxes or estate planning matters (Accountants, Attorneys, Brokers, etc.) may not be fully aware of the wealth management process. Therefore, their recommendations or suggestions, taken in isolation, may not seamlessly integrate into one’s overall wealth management plan. It is therefore very important that clients contact their advisor before implementing any recommendation in isolation of their overall wealth management plan.

Another important component of our Unique Wealth Management Experience® product is Asset Allocation. The asset allocation is what determines the majority of a portfolio’s return. When we develop a client’s unique wealth management plan, we take into consideration a number of factors, among them; their age, time horizon, risk tolerance, cash flow needs, tax bracket, goals and more. We have always been very conservative in the assumptions we use in our wealth management process. What this means is that we are more likely to consistently produce the returns we are looking for, with lower risk over longer periods of time. We take issue with some of our colleagues in the financial industry whom we believe seek greater returns with high-risk vehicles without regard for the client’s risk tolerance and goals. Asset Allocation is such an important part of a client’s overall wealth management strategy that in addition to our regular reviews, we monitor a client’s plan against their risk tolerance, and asset allocation factors. By doing this we are, in fact, double-checking our clients’ positions based on our experience and their tolerance for risk. We then make appropriate adjustments along the way. In the quarterly report we just sent to our clients, we asked them to review their asset allocation and any changes we may have recommended. An asset allocation review should be done whenever there is a change in lifestyle or material change in one’s financial responsibilities. We believe that clients who continuously communicate their financial situation with their advisor are more likely to achieve their goals.

Rebalancing Your Portfolio: Rebalancing is the component of your plan that keeps it real. It is human nature to always want more of a good thing, but it is just that approach that can lead to less than desirable portfolio results. Therefore, our process guides us to sell a portion of the portfolio that has recently done well and allocate the proceeds to the portion of the portfolio that has not recently performed as well. This technique is called rebalancing. It allows us to sell some of an asset class when it is high and buy some of another asset class when it is low. After all, isn’t that what you are supposed to do - buy low and sell high? Disciplined rebalancing of a portfolio reduces exposure to asset classes that may have performed well and may now be overvalued. In today’s environment, it tells us to sell a portion of our bonds and buy stocks with the proceeds. Individual investors usually do the opposite and buy assets that are now performing well. Rebalancing of your holdings helps remove the emotion from the investing process.

Your involvement in and understanding of our Unique Wealth Management Process is very important to us. From this process we develop strategies and action plans that guide the activities we perform on your behalf. In some cases the effects of our direction are subtle and may go unnoticed while at other times changes we make are more visible. Whether your portfolio needs changes large or small, our Unique Wealth Management Process is used for all of our client recommendations.