What to Expect
Ongoing Financial Plan Management
Financial plan management encompasses all the following services: management of open planning recommendations, ongoing discretionary investment management, periodic review of planning areas, ongoing income tax planning, and assistance with personal financial concerns and challenges as they arise.
The Planning Process
Gather & Analyze:
- Understand client’s values, goals, and concerns
- Gather relevant documents and data
- Address financial matters that require immediate action
Plan:
- Compile a list of specific financial planning recommendations in all personal financial areas: debt, cash flow, insurance, employee benefits, estate tax, income tax, and education funding
- Design an investment plan, which includes preparing an Investment Policy Statement, investment selection, and guidance on tax location
- Present financial planning recommendations and investment plan to client
- Collaborate with client and adjust plan if necessary
Implement:
- Assist client with the implementation of recommended planning items
- Consolidate financial assets and implement recommended investment plan
- Coordinate with insurance, tax, and legal professionals as needed
Monitor:
- Communicate with client on a regular basis to understand changes in circumstances
- Update plan to incorporate changes in tax law, estate law or investment climate
- Adjust plan as needed to address changes in circumstances
- Evaluate progress on recommended planning items and goals
- Monitor and alter investment mix as needed
- Serve as the client’s first call for anything related to personal finance
Trust
Nothing else matters if you are unsure that you are getting unbiased advice. The company was founded as a fee-only firm. This means that we have never accepted commissions, kickbacks, referral fees or any compensation whatsoever other than directly from our clients. Sitting on the same side of the table as our clients is something we felt was non-negotiable.
Experience
From the very beginning, we recognized the need to cover a lot of ground. Investment management was a subset of a bigger picture. A client’s “plan” that included retirement projections, tax projections, structuring cash flow, insurance reviews, estate, and debt planning was a 40+ hour project that was delivered to each new client. It showcased our comprehensive nature and set the tone for what our clients have come to expect – thoroughness and a thoughtful approach. From that point onward, we helped clients navigate every issue of financial consequence from employment agreements, business structure and stock option compensation to early retirement, pension distribution options, tax-efficient charitable giving and decanting of trusts. We would put our firm’s subject matter expertise against any other in the area.
Service
Our view is simple. If we are excellent at servicing our existing clients, they will share their experience with others which would turn into our primary source of new clients. Marketing would never need to consume much of our time. Furthermore, we have always set limits on the annual number of new client additions. In the 1990s our limit was generally capped at 10 new clients per year. Today, that annual limit is typically 20. Our focus has always been quality over quantity.
- Structuring a monitoring process that helps clients measure what they are spending, which is a critically important variable in designing an investment allocation as well as reliable retirement projections.
- Running a series of retirement projections to answer various what-if scenarios. Planning is about economic trade-offs. Framing those trade-offs help clients determine a hierarchy of what they deem most important.
- Constructing an investment portfolio that has the best chance of a client having the money they need, when they need it. We do not use a cookie cutter approach to building portfolios. Attempting to maximize returns is frequently at odds with ensuring money lasts a lifetime.
- Locating the appropriate investment between IRAs, Roth IRAs, and taxable accounts to produce a better after-tax result with no additional risk. Some investments are inherently tax-efficient, while others are not. Placing the tax-inefficient investments in tax-deferred accounts, for example, is one way to earn a superior after-tax return.
- Rebalancing the portfolio on a threshold basis (i.e., when the portfolio drifts to the point of hitting pre-defined limits). Rebalancing on a time basis (i.e., quarter-end) will not provide for the best rebalancing opportunities. If the stock market falls substantially during a quarter, and then recovers back to even at quarter-end, time-based rebalancing would miss this opportunity.
- Projecting taxes in November/December of each year, making tax recommendations and executing them. Tax planning is more than just sending out a newsletter that suggests clients consider a tax move. To us, it involves running multi-year projections, running through a robust checklist of items to consider, and making recommendations to then execute on.
- Reviewing estate planning documents and summarizing key components to facilitate better client understanding.
- Analyzing property & casualty, disability, and long-term care insurance needs and facilitating changes.
- Devising a tax-efficient education savings plan that goes beyond simply using a 529 plan.
- Counseling on paying down debt versus saving and investing on an after-tax basis. The after-tax cost of mortgage interest is higher than most realize.
- Optimizing Social Security benefits / Medicare planning. Longevity is one of the biggest retirement risk factors. Decisions around Social Security should be incorporated in a broader financial context.
- Managing concentrated stock and stock option positions.
- Assisting with investment property analysis.
- Coordinating planning with other professionals.
- Educating heirs on personal finances.
- Reviewing income tax returns for obvious errors and omissions.