Step 1: Establish the Relationship
Initial conversations and discovery phase where we get to know you and the people who are important in your life (ie: spouse, children/grandchildren, parents/grandparents, and other dependents/beneficiaries). Next we aim to understand and help develop your ideal and minimally acceptable goals/objectives, time horizon, risk tolerance, and need for liquidity, to name a few. At this point we also define the scope of our engagement, identify the types of services to be rendered, and disclose all pertinent information including our fees, as well as determine each party’s role and responsibilities in the financial planning process.
Step 2: Gather Data
Gather all qualitative and quantitative financial and personal data such as cash flows, budget, income and expenses. Then, we proceed to list all your assets and liabilities. We take note of all your real estate investments, CDs, stocks, bonds, mutual funds, brokerage account statements, 401(k), IRA and other types of retirement and pension plans, cash/bank statements, employer benefits, health and life insurance policies, annuities, tax returns, mortgage statements, anticipated social security benefits, and copies of wills, trusts, or other estate planning documents. All of your information will be kept private and strictly confidential.
Step 3: Analyze Data
Analyze and evaluate all of the data, documents, and financial information. This is done both manually as well as via various sophisticated financial planning software programs. Here we will determine strengths, weaknesses, opportunities, and threats in the client’s current financial situation by conducting an evaluation of the client’s objectives in view of currently available resources, potential future resources, economic conditions, and cash flow for the client and his/her family. In this stage we evaluate the viable options for achieving the established goals/objectives.
Step 4: Develop the Plan
Develop the long term strategic plan and present the plan recommendations and all available alternative options to the client. The tasks involved in this stage include devising a formal Investment Policy Statement (IPS) as well as a Dynamic Asset Allocation. The IPS serves as a roadmap and business plan for a client’s portfolio, clearly outlining the investment objectives and defining what is and is not acceptable. The asset allocation will lay out specifically where and how much clients should invest in each respective traditional as well as alternative investment asset classes, taking into account capital market assumptions and utilizing new factor-based asset allocation techniques. It is also important to identify and help develop strategies and solutions for tax planning and reduction, college education planning for children/grandchildren, insurance planning and risk management, retirement planning and benefits, charitable and philanthropic giving, and estate planning.
Step 5: Implement the Plan
Implement the recommendations of the plan by identifying and helping to select specific strategies, solutions, products, and services. This may include individual securities, ETFs, Mutual Funds, Separately Managed Accounts, and various Alternative Investment Managers. In this stage, we will work closely with a client’s other service providers and professionals such as accountants/CPAs, lawyers, estate planners, etc. We may also look to scale into or out of individual investment holdings to help minimize taxes as well as various market timing risks.
Step 6: Monitor the Plan
Constantly monitor and review the plan to make sure the client is on track to help reach their targeted goals and objectives. Determine the significance of any changes in tax/estate laws, economic conditions, newly available investment techniques, or your personal financial/family situation. Rebalance the portfolio when appropriate, within the acceptable tolerance bands as dictated by your IPS and according to the asset allocation. Set up quarterly and annual reviews. Aggregate data to get the full big picture for customized performance reporting and analytics.