Hypothetical client example

You Hold Assets in More Than One Place

This hypothetical example is for illustrative purposes only. The names, circumstances, and outcomes are fictional and do not represent an actual client or actual results. Actual recommendations and results will vary, and no outcome is guaranteed.

If your accounts have accumulated over time the way most people’s do, a job change here, an inheritance there, an account you don’t even look at anymore, you’ll probably recognize something of yourself in Christine’s story. A Family Office Director uses a holistic approach to solve exactly this kind of problem: money that’s been put to work, but not working together toward a common purpose. Christine’s accounts are unique to her, but the underlying concerns are common to almost anyone who’s accumulated wealth over time: no one has ever looked at it all as a wealth story, no one can say what it’s really diversified to achieve, and no one has thought through what it will actually provide in retirement.

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“All Over the Place” Is Not a Strategy

Christine has accumulated accounts over time. Lots of them: an IRA rolled over from a former employer, another IRA inherited from her mother, a stock and bond account opened by a money manager years ago and rarely revisited since, a brokerage account now sitting idle in a money market fund, and her largest account, a Solo 401(k) tied to her consulting business.

Christine’s investment accounts are spread across two custodians, plus a household checking account and CDs at a major bank. Each one made sense on the day it was opened, but when she says “my money is all over the place,” it’s hard to disagree.

Christine’s accounts are not coordinated to solve a clearly stated objective. No one has ever aggregated and analyzed Christine’s accounts to see the risk and reward structure they sum to, or what they could support in retirement.

Each of Christine’s accounts is invested in isolation, and reported on its own statement without context to any goal or plan. No consolidated review has ever been available to her, and she has never been shown one number for what all of it, together, is actually worth to her future.

Christine Needs a Plan That Unites Her Accounts Into One Portfolio

Christine has the right instincts and the discipline to save money and invest for retirement. However, she hasn’t done the deeper work to set specific retirement income goals and arrange her affairs to achieve them.

Christine is needlessly overpaying taxes

Christine’s accounts have been set up one at a time, each with its own structure and asset types. Because there’s been no overarching management to locate the right assets in the right types of accounts, her gains, income, and withdrawals are taxed less efficiently than they could be.

As accounts accumulate for different reasons over the years, from a job change to an inheritance, few investors ever go back and ask which asset belongs in which kind of account. Only the net, after-tax compounding builds wealth.

A Family Office Director reviews all of Christine’s accounts and evaluates her overall risk exposure and return potential. The goal is to reposition holdings across her accounts to balance risk and return, while reducing tax liabilities.

Tax planning

HALO™ maps every account’s tax treatment and asset location so the combined portfolio can be positioned and managed efficiently.

Christine’s money has a specific job to do

Christine has a busy life running her consulting business and managing her personal life. The money she saves in retirement, bank and investment accounts should be working to create a secure retirement for her.

Christine is missing available compounding benefits due to a significant amount of money in cash and equivalent assets spread across her accounts. She also holds similar investments in multiple accounts, so her actual diversification and real risk exposure are both unclear.

When accounts open at different times for different reasons, the same kinds of assets often end up duplicated across them, invisible to anyone looking at a statement in isolation.

A Family Office Director consolidates Christine’s accounts into a single allocation, so new money additions and withdrawals are managed coherently, and her actual diversification and risk exposure can be managed intentionally and efficiently.

Asset management

Control the Controllables® applies an orchestrated, goal-oriented and disciplined investment approach across every account instead of a different strategy in each.

Christine needs a retirement plan with specific goals

Christine is operating on blind faith that simply setting aside money will eventually produce enough to secure her lifestyle in retirement, no matter how long she lives. This eliminates the opportunity to course correct, and could extend the number of years she needs to keep working.

Christine needs a plan with specific goals for spending in retirement, and one that contemplates risks of healthcare and disability. As a result, her accounts operate without context. A necessary first step is to examine Christine’s accounts to determine what they can produce as a whole, and what they can support once she retires.

A Family Office Director gathers all of Christine’s accounts, as well as her expenses and risks, and creates a financial and retirement plan that will guide asset location, risk exposure and rebalancing disciplines.

Retirement planning

Incomize™ models retirement income from Christine’s total assets, rather than discrete accounts, and in retirement, reacts to real market conditions.

Compartmentalizing account risks misses Christine’s big-picture needs

Christine takes comfort from her low-risk savings account and cash position, but has real anxiety regarding her securities account, while in reality, she may not have enough risk exposure overall to reach her goals.

Christine’s investing behavior is entirely normal, but she needs significant exposure to the kind of after-tax compounding that only riskier assets, like stocks, can provide. By considering, and examining, all of her accounts as one organic whole, she will be much more likely to handle market volatility and stay invested for the long haul.

Selling into a bear market or buying into a bull market, commonly called market timing, is among the most destructive investor behaviors. The safer and more effective approach is to find the ideal agreement between the need for growth and the investor’s ability to withstand volatility.

A Family Office Director calculates the overall risk and return potential in Christine’s combined portfolio, not each account in isolation, and adjusts it to solve for her needs in retirement, her actual risk tolerance and her time horizon.

Risk management

Real Risk Meter™, using historical market statistics, measures the risk and return of the combined portfolio, not just the risk of any single account viewed alone.

Four Steps to Build a Lasting Plan for Christine

The Family Office Director starts with a comprehensive review of Christine’s accounts, household finances and desired outcomes, coordinates the work across specialists, and reviews the plan periodically as circumstances change.

01
Start with the whole picture

Bring every one of Christine’s accounts, regardless of institution or type, into a coherent focus, and measure the allocation, expected return and maximum downside loss potential.

02
Build a coordinated plan

Determine Christine’s personal situation, her income and expenses, risks and time horizon, and create a holistic retirement plan. Replace account-by-account decisions with one coordinated allocation and tax strategy.

03
Coordinate the work

Keep asset location, tax treatment, and retirement income working from the same plan across every account. Rebalance accounts as necessary, adjust for risk and return, and implement changes.

04
Keep the plan current

Revisit and, if necessary, refresh the plan with regular strategy reviews.

Your first conversation covers the same ground for your situation: what you have, what you want it to do for you, and where disconnects and risks exist. There is no charge and no obligation.

Schedule a Call

If you would rather talk first, please schedule a call. Family Office Directors are located across the country, and also meet remotely. A discovery conversation is complimentary.

Christine’s Family Office Advantage™

Christine’s story is one of disciplined accumulation and years of good, if disconnected, decisions. It’s also a common situation: for most investors, accounts pile up one job change, one inheritance, and even one relationship at a time. The decision to get organized under a single, coherent plan can pull diverse assets together into a powerful tool for retirement security.

Now that Christine has a Family Office Director, her accounts don’t stay scattered. Her after-tax compounding, her asset allocation, the risks to her plan, and her retirement income potential get reviewed together, every year, with the focus where it needs to be: her lifetime lifestyle protection.

Start With What You Actually Own

Most investors have a story similar to Christine’s. They accumulate accounts over time, as new jobs and life changes occur, and rarely stop to ask what they add up to until they need them to perform as a whole.

What would you see if every account you own were in one place? Is your money really diversified, or just duplicated across accounts that don’t know about each other? Do you know what all of it, together, could produce for your retirement? Every useful retirement plan starts with a hard look at the status quo, and the answer to one powerful question: do I have enough?

Virtually every billionaire worldwide employs the Family Office model. The amounts of money vary widely, of course, but the need for security is something we all share.

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Other client profiles
You Own a Business
When a business outgrows its original structure, favorable tax strategies can be missed, and the quality of life in retirement can hinge on a successful exit.
I’m Worried About My Retirement Security
Retirement is less a finish line than a starting line, with real threats that need to be identified and managed.
You Want What You Have Built to Last, Intact, Beyond You
What you have built becomes a legacy when it passes, intact, to the people and causes that matter most to you.

Request a Taxes First, Then Math™ Analysis

Taxes can materially reduce investment gains over time, but often don’t get the attention they should. The right investment program starts with tax considerations. Wise investors also carefully consider all the costs of managing their money, and they use diversification to solve for a wide range of risks that go far outside the ones in their portfolio.

On top of all that, many investors simply do not know what their maximum downside loss exposure is. Do you? Can you say just how risky your portfolio really is?

It costs nothing to find out if your portfolio is right for you. Get your Taxes First, Then Math™ Analysis with no obligation. After all, a quality second opinion never hurt anyone.

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