Advice-only Financial Planning
Our comprehensive Financial Planning process primarily focuses on helping those who do not have or are leaving behind traditional W-2 incomes. The service starts with an in-depth review of your financial life, followed by an extensive analysis of potential future financial scenarios under different investment and economic assumptions. A plan with recommended action steps will be delivered at the conclusion.
Value Proposition
A professional plan can provide clarity and confidence. The Financial Planning process can result in actual savings, or even increased income, through the adoption of lower-cost investment strategies, improved tax efficiency, the optimized timing of Social Security and pension payouts, and other actions.
Covered Areas:
The Financial Planning review covers the following areas:
- Current Employment Income, Benefits (if Employed)
- Current income, benefits
- Deferred benefits – Restricted stock/options, partnership interests, pension
- Retirement Assets, Benefits, and Strategies
- Retirement plan options for self-employed such as SEP IRA, Simple 401(k)
- 401(k)s and IRAs; Withdrawals, rollovers, timing, penalties, tax efficiencies
- Roth IRA conversions – when they make sense; the mechanics and rules
- Asset allocation – balancing income, capital growth, and withdrawals
- Social Security and Pensions – payout elections, projected payouts, timing
- Medicare choices
- Non-Retirement Assets and Strategies
- Liquid (securities, funds) vs illiquid (real estate, private equity) assets
- Asset allocation – balancing passive income and capital growth
- Whole Life Insurance as a potential source of funds
- Expenses
- Household budget, including healthcare
- Big-ticket items – children’s education, new house, new car, etc.
- “Empty nest” discount
- Taxes
- Tax benefits for different self-employed retirement plans
- Tax efficient income strategies, including retirement distributions
- Tax consequences of state of domicile, especially for retirement benefits
Fees
A comprehensive plan as described above typically costs a one-time $3,000.
Optional annual updates will be $1,000/year. Clients will get an updated written plan annually and 4 quarterly check-in meetings with us with this option.
Clients always have the option to consult with us based on a $300/hour rate.
Investment Management Service
Our Investment Management service can be a valuable option for clients who would like our active help with income generation. Typically, this service will apply to a portion of client assets. A customized portfolio will be constructed with the primary goal to generate passive income to supplement client cash flow needs, and the secondary goal of long-term capital growth.
Value Proposition
Immediate, measurable outcomes are in the form of monthly or quarterly passive income – dividends, interest. Longer term – typically several years – value is measured by total returns from dividends and capital appreciation.
Approach:
Construct a portfolio of income generating securities, consisting of primarily dividend-paying equities with different growth prospects, and opportunistically, preferred and fixed income securities. The portfolio mix will depend on the client’s asset base and level of passive income needed.
Selection criteria:
Publicly traded businesses with high returns on capital, run by competent and aligned management teams, purchased at reasonable valuations; businesses we understand and follow, and in which we may, ourselves, be investors.
Risk management:
Closely monitor business fundamentals of holdings. Steady and increasing dividends tends to be an indication of a healthy business. We differentiate market price movement from underlying business performance. When securities’ prices decline due to market volatility and business fundamentals are stable or strong, new money can be deployed to earn a higher yield.
Fees
Investment Management fees are up to 1% of actively managed Assets Under Management (AUM) up to $2MM and 0.75% of AUM in excess of $2MM. Active management involves analyzing and monitoring individual securities using company filings, earnings transcripts, and investor presentations; and keeping abreast of industry publications and general financial news.