My Wealthcare for Women process puts you – our client – at the center of our attention and care.
Merriam Webster defines client as “one that is under the protection of another.” To us the client-advisor trust relationship is sacred. For as long as you allow us to be your advisor, we are in no small way, responsible for the quality of your life as it relates to financial matters.
Simply put, we designed our process to empower you to do extraordinary things with your wealth, both now and in the future. There are numerous functions and systems that comprise our process. All are carefully integrated to produce results far superior to those any of the individual elements might achieve alone or if less optimally combined.
Our value proposition to you is this:
By controlling what we can and by planning for what we cannot, we help you, our client, live a better life.
Our planning is the foundation of our process. We learn your important goals within a range of ideal and acceptable. From there we create an optimal mix of goals according to the priorities you place on each. We then “stress test” your plan using our patented Monte Carlo simulation engine to determine its funded status (or confidence in exceeding your important goals).
We develop a plan which delivers as many of your goals at or near their ideal levels as possible, with sufficient confidence. We want to impose as little sacrifice as possible on your current lifestyle. Along with an ongoing representation of your goals and priorities, the plan addresses other important components of your family’s finances such as savings, spending (both now and in retirement), special goals and dreams, independence from salary, education expenses, portfolio risk and anything else unique to your life.
Once your plan and its corresponding portfolio are implemented, we continually stress test your plan for funded status. We know asset values will change. Your goals and priorities will also change. For these reasons, your plan is as dynamic as you are.
We believe, and research supports, that actively managed portfolios can actually take you further from achieving your goals, even if returns are higher. In order to reduce the risk that a manager’s performance (which cannot be predicted) will misalign with your cash flows, we employ a passive approach to managing your investments. Our portfolios are comprised of low-cost, tax- and market-efficient exchange-traded funds (ETFs). We use these ETFs to efficiently capture the capital markets in our client portfolios.
Exchange traded funds have numerous advantages over mutual funds. They are closed portfolios (a fixed pool of funds) so they don’t ‘leak’ capital gains and expenses as mutual funds do when investors buy or sell shares. When an investor sells their shares in a mutual fund the manager must sell shares within the fund to provide cash. The liquidations of assets held by the fund generate taxable gains or losses for you, a shareholder in the fund, even if you simply held your shares throughout the year.
Liquidity is provided on the major exchanges throughout the trading day, unlike mutual funds which must be traded at net asset value at the close of each business day. Owners of ETFs know exactly what they own on a real-time basis. Mutual fund owners never really know what they own. By the time the quarterly statement/prospectus arrives, the manager has likely already made significant changes to the portfolio.
Market index ETFs are designed to track indices, not to beat them, so you can be assured of not beating the index they mirror. Alternatively, you can be assured of not underperforming it either by any more than the internal fees associated with managing it. Which brings us to the final and significant benefit: The ETF’s we use in our model portfolios have internal expenses that average 0.12% in our models. These expenses compare favorably with average mutual funds which range between 0.7% and 2.5% or more per year.
Our U.S. Stock Market Fund employs a passive management or indexing investment approach designed to track the performance of the of the MSCI US Broad Market Index, which represents 99.5% or more of the total market capitalization of all of the United States common stocks traded on the New York and American Stock Exchanges and the NASDAQ over-the-counter market. Our International Fund tracks the performance of the FTSE All-World ex-US Index and includes approximately 2,200 stocks of companies in 46 countries, from both developed and emerging markets worldwide.
For the fixed income component of our models, we use an ETF that measures the performance of public obligations of the United States Treasury that have a remaining maturity of greater than or equal to 7 years and less than 10 years. We invest in bonds as a hedge against stock market risk. In our historical research dating back to 1926, no asset class has provided a better hedge against stock market risk than 7-10 Year Treasuries.
Limiting our holdings to as few as possible primary components enable us to provide you with significant savings in rebalancing costs. For example, the U.S. Stock ETF is always in balance with itself, so there is never a need to rebalance small-cap or mid-cap components as others do – the index/fund is self-balancing.
When appropriate we use a household approach to manage all those accounts which are covered by your plan. The household approach benefits you in numerous ways. By using tax-location management we can shelter the interest from Treasuries in tax-advantaged accounts where their taxable income will be protected from taxation and focus equities in your taxable accounts to allow full advantage of long-term capital gains and qualified dividend tax treatment. When portfolio rebalancing is required, we can significantly limit trading costs and tax exposure by trading in one or two of your tax-deferred accounts to balance the entire household. Our fee is calculated against the total portfolio and is customized based on your unique situation.
You do not pay us to attempt to “beat the market”, but to confidently produce the wealth you will need to accomplish every important goal in your life.