We are advocates of the time-tested concept in financial management of risk-based asset allocation to fund future objectives while minimizing fees, taxes, and expenses.
A strong process provides the necessary confidence that allows investors to remain committed to their long-term plan by advising on a client’s structure, financial plan, risk, asset allocation, and specific investments.
Structure refers to the legal “containers” through which your plan is implemented. Maybe some assets should be held in a spouse’s or child’s name or maybe holdings need to be placed into a trust. Structure is your account and asset types and their ownership. 79 Financial can help with basic structure but many times an attorney or estate planner are needed to put the proper structure in place.
Defined by Investopedia, a financial plan is a “document containing a person’s current money situation and long-term monetary goals, as well as strategies to achieve those goals.” The plan is a guide, or a map, to ensure clients that they are still on track to meet their future goals in their stated timeframe.
79 Financial uses a behavioral finance approach to help with properly evaluating a client’s tolerance and capacity for risk. A better understanding of how clients relate to money is the foundation for setting an asset allocation that achieves long-term goals at a risk level that allows investors to sleep at night.
An asset allocation aims to balance risk and reward by apportioning a portfolio's assets according to an individual's goals, risk tolerance, and time horizon. Asset classes have different historical levels of risk and return. Investopedia explains that, “Asset allocation is a very important part of creating and balancing your investment portfolio. After all, it is one of the main factors that leads to your overall returns...”
79 Financial selects investments in one of three ways. The first is to build an allocation based on the client’s risk profile from a roster of candidates that places the portfolio on the efficient frontier*. The second is for those who may benefit most by owning individual stocks rather than funds or ETFs. Money managers are used for these clients while still minding their risk-based allocation. Finally, some clients provide a specific mandate such as generating income or socially responsible investing.
Confidence is hard to obtain if you're in the dark about what's going on. 79 financial wants to ensure it properly communicates with its clients. To that end, quarterly reporting delivers reviews on various elements of the client's relationship including performance, risk, allocation, plan projections, managed accounts, annuity/ insurance review, charitable giving, and more.
View the Client Service Calendar for an overview of what to expect and when.
*According to Investopedia, the Efficient Frontier is the set of optimal investments that offer the highest expected return for a defined level of risk or the lowest risk for a given level of expected return.