By Jean L. P. Brunel
Take a extra energetic function in strategic asset allocation
Goals-Based Wealth Management is a handbook for shielding and turning out to be shopper wealth in a manner that alterations either the providers and profitability of the company. Written through a 35-year veteran of foreign wealth schooling and research, this informative consultant explains a brand new method of wealth administration that enables participants to tackle a extra energetic function within the allocation in their resources. assurance encompasses a specified exam of the goals-based strategy, together with what works and what has to be revisited, and a transparent, comprehensible version that enables advisors to aid participants to navigate advanced methods. The significant other web site bargains ancillary readings, perform administration checklists, and tests that support readers safe a deep knowing of the foremost principles that make goals-based wealth administration work.
The goals-based wealth administration procedure used to be pioneered in 2002, yet has noticeable a sluggish evolution and in simple terms modest refinements mostly as a result of a scarcity of wide-scale adoption. This e-book takes the 1st steps towards finalizing the strategy, through delineating the powerful and useless points of conventional techniques, and providing alterations which could carry larger worth to practitioners and their clients.
- Understand the demanding situations confronted via the prosperous and wealthy
- Examine strategic asset allocation and funding coverage formulation
- Learn a version for facing the asset allocation process
- Learn why the constitution of the common advisory enterprise must change
High-net-worth contributors face very particular demanding situations. Goals-Based Wealth Management specializes in how these demanding situations could be conquer whereas adhering to their ambitions, incorporating constraints, and dealing in the individual's body of connection with force strategic allocation in their monetary assets.
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Extra resources for Goals-based wealth management : an integrated and practical approach to changing the structure of wealth advisory practices
Sample text
A book could be written on this topic—and in fact a few of them have been—but our point is not to take our readers to the full depth of the issue, but rather to use it as a proxy for the way in which considering the interactions identified in Chapter 1 require practitioners and families alike to revisit the way they have been working. We’ll start with a simple exposition of the effect of the tax bite on compound returns, and then focus on three ways in which our thinking must change: (1) the definition of active management may need to be expanded; (2) portfolio architecture may need to be altered; and (3) for families who can handle the complexity and minimum asset requirement, there may be a place for a greater reliance on derivative securities.
This could provide an interesting additional benefit: it might lower the ratio of the market value of the portfolio to its tax basis (the stock that was given away had the most imbedded unrealized gains, while the new stocks purchased with the cash have no unrealized gain). This increases the flexibility of the manager to be tax-efficient in his or her handling of that portfolio. Although beyond the scope of this book, one might also mention other routes, such as charitable lead or charitable remainder trusts as a means to achieve either tax or transfer benefits.
Assuming that the family has both some cash available for giving and appreciated securities within an equity portfolio, for instance, a smarter strategy emerges: the family may give the appreciated stock, thus satisfying its charitable intent. It can also use the cash that it has available to top up the equity portfolio (some part of which has just been given away). This could provide an interesting additional benefit: it might lower the ratio of the market value of the portfolio to its tax basis (the stock that was given away had the most imbedded unrealized gains, while the new stocks purchased with the cash have no unrealized gain).