Our Investment Approach
Traditional Investment Management
The way most people manage their investments – on their own, using an advisor or some combination of the two – has a number of shortcomings for financially wealthy families.
It’s been our experience that most households consider the administrative and record keeping aspects of investment management a real burden and something they would rather not do. They feel like there are too many accounts to keep track of and statements are hard to understand, if not downright confusing. Additionally, some statements come monthly, some quarterly, and some even annually.
A second shortcoming of traditional investment management is many households have an investment advisor for one or a few of their accounts but often a portion of their nest egg is self managed. What sense does that make?
But a much bigger and often unnoticed problem is illustrated by the pie chart at the bottom of the illustration below, labeled "Overall", that shows if you combine the various investments together they lack diversification. Having too many eggs in too few baskets leads to portfolios that under perform, are high risk, or both. And there is no one who is looking at each individual investment to make sure they are low cost, tax efficient, suitable for the overall portfolio and performing well.
And notice who is in the middle trying to handle it all? Is it any wonder that the family is often left feeling not entirely in control of their investments?
In short, many financially successful households don't feel on top of the administrative aspects of their investments which results in a general lack of control. Additionally, there is no overall strategy or coordination among accounts so the portfolio as a whole often underperforms. For these reasons they are often not entirely satisfied with their investments.
PARTNERSINWEALTH Investment Management
Because of the problems cited above many financially successful families would benefit from having a knowledgeable and trustworthy single point of contact overseeing their investments. We call that person a PERSONALCFO.
In the diagram below, note the PERSONALCFO is positioned between the financially successful family and all the investment accounts. There is ongoing communication between the household and the PERSONALCFO, and the PERSONALCFO is in charge of administration, record keeping, investment expense, tax and risk minimization, diversification, and of course, overall performance.
If you already have a valued advisor currently managing a portion of your investments the PERSONALCFO doesn't replace them, they increase their effectiveness by working with them. Additionally, through our sophisticated web portal, your PERSONALCFO receives daily updates on all investment values so they can seamlessly manage your accounts.
A PERSONALCFO will simplify your life and give you relief from investment administration so you can focus on your most important priorities. Additionally, they will put your mind at ease and you will have the confidence that the investment piece of your financial life is being done well. But what's really exciting is having a PERSONALCFO executing a well-designed and well-executed investment strategy that will accelerate the growth of your net worth.