Portfolio Management Services Overview

Portfolio Management services involve delegating the on going management of your investment accounts to WiseWealth. We categorize clients into three loose groups:

• The Accumulators
• The Consolidators
• The Retired.

We have different recommendations on using our Portfolio Management services depending on what category a person or family most closely fits.

The Accumulators:
 
Accumulators are 10+ years from ceasing to work at their present income level. Their primary investment goals are focused on contributions and having their investment earn the highest possible return within their personal risk tolerance. This group benefits tremendously from financial planning to answer question like, how much do I need to put into my 401(k) each month and how should I invest it?

Most Accumulators won’t need Portfolio Management Services, yet. Typically their primary investment accounts will be through work. Contribution amounts and investments allocation inside a tax deferred account can be handled through an annual financial planning engagement.

Exceptions to this include:

1. The self employed.

2. Someone who has left one or more jobs after building up significant resources in retirement accounts but is still 10+ years away from retirement.

3. Someone who is very busy and/or well paid and prefers to delegate the job so as not to have to worry about it.

4. Someone who receives a large lump sum from sale of an asset, inheritance or a settlement (including divorce settlements) and wants to insure it is managed professionally.

The Consolidators:

Consolidators are from 1 to 10 years away from ceasing to work at their present income level. This category still benefits tremendously from financial planning to answering questions such as:

1. Can I ever quit working without running out of money?

2. How much can I withdraw from my investments safely without running out of money?

3. What if that is not enough? What can I do to improve my chances of having enough money?

4. I’ve done a good job saving - can I retire early?

5. What is Long-term Care insurance and do I need it?

6. Should I adjust my portfolio to be more conservative?

7. What about the equity in my house?

WiseWealth begins to recommend Portfolio Management Services for all investment accounts not with the Consolidator’s current employer. We prefer to consolidate everything at one custodian under our management. Risk management and rebalancing become critical at this point in time to insure the investment accounts perform within desired ranges in the years just proceeding retirement.

The Retired:

This group is 1 year or less from retirement or has retired. WiseWealth recommends everyone drawing income from a portfolio should consider becoming a Portfolio Management client. This will often involve rolling over accounts held at your employer shortly after ending employment. Complex rebalancing rules will dictate how much may be withdrawn, which account it should be taken from and which investment within that account should be sold so as to maximize the longevity of the portfolio.

This is also the time when a financial mistake can setback a portfolio to the point it will never recover. It is the time to place safeguards against the struggles of aging. Knowing your investments are in the hands of a highly competent manager, with specific instructions on how to manage the investments, can take a great burden off you and your loved ones.

How WiseWealth, Inc. Manages Portfolios

WiseWealth’s investment strategy is to build broadly diversified portfolios out of no-load, low cost mutual funds and ETFs; WiseWealth’s portfolios are currently built from Vanguard, T. Rowe Price and Bridgeway mutual funds as well as Barclay’s iShare ETFs.

To determine an appropriate portfolio for each individual client WiseWealth follows this 7 step process.

1. An analysis of the client's Risk Capacity. Risk Capacity is the non-emotional constraints on the amount of risk which the portfolio may be exposed based on its goals. These constraints are determined by how much money you need when.

2. An analysis of the client's Risk Tolerance. Risk Tolerance is the emotional constraints on the amount of risk which the client can tolerate. How much downward fluctuation can you withstand in your portfolio while still sleeping well at night?

3. If necessary a discussion and  decision  making process to resolve, as best as possible, conflicts between Rick Capacity, Risk Tolerance and the client's financial goals. At times it may be impossible to resolve these conflicts and an imperfect compromise must be accepted. In these situations the ultimate responsibility for the compromised decision rests upon the client.

4. Develop a written Investment Policy Statement (IPS). This is the master document which controls the investment process. This is where the target portfolio is designed and the supporting information for choosing the design is presented.

5. Implement the target portfolio in the client's account as defined by the ISP.

6. Review client’s holdings quarterly against Investment Policy Statement. Rebalance holdings as defined by the IPS.

7. Annually provide a detailed statement of client’s holdings, deposits, withdrawals, interest and dividend income, and capital gains. In addition client receives quarterly statements of account holdings.

The annual fee for Portfolio management services are listed below. The fees are based on the account size on the last day of each quarter. Tax-deferred accounts are charged less because they do not require taxes to be taken into account in the trading strategies. The fee is debited from the client's custodian account quarterly.

*Portfolios below $100,000 are handled in Financial Planning Engagements on an hourly basis. Often Target Retirement funds or Lifestyle funds are recommended for smaller accounts.

Our top rate of 0.60% equals $60 per $10,000 invested per year.

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