For most companies, the investment process starts with a lot of "talk" -- an analyst at a brokerage firm "talks up" an investment idea to the company's brokers. The brokers, in turn, talk to as many existing or potential customers as they can, telling them why this item should be added to their portfolio. Typically, clouding the conversation is the fact that the broker's compensation comes in the form of a commission, thereby making the investor unsure of how much of the "talk" is advice and how much is a sales pitch.
Unfortunately, the result of this type of "talk" is sometimes the purchase of an investment that has nothing at all to do with a clients' goals, and may not even be appropriate for him or her to own. In this example, worse than talk being "cheap", it can be downright costly.
At Marciano Wealth Advisors, we take a decidedly different approach. Our investment process begins with the old-fashioned art of "listening".
Each client relationship starts with a client sharing with us, not just the quantifiable aspects of their planning goals -- their risk tolerance, the age at which they want certain events to be funded for, the amount of money they hope to have available -- but they share with us their dreams and aspirations.
Our clients share with us the vision they have for their own future, the future of their children and grandchildren, and if they own a business, for their key executives and for the evolution and succession of their company. Ultimately, they might consider and articulate to us the legacy that they hope to leave behind.
Once we fully understand our client's motivation, we can employ the following fee based investment methodology:
The client is asked to complete a comprehensive questionnaire which attempts to identify the amount of risk they are willing to assume in their investment portfolio. Utilizing techniques from "Modern Portfolio Theory" we are able to easily quantify the amount of risk their portfolio should have. In virtually every future conversation with the client, the amount of risk the client is comfortable taking is discussed, and matched against the current risk of the portfolio so that proper adjustments can be made.
A client's existing assets are analyzed in a comprehensive, written report that details the portfolio's asset allocation, risk, expense ratio, tax-efficiency, redundancy of holdings, and performance.
Also in written form, our observations are presented to the client so that we can discuss how their current portfolio could be altered to enhance any of the aspects listed above.
A detailed report is provided that demonstrates exactly which items should be sold, and when, and precisely what assets should be purchased, to achieve the new Target Portfolio. Careful consideration is given to any tax implications that might result from these moves and how to mitigate or postpone them, and if any contingent deferred sales charges might exist on the assets to be sold.
Our expert staff prepares the appropriate applications to open a client's new accounts, and completes, sends, and monitors the required forms to notify the existing brokerage company to transfer the assets into the client's new accounts. Once the assets arrive, they are carefully audited to insure that all requested items have arrived.
Trades are executed to sell off undesirable assets, as indicated in the report provided, and purchases of targeted assets are made, in a fee-based, unbiased environment.
At the end of each calendar quarter, our clients in our fee-based programs receive a comprehensive performance report detailing each asset's performance. Included in this report is a Recommendations section, alerting our clients to what assets must be bought or sold to keep the portfolio within the strict allocation guidelines established from the client's Investment Policy Statement.