I. Plan development
Your personal finances are tightly connected to the business, and present a complex web of succession, insurance, tax, and legal issues. Investment in the business or in a portfolio is a separate process with different risk, return, and liquidity characteristics. Business owners are often too busy with daily demands to think through these issues, and can miss key planning and investment opportunities or become exposed to undue risk. Where is discretionary spending best utilized: in the business or in the portfolio? What is your time horizon to exit? Is liquidity or return on investment the main criteria?
Important planning and investment considerations include: succession timing, how to finance a sale to maximize cash flow and minimize risk; to whom and how to sell (3rd party, employee, or family member). These decisions all dictate different financial strategies and in general require a minimum planning period of 5 years. The first step in succession planning is to have a high quality appraisal performed by a certified business appraiser. Our appraisal services will provide a reliable estimate of business value, help to surface key issues, and catalyze the planning process. For example, there may be ways to enhance business value, devlelop tax efficient funding, or think through deal structures to best accomodate your goals.
Our service philosophy includes working in concert with your existing professional team. Success requires careful consideration of multiple issues. A well-orchestrated team effort can further save you money, secure your assets from undue risk, and ensure your estate is in order. Once we have insight into these issues, we can better develop an investment policy that is consistent with your goals. We will explain our discipline, strategy implementation, and why we strongly believe our model will serve your objectives.
II. Strategy Development
The investment policy will prescribe an appropriate mix of assets to balance your income and/or return requirements against your risk tolerance and time horizon. We place strong emphasis on understanding your need for downside protection and manage this risk as prudently as practicable. Free lunches do not exist in financial markets, and we will explain to you the tradeoffs between risk and return in every asset mix. Tax advantaged strategies will be used where practicable.
Key Strategy Considerations
- Asset Allocation
- Asset Selection
- Asset Location
- Time Horizon
- Appraisal & Valuation Issues
- Succession & Planning Issues
- Personal & Portfolio Objectives
- Planning and Tax Issues
III. Strategy & Service Execution
Once a strategy is developed, it’s important to exercise discipline in its execution. Accounts are rebalanced as needed to ensure asset class exposure is consistent with your stated ability and willingness to accept risk. Different stages in life may change how you think and feel about your money. If strategy changes or adjustments are needed, they will be driven by you during our ongoing dialogue as life events unfold. Custom reports are designed that are easy for you to track your investment results, and gauge if you’re on track with your goals. Accounts are reviewed quarterly and, of course, you can call us at any time.