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Our Concierge Process
 

Our Concierge Process

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    Our Concierge Process Our Concierge Process Document Transcript

    • Invest In Your Future
    • In this Guide: Smart Investing 1 Your Team 2 Our Six-Step Investment Process 4 Step 1: Financial Analysis 5 Step 2: Asset Allocation 6 Step 3: Portfolio Strategist Selection 8 Step 4: Investment Management Firm Selection 9 Step 5: Monitoring Your Portfolio 10 Step 6: Reporting 11
    • A Disciplined Plan with a Long Term Perspective As your Financial Advisor, our goal is to design an “rowing” markets when Bear Market headwinds investment plan that incorporates a realistic long- and choppy financial waters required more active term perspective and keeps you informed, up to management. date and on track. Invest in Your Future details step by step how our investment team will work on Our goal is to take this into account along with your behalf. We believe that the more you know, your specific goals and risk tolerance. We typically the better you will be able to maintain discipline combine asset allocation approaches and shift throughout varying market environments. emphasis by overweighting approaches as your needs and the markets evolve. We will incorporate Our approach begins with an understanding that diverse perspectives and multiple managers as the market has historically moved through long- appropriate for you. The ongoing evaluation of term secular bull and bear market cycles, as the chart market cycles, examining asset allocation approaches on this page illustrates. Simply put, there have been and diverse manager perspectives is a process that “sailing” markets when the prevailing economic will continue throughout our relationship. winds drove strong Bull Market returns, as well as Alternating Secular Bear And Bull Markets Dow Jones Industrial Average: 1906 - June 2009 Market Regime BEAR BULL BEAR BULL BEAR BULL BEAR Dates 1906-1921 1921-1929 1929-1942 1942-1966 1966-1982 1982-2000 1/14/2000- 6/30/2009 Length in Years 15.5 Years 8 Years 12.5 Years 24 Years 16.5 Years 17.5 Years 9+ Cumulative Return -15.31% 496.51% -75.62% 970.98% -21.93% 1408.9% -27.94% Annualized Return -1.06% 24.9% -10.55% 10.47% -1.49% 16.84% -3.36% 10,000.00 1,000.00 100.00 10.00 1906 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2009 (June) Source: Ned Davis Research. The Dow Jones Industrial Average (a registered trademark of Dow Jones & Co., Inc) is an unmanaged index composed of 30 common stocks. Past performance is no guarantee of future results. It is not possible to invest directly in an index. Returns shown above do not reflect the reinvestment of dividends or other distributions, and represent only the price appreciation of the index. 1
    • Your Team: Assembled to Bring Great Capability to the Investment Process InvESTOR FInAnCIAl ADvISOR PORTFOlIO STRATEGIST InvESTMEnT MAnAGEMEnT FIRMS Our team of financial professionals will work together to help you meet your investment goals. Each member of the team plays an integral part, focusing on a defined role and area of responsibility. Together, the team brings substantial capability and expertise to each step in the process. As your Financial Advisor, we are here to guide Together, we will work through our entire Six- you through every step of the investment process. Step Investment Process. This will provide us As part of this process, we will assemble a team of with a disciplined structure for implementing an professionals with expertise in investment man- investment strategy that is uniquely tailored for agement and specific asset allocation approaches, you. including professionals not typically accessible to individual investors. 2
    • Meet the Members of Your Team FInAnCIAl ADvISOR • Assembles the investment management team • Navigates you through every step of the Six-Step Investment Process • Monitors your investment plan and communicates with you on a regular, ongoing basis As your Financial Advisor, we will be your primary point of contact and interaction. We will work with you to analyze your current financial situation and assist in determining a suitable approach or combination of approaches based upon and your Risk/Return Profile. We will develop your Investment Policy Statement and monitor your asset allocation and portfolio strategist decisions on an ongoing basis. We will also monitor the performance of your account and suggest changes when, and if, your financial circumstances change. PORTFOlIO STRATEGIST • Determines asset class mix with their specific strategy • Selects and monitors Investment Management Firms • Reallocates and rebalances your portfolio Your Portfolio Strategist has a carefully crafted mandate to create and manage your portfolio according to your specified approach to asset allocation. They select the asset classes and determine the right allocation of equities, fixed income, and cash for your portfolio. They also analyze and select individual Investment Management Firms according to both style and performance criteria and are responsible for continually reallocating and rebalancing portfolios. InvESTMEnT MAnAGEMEnT FIRMS • Analyze and identify specific investment opportunities • Maintain a disciplined investment process and consistent investment style The Investment Management Firms are responsible for gathering and analyzing intelligence about the securities being considered for purchase or sale. They are carefully selected by Portfolio Strategists to implement their specific investment styles, such as large cap equities, small cap equities or investment grade bonds. 3
    • Our Six-Step Investment Process is Designed to Maximize Long-Term Success The likelihood of achieving success in your investment strategy is greatly improved by adhering to a disciplined investment process. Achieving all your life goals requires dedication, your team members to focus on their particular skill, and discipline. This is particularly true when strengths and to deliver their best ideas. By following it comes to attaining your financial objectives. a disciplined investment process, we’re able to make rational investment decisions, focused on Our Six-Step Investment Process is an estab- long-range goals, which are designed to maximize lished framework for identifying, analyzing, and long-term results. implementing investment opportunities. It allows The Six-Step Investment Process Financial Analysis Asset Allocation 1. 2. Accurate, in-depth review Align with the market Reporting Portfolio Strategist Selection 6. 3. Keep informed Institutional vision Investment Management Monitoring Your Portfolio 5. 4. Firm Selection Stay on track Security selection 4
    • Financial Analysis Step 1 Understanding Your Needs, Goals and Circumstances Before providing you with a recommendation, we need to fully understand your current financial Matching Your Financial Goals to One of situation. Six Risk/Return Profiles Together, we will complete a comprehensive Conservative Moderate Aggressive Discovery Workbook that gives a clear picture Potential Return of your financial circumstances, challenges and objectives. In addition, we will discuss the follow- ing critical questions: What are your investment goals? What is your time horizon? What are your liquidity needs? What is your risk tolerance? What are your investable resources? Potential Risk/Volatility What are your income needs? Based on your answers to these and other questions, Conservative we will determine your appetite for risk. This Moderate Conservative Moderate financial intelligence is used to determine which of Moderate Growth six Risk/Return Profiles match your unique situation. Growth Maximum Growth Determining where you are in terms of risk and return is the foundation for moving forward. It sets the framework for our recommendations regarding which Asset Allocation Approach, Portfolio Strategists and Investment Management Firms will work best for you. 5
    • Step 2 Asset Allocation How Should You Allocate Your Assets? More than timing or the specific securities in which you invest, the way in which your assets are allocated in equities, fixed income, and cash and how they are rebalanced over time ultimately drive your returns. Most investors focus on individual security selection Allocation approaches that attempt to capture long- and often overlook the importance of asset allocation term market averages, to various Tactical Asset to their portfolios. Yet, according to several academic Allocation approaches that are able to respond to studies, 90% of portfolio variance is determined by shorter term opportunities and risks. how your assets are allocated among equity classes, fixed income securities and cash. Whichever approach to asset allocation we incorporate, the goal will be the same: to keep your Various approaches may be suitable for different portfolio aligned with your investment goals. investment objectives, risk profiles, and market environments. They range from Strategic Asset There are four approaches to Asset Allocation suitable for various market environments: Asset allocation: the most important determinant of variance in portfolio performance Strategic Asset Allocation Provides a mix of equities, fixed income, and cash that seeks to capture broad capital market returns while balancing risk and volatility. Tactical ConstrainedSM Asset Allocation Seeks to enhance broad market returns through moderate allocation shifts intended to take advantage of shorter term opportunities or mitigate risks. Tactical UnconstrainedSM Asset Allocation Removes the limits on the extent and frequency of allocation shifts, allowing the portfolio strategist to respond more aggressively to changes in their outlook. 91.5% Asset Allocation Absolute Return Asset Allocations 4.6% Securities Selection Seeks modest returns pursued through 1.8% Timing highly active, extremely risk-sensitive 2.1% Other Factors management that may include alternative strategies. Source: Brinson, Hood & Beebower, Financial Analysts Journal, 1986 Brinson, Singer & Beebower, Financial Analysts Journal, 1991 6
    • Portfolio Strategist Selection Step 3 Which Portfolio Strategist Meets Your Needs? Because your asset allocation decision is one of the • Have an investment policy committee comprised of senior investment most important components of your investment professionals plan, the expertise of your Portfolio Strategist(s) is • Adhere to a defined and disciplined critical. We adhere to rigorous criteria in selecting our investment process Portfolio Strategists, who are charged with selecting As your Financial Advisor, we’ll work with you to the asset classes and deciding on the right mix of find, based on your investment objectives and risk equities, fixed income, and cash for your portfolio. tolerance, the appropriate Portfolio Strategist(s) To be considered for selection, firms must: for you. • Have considerable expertise in specific approaches to asset allocation • Conduct substantial research across global capital markets Our Portfolio Strategists have expertise in one or more approaches to asset allocation. Asset Allocation Approaches tactical tactical abSolUte Strategic conStrainedSM UnconStrainedSM retUrn 7
    • Portfolio Strategists: Different Approaches to the Same Market With different mandates and their own unique analysis, Portfolio Strategists may respond very differently to the same market. For example, here are four different allocations that might be seen on the same day. 60% 40% Equity Fixed Income Portfolio Strategist 1: Strategic Portfolio Strategist 2: Tactical Asset Allocation ConstrainedSM Asset Based on long term Allocation 40% capital market 60% 40% The Portfolio Strategist 60% 35% Fixed Fixed Equity 65% Fixed expectations, this Equity Income is optimistic about Equity Income Income strategist has a neutral equities over the short outlook and has to intermediate term. developed an optimized As a result the Portfolio asset allocation consistent Strategist has tilted 40% 15% 35% with target weights. 60% 35% Fixed away from the strategic baseline by 30% Cash Fixed Equity Fixed 65% 65% Income Income increasing exposure to equities. Income Equity Equity Equity 55% Fixed Income 15% 35% 20% 15% Cash Opportunistic 30% 65% 30% Cash Fixed Income Equity 40% Equity Equity Market 55% 40% 55% Neutral Fixed Fixed Portfolio Strategist 3: Tactical Fixed Portfolio Strategist 4: Absolute Income Income Income UnconstrainedSM Asset Return Asset Allocation Allocation Absolute Return 15% 20% The Portfolio Strategist 20% Cash 30% objectives seek modest Opportunistic Opportunistic Equity 40% has a pessimistic view Equity Equity 40% returns while actively Market over the short term and Market managing portfolio risk. 40% 40% 55% Neutral Fixed Neutral has added cash and Fixed Fixed Allocations will tend to Income IncomeIncome fixed income exposure be very conservatively to the portfolio. positioned over the long 20% Opportunistic term and will typically have exposure to Equity 40% non-correlated asset classes. Market 40% Neutral Fixed Income The pie charts shown are for illustrative purposes only and may not be indicative of any actual investment. 8
    • Investment Management Firm Selection Step 4 What’s the Right Solution for You? Investment Management Firms are responsible for Regardless of the investment approach we selecting the individual securities that comprise ultimately recommend for you – and it may your portfolio. The Investment Management Firms include No-Load Mutual Funds or exchange are carefully selected by your Portfolio Strategist(s) Traded Funds, Unified Managed Accounts or to implement their specific investment style, based Privately Managed Accounts – you have the on their performance relative to their peers and to assurance that your Investment Management asset class benchmarks. Firms are dedicated to helping you achieve your financial goals. Working with us, you have a wide range of investment strategies, according to your objectives, investable assets and Risk/Return Profile. Investment Implementation Options no-load Exchange Unified Managed Privately Mutual Funds Traded Funds Accounts Managed Accounts Fees and charges vary for these services. There may be additional fees and expenses separate from GFWM’s fees or charges associated with the mutual funds & ETFs held in the various investment strategies. You can obtain the applicable Disclosure Brochure, (Schedule H or Form ADV Part II) for complete information on all applicable fees, from your Financial Advisor. 9
    • Step 5 Monitoring Your Portfolio Keeping You Aligned With Your Goals Asset allocations are not static. They continue to Rebalancing aims to return your asset allocation expand or contract at different rates. This can cause to its optimum policy mix. Reallocations intend to some asset classes to grow or shrink beyond what capture opportunities or minimize potential risks. your Portfolio Strategists might have intended. We take great care in monitoring your ongoing Allocation shifts might be recommended to keep allocation decisions and keeping you up to date on you aligned with your goals and risk profile. these changes. THeSe ILLuSTRATIONS SHOW HOW vARIOuS ALLOCATION CHANgeS MAy be eNACTeD Strategic asset allocation rebalancing normally occurs quarterly or annually and is designed to manage the risk exposure of your portfolio. Target Asset Mix Change in Portfolio Rebalanced 2% 2%2% 5% 5%5% 2% 2%2% This portfolio is initially Cash 38%38% Cash 38% Cash Over Time 25%25% Cash 25% Cash Portfolio 38%38% Cash Cash 38% Cash Fixed Fixed Fixed Fixed Cash Fixed Fixed Fixed Fixed targeted at 60% Fixed As time passes and Income Income Income Periodically, the Income Income Income Income Income Income equities, 38% fixed equities outperform 70%70% 70% portfolio is rebalanced 60%60% 60% 60%60% 60% income, and 2% cash. Equity Equity Equity cash and fixed income, Equity Equity Equity to the target mix. Equity Equity Equity the composition of the 2% 2% 2% portfolio changes. 5% 5% 5% 2% 2% 2% 25% Cash 25%25%Cash Cash 2% Cash 38% Cash 38%38% 2%2% Cash 38% Cash 38%38%Cash Cash 38%38% Fixed Fixed Cash Fixed 38% Cash Cash 5% Fixed Fixed 5%5% Fixed 25%25% Cash Fixed15% 15% Fixed Fixed 15% Cash IncomeIncome Cash 25% Income Cash Cash IncomeIncome FixedIncome Fixed Fixed FixedFixed IncomeIncomeCash Income 50%50% Tactical ConstrainedSM Income Income60% asset allocation adjustments Income 60% 60% can be made Fixed 70%time Incomeany at70% 70% Income Income to capitalize on the 50% global capital Fixed 60% 60% Fixed Fixed 60% Equity Equity Equity 60% 60%60% Equity Equity Equity 70%70% Equity Equity Income IncomeEquity Income 35% 35% 35% market outlook of the Portfolio Strategist. Equity Equity Equity 70% Equity Equity Equity Equity Equity Equity Target Asset Mix Stock Market Stock Market This portfolio is also initially 2% 2% 2% Undervalued 5% 5% 5% Overvalued 15%15% 15% 38% Cash 38%38% Cash Cash 2% 25% Cash 25%25%Cash Cash In this portfolio, the When the Portfolio Cash Cash Cash targeted at 60% equities, Fixed Fixed 20% 35%Fixed 2% Cash 35% 2% 20% 20% 35% 25%Fixed5% 5% 5% 25% 5% Fixed 25% 5% Fixed 25% 25% CashCash 25% Cash 50%2% 2% 2% 50% 20%20% 50% 38% Cash 20% 38% fixed income, and 2% Income38% Fixed Income Cash 38%Income Cash Cash Fixed Cash 38%Fixed Portfolio Strategist IncomeIncome Cash Fixed Fixed Cash Income Fixed Fixed Fixed Fixed Strategist believes 38%FixedCashCash 38% Cash Cash Fixed Fixed Fixed Cash Income Fixed 60% Fixed Income 60% Fixed Income Income Income 70% Income 70%70% Fixed Income 35% Fixed70% Income IncomeIncome 35% cash. When the Portfolio Income 60%Equity Income Income maintains a 35 - 70% target Income 70%70% Income the stock market is Income 35%Equity 10% Fixed Fixed 10%10% Fixed Income Equity Equity Equity Equity Equity Equity Equity Strategist believes the 45%45% 60% 45% 60% 60% range for equities. When 70%70% 70% 70%70% Equity Equity overvalued, exposure Income Income Equity Equity Income 60% 60% 60% Equity Equity Equity Equity Equity Equity Equity Equity Equity market is fairly valued, 60% Equity Equity Equity the stock market is deemed might be reduced to 35% Equity is invested in equities. by the Portfolio Strategist equities – the lower limit of 35% 20% 35%35% 20%20% to be undervalued, a full 70% might5% 5% 25% 5% 25%25% invested be the range. 20%20% 20% Cash Cash Fixed Fixed Cash Fixed 2% 2% 2% Cash Cash Fixed Cash Fixed Fixed 5%5% 5% Cash Cash Cash 15% 38% 38% Income Cash Income 38% Cash IncomeCash in equities. Income 25% Income Income Cash 25% 70%70% 15% Cash 70% 15% 25% CashCash Cash 10%10% Cash Fixed Fixed Fixed Fixed Fixed Fixed Fixed Fixed Fixed 50% 10% 50%Income 50% IncomeIncome Equity Equity IncomeIncome 45% Income 45% 45% Income70% 70% IncomeIncome70% Fixed Fixed Equity Fixed Equity Equity Equity Equity Equity Equity IncomeIncome pursuit Tactical UnconstrainedSM allocations 60% 60% 60% can adjust at any time without 70% 70% regard 70% to preset asset class mixes in Equity Income 35% 35% 35% Equity Equity Equity Equity Equity Equity Equity Equity of their return. no Target Mix Stock Market Stock Market Without a set target mix, 35% 20% 20% 35% 35%20% Undervalued 25% 5% 25% 5%5% Cash 25% Overvalued 20% 20% 20% the Portfolio Strategist Fixed Fixed Cash FixedCash Cash The Portfolio Strategist Fixed Cash Fixed Fixed Cash Cash Cash After a long bull market, 70% 70% Cash IncomeIncome Income IncomeIncome Income 70% can opportunistically believes that the stock the Portfolio Strategist Fixed Fixed 10% 10% Fixed 10% 70% 70% Income Equity Equity position their portfolio 45% 45% 45% market is greatly 70% believes that equities are Income Income Equity Equity Equity Equity Equity Equity Equity based upon the market. undervalued and overvalued and that fixed In this case, a mix of 45% presents limited risk. The income may offer attractive equities, 35% fixed income, and portfolio is adjusted to 70% returns. The portfolio is adjusted to 20% cash is used. equities, 25% fixed income 10% equities, 70% fixed income and 20% cash. and 5% cash. 10
    • Reporting Step 6 You Need Knowledge, Not Just Information Our goal is to engage you in the investment process by reporting – clearly, concisely and in a timely manner – everything you need to know about your accounts. An important part of our job is to keep you well While some clients prefer quarterly written reports, informed about your investment strategy and others want around-the-clock online access to their performance. each quarter, we show you exactly financial information. When you work with us, where you stand in relation to your goals and we deliver both. Our secure, online client resource objectives. We send you print and online portfolio center provides: information, via: • Daily updated account information • Custodial statements • Market commentary • Quarterly Performance Reviews • Investment research • year-end tax reports 11
    • Are You Ready to Invest in Your Future? If you want to identify clear financial goals and If you are ready to commit to having a team of the make knowledgeable investment decisions, you industry’s most talented investment professionals have an important choice to make. You can go back you up, we’re ready to work with you. The next it alone or, you can choose to work with a team move is yours. Simply schedule an appointment to of financial professionals with a disciplined and work with us to complete your Discovery Workbook. rigorous decision-making process. It’s the first step to investing in your future. Capital Brokerage Corporation (CBC), Member FINRA – CBC is a Genworth Financial Company. 46140 8/2009 © 2009 Genworth Financial Wealth Management, Inc. 252_ClientBro (2009/08) 12 12