PWA's Asset Management offering takes the inputs that were gathered through financial plan development and invests your assets through an asset allocation designed to match your financial situation, risk tolerance, and exposure to various asset classes in your everyday life. It utilizes the globally accepted concept of diversification to target the return necessary for goal-attainment, without taking on excessive risk. You will open an account at a custodian (our preferred custodian is Schwab) that invests the funds as determined by PWA. These investments could include US or foreign, large or small cap equities, options, corporate or government debt, mutual funds, ETFs, real estate, money market funds, or other cash equivalents. The Asset Management program provides ongoing monitoring, adjustments, and reporting such that progress toward goals can be tracked and maintained. By component of the overall PRETIRE program, Asset Management includes the following:
Planning & Goal Setting - Determines your required returns for the asset management program based on your goals and needs. Determines the overall asset allocation (% stocks, % fixed income, % cash, etc.) for the portfolio.
Risk Management - Ensure assets under management are protected from unnecessary risk wherever possible. If permanent life insurance is included in the portfolio, monitor its funding progress and its ability to achieve client goals.
Employee Benefits - Manage employee 401k / 403b / other retirement plans if included in assets under management.
Tax - Manage assets in a tax efficient manner using tax-exempt, tax-deferred, and taxable accounts where appropriate. Provide capital gains analysis for tax preparation. Utilize tax loss harvesting and other tax-reducing strategies where possible.
Investments - Buy/sell investment assets using target asset allocation and securities analysis and monitor portfolio accounts. Rebalance / Shift investments when necessary. See the Investments component of What We Offer for a description of our investment philosophy and process.
Retirement Planning - Implement and monitor the retirement component of the financial plan using retirement accounts and taxable accounts as appropriate. Monitor progress toward retirement goals and adjust as necessary.
Estate Planning - Ensure proper titling of assets under management. Review documents necessary to ensure your assets are distributed effectively and efficiently after death.
The Asset Management service is suited for all clients, regardless of current assets or age. If you already have assets in a stock portfolio, 401k, IRA, or some other form, PWA will work with you to reallocate those assets as appropriate for your goals and risk tolerance. Once the allocation is set, we will conduct ongoing reviews, rebalance where necessary, and invest additional contributions according to the plan. If you don't already have assets, we'll help you determine a plan to start accumulating them and we'll invest them in a manner that is suitable for you. Starting to accumulate assets early in life has a dramatic effect on your wealth later in life (see Youthful Savings). The earlier you can start, the better.
Asset management is an ongoing process once you've signed an asset management agreement with PWA. The agreement will state those assets that are considered under PWA management (Assets Under Management or AUM). The physical location of the asset will depend on its type. Investment assets that are not restricted (like a 401k) will be housed at a custodian like Schwab (PWA's preferred custodian). This allows PWA to manage the assets on a day-to-day basis without needing you to act as an intermediary, but ensures the security of your assets as no one but you will have the authority to withdraw them. Assets physically located in other places will be managed with you acting as an intermediary where necessary, by either providing PWA access to the asset, or by implementing tasks as recommended by PWA. Ongoing communication with you will be accomplished primarily via email and/or phone calls, though we're always available for face-to-face meetings as well.
The Asset Management service begins as soon as you sign an Asset Management agreement, and have a financial plan generated so that PWA knows the asset allocation that is suitable for you based on your target returns and risk tolerance.
Asset management is the core component for executing a successful financial plan. Virtually all financial goals depend on the investment of capital to earn a return that will allow that capital to grow so that it can be later used. As described earlier, in order for you to reach "pretirement", you'll need to have all your needs fully funded. PWA's Asset Management program attempts to help you do just that.
Asset management services are priced as a percentage of assets under management (AUM) as is typical for fee-only advising in the industry. AUM include all brokerage accounts, retirement plans, and other assets for which PWA provides service. Certain breakpoints in AUM will determine the percentage of fees such that the larger the AUM, the lower the fee as a % of AUM. The breakpoints are as follows:
|
Assets Under Mangement (AUM) |
Quarterly Fee |
Annual Equivalent Fee |
|
First $50,000 |
0.25% of AUM |
1.0% of AUM |
|
Next $150,000 (up to $200,000) |
0.225% of AUM |
0.9% of AUM |
|
Next $800,000 (up to $1,000,000) |
0.20% of AUM |
0.8% of AUM |
|
Next $2,000,000 (up to $3,000,000) |
0.175% of AUM |
0.7% of AUM |
|
All additional (no limit) |
0.15% of AUM |
0.6% of AUM |
As is legally required, PWA does not structure asset management arrangements based on a share in capital gains. While the reason may not be intuitive, such arrangements do not align the advisor's incentives with your goals. For an overview of why, see our article on Pay For Performance: Why Sharing In Client Profits Isn't Legal.
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