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Results

Evidence-based Drivers of Results

The conclusions from research are conclusive and compelling. There are evidence-based wealth management strategies that investors can employ to achieve greater outcomes. The best advisors are diligent and careful to keep up with the latest findings while not jumping from fad to fad. It is a full-time job that requires training, expertise, tools and time.

Please review the following research, which guides our strategies.

Certain factors have historically earned a long-term risk premium

“A large body of academic research highlights that long term equity portfolio performance can be explained by factors*. This research has been prevalent for over 40 years; Barra (now an MSCI company) for instance has undertaken the research of factors since the 1970s. Certain factors have historically earned a long-term risk premium and represent exposure to systematic sources of risk. Factor investing is the investment process that aims to harvest these risk premia through exposure to factors…

…Thus we distinguish between generic factors and “risk premia factors,” which have earned a persistent significant premium over long periods and reflect exposure to sources of systematic risk. All of the Fama-French factors count as risk premia factors since the aim of those original studies was to isolate asset pricing drivers….

…Empirical studies confirm that it is difficult for active managers to earn alpha. Studies by Malkiel (1995), Gruber (1996), Wermers (2000, 2003), and Jones and Wermers (2011) found that the median active manager generally does not outperform the cap weighted benchmark net of fees and even the small subset of those who do outperform are only able to maintain that outperformance for short periods. Studies have also found that active managers often tilt their portfolios towards well-known factors such as Value and Size and that these tilts account for a substantial portion of managers’ returns over market capitalization weighted benchmarks…”

Foundations of Factor Investing

MSCI Research Insight

December 2013


* A factor can be thought of as any characteristic relating to a group of securities that is important in explaining their return and risk.
Measuring the importance of intelligent financial planning decisions

Measuring the Importance of Intelligent Financial Planning Decisions


Alpha, Beta, and Now… Gamma

Morningstar

December 2012


Vanguard Quantifies the Value-add of Best Practices in Wealth Management


Vanguard

Putting a Value on Your Value

March 2014


Please read our illustrative case studies* below to get a sense of the results that we have achieved for others.

*The details have been modified to protect our clients’ privacy. In addition, and you likely don’t know this, Registered Investment Advisors are not allowed to advertise testimonials per the Securities Act of 1940.

Please visit us for a financial roadmap meeting, and we can discuss the results that are most important to you — and how we may be able to help you achieve them.

Case Study #1

Technology Executive

“How can I be sure our portfolio is optimized and I am not missing any opportunities to reduce my taxes?”

Our client implemented our portfolio and reduced their taxes this year and every year and benefited from a match of their employer’s deferred compensation plan. With their increased confidence, more time made available for other more important pursuits such as setting a new goal to complete an important industry white paper and time on the slopes.

Case Study #2

Finance Executive

“How do I know if we are saving enough for our children’s education and our own retirement?”

Our client implemented a ‘savings allocation’ for education and retirement and changed current insurance producing savings to accommodate more appropriate insurance. Our client implemented a revised portfolio including Dimensional Funds, CREF, Vanguard index and ETF funds. This resulted in lower fund expenses and greater diversification. This was implemented across all employer plans and personal banking and brokerage accounts.

Our client achieved greater peace of mind knowing that how savings and expenses were allocated would allow both parents to look forward to the college process for their four children, and their own financial independence. They found a creative way to vacation that enabled more “memory making” without sacrificing savings.


Case Study #3

Medical Doctor and Ph.D. Research Scientist

“I wish I knew if I could work less and still help our two kids with their medical school tuition.”

Our client implemented a full financial make over. By reducing their cost structure, they were able to save more aggressively. They also accepted a promotion to increase their income and to have more control over their schedule.

Worry was replaced with a sense of purpose, accomplishment and control. By bringing the children into the conversation about their own financial commitment the whole family is wiser and stronger due to having clear expectations for everyone’s contribution.


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