Comprehensive Wealth Management
A high-touch service that provides the solutions necessary for achievement of one’s vision for their wealth. It incorporates a variety of topics to include Financial Planning, Investment Management, Charitable Giving Strategies and additional planning in the areas of Income, Liquidity, Estate, Tax and Insurance.
Financial Planning
A process for analyzing and verifying the financial goals involved in one’s vision for their wealth.
Investment Management
The administration of investments with the purpose of providing the income and returns necessary to meet all financial goals
Asset Allocation
Dividing a portfolio among different types of investments with the purpose of providing the best return for a given level of risk. (e.g. 60% stocks and 40% bonds)
Asset Location
A strategy of placing the various categories of investments into the specific types of accounts that will maximize after-tax returns (e.g. holding taxable bonds in a tax-deferred account)
Diversification
A strategy for owning multiple securities so that the returns of the group, when risk is considered, are better than owning only one of the securities
Investment Policy Statement (IPS)
A document that captures the investment goals of a client and the strategies the investment manager will use to attempt to achieve them
Market Timing
A tactical investment scheme that is designed to take advantage of what will occur in the markets in the future. In general, market timing is not a viable and consistently repeatable strategy
Portfolio
The combined assets of an investor
Risk
The possibility that an investment will not provide the return that was expected
Risk Tolerance
The magnitude of losses that an investor can afford, or is willing to experience
Volatility
The magnitude of variability in the returns of an investment
Total Return
The rate of return that takes into account interest, dividends, and price change (capital gains or losses)
Yield
The income from an investment divided by its original or current value, usually expressed as an annual percentage
Capital Gain or Loss
The variance between the purchase price of an investment and the current price (unrealized) or the price at which it was sold (realized)
Charitable Giving Strategies
An analysis of the assets available for gifting and the most tax-efficient manner with which to give. In many cases, cash is the least tax-effective asset to donate
Donor-Advised Fund
A charitable investment account that provides a donor with flexibility in regards to the timing and recipients of charitable contributions
Qualified Charitable Distribution
tax-free gift from a tax-deferred IRA that fulfills Required Minimum Distribution requirements
Gift of Appreciated Securities
A gift of a security that transfers the tax liability to the recipient. If the recipient is a charity, then no one pays taxes on the gain
Life-Income Giving
A gift of an asset to a charity or nonprofit that provides the donor with an income stream for a period of time
Income & Liquidity Planning
A strategy for covering routine expenses and one-time purchases with income and asset sales
Income Planning
A process for insuring that there are sufficient sources of income to cover the lifestyle needs during the various phases of life
Retirement Income Planning
A process for insuring that there are sufficient sources of income to cover the lifestyle needs during the retirement years
Liquidity Planning
A process for insuring that there are sufficient liquid assets for a particular purchase in the future
Estate Planning
The process of designating what should happen regarding a person’s health care and assets when they are incapacitated or at their death
Estate Plan
A legal blueprint that spells out what should happen regarding a person’s health care and assets when they are incapacitated or at their death
Estate Tax
A tax on the net value at death of a person’s assets, if that value is greater than an amount defined by law
Executor
The person responsible for executing the instructions laid out in a will
Gift Tax
A tax on the value of a gift, if that value is greater than an amount defined by law
Grantor
The person who has a trust created, and then transfers or “grants” assets from their own name into the trust
Intestate
The situation of dying without a will in place
Will
A legal document that designates what should happen regarding a person’s assets at their death. The existence of a will does not mean that assets named in the will avoid probate
Trust
A fiduciary relationship that allows a trustee to manage assets for the benefit of beneficiaries, generally captured within a legal document
Revocable Trust
A trust that can be altered by the grantor
Irrevocable Trust
A trust that, generally, cannot be altered by the grantor
Power of Attorney
The authority for a person or institution to make decisions on behalf of another
Probate
The legal process through which a court will validate a will, approve an executor, and insure that distributions for outstanding debts, then distributions to beneficiaries, are handled properly
Tax Planning
The process of analyzing a tax situation and finding ways to legally reduce both current and future tax liabilities
Taxable Income
Gross income minus adjustments, deductions, and exemptions. This is the amount of income on which taxes are calculated.
Tax Deduction
An item or item(s) that reduce the amount of income on which taxes are calculated
Tax Credit
An item or item(s) that reduce the amount of taxes due
Tax-Deferred
Types of accounts that delay taxation on income or capital gains until withdrawals are made from the account
Tax-Exempt
Types of accounts for which there are no taxes due on income or capital gains even when withdrawals are made
Tax Loss Harvesting
Selling a security to capture (“realize”) a capital loss. A capital loss occurs when you sell a security at a price that is below what you paid for it. Realized capital losses can be used to offset realized capital gains (selling a security at a price that is higher than what you paid for it)
After-Tax Return
The return on an investment after taxes are taken into account
Required Minimum Distribution (RMD or MRD)
An IRS-mandated distribution from tax-deferred IRAs or qualified plan accounts that in most cases must occur by April 1st of the year after a person turns age 70 ½
Insurance Planning
The process of analyzing the need for protection against loss, and the insurance products that can provide that protection
Long-Term Care Insurance
Insurance coverage that is designed to provide health care benefits for expenses associated with nursing homes, assisted living, and in-home care. The majority of these expenses are not covered by Medicare or traditional health insurance policies
Permanent Life Insurance
Life insurance that is designed to stay in force until death, not until a specific age. Examples are whole life policies and universal life policies. These policies have higher premiums than term life insurance
Term Life Insurance
Life insurance that is designed to stay in force until a specific age, not until the expected age of death. These policies have lower premiums than permanent life insurance.
