Veros Partners' Wealth Management Services for Executives/Professionals
As a successful Executive/Professional, you generally have additional financial incentives or benefits that offer you much opportunity, but increases the complexity of your personal financial situation. In addition, most Executive/Professionals either do not have the free time to devote to managing their personal finances and/or the expertise to effectively manage their personal finances. At Veros, we have the ability, expertise and time to provide comprehensive wealth management services that meet the specialized financial needs that you may face. This allows you to work closely with us to ensure that your financial opportunities and potential is maximized.
At Veros, our goal is to provide personalized wealth management services to ease the financial complexities and burdens that Executives/Professionals face, provide these services in an innovative, comprehensive and independent manner that we believe is unequaled in terms of scope and quality, and become your most trusted advisor for life.
Veros Partners provides personalized wealth management services to Executives/Professionals including:
Description of our Personal Wealthcare Services
Our Personal Wealthcare Services are designed to help our clients live the one life they have, the best way they can. The basic premise of our Personal Wealthcare Services is to ensure that we are focusing our financial and investment advice on what is important to each individual client. The end result of our Wealthcare process is to:
§ Provide confidence in achieving the life goals each client uniquely
values
§ Avoid needless sacrifice to our clients’ lifestyles
§ Avoid unnecessary investment risk within our clients’ portfolios
Services included with our integrated Personal Wealthcare Services are as follows:
Initial Services
§ Preparation of Personal Wealthcare Plan focused on achieving
the client’s life goals – these plans are prepared and maintained on an
on-line platform that allows for us to easily make updates and changes
to these plans and communicate these changes to the client
§ Preparation of additional financial plan to complement Wealthcare Plan
if needed
§ Preparation of written Investment Policy Statement with investment
strategy based on output from client’s Personal Wealthcare Plan
§ Transition of client’s investment portfolio to be under our management
Ongoing Services
§ Discretionary investment management based on the client’s Investment
Policy Statement and using our well-defined investment strategies and
methodologies
§ Periodic updates and reviews of the client’s Personal Wealthcare Plan
(semi-annually or annually)
§ Ongoing maintenance of the client’s Personal Wealthcare Plan on an
on-line service platform – this platform provides the client with an
electronic vault to store and view their financial documents
o Clients over $1,000,000 under our management will be provided
with their own personal financial web-site that provides daily
account aggregation and updates to the client’s asset allocation
and Personal Wealthcare Plan along with other advanced
capabilities (service to be rolled out in mid-2005)
§ Periodic investment performance reports and reviews (semi-annually or
annually)
§ Advice and assistance with personal finance issues caused by "life"
events
§ Advice based on client’s situation and life goals with any personal
finance question or issue
Preparation of the client’s individual tax return if their portfolio is greater than $500,000 (for standard return that requires up to 5 hours of preparation time, more complex returns will incur an additional fee).
The Benefits of our Personal Wealthcare Services
Below we have briefly summarized what we believe are the major benefits of our wealthcare planning services and the characteristics that differentiate our services from other advisors.
Independent & Fee-Only
We are completely independent and fee-only. This means that we do not receive any compensation from any source other than our clients. We have no products to push or hidden agenda and we are committed to providing unbiased advice with no conflicts of interest to our clients. We provide either a fixed preparation fee or a fixed fee range for completing our client’s Wealthcare Plan that is discussed and agreed upon by the client before any work is begun. This allows us to focus solely on designing the most optimal financial plan for our clients based on their goals and objectives. Further, our management fee is based on the value of our clients’ portfolios; therefore, our fees increase only as the value of our clients’ portfolios increase.
Focus on Client’s Goals and Objectives
We ensure we take the necessary time before preparing the first draft of a Wealthcare Plan and Investment Policy Statement (IPS) to have a thorough understanding of our client’s financial goals and objectives. Our plans are customized based on these goals and objectives. Our strategies and recommendations will vary from plan to plan based on each client and their specific situation.
Detailed Asset Allocation
We develop a detailed, customized asset allocation for each client’s portfolio based on the factors outlined in their Investment Policy Statement. In our asset allocation models, we include and use valuable asset classes that are many times completely ignored by other advisors, such as real estate investment trusts (REITs) and convertible bonds.
Disciplined Investment Selection and Sell Decisions
We use strict criteria and proven methodologies to buy and sell investments in our clients’ accounts. These criteria allow us to make knowledgeable, unbiased and unemotional buy and sell decisions.
Focus & Assistance with Plan Implementation
We focus on providing detailed action steps for our clients to fully implement their completed wealthcare plans. Our action steps detail the action to be taken, who is responsible for completing it and an estimated timeline for completion. We assist the client as much as necessary with the full implementation of their wealthcare plan.
Team Approach
We utilize a team approach to the delivery of our services and advice. This allows us to have and maintain the expertise to provide objective advice to our clients concerning their entire personal financial situation. It also allows us to provide continuity of service to our clients if one team member is not available and to deliver our services in a more efficient and effective manner.
We Practice What We Preach
Each partner, the partner’s parents, and our team members have their personal investment portfolios managed using the exact same methodologies and management style we use for our clients’ portfolios.
Innovative Thinking
We believe there are wealth accumulation and preservation strategies and attractive investment opportunities that are many times ignored or not discussed or recommended by other advisors due to their lack of knowledge, lack of research or lack of familiarity. We strive to consider all potential strategies which could be used and recommend the strategies that we believe are most appropriate and will best help our clients achieve financial success.
Flexibility
We have a very flexible service platform that allows us to fit our service platform around your situation as needed or as desired. We can structure a client’s investment portfolio based on their preferences in terms of asset class allocation and the types of investments we used if their preferences differ from our recommendations. We can also plan around a client’s existing investment that they want to continue to hold such as company stock or a laddered bond portfolio.
Ongoing Communication, Monitoring & Reviews
We provide ongoing maintenance of the client’s Personal Wealthcare Plan on an on-line service platform, which provides clients with an electronic vault to store and view their financial documents. We will periodically review and update the client’s Personal Wealthcare Plan (semi-annually or annually) or as client’s goals change. We review all of our clients’ investment holdings on a continuous basis. We perform a monthly review of our clients’ mutual fund holdings and a daily review of our clients’ individual security holdings. These reviews allow us to employ our strict sell criteria on a consistent, ongoing basis. We also prepare periodic performance reports for our clients to communicate how their portfolios have performed compared to certain benchmarks and their personal return goals. For any Wealth Management client opting not to receive ongoing investment advising services, we will complete annual reviews of their plan on an agreed upon annual retainer basis or at an hourly charge.
Written Plans
We prepare written Wealthcare and Supplemental Plans and Investment Policy Statements, which we thoroughly review and discuss with each client to ensure the plan meets their goals and objectives. Developing a written plan designed to attain the client’s goals provides many benefits, such as facilitating implementation, providing benchmarks to chart and review progress and providing clear planning steps for the future. Those benefits combine to give the client a strong sense of direction, focus and discipline, knowing that if they follow their plan they will achieve personal financial success.
Referrals to Other Service Providers
Since we are an independent and fee-only advisor there will be times when we recommend that our clients purchase certain financial products – such as insurance, mortgages or other loans – which we do not offer, or where we recommend our client have certain documents drafted – such as estate documents – that we can not prepare. In these instances, we will discuss the client’s options for completing these parts of their plan and, if desired by the client, we will recommend trusted service providers. We will also facilitate the process between the client and the other advisor as much as possible or desired.
Investment Advising Services
(Included within our Personal Wealthcare Services)
Our investment advising services are designed to deliver a disciplined investment approach that allows you to earn an appropriate rate of return from your portfolio without incurring major volatility and losses. The foundation of our investment advising services is to determine an appropriate target asset allocation for the client based on their specific situation and then implement that allocation by using well-defined criteria for how investment securities will be selected for their portfolio. The methodologies we use allow us to effectively manage our client’s portfolios on a continuous basis based on their specific situation, goals and objectives.
Our investment strategies include the following:
Equity Strategies
§ CAN SLIM™ – to invest in individual, publicly-traded stock securities
§ Covered Call REIT Strategy – to invest in individual, publicly-traded
real estate securities
§ Mutual Fund Selection & Review Methodology – to maintain our
Recommended Mutual Fund List
§ Separate Account Managers Selection & Review Methodology – to
maintain our list of recommend separate account managers
Fixed Income Strategies
§ Preferred Stock Under Par – to invest in relative high-yielding
preferred stocks trading under their par value
§ Other Individual Fixed Income Securities – at times, depending on
the current interest rate environment and the client’s needs and tax
situation, we may utilize criteria to select other individual fixed income
securities such as corporate bonds, municipal bonds, or closed-end
bond funds
§ Mutual Fund Selection & Review Methodology – to maintain our
Recommended Mutual Fund List
§ Separate Account Managers Selection & Review Methodology – to
maintain our list of recommend separate account managers
Additionally, the following factors can be crucial when reviewing and implementing investments for executives and professionals:
Diversification Strategies for High Equity Concentrations – For clients who have a large percentage of their net worth in one stock this can be a difficult planning issue, because generally there are emotional issues involved with diversifying this position as well as the potential financial implications. We discuss the various methods that can be used to diversify this position that each may have a different emotional and financial impact. The options considered include: outright sale of the stock, tax loss harvesting, utilizing equity collars – which is hedging the associated risk through the use of put and call options, utilizing an exchange fund – which is transferring the security into a diversified private equity pool of securities, gifting to family members and charitable gifting strategies.
Focus on Expenses & Taxes – Expenses and taxes can have a material impact on a client’s long-term portfolio return. We focus on minimizing the total portfolio expenses paid. We ensure we understand each client’s tax situation and, based on that situation, we make the appropriate portfolio decisions.
Specific Issues faced by Executives/Professionals
Life and financial goals differ greatly from one Executive/Professional to the next and we appreciate those differences. Most Executives/Professionals have goals for retirement, education savings, and other personal short and long-term goals; however, to effectively plan for these items they must carefully consider and integrate their goals with their other critical personal financial areas. Our Personal Wealthcare Services for Executives/Professionals address the following items in a fully coordinated manner:
Defining Life & Financial Goals – We help you refine, define and/or establish and quantify your life and financial goals such as for retirement – when and what type of lifestyle; for education – when and how much; and for other items such as a large purchase or a special vacation.
Wealth Accumulation Planning – We determine the best strategy to be used to accumulate wealth for future goals such as retirement, education and other goals.
Investment Planning – Based on the structure of your current investment portfolio and your tolerance (or lack of) for volatility in your investment portfolio, we determine what rate of return should be used within your wealthcare plan. This rate of return must be properly planned for within your investment plan.
Stock Option Planning – Most Executives/Professionals in the private sector will receive some form of additional compensation through company stock options. These stock options may be Non-Qualified Stock Options or Incentive Stock Options (ISOs). The rules and tax laws regarding these two different type of stock options differ greatly. We will help educate you on the rules regarding your stock options and help you determine an appropriate stock option exercise strategy considering all the critical factors such as cash flow, tax implications and stock price of your company.
Tax Planning – As a Executive/Professional, effective tax planning must occur in an integrated fashion at both the business and personal level. We always focus on the after-tax value or impact of any planning we do; therefore, some of the tax planning is completed throughout the other facets of completing your financial plan. Additionally, we review all of your individual tax returns filed for the prior two years to search for additional tax planning ideas. We will make recommendations to maximize your tax deductions and minimize your taxes due to the greatest extent allowed by law.
Cash Flow Planning – We review your sources of income and expenses to determine how much money can be saved for your life and financial goals. We review your current debts to ensure they are being managed and utilized in the most effective manner and we evaluate the appropriateness of paying debt off versus saving for certain goals. We also determine an appropriate cash emergency fund and how that amount can be funded if needed.
Insurance/Risk Management Planning – We are not proponents of spending large amounts of money on insurance policies nor are we typically fans of blended insurance policies such as whole life, universal life or annuities; however, each client has an important layer of insurance protection that needs to be in place to protect them from suffering major financial damage. We review all of your insurance policies such as life, disability, long-term care, health, medigap, auto, homeowners and any other policies you may have and make recommendations on changes that should be made from reducing your amount of coverage, to making changes in your current coverage, to evaluating whether any new coverages should be added.
Basic Estate Planning – We review and/or help you develop your estate plan based on minimizing potential estate taxes, ensuring your estate will be distributed to your heirs according to your wishes in an efficient manner, and ensuring that your business interests will be handled and transferred efficiently. Most clients’ estate plans include wills, trusts, powers of attorney, health care proxy and living wills. Trusts may be recommended to minimize estate taxes and/or to make an orderly distribution of your wealth, during your lifetime and upon death, while maintaining control. We will also review your beneficiary designations on your retirement plans and life insurance policies and the titling of your assets to ensure they are fully coordinated with your estate plans.
Advanced Estate Planning – The use of certain specialized trusts such as Irrevocable Life Insurance Trusts, Qualified Personal Residence Trust, Charitable Trusts and other advanced financial planning techniques such as Family Limited Partnerships, Limited Liability Companies or Private Annuities will be evaluated and recommended if, based on our analysis and review, your estate warrants the need or use of advanced planning vehicles.
Charitable Planning – We will assist you in identifying and discussing any charitable priorities that require or have need of specialized planning techniques. Different strategies that may be evaluated include different types of Charitable Trusts, Charitable Pooled Funds and Private Foundations.
For clients with over $1,000,000 under our management, we will maintain their Personal Wealthcare Plan through eMoneyAdvisor, which is an on-line platform. By utilizing this platform, we have the capabilities of performing all of the above planning and analyses. This technology enables Executives/Professionals to access a comprehensive view of their financial status at all times from a user-friendly, secure web site (service to be rolled out in mid-2005).
In addition, the eMoneyAdvisor platform offers the following benefits:
§ Account aggregation
§ Balance sheet that is updated daily
§ Online storage vault for important legal documents
§ Comprehensive view of all corporate benefits
§ Personalized webpage
§ Broad financial planning capabilities, including estate planning
§ Printed reports
Individual Tax Services
Our individual tax preparation and planning services focus on maximizing deductions and minimizing the amount of tax our clients must pay while maintaining full compliance with the tax laws. For Executive/Professionals there are several main tax issues that need to be considered on a year-to-year basis. Those issues include:
Alternative Minimum Tax (AMT) Planning – As tax law changes have been made over the last several years, a greater percentage of high-income individuals are being required to pay additional income taxes through their Alternative Minimum Tax calculation. Certain large deductions and/or income from stock option exercises can cause AMT to be owed. It is important to consider the impact of the AMT and plan for it appropriately to minimize its impact on your long-term income tax liabilities.
Impact of Stock Option Exercises – The exercising of stock options needs to be considered for tax planning purposes for the following reasons: the taxable income from the exercise may cause you to enter a higher federal tax bracket and pay a higher effective tax rate, the taxable income from the exercise may cause you to be phased-out of certain deductions and credits you would otherwise receive, and the exercise of Incentive Stock Options create income subject to AMT (see above) and may cause you to owe AMT.
Calculation of Investment Gains and Losses – For all of our wealth management and investment advising clients we track and compute their realized gains and losses from their taxable investment transactions.
See the Overview of Our Wealth Management Services for more information regarding our individual tax services.
The Next Step
You have worked hard to get where you are today. It is important to manage your personal financial situation in a diligent and coordinated manner to preserve and build on the success you have achieved. To accomplish this it is important that you have an advisor who has the expertise, knowledge and ability to work closely with you to make sure you attain your life and financial goals. We offer a free initial consultation meeting to learn more about your situation and further educate you on the services we provide and the manner in which we work with our clients. This initial meeting is designed to allow both of us to evaluate whether we are a good fit to form a client-advisor relationship. This meeting also gives you an opportunity to better compare our firm to other financial service firms.
See the Contact Us section for information on how to contact our firm and establish a time for your initial consultation meeting. |