Private Wealth Management Group
(800) 585-9888
Investment Management

Investment Management Service

SUMMARY:

If your focus is specifically on managing your investments, our conversation begins with an assessment of your goals and objectives. Next, we'll measure the risk inherent in your current portfolio, determine what's actually necessary for your investments to achieve your goals, and create a written Investment Policy for taking you from here to there.

We will help you consolidate and "custody" your investment accounts at one of the major discount brokerages like TD Ameritrade or Charles Schwab, and with your written permission, FirsTrust will manage the accounts for you pursuant to your written Investment Policy Statement.

Collaboration between you and your Investment Advisor will take place at your preferred frequency, monthly transaction reports will be sent by your account custodian, and FirsTrust will produce Consolidated Performance Reports each quarter to show how well your investments have performed compared to your Target Rate of Return. 

Here's the process in greater detail. 

 
ASSESS GOALS AND RISK PREFERENCES
For many frustrated investors, their expectations have not been met  because their expectations have not properly been measured.
 
If you choose the wrong road, drive the wrong speed, or take the wrong vehicle, you'll be significantly less likely to arrive where you want to be - when you want to be there.
 

                                   Plan Your                                   Quantify Your                               Engineer Your

                               Optimal Route                              Optimal Speed                            Optimal Vehicle 

                                                                          

The Time Value of Money tells us that investments grow to a specific Future Value over a specific Time Horizon by achieving a specific Target Rate of Return.
 
Grow to your Future Value by avoiding emotional driving:
Investors don't like to see their  accounts go down. But without allowing the investment  strategy sufficient time to achieve its Future Value, many investors inevitably let their emotions take over, and they end up buying or selling when they should be doing the exact opposite.
 
Maintain speed at your Target Rate of Return and ignore other speeding vehicles:
The progress of your investment portfolio should be measured over time by how well it's meeting your Target Rate of Return; not the Dow Jones index, not the bragging neighbor, and not the pundits on tv.
 
Don't rush your Time Horizon or increase the risk of crashing:
Pursuing higher returns comes with the potential for higher risk. Why drive 100 miles per hour to your destination if you have plenty of time to get there? It is similarly important to align your investment risk with the Time Horizon of your investment goals.
 

Short-Term: Funds needed within a brief time horizon will generally tolerate little risk. Focus on safety and liquidity, avoid anything that may impose a penalty for early withdrawal, give more attention to stability than inflation, and watch out for total costs, fees and expenses

Mid-Term: Determine the resources that can be can be allocated to each mid-term goal and calculate the rate of growth needed to achieve it. Balance investment risks, employ some concern for taxes and inflation, and consider reducing risk exposures over time as your goals approach.

Long-Term: Determine the resources that you can allocate to each long-term goal, and calculate the rate of growth needed to achieve it. Align investment risks in proportion to the expected return, consider the impact of inflation, evaluate domestic and international assets, and systematically capture losses and offset gains for tax efficiency. Monitor progress, benchmark your performance against the necessary rate of growth, and reduce risk exposures over time.

 

 
2   CREATE YOUR INVESTMENT POLICY STATEMENT (IPS)
Next, we will document the process of achieving your investment objectives with a written Investment Policy Statement. 
 

With your input and your goals in mind, we draft your Investment Policy Statement. An IPS provides the mandate for day-to-day decisions on your investments. It includes your return expectations, income requirements, risk tolerance, time horizon and other personal criteria.documents the management process of discovery, design, advice, coordination, implementation, collaboration and reporting. This process is ongoing and evolves as your circumstances change. 

Clients often come to us with relatively suitable investments but a disproportionate exposure to risk. In these cases, we seek to realign the portfolio without selling everything, paying the taxes and starting all over again. 

We know the widest selection of the world's best performing investments is rarely ever found at the local bank or brokerage. As a truly independent firm, we are free to evaluate investments across the globe for the most appropriate components of each client's portfolio.

We know that taxes can be a tremendous drag on a portfolio's total return, and employing strategies to reduce them can produce better net returns without incurring additional risk.

We know many financial products are burdened with ambiguous fees and unnecessary expenses, buried in the fine print of confusing disclaimers. Reducing or eliminating these costs is another effective way to save our clients money.

We also know that emotions often drive or inhibit investment decisions. We believe that not making an investment is just as important as making one, and adhering to the disciplines of a strategy, prudent risk management, and having a written investment policy are essential to fulfilling a client’s long-term objectives.

 

3   STRUCTURE THE PORTFOLIO
Each portfolio is different, depending upon the client's personal objectives and the existing components of their investment accounts.  
 
 
Our Investment Committee Leadership
 

Large institutions will often scale their operations by generalizing consumers into model portfolios. This may allow them to become large and profitable with minimal effort, but we don't believe it delivers much value.  

A prudent and collaborative due diligence process  guarantees that a consensus of best practices, research and expertise of our Senior Investment Committee Leadership, and some of the leading portfolio managers from around the world, are incorporated into each of our clients' portfolios.

Each portfolio manager is selected and evaluated according to our three levels of analysis:

First level analysis:  Using risk return analysis, we distill a short-list of select portfolio managers from a universe of over 3,000 investment mandates.

Second level analysis: An analysis of past performance over several market cycles is performed for each manager identified. We not only examine the past performance to confirm a track record, but dig deeper to assess the manager's ability to outperform (or continue to outperform) on a go forward basis. We also conduct an in-depth personal interview to fully ascertain their investment selection process, style, philosophy and objectives for their respective portfolio mandates.

Third level analysis: Our due diligence process does not end once a portfolio manager is selected. We continue to monitor their performance and ability to maintain superior relative risk adjusted returns that meet our high standards. We maintain ongoing communication to ensure they stay the course of the mandate objectives, as each manager has a defined investment role within our clients' portfolios. We also maintain a list oftop alternatives in the event of a material adverse change that would warrant the dismissal of a specific manager from our portfolios.

Asset allocation

 We have boundless, global access to portfolio managers to meet your investment needs. We identify and integrate the portfolio managers who have shown a consistent ability to outperform their benchmarks. We carefully consider the potential tax implications of each recommended investment.

As an independent wealth management firm, we can guarantee impartiality and truly objective investment opinions for our clients. We make our recommendations based on careful analysis of data collected from top industry sources.


4  MONITOR & REPORT