Personal Finance
Master Your Asset Allocation
Shawn Zhu
Feb 6, 2025
Client Profile: A husband and wife, who have been independently managing their assets while hiring us for financial planning since 2015, requested an objective evaluation of their portfolio during their annual review. With a portfolio valued at approximately $9,500,000, their allocation was 75% equities and 25% fixed income, reflecting their risk tolerance and goal of retiring within five years.
Key Portfolio Recommendations:
1. Replace current mutual fund holdings with specific stock ETFs in the same asset class to significantly lower expenses, reduce turnover and taxes, and improve cost efficiency without compromising growth potential.
2. Replace fixed income holdings in non-qualified accounts with more tax efficient municipal bond funds.
3. Consolidate multiple tech holdings into a specific fund for better management and efficiency.
4. Eliminate current international holdings due to limited growth prospects in the EU economy.
5. Implement conservative investments that offer steady retirement income stream regardless of market conditions.
6. Consider reduction from 75/25 to 60/40 stock/fixed income to enhance diversification and mitigate risk.
7. Rollover client’s old 401(k) into their existing IRA to simplify account management and potentially lower fees.
Outcomes Anticipated:
• Lower overall portfolio expenses.
• Enhanced tax efficiency, particularly in non-qualified accounts.
• Improved diversification and reduced market risk.
• Streamlined portfolio management for long-term growth and stability.
Takeaway:
This case study offers a glimpse into the behind-the-scenes efforts we undertake to support our clients’ financial journeys. This is not an one-size-fits-all approach. Before making any investment recommendations, we always perform a comprehensive analysis on clients’ finances including assets, liabilities, work benefits, goals, timelines, investment risks, long term taxes, and withdrawal strategies. While we seamlessly collaborate with self-managing clients, we understand that most investors may lack the time, knowledge, or desire to handle every detail themselves. That’s why many clients entrust us to manage their portfolio and help them navigate the ever changing financial market. By tailoring strategies to individual needs and proactively addressing challenges, we aim to deliver lasting value and peace of mind.
This article is provided by McAdam LLC dba Birch Financial Partners (“McAdam” or the “Firm”) for informational purposes only. Investing involves the risk of loss and investors should be prepared to bear potential losses. Past performance may not be indicative of future results and may have been impacted by events and economic conditions that will not prevail in the future. No portion of this article is to be construed as a solicitation to buy or sell a security or the provision of personalized investment, tax, or legal advice. Certain information contained in this report is derived from sources that McAdam believes to be reliable; however, the Firm does not guarantee the accuracy or timeliness of such information and assumes no liability for any resulting damages.
Securities offered only by duly registered individuals through Madison Avenue Securities, LLC (MAS), member FINRA/SIPC. Investment advisory services offered only by duly registered individuals of McAdam, LLC, a registered investment advisor. Insurance products and services offered through McAdam Financial. McAdam, LLC and McAdam Financial are not affiliated with MAS.
This is intended for illustrative purposes only and may not be indicative of your situation. Your results will vary.
© 2024 Birch Financial Partners
We are supported by McAdam LLC. McAdam is an independent financial advisory firm with a nationwide network of hundreds of advisors operating out of four offices in Philadelphia, Chicago, Boston, and Tysons Corner. McAdam LLC dba Birch Financial Partners is an SEC registered investment adviser that maintains a principal place of business in the State of Pennsylvania. The Firm may only transact business in those states in which it is notice filed or qualifies for a corresponding exemption from such requirements. For information about Mcadam LLC Dba Birch Financial Partners registration status and business operations, please consult the Firm’s Form ADV disclosure documents, the most recent versions of which are available on the SEC’s Investment Adviser Public Disclosure website at www.adviserinfo.sec.gov.