When creating an individually tailored investment strategy, we utilize an investment process which includes initial discovery, development of a customized Investment Policy, implementation, monitoring and rebalancing, and reporting and ongoing communication.
Our early meetings with clients allow us to develop a complete understanding of their specific financial, personal, and life-style goals. We also gauge their ability to tolerate risk, and determine their time horizon, income requirements, tax status, and any other special circumstances, including exposure to Alternative Minimum Tax (AMT). We often communicate with their trusted advisers, such as accountants or attorneys, to further our understanding of the client’s particular situation. We use all of this information to create a customized investment strategy that we document in a written Investment Policy.
The Investment Policy specifies the asset allocation targets, the types of securities to be used, and the expected risk/return profile of the client’s portfolio. It discusses income requirements, tax considerations, and any extraordinary circumstances that may affect the management of portfolio assets, such as company retirement plans. The Investment Policy is a mutually-agreed roadmap for reaching a client’s financial goals.
Only after a client has reviewed and approved the Investment Policy do we begin to implement the investment strategy outlined therein. The pace of implementation will depend on the composition and complexity of the client’s portfolio. A key element of our investment implementation is determining the proper mix of taxable and tax- deferred accounts to optimize the client’s after-tax rate of return.
Monitoring and Rebalancing
We manage portfolios in accordance with the client-specific Investment Policy and do not allow day-to-day volatility in the financial markets to dictate changes in long-term asset allocation strategies. We do, however, provide ongoing monitoring of client portfolios which includes
Portfolio rebalancing to ensure the actual asset allocation is in line with the target asset allocation and intended risk / return profile
Monitoring Alternative Minimum Tax (AMT) exposure
Investing additional cash inflows
Harvesting tax losses when appropriate
Processing required minimum distributions for tax-deferred accounts
Facilitating trust distributions
Maintaining detailed tax records for the accounts
Reporting and Ongoing Communication
Ongoing communication, not only between Dowling & Yahnke and our clients but also with our clients’ other trusted advisers (such as tax professionals and trusts and estates attorneys), is critically important component of our investment process. Our clients’ main contact point is their Portfolio Manager (who include ten Chartered Financial Analysts and eleven Certified Financial Planners). Additionally, clients are supported by a team of professionals to ensure personal attention at all times, including a Planning Specialist, Assistant Portfolio Managers (who include two Chartered Financial Analysts) and Client Service Specialists. Communication takes various forms including face-to-face meeting, phone calls, e-mail, quarterly statements, 1099 reconciliation, and ad-hoc requests. We take great pride in our detailed attention to our reporting and responsiveness to clients’ requests.