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About You > Risks and Rewards Case Study

Balancing risks and rewards.

Services Utilized

Financial PlanningRetirement PlanningCash ManagementInvestment PlanningInvestment ManagementPerformance TrackingEducation PlanningBenefits PlanningTax PlanningRisk ManagementEstate PlanningCharitable Planning

The situation

A small business owner and his wife came to us with about $1,500,000 in liquid investments, a $2,000,000 personal net worth, and a business worth $500,000. He was concerned that he was not achieving a 10-12% return on his investments, which were largely made up of stocks found in the S&P 500. In addition, he and his wife found the stock market volatility made them uneasy. They also felt that the service they were receiving at the large broker they had chosen was using was not great and was high-priced.

The plan

It always comes back to goals - even when the situation deals with investments. When we asked the couple what they were hoping to acheive in life, we found that had a pretty clear plan: Get the kids through college and then begin to enjoy life's pleasures by travelling. They planned to continue saving and investing for 10 years.

The outcome

After we quantified their goals with dollar amount and time framework, we went to work assessing the success of their plan, given their current assets. What we discovered was amazing: They could hit all their goals and reduce that amount of risk they were taking with their investments. In other words, while they wanted to acheive a 10-12% return on their investments, they only needed to seek a 7.5% return. Thus, we could reduce their stock market exposure and let them sleep better at night. In addition, we were able to provide better global diversification which also dampened their portfolio's volatility. Finally, we were able to do this at a cost that was less than they were currently paying their broker.

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