Our clients often think of Fairway Wealth Management as their personal CFO because we take leadership in the analysis of big-picture financial goals, the evaluation of strategies to achieve those goals, the implementation of the chosen strategies, and the ongoing oversight and adjustment of those strategies.
Establishing an Integrated Wealth Management Strategy
The beginning of each client relationship triggers a process of eliciting goals, establishing priorities and tasks, and developing strategies. Our wealth management approach and strategic viewpoint integrates three core factors that impact the actual realization of wealth over time: financial planning, investment planning, and estate planning. Within each, there are fixed realities as well as opportunities to make decisions that impact long-term, after-tax, wealth accumulation. After evaluating each client’s current reality and understanding his or her financial needs, desires, and goals, we develop strategies for each core area that support achievement of the overall goals and do not work at cross-purposes with each other.
- Financial Planning: Financial Planning is concerned with quantifying goals, exploring alternatives, running numbers, and making informed decisions. In cases where clients have more than sufficient resources, financial planning also involves strategic wealth allocation. We ask questions about clients’ goals for their day-to-day spending, family gifting, charitable giving, and major acquisitions related to their own lifestyle. We explore the best timing and execution for any anticipated retirement, or the purchase or sale of a business or other major asset. We analyze the advantages of debt restructuring and re-financings. We analyze strategies dealing with employee stock options and deferred compensation plans. We answer the questions that come up day-to-day. Financial Planning is about managing cash flow needs today and in the future, and the ways (other than investing) that we can optimize each client’s financial position.
- Investment Planning: Investment Planning focuses on education about investment concepts, asset allocation, asset location, and selection of investment managers and specific investment vehicles. Having evaluated the client’s financial goals and taken care to understand their risk tolerance, we then assist the client in selecting an Investment Objective and defining their unique set of strategic asset allocation targets. We then identify investment managers and select investment vehicles. We combine our industry expertise and informed skepticism about the investment marketplace with an open-architecture platform to bring our clients the most appropriate options for their particular needs. Investment Planning is concerned with creating a unique and elegant strategy to maximize after-tax returns on investments over the long term.
- Estate Planning: Estate Planning provides an opportunity for clients to not only shape their legacy, but also, importantly, to protect their loved ones. Fairway Wealth Management helps determine whether financial accounts and real estate are appropriately titled, that beneficiaries have been properly recorded for insurance policies and retirement accounts, and that the right types and levels of insurance are in place. We also work with clients’ attorneys to keep wills up to date and to create trusts and foundations that maximize benefits for individuals and charities while avoiding unintended negative consequences. Estate Planning is focused on contingencies and the details that shape legacies and bring peace of mind.
Ongoing Oversight, Counseling and Management
After the client’s initial wealth management strategy has been defined, Fairway begins the process of ongoing oversight, counseling, adjustment and reporting.
This process is structured and nimble. It enables both us and our clients to focus effectively on the key components of their wealth management plan and make adjustments scaled to their needs at appropriate times. We provide reports that are organized and written to facilitate effective communication between Fairway, our clients, and our clients’ other advisors.
Some activities are done every quarter:
- Portfolio Management and Performance Reporting: Routine portfolio management and adjustment along with a written overview of the markets in general and measurement of each client’s portfolio returns and managers’ results in particular, compared to appropriate benchmarks.
- Cash Flow Management: Ongoing monitoring of cash flow needs and cash levels as compared to pre-established targets, to ensure that liquidity is available when needed.
- Income Tax Management: Updating of current and subsequent-year tax projections, and determination of quarterly estimated payment.
Other activities are primarily handled on a periodic or as-requested basis such as:
- Investment Strategy Review: Refresh our capital market assumptions and client inputs to ensure that the Investment Strategy stays well aligned with the client’s financial goals.
- Risk Assessment: Review various risk items other than investment-related risk and address risk-mitigation solutions. This may include property, casualty and liability insurance, life insurance, and identity theft.
- Estate Plan Check-up: Prompt the client to consider whether any events have occurred that would change the client’s wishes in regard to wills, trusts, charitable giving and other related issues. Perform an estate simulation to understand how the estate would have been distributed given existing documents, asset titles, and beneficiary designations.
- Goals and Capital Sufficiency Testing: Review each client’s goals, and update long-range net worth and cash flow projections to assess feasibility. This prepares us to take on the Investment Strategy Review with the most up-to-date information about clients’ financial goals.