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Investment advisory services are offered through Brokers International Financial Services, LLC.
Our Investment Management service is intended for clients who wish to leave the day-to-day supervision of their investments in the hands of a professional.
An IAR assists you in selecting an investment strategy that is appropriate for your goals and needs. IAR puts the strategy into effect, supervises your investments on a day-to-day basis, and submits a comprehensive yearly performance review.
Discretionary management frees you from the time commitment necessary to successfully research and oversee an investment portfolio. We look after the day-to-day management and advise you if a change of strategy should be considered. You always have access directly to the IAR, not to a middleman, and our reasons for each investment decision we make on your behalf are logged and available to you upon request.
In this initial stage we gather your information regarding your current financial situation as well as your investment profile. Your investment profile is determined by your tolerance for risk (as measured by volatility and downside risk) as it relates to your portfolio investments, any constraints you might like to place on your portfolio holdings, and special considerations such as concentrated stock positions, mutual funds, ETF’s etc. as well liquidity needs, or saving for specific major purchases such as a home.
Your client profile will allow us to determine your risk tolerance as it relates to your portfolio investments and serves as an input into a financial plan.
A financial plan takes your current and expected financial situation and projects it into the future based upon several assumptions including inflation rates, rates of return on investments, macro and microeconomics and your future income and expenses. The plan incorporates and emphasizes any goals you might have such as funding liabilities, large purchases, debt reconsolidation, etc.
The financial plan will help estimate the rate of return on your investments necessary to fund your future goals through sensitivity analysis and lifestyle and results in current and projected personal balance sheet, income, and cash flow statements. This provides valuable input into how your investments should be allocated. Research of available securities is done by IAR directly, with the value added by independent third-party research as well.
In addition to providing insight into investment decisions, the financial plan is also useful for planning future lifestyle events for you and your family. Important considerations such as funding children’s education, retirement spending, or the purchase of a future home are addressed.
At this stage we are ready to bring together your risk tolerance, return expectations and investment constraints, and translate them into a portfolio asset allocation. Hopefully we can devise a portfolio that will satisfy your needs but if your willingness to take risk and ability to bear risk are not aligned with one another at any time, we will adjust it as necessary.
The Investment Policy Statement is a summary of how your portfolio is to be managed. In most cases IAR manages portfolios on a discretionary basis, which means that your IAR will choose and change the specific investments and securities within your portfolio without specific direction from you. The IPS is your assurance that selected investments will always be in keeping with the strategy you have approved.
The Investment Policy Statement results in what we call your “strategic” asset allocation which is a set of exposure to asset classes that are expected to achieve your long-term objectives given your risk profile and investment constraints. Strategic asset allocation will be implemented into real portfolios. The future is inherently uncertain, and therefore investment results cannot be guaranteed. We can make reasonable assumptions based on the historical performance of various asset classes and strive for objective positive returns in the future.
This is an optional but highly recommended step where we modify the strategic asset allocation based upon our perception of which asset classes are likely to outperform given the current economic picture and based on our investment research. Tactical asset allocation is the decision to deliberately deviate from the policy exposures and risk factors with the intent to add value based on forecasts of the near-term returns of certain asset classes. With this, you may be exposed to different levels of volatility, but within certain corridors that are established to have upper and lower limits.
The final step in the process is monitoring your portfolio and reporting results to you in a timely manner. We do regular monthly review of securities and an in-depth yearly performance summary and portfolio review. In addition, you have online access to your account where you can download statements directly from your brokerage custodian and track portfolio allocation and performance if you wish.
Investment advisory services offered through Brokers International Financial Services, LLC.
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