Why Work with Focus Wealth Management?
Your Investment Policy
Portfolio Design and Management
Investment Services for Trustees and Executors
Our Investment Philosophy

Finding your mailbox stuffed with confusing monthly statements…not knowing if your investments are doing as well as they should be…holding onto your grandfather’s stocks because you are reluctant to pay taxes…suspecting that your “diversified” mutual fund portfolio really isn’t…questioning how objective your broker’s advice really is… or just growing frustrated with trying to chase the next investment du jour…

We take asset management seriously. After all, it is one of the most important contributions we can make to your long-term financial health.

Effective investment planning is no accident. It requires thoughtful and rigorous analysis, including adherence to tested and proven strategies and continuous monitoring of both your personal situation and your portfolio’s performance. To implement the three components that form the foundation for our investment services, we:

• Develop a customized investment policy to achieve your goals.
• Design and fund your portfolio with appropriate investments.
• Establish management and performance criteria for ongoing monitoring of your investment accounts.

No commissions. As a fee-only registered investment advisor, we have no financial incentive to recommend one investment over another. No award trips, no sales prizes.

High fiduciary standards. Working as a fiduciary means we work for the client and we put the client’s interest first. That may seem obvious, but financial advisors who work for brokerage firms have a legal obligation to put their company’s best interest first, not that of their client. For obvious reasons, that distinction has typically been buried in fine print and not adequately conveyed to the consumer. For more information on this topic, go to www.focusonfiduciary.com.

Institutional quality asset management. We apply the same rigorous principles to individual portfolios as we do for trusts and foundations. We comply with the standards of the Prudent Investors Act by designing broadly diversified portfolios that manage risk and reflect the purpose, time horizon and requirements of each client.

Accessibility and responsiveness. We keep in touch. Each advisor is familiar with each client’s situation. We answer our own phones and welcome your calls. These add up to peace of mind. You will know that your money is invested appropriately and that it is being monitored closely by professionals.

The Investment Policy is the cornerstone of your investment planning. Essentially, it is a job description for your money. A well-drafted Investment Policy will not only address the tax implications for your portfolio, but will also identify any constraints caused by planned contributions, withdrawals, legacy assets, concentrated positions or other unique characteristics

However, the most important reason for crafting a customized Investment Policy is to explore and articulate the various dimensions of investment risk as they apply to your specific situation and establish appropriate portfolio parameters to address these risks. All investors, even the ultra-conservative, will be forced to assume some degree of one or more types of investment risk. We believe that any exposure to investment risk should be a deliberate, well-informed decision based upon your need to assume the risk, your capacity to withstand the risk, and your desire to experience the risk. We also strongly believe that investors should never assume risks that do not provide expected returns proportionate to the risks.

Designing and funding your investment portfolio

We will use your Investment Policy as the basis for determining the appropriate allocation of funds among various asset classes including stocks, bonds, and cash. The amount of funds available, your time horizon, tax issues and other considerations will influence the actual securities selected for your accounts. We primarily employ structured, institutional asset class mutual funds, exchange traded funds, and individual fixed income securities to fund our portfolios. These instruments enable us to construct highly effective portfolios.

Our structured approach to portfolio management accomplishes three goals:

• Proper asset allocation
  Determining a deliberate exposure to the various asset classes to meet your financial objectives
  
  
• Cost management
  The more you can reduce costs, the more return you keep
  
  
• Tax management
  Lower turnover, careful harvesting of gains and losses, and intelligent withdrawal planning to reduce the negative drag of taxes on your returns

We believe that regular rebalancing is a crucial part of portfolio management and critical to maintaining an appropriate asset allocation over time.

Academic studies suggest that such rebalancing can add up to 1% or more to a portfolio’s expected return. The institutional funds and exchange-traded funds we employ are selected for their disciplined adherence to asset class exposure as well as for their extremely low turnover and expense ratios.

More importantly, we relate the performance of your investments to your overall financial goals on a regular basis.

Beating one index or another is not the true measure of success. Being able to retire comfortably, affording the college of choice, or being able to sleep during protracted market downturns are more meaningful barometers of successful investment planning. This regular evaluation of your overall financial situation, along with our expertise in portfolio management, is one of the things that set us apart from traditional money managers. Our emphasis on ongoing financial planning is where we really add long-term value.

We calculate portfolio performance on a quarterly basis, net of our advisory fees, and furnish clear, understandable reports so you can easily see how your accounts are doing.

We accept new investment portfolios of $500,000 or more for discretionary asset management services. Our annual investment advisory fees are:

If you are entrusted with the assets of others, by being named a trustee or executor, you need to understand the responsibilities involved, both moral and legal. Most states have now adopted the Uniform Prudent Investor Act dictating the care fiduciaries must take with these funds. Our process of creating an investment policy statement to identify and address the objectives and unique circumstances of each beneficiary, and our comprehensive investment services, promote compliance with the Act. Focus can help you to serve capably as a fiduciary, without creating unnecessary personal liability.

Our investment philosophy adheres to the four tenets of Modern Portfolio Theory that have become the cornerstone of the Prudent Investor Act:

• Markets are inherently efficient
  
  Markets process all available information so rapidly in determining the price of any security that it is statistically improbable to gain a competitive edge by exploiting the occasional anomalies. This means that to “beat the market”, an investor would have to possess not only the correct insight or information regarding a specific security, he would have to be the only investor to possess it, and he would have to do this consistently over time.
  
  
• Exposure to risk factors determine investment returns
  
  Numerous, well-documented academic studies have confirmed that an investor’s return is overwhelmingly dependent on the amount of exposure to the specific risks associated with the various asset classes. Over time, riskier assets provide higher expected returns as compensation to investors for accepting the greater risk. This is the basic concept underlying the Nobel prize-winning strategy that has become the new legal standard for prudent investing by fiduciaries.
  
  
• Diversification reduces portfolio risk, and increases expected returns
  
  Adding low-correlating asset classes, even if they carry a higher risk on their own, can actually reduce overall volatility on a portfolio level, and increase expected rates of return. By intentionally designing portfolios to incorporate various degrees of exposure to different asset classes, we can help investors to create the most efficient (highest expected return) portfolio for the level of risk they are willing to assume.
  
  
• Passive portfolio management is less costly, thus increases expected returns
  
  Active management is expensive and these expenses reduce investment returns. Active managers are expensive in terms of fees and salaries. The associated high turnover of securities creates trading costs and higher tax liabilities that are also passed along to the individual investors. Active portfolio managers are also susceptible to style drift, a commonly observed trait of skewing a portfolio’s asset allocation to chase recent high performance of specific securities.