Ongoing advisory clients receive a suite of services that include portfolio design, implementation and ongoing management and review.
At Silver Oak Advisory Group, before we invest your money, we build your financial blueprint to analyze issues such as determining the amount of assets necessary to retire, paying for children's education, devising strategies for qualified plan distributions, and calculating the investment rate of return over inflation necessary to meet financial goals. We also assist you in developing your personal and financial values.
With the results of the financial blueprint and our conferences with you, we then turn to the portfolio. Research has shown that successful long term investment performance is primarily a function of proper portfolio design rather than market timing or specific investment selection. Thus, we attempt to design a portfolio for you consistent with your financial objectives, investment time horizon, risk tolerance, personal experience with investments, desired real rates of return, and other personal factors. These personal factors are blended with an efficient diversification of asset groups to produce an individually tailored portfolio.
Diversifying an investment portfolio involves a series of critical decisions. An optimal combination of stocks, bonds, cash and other assets must be chosen. Within the broad categories, an investor can choose from dozens of different asset classes. In addition, one must decide when to reposition monies into or out of those asset classes over time. Silver Oak Advisory Group will assist in developing and implementing the portfolio design best suited to the long term needs of each client.
Unlike other approaches Silver Oak's investment philosophy relies on blending each client's personal dynamics with time-tested asset allocation strategies, quantitative methods and consistent long term portfolio discipline. Each portfolio is individually designed and managed.
After the portfolio is designed, we will develop an implementation plan. Wherever possible, we recommend the use of institutional quality index or asset class mutual funds for your portfolio. Most of these funds are available through certain fee-only planners working with the Charles Schwab Financial Advisors service, and not to retail investors. All funds are sold without sales charges and typically have very low annual management expenses. They are designed and managed with a long term "buy and hold" philosophy and do not allow excessive trading by shareholders.
In some cases, it may be appropriate to dollar cost average into new investments, and we will prepare a suggested timetable of purchases. The action plan will consider the transaction costs involved in making purchases and attempts to keep the average implementation cost of the portfolio as low as practical. For management and retainer clients, we will make the purchases and sales according to the portfolio design, after consultation with you, and you will receive confirmations from the broker.
The implementation plan also considers the use of tax advantaged investments (such as no load tax deferred annuities), whether changes should be made to existing accounts, and the tax impact of sales.
Ongoing Management and Review
You will receive monthly reports from Charles Schwab (or other broker of your choice) and management clients receive quarterly reports from Silver Oak Advisory Group listing investments and portfolio return. The periodic report covers several topics including:
- Portfolio Management Report - contributions, withdrawals, investment gains, your annualized rate of return and your return since inception;
- Investment Detail Report - detailed snapshot of your investment holdings used to examine your overall asset allocation;
- Portfolio Position Analysis - security level investment detail including cost basis, current value, unrealized gains, and annual rate of return;
- Portfolio Value versus Net Investment Graph - portfolio value since inception.
We will review your personal goals, financial situation and portfolio performance with you at least once a year to help assure achieving your objectives. We will be available for phone consultations at any time, and encourage you to call before making major financial decisions or when major changes occur in your personal situation or goals.
If major changes do occur, it may be necessary to review your initial portfolio design to determine if it is still consistent with your long term financial objectives in terms of expected real returns over inflation, level of risk or volatility, and suitability. Necessary changes or adjustments will also be made to your strategic plan, including an updated retirement capital projection if appropriate. The portfolio design is maintained on an ongoing basis by rebalancing the asset groups back to the target allocations by buying and selling funds when appropriate. Without rebalancing, the portfolio will achieve a different level of risk and return than was desired. We will implement those changes for management and retainer clients.
In addition, we will spend all time and effort necessary to remain current in the field of financial advising, to study new laws and strategies as they develop, to evaluate the impact of the changing capital markets on portfolio design, and to maintain the critical cross-discipline of financial advising and investment expertise you need. We will notify management and retainer clients of items that impact them, and examine whether decisions made in the past continue to be viable.