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Establishing and enhancing the Family Portfolio is the essence of our service. So, what is the definition of a Family Portfolio? The Family Portfolio is the sum of all the individual sub-accounts and the investable assets of your family. It should provide a complete and holistic picture of your Family’s Wealth, it needs to be well diversified and efficiently managed for risk that’s appropriate for your Family. Let’s review this in the context of a couple of hypothetical but typical families that many of us can relate to.

Growth Family Portfolio

Rob and Jen are a working couple and have two children Jack and Rosie. Rob and Jen are busy building their family and their careers now and would like to retire in the next 15 years. They have a bank checking account with uninvested cash that they want to invest in the market. Rob has worked for three prior employers and participated in their 401K plans. They also want to start investing money for their kids' college education. After discussing the family goals and understanding their risk profile, the following Family Portfolio is established

  • A Joint Brokerage account for Rob/Jen to invest their post tax earnings

  • A Traditional IRA rollover account for Rob consolidating all his prior 401K accounts

  • Starting a new Traditional IRA for Jen

  • A Roth IRA for Jack who started earning some internship money

  • 529 College Savings plans for Jack & Rosie

  • Guidance around a Health Equity plan at Jen’s current employer  

A commonality for each of the accounts in the Family Portfolio is that they are all invested in the stock market. While constructing the holistic picture, the following aspects will be taken into consideration

  • Goals

    • Growth expectations for the overall Family portfolio and for each of the accounts that are part of the portfolio

    • Income needs that will help drive the portfolio’s dividend and interest paying assets

    • Taxation

  • Diversification

    • Asset diversification not only within a given account but also across all the accounts of the Family portfolio

    • Avoid redundancy and at the same time over concentration in single assets or asset classes. 

  • Time Horizon

    • Investing time horizon: How long would the family expect to be in a contribution phase

    • Overall time horizon: Account withdrawals, when and for how long?

  • Risk: Overall attitude towards risk.

  • Portfolio Cost: Minimize overall portfolio cost which is a combination of the Advisory fee and Portfolio fund fees. 

Value Family Portfolio

Mr & Mrs Reddy are empty nesters and want to retire in the next couple of years. Their house is paid off and they are eligible for social security withdrawals. The Reddys have a personal brokerage account and a couple of traditional IRAs. All their accounts currently are mostly invested in high growth technology stocks. After discussing the family goals and their retirement income needs, the Reddys’ Family Portfolio requires the following adjustments to be made to decrease their current portfolio risk and also increase their income generation to support their retirement

  • Rebalance the Joint Brokerage account by incorporating dividend paying index funds, inflation protected bonds and government treasuries.

  • Rebalance the IRAs to add better diversification than before but still maintain some growth orientation.