We Keep Investment Management Personal
Payne Wealth Partners sees investment management as a process of building and continually adjusting your portfolio to stay consistent with your personal situation and financial goals. Investment management considers your income tax situation, risk tolerance and risk capacity. These highly personal measures are then integrated with big-picture asset allocation factors such as economic conditions, market fundamentals and appropriate investment selection.
Here is how our individualized process compares to a similar sounding, yet quite different process: investment selling. In that format, the process begins with the product (“You really ought to buy some of this great XYZ Fund”). The broker then tries to sell you on the merits of the investment so you will buy what he is selling. In contrast, our investment management process begins with our client and ends with the product (“Now that we deeply know your complete personal and financial situation, we will take the steps to invest”).
We believe the investment management approach is best for our clients, while leaving the investment selling approach for the brokerage salesperson.
What you will experience with our investment management process…
While we prepare your customized wealth plan we are able to manage your money based on your personal circumstances. This process helps us understand and measure your emotional tolerance and capacity for accepting various types of investment risk. We also measure the rate of return you need from your portfolio to reach your lifetime financial goals.
Your portfolio’s investment mix is actually derived from an Investment Policy Statement (IPS). It is based on your goals, your comfort with risk, your cash needs and your investment timeline. The IPS sheds light on the types of investments that may be used in your portfolio, and it acts as the main strategy in helping you reach your long-term goals.
Your personal circumstances, risk tolerance and risk capacity help determine which type of portfolio is right for you. We follow a disciplined trading process to help control risk and keep your investment mix balanced. In addition, we constantly screen the investment landscape to discover opportunities beneficial to your portfolio. We implement investment strategies with institutionally priced and/or no-load mutual funds and exchange-traded funds.
We are aware of how taxes can affect your wealth, so we diligently follow tax-efficient trading practices. That way, over time, you keep more and Uncle Sam gets less. This can entail offsetting capital gains with capital losses, avoiding the recognition of short-term capital gains (which are taxed at a higher rate than long-term capital gains) and positioning certain investments in tax-deferred accounts to shelter interest income from federal and state income taxes.
We understand that you want feedback. That’s why we send a quarterly client e-letter with our thoughts on the markets and current investment themes. We also write to our blog once a week. An easy-to-understand investment report is prepared for each client every three months. This performance report gives a concise assessment of your investment returns with comparisons to appropriate market benchmarks, so you always know how you are doing. You also have access to your portfolio information 24/7 through our website. To validate our reporting, monthly brokerage statements from Charles Schwab & Co. are sent to you directly.
By keeping our client count manageable, our professionals are accessible for questions via the phone, email or in-person appointment. We encourage and welcome discussing the investment choices and direction of your portfolio, and we proactively schedule personal investment review meetings. Communication is a two-way street, so we want to understand any changes in your personal circumstances or financial situation that might require a change to your portfolio.
Key features of the Payne Wealth Partners Investment Process…
Our six-member investment committee meets at least monthly to review various portfolio asset allocation strategies, as well as, each of the mutual funds and exchange-traded funds we are using. From time to time, this committee will order a change in either portfolio asset allocations or the funds that are used. The advantage of this approach is that it provides an appropriate level of oversight — as well as accountability — for client assets entrusted to our management.
Simply put, each team member at Payne Wealth Partners invests in the mutual funds and ETF’s we use for our clients. We also prefer to use mutual fund managers who have a significant financial commitment to the funds they manage.
We build portfolios using a combination of no-load/institutional mutual funds, exchange-traded funds (ETFs), and separate institutional money managers. Our investment team conducts deep and ongoing due diligence on the investments we select for your portfolio through speaking directly with money managers, conducting quarterly manager conference calls, visiting fund manager offices and by purchasing impartial research. We continually evaluate each fund manager against his peer group and appropriate benchmarks to ensure he is providing competitive returns for his investment category. Studies have shown that the best money managers “eat their own cooking.” That way, everyone’s interests are firmly aligned.
We have selected Charles Schwab & Co. to serve as the custodian of our client’s assets. We believe Schwab has the resources, tools and financial strength required for us to best serve your investment needs. Schwab does not have any financial stake in Payne Wealth Partners, so if we find a brokerage firm that will better serve your interests, we are free to make a change. We have established an electronic link to Schwab that downloads all your account activity into our web-based portfolio management system on a daily basis.
We also use an account aggregation service that allows us to link to your company-sponsored retirement plan and pull its investment holdings into our portfolio management software. Thus, we can incorporate those investments into your overall asset allocation strategy, recommend changes from time to time and report the returns on that account in your quarterly performance report.
Being independent means that you will receive advice focused on your best interest. We’re not beholden to a bigger corporate agenda that might conflict with the best solutions for you. You will feel comfortable knowing that we don’t have any hidden agendas.
Most individuals don’t know how much — or through what means — they are paying for their investments or the financial advice they receive. Remember — there are no free lunches. Everything has a cost, and the standard operating practice in the investment industry has been to bury fees inside of the financial product you purchase. We take the guesswork out of the equation. Our fees are clearly stated and fully disclosed to help you fully understand your costs of advice and investing.