This is a case study and is for illustrative purposes only. Actual performance and results will vary. This case study does not constitute a recommendation as to the suitability of any investment for any person or persons having circumstances similar to those portrayed, and a financial advisor should be consulted. This case study does not represent actual clients but a hypothetical composite of various client experiences and issues. Any resemblance to actual people or situations is purely coincidental.
Meet Chris
Challenges
Due to the long hours Chris worked selling, taking care of his customers and managing his employees, he felt like he didn’t have time to focus on the financial aspects of his business like he wanted. He knew he could be more efficient and probably more profitable, but he wasn’t certain what he should do next.
Chris had accumulated cash and investment assets yet he wanted to do more to save intentionally for retirement, fund other short-term goals, and minimize his income tax liability. He had an idea what he should be doing but, again, he didn’t have the time to strategically plan for the future.
One day, he dreamed of running a business that could function without him so he could spend more time with his wife, Amanda, and their family.
Chris wished Amanda would get more involved in understanding their financial situation in case anything happened to him.
How Valerie Solved It:
- Valerie met with Chris to get to know him, understand what was most important to him, and explore future planning options with him.
- Since he was busy and constantly running in multiple directions, she offered to meet with him in his office so that he didn’t have to take valuable time away from his business. Valerie suggested that Chris’ wife, Amanda might wish to attend future meetings so that Valerie could educate her about their finances and gain a better perspective of their goals as a married couple.
- Valerie utilized a tool that helped Chris and Amanda understand how much investment risk they needed to take to reach their goals, how much risk they were currently taking in their existing investment portfolio, and how much risk Chris and Amanda were ultimately comfortable taking when investing.
- Valerie designed an investment portfolio that met Chris and Amanda’s personal tolerance for risk and took into account their needs and goals. The portfolio was monitored and adjusted by Valerie as needed. Valerie communicated with Chris and Amanda regularly to keep them up-to-date on the state of the market and economy and whether their investment strategy should be altered given the market’s outlook.
- Valerie worked with Chris’ CPA to regularly review his business financial statements and look for opportunities for tax planning strategies and overall improvement in profitability.
- Valerie advised Chris on how much he needed for retirement planning purposes and offered strategies for funding retirement using appropriate savings vehicles.
- Valerie managed Chris’ company-sponsored 401(k) plan and advised Chris on ways to offer best-in-class 401(k) investments and manage his day-to-day administrative and fiduciary responsibilities under the Plan. Valerie met with Chris’ employees twice each year to give them investment advice and financial planning strategies they could implement to improve their own chances of retirement success.
- Valerie helped Chris identify key employees who could potentially takeover the company in the event of Chris’ disability or premature death. She recommended and designed a key-man life insurance solution, disability insurance program, and also helped coordinate buy-sell planning to transition the business to a new owner in the event of Chris’ disability or premature death so that Amanda wouldn’t be left to figure it out on her own.