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Wealth Accumulation Target
This page is designed to provide a more in-depth understanding of the following:
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Who is the right fit for our Wealth Accumulation Target (WAT) solution.
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Why we chose our 0.65% AUM pricing.
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Understanding how WAT is designed to work.
As you learn about our Wealth Accumulation Target solution & evaluate if it's right for you, feel free to use the contact form below with any questions you may have.
No matter what stage of your career you're in there is one constant truth of life - it's busy! It's a time in life that is easy to get distracted during & sometimes financial wellness falls to the wayside. We want to help provide direction in the chaos. One of my favorite quotes comes from Earl Nightingale. Earl was a well known radio host in the 1950s and he said, "People with goals succeed because they know where they're going". We at Prosperity Wealth Management couldn't agree more. Our Wealth Accumulation Target solution is built on this simple premise.
Key Features
AUM Fee: 0.65% (annually)
Min. Target: $1,000 (account value)
Required: Financial Plan (included in service)
"The best time to plant a tree was twenty years ago. The second best time is now."
~Chinese Proverb
This proverb rings true for most people when it comes to their personal finances. Unfortunately financial literacy isn't something that is taught in schools which leads to many people feeling unprepared and late to the game. You can't do anything about 20 years ago, but we can help you start today!
Wealth Accumulation Target (WAT) is designed for three main groups of individuals that are more than 10 years out from retirement:
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People too busy to take day-to-day control of their investments.
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People that don't feel they have the knowledge, or expertise, to manage money and are looking for a partner.
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People that just aren't interested in this responsibility and would rather hire someone for it.
There's no shame if you find yourself a part of one of these groups. Your friends & family would be concerned if you chose to represent yourself in court or tried to perform surgery on yourself. Why is managing the complexities of wealth any different? The reality is most people aren't well suited to this job. That's where we come in.
The best way to think about how the Wealth Accumulation Target solution works is to think of your personal finances like a business. At the top of the corporate hierarchy is the CEO, you. Your job is to develop the vision and direction of the company. That vision gets put onto paper so everyone can understand it. That's your financial plan. Prosperity Wealth Management is your CFO. Our job is to develop the best strategy to fund this vision. We steward the company's resources towards the target you've provided. This frees you up to handle the day-to-day operations of running your business (kids...it's always kids).
Why a 0.65% AUM fee and not 1.00%?
Why is our fee for the Wealth Accumulation Target solution lower than our competitors with a similar offer (1.00% typically)? It's an easy answer. In our view we're charging you a fair price, with think 1.00% is an overcharge. To better understand why there are a couple of concepts it's important to know.
First, is how our asset allocation models are designed to work for the WAT offering. In our view a "one portfolio solution" can only effectively accomplish one task. That is to grow within the client's comfort level. They're not portfolios that are great income vehicles. They're not portfolios that take a lot of timing chances. They're not great at avoiding market turmoil. And you wouldn't want them to....
What makes asset allocation models effective is the combination of exposure to multiple asset classes and their rebalancing methodology. Look at the chart to your right. Since 2009 we've had 5 different asset classes that were the top performers for the year. Twice it was Cash! The oldest maxim in investing is, "Buy low, Sell high". Chasing return can result in disaster. Look at 2017.
If you bought the best performing asset class, emerging market stocks (EM) up +37.8%, at the end of 2017 to chase return you would have been very upset in 2018 with your -14.3% loss. Asset allocation models aren't about picking one specific asset class. They're about broad exposure to multiple asset classes and then using the rebalancing process to "Buy low, Sell high".
Let's use our 2017 example again. Rebalancing a portfolio is about bringing the investment exposure back into alignment with your target. This means that investments that have performed really well are typically going to be sold. This is because their growth took them above the target allocation. Investments that have done poorly, or just not as well, are going to be bought because their performance has them under target exposure. We've sold the best performers (High) and bought underperformers (low). With this methodology you don't need to predict "next year's best asset class". You just need time. Time to keep taking advantage of the market's volatility & the constantly changing economic landscape.
So why would we charge you for things like income production, active market timing, and dynamic risk avoidance when they are counterproductive to what the portfolio is intended for? We'd ask the same question of our competitors. Our Strategically Personalized Framework offers these services and is priced at 1.00% of AUM because all those services are essential to the offering. That's why it's our retirement solution. In our view you should only be charged for services you're actually going to use...
WAT: Designed for your busy lifestyle!
The Wealth Accumulation Target (WAT) solution is designed to be an efficient and durable solution for busy clients. Once we've completed our initial onboarding & financial planning process, the standard WAT client's ongoing engagement is typically an annual financial planning meeting (requirement of all relationship services with PWM) and a semi-annual update call. In addition to these engagements, we are always available to address on demand questions.
Your engagement experience with us is always customizable to your desires & the above is a general guide. Our WAT clients are typically looking for a lower level of engagement. This solution is designed to address a need over 10 years in the future. That means it doesn't require your daily attention - that's what we are for.
Our WAT clients also desire more educational content from us. Included in your relationship is our Wealth Coaching Service (WCS) membership. We produce various educational content every month to help our clients build their personal finance knowledge base. In addition to the WCS membership every Wealth Accumulation Target client receives an an annual "Companion Consultation" voucher. This voucher is designed for friends & family. Not everyone is comfortable and open discussing money. Some people aren't looking for a full financial plan. Sometimes people just want to talk to a professional about buying a house, planning for college, or understanding company benefits. The Companion Consultation voucher is your gift to them. It's a NO SALES, no requirement, no commitment meeting with a financial professional at our firm that can address a one-time need for those closest to you.
If you'd like to learn more about the Wealth Accumulation Target solution, or you have additional questions, feel free to reach out to us using the contact link below. Meeting clients where they're at in life and helping them better handle the complexities & anxieties personal finance can bring to families is our calling. If you think you're a good fit at our firm, make the call!