FINANCIAL PLANNING
Think Like an Endowment
While many investors (and their advisors) still think about investment portfolios in terms of cash, stocks, and bonds, a growing number of investors and advisors have expanded their investment universe to include non-traditional investments, often called “alternatives”. The primary benefit of using non-traditional investments in a portfolio is to augment the risk-adjusted returns provided by a common stock-bond portfolio. This strategy is commonly referred to as taking an “endowment approach” because the endowments of large universities were early adopters of non-traditional investments.
As an example, as of June 30, 2015, Harvard University’s Endowment was valued at $37.6 billion, making it the single largest university endowment. Below outlines Harvard’s asset allocation shifts over the years[1]:
As can be seen in the table above, the percentage allocation to non-traditional investments increased from 25% in 1995 to almost 57% by 2014.
Harvard University Endowment’s annualized performance over the last 10- and 20-year periods ending June 30, 2015 was 7.6% and 11.8%, respectively, as compared to a standard 60% stock / 40% bond portfolio (using the S&P 500 Index and the Barclays Aggregate Bond Index), which provided 6.8% and 7.9% average annualized returns over those same time periods[2].
[1] Source: Harvard Management Company Annual Report 2015.
[2] Source: Harvard 2014 Annual Report.
Atomi’s Five-Step Process for Maximizing Financial Independence and Personal Well-Being
Over the course of four to five meetings, your Atomi Personal Strategist will help you visualize a future lifestyle that is both sustainable, given your assets and resources, and fulfilling, given your personal goals and dreams. Key action items include:
Step 1: Clarify Your “Ideal” Future
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Guided exploration of your ideal retirement – What do you want to do? Where do you want to go? What accomplishments do you want to make? What childhood dreams do you want to re-connect with? What is your ideal lifestyle?
Step 2: Review “What if…” Scenarios to Identify the Best Potential Retirement Plan
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Identify Your Current Resources – Using your financial statements and valuation estimates for real assets, we input your data, goals, and assumptions into our scenario planning software. Then, using our software, we’re able to generate and evaluate various financial projections.
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Participate in an Interactive Scenario Planning Session – Together, we review multiple scenarios with life-long savings, income, spending, and net worth projections on a big-screen TV. We’ll discuss various strategies, priorities, trade-offs, concerns, and risks. You will see the most probable outcome of your decisions and get answers to all your “what if…” questions.
Step 3: Set Realistic and Achievable Financial Goals
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Based on the output developed during your “what if…” scenario planning session, we document your personal and financial goals, and develop specific strategies and tactics that provide the highest probability of achieving them.
Step 4: Develop and Discuss Your Retirement Plan
We create the following written documents for your approval or refinement:
Step 5: Implement, Monitor, and Adjust Course as Needed
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Implement financial and investment recommendations
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Engage professional investment managers and select appropriate direct investments
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Implement any personal recommendations
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Meet periodically to review and discuss progress against goals, and any changes in your situation
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Adjust course, as necessary, to maintain life-long financial independence
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Executive Summary
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Personal success criteria with vision, goals, priorities, and concerns
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Monte Carlo probability analysis
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Net worth statement
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Risk comfort level profile
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Recommended lifestyle, wealth, and estate-transfer strategies
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Investment portfolio asset allocation recommendations
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Insurance recommendations, if appropriate
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Implementation schedule
Planning Specialties
For many, standard traditional financial planning is not enough. Unique circumstances may necessitate a specialized financial solution. Atomi Financial Group offers the following specialty areas of planning:
Planning for Women
For women investors, particularly, widows, single women, and recent-divorcees, Atomi Financial Group offers planning advice that takes into account the macroeconomic particulars for women. For instance, women typically live longer but receive less social security. Atomi’s “Planning for Women” specialty helps women understand what they need to do in order to achieve their financial goals.
Social Security Analysis
Baby Boomers (those born roughly between 1946 and 1964) now have to make sense of the myriad of Social Security options; everything from when to take income benefits to Medicare. As a supplement to its overall financial planning process, Atomi offers special analysis of social security options for its Baby Boomer clients. This may also include referrals to third-party Social Security Insurance Specialists.
Probate Support Services
The unwinding of a deceased family member’s estate is often complicated, more so when having to go through Probate. Typically offered as an hourly service, Atomi Financial Group offers a variety of probate-related consulting services, such as stock certificate research, stock certificate re-registration and liquidation, and estate account setup and administration.
Planning for Divorcing Individuals
Individuals going through a divorce face one of the most stressful times in their lives. They need access to financial expertise to help understand the long-term financial implications. Typically offered as an hourly service, Atomi Financial Group provides consulting and research services that specializes in the financial, legal and tax aspects of divorce.
Estate Plan Consulting
Offered as a standalone service, Atomi offers a financial planning specialty service that helps clients understand their estate planning options, particularly as it pertains to the reduction of estate taxes, ensures the proper transfer of wealth to heirs, and the disposal of illiquid assets.
Asset Protection Planning
Atomi Financial Group has established partnerships with various Orange County and national asset protection experts to offer a comprehensive asset protection consulting solution. Offered as a standalone service, Atomi’s “Asset Protection” solution integrates legal, account registration, insurance, and investment advice into bundled package.
Tax Reduction Planning
Through partnerships with various CPAs and tax attorneys, Atomi Financial Group offers a comprehensive tax reduction consulting solution. Offered as a standalone service, Atomi’s “Tax Reduction” solution covers both current and future income taxes, as well as possibly reducing potential estate taxes.
Charitable Gifting Planning
In conjunction with estate attorneys, Atomi Financial Group offers a comprehensive charitable giving consulting solution. Offered as a standalone service, Atomi’s “Charitable Giving” service helps clients understand the quality of their potential beneficiary, determines the tax benefits of different charitable options, and ultimately designs and implements the necessary trust vehicles. Please note that certain fees may be waived if the client directs his/her charitable giving through an Atomi Donor Advised Fund or similar investment vehicle.