Making the decision to have someone manage your hard-earned money on your behalf is an important step in potentially growing your wealth and attaining your personal financial goals. Read on to discover how the process works from here.
The asset allocation layer of investment management aims to distribute your portfolio among investment strategies that are well-suited to your personal financial goals. That means allocating your capital between strategies built around U.S. Large Cap Stock, Small or Mid Caps, Hedged Equity, Fixed Income, or International investments.
Simply put, we believe the businesses that are changing the world can do the same for our clients’ investment portfolios. Our team of seven in-house portfolio managers, with combined investing experience of over 75 years, makes all the buying and selling decisions within the investing strategies listed above. To do so, we use a proprietary investing process that combines both quantitative and qualitative factors.
We believe that investing in individual stocks is a time-tested path to building long-term wealth. While stocks can generally be considered more “aggressive” or “risky” than bonds or other asset classes, we believe that a long-term, buy-and-hold methodology (staying invested for years rather than days, weeks, or months) is key to mitigating risk and potentially realizing market-beating returns over time.
So we power each of our strategies with a basket of high-conviction stock picks, while achieving diversification through our asset allocation process. We believe that the companies in our strategies are positioned for long-term business success, and whose share prices we believe will grow along with the company itself. We discover and evaluate these companies based on a criteria we call the Four Pillars of Quality.
While certain of our strategies may utilize exchange traded funds (ETF), we believe that our focus on stocks (whenever possible) separates us from many other financial advisors, especially those offering automated investing solutions. These advisors primarily invest their clients in mutual funds and ETFs that may not be able to achieve the same level of customization, not to mention that these funds are subject to fees and expenses that are passed along to their clients. We use ETFs (not mutual funds) only when we believe that they are the most efficient and appropriate way to obtain exposure to an asset class. And when we do invest in ETFs, we look for low-cost ETFs in order to minimize costs for our clients.
In our view, great companies make great investments. And great companies start with visionary leadership. We look for management teams that can clearly articulate their strategies and effectively rally their entire organizations around executing them. They cultivate a culture filled with smart, motivated employees, and incentivize them to do ground-breaking work. When management and employees are personally invested financially, emotionally, or - preferably - both, businesses are poised to thrive.
Once we find a company with a strong vision, leadership, and culture, we dig into the numbers. Quarter over quarter and year over year, we want to see growing revenue, increased profits, and a business model that can support them well into the future. We look at traditional factors like cost structure, revenue models, and capital efficiency, along with other considerations like customer loyalty and pricing power. And we always like to see a healthy balance sheet when it comes to cash on hand and corporate debt obligations.
Next, we broaden our perspective to assess the competitive landscape in which our prospective holdings operate. Are they an established player? A promising up-and-comer? A potential industry disruptor? How much competition do they face, and how do they stack up against it? We look for unique strategies, products, services, or business models that stand out from the competition, and which may potentially help them dominate the landscape for years to come.
Our final pillar involves looking forward and assessing the future potential of each business. We love fast-growing companies, but is that growth sustainable? Our team identifies each holding’s keys to growth, and analyzes how shifting consumer tastes, regulatory trends, and the competitive landscape may affect their potential. If we believe the company can scale up its business model while keeping its culture intact, that can make it an attractive long-term, buy-and-hold investment in our view.
The customized asset allocation plan you receive is based on your risk tolerance, time horizon, and asset level, and we believe is best suited to help you potentially achieve your financial goals.
As stock investing is our forte, we strive for a diversification strategy within each portfolio that aligns with your unique, personal financial goals.* Additionally, Fixed Income and, at certain asset levels, Hedged Equity strategies may play an important role in a diversified portfolio for clients making the transition to retirement or who simply prefer to see less volatility in their portfolio.
And so, when you complete your Investor Profile, you’ll receive a Personal Portfolio recommendation custom-tailored to your needs and goals, your time horizon, your risk tolerance, asset levels, and some of your personal investing preferences.
To assist prospective clients at all different levels who are looking to get started with us, we offer three ways to invest with us.
Online Guidance: For prospective clients looking to get started investing, or those with portfolios under $500,000 looking to grow, we offer a convenient portal where you can create your Investor Profile, receive your customized asset allocation proposal, and open and fund your account -- all online. It’s a simple, straightforward, 3-step process.
At lower asset levels, prospective clients may not have access to our full suite of strategies, specifically our Hedged Equity strategy, and your intended investment amount will inform our allocation advice.
Advisor-Based Guidance: For investors who would like us to manage portfolios and accounts over $500,000, we encourage you to schedule an appointment with our financial planning team.
Full-service with Financial Planning: For investors with over $1,000,000 in assets under management, we offer full-service financial planning from our dedicated, in-house team. This includes expert advice on tax**, retirement, and estate planning, as well as guidance on other personal finance matters.
We’ll get a sense of your age, goals, income level, time horizon (AKA years until you’ll need to withdraw funds), and risk tolerance. There are no right or wrong answers! Simply provide the answers that best describe you.
Based on the information you provide in your Investor Profile, we’ll generate a recommended asset allocation made up of a blend of our proprietary investment strategies. In other words, you will get to see exactly how we will allocate your portfolio for you.
Once you’ve accepted your Personal Portfolio allocation, you will be able to open an account at Interactive Brokers, the custodian of our Personal Portfolio program, and transfer funds into your new account. When your account is ready to go^, our in-house Trade Desk will put your account to work. We will invest your portfolio according to the customized asset allocation plan we created for you.
From there, you can sit back, relax, and let our team of professionals do the day-to-day work of actively managing your hard-earned money.
We look forward to helping you pursue a smarter, happier, and richer financial future! Welcome to our Foolish family!
* Our selection of individual securities is not personally tailored to client accounts. Rather, the individual securities purchased and sold for client accounts are based upon and track the holdings in our Model Portfolio.
** While we can counsel on tax efficiency and general tax considerations, MFWM does not (and is not permitted to) provide tax or legal advice. Clients who need such advice should consult tax and legal professionals.
^ Unless instructed otherwise, we generally refrain from trading securities in a client’s account until the client transfers or deposits in full his or her indicated funding amount. This delay is intended for our clients’ benefit by minimizing the potential transaction and tax costs associated with mapping client accounts to our strategies. Upon receiving the full funding amount (and assuming that the account has been properly configured by the client for trading), we will generally begin placing trades for within two (2) business days.
Access to MFWM is only available to clients pursuant to an Investment Advisory Agreement and acceptance of our Brochure (PDF - 204 KB). You are encouraged to read these documents carefully. All investments involve risk and may lose money. MFWM does not guarantee the results of any of its advice or account management. Clients should be aware that their individual account results may not exactly match the performance of any of our Model Portfolios. Past performance is no guarantee of future results. Each Personal Portfolio is subject to an account minimum, which varies based on the strategies included in the portfolio. MFWM retains the right to revise or modify portfolios and strategies if it believes such modifications would be in the best interests of its clients.
During discussions with our Certified Financial Planners, they may provide advice with respect to 401(k) rollovers into accounts that are managed by MFWM. Such recommendations pose potential conflicts of interest in that rolling retirement savings into a MFWM managed account will generate ongoing asset-based fees for MFWM that it would not otherwise receive.