Introduced to the Capstone Team by their accountant, Jack is a physician and Nancy, a homemaker. She is concerned about Jack after retirement and Jack is worried about providing for his wife’s existing lifestyle once he retires. Jack makes investment decisions based on research and historical evidence while managing his 2.4 million dollar investment portfolio.
Jack wants Nancy to be surrounded by trusted advisors, including a financial consultant and accountant, to help her in the event of his death. Their goals also include the maintenance of their current standard of living and the preservation of their investment portfolio. Jack and Nancy want to minimize their risk of assets to litigious creditors and market volatility.
The Client-Centered Consultive Process™
- Jack and Nancy met with Capstone Advisor, filled out necessary forms for securing appropriate information and discussed their assets which include retirement assets, real estate and personal investments.
- Jack and Nancy showed their real estate and investments to be valued at $3.2 million.
- Together with Advisor, they looked at the impact of Jack’s retirement on their desired income needs.
- Jack and Nancy completed a risk assessment with the help of their Advisor and determined net of income tax cash flow needs through retirement.
Investment Plan Meeting
- Advisor reviewed current will, assets and ownership. The Advisor confirmed titling of assets consistent with desired estate transfer per legal documents.
- Advisor created cash flow model which included a portfolio gap analysis to reduce cost and portfolio volatility during income distribution season. Jack and Nancy realized less risk to portfolio and 5% increase in net spendable income. Cash flow model included income sources from 401K rollover to self-managed IRA, Social Security, real estate and personal investments.
- Advisor reviewed life insurance policies and determined insurance company’s financial status and policy description of disability. The needs of the client were considered for maintenance of adequate coverage.
- Advisor reviewed property casualty insurance with Jack and Nancy’s insurance agent and determined a need to increase liability umbrella coverage.
Mutual Commitment Meeting
- Advisor, Jack and Nancy established a mutual understanding of commitment and decided to move forward together.
- Jack and Nancy signed necessary forms to establish the relationship with Capstone Wealth Management.
Implementation of Plan
- Advisor worked with attorney to draft new estate documents including additional asset protection language to increase defense from litigious creditors.
- Jack, Nancy and Advisor created an investment plan that provided a stable income to replace current income when Jack retires. This included an assessment of current investment portfolio allocation and portfolio costs.
- Advisor worked with clients and accountant to determine net income projection of current real estate. This analysis included a review of potential income options via a 1031-Exchange.
Reporting of Plan
- Ongoing performance review monitors portfolio allocation, portfolio expense management and income model modification due to portfolio appreciation.
- Jack and Nancy call Advisor with questions or concerns.
- Together with Advisor, they make changes to rebalance the plan to reduce volatility.
- Jack, Nancy and Advisor review plan’s performance in relation to cash flow benchmark.
- Advisor initiates the custom Capstone Family Legacy Workbook process with Jack and Nancy.