Rick and Sheila were working with another advisor but wanted CJM to review their investment portfolio and provide a second opinion. Rick and Sheila had worked with their current advisor for a few years and added funds to their account, but were unsure as to how their portfolio had performed and how much they were paying in annual fees and expenses. After reviewing Rick and Sheila’s portfolios, CJM’s team of advisors discovered that the portfolio was largely invested in high-fee proprietary mutual funds sold by their current investment manager. Their portfolio, which did not appear to be managed with regards to the clients’ income tax situation, contained municipal bonds, some of which were held in their IRAs. In addition, they were not receiving regular performance reports on their investments.
CJM provided Rick and Sheila with much needed third party due diligence on their investment portfolio and asset allocation. CJM’s Portfolio Research Director, a Chartered Financial Analyst (CFA), helped Rick and Sheila reallocate their accounts to include low-cost, no-load mutual funds and exchange-traded funds. Municipal bonds were removed from the IRAs, as the tax-free nature of their income would be better placed in their taxable accounts.
By holding a greater amount of bonds in their IRAs, taxable income generated from those fixed income holdings would be received by the IRA on a tax-deferred basis. An overweighting of equities was established in the taxable account, which is subject to the more favorable dividends and capital gains tax rates.
Furthermore, Rick and Sheila now receive quarterly reports clearly outlining the management expenses as well as their accounts’ performance relative to various stock and bond indices.
CJM worked with Rick and Sheila to create a detailed investment analysis and proposed changes to their account that would reduce fees and more effectively manage taxable income generated from their portfolio. Working closely with CJM, Rick and Sheila were able to leverage CJM’s decades of expertise to reduce their income tax burden without reducing the income generated by their portfolio. The quarterly statements provide Rick and Sheila the ability to track the growth of their investments and fees paid over time.
At CJM we understand that no two clients are alike and real world problems require practical and timely solutions. The CJM team brings together the best and the brightest in the areas of investment, tax, insurance, financial planning & wealth management to resolve each client’s particular issue(s).