Following the post-COVID stimulus hangover in 2022, the bull market has continued to run. One of the key factors was the Federal Reserve’s decision to
Drop the Baggage and Streamline Your Life
Published Date : February 24, 2014
It is becoming a common occurrence to see new clients of Sand Hill arriving with excess baggage in tow. By baggage, I am referring to: 1) Assets held at multiple brokerage firms, 2) in multiple accounts, 3) registered with incorrectly titled names, 4) stock held in certificate form or held directly with transfer agents, and 5) former employer retirement plans still held with the plan administrator. Every case is different, but it is not uncommon to see one (or all) of the above.
Having a complicated situation becomes a headache during tax season, and a nightmare when trying to take inventory of your net worth. Then, consider the dilemma it poses when attempting to manage your investments.
• If you are self-managing your accounts, are you considering every asset held outside of your main trading accounts?
• If you have an investment manager, are they aware of all your outside investments?
If the answer is no to either, you could be taking on unnecessary risk. As an example:
Your portfolio is managed with a simple target of 50% capital appreciation assets and 50% capital preservation assets. Twenty years ago, you were awarded common stock in a company that is still sitting in certificate form. That stock is worth far more today than when you originally obtained it 20 years ago. Having these additional assets is a wonderful problem to have, but keep in mind — the value of that certificate is not reflected in any of your account statements. So while you may think you have a balanced asset allocation on paper, in fact, your allocation has a significant overweight to the higher-risk capital appreciation side. As a result, when the market fluctuates, you’ll have underestimated the volatility, or risk, of your portfolio. At Sand Hill, our job is to properly align risk exposures to desired returns and this can be better achieved by putting all your cards on the table.
For most, attacking something like this on your own can be daunting, stressful, and (simply put), not worth the trouble. We strive to make things neat and organized for our clients through the establishment of a systematic strategy for consolidating your assets that addresses registration issues, combining like-titled accounts, and rolling over retirement plans and 401(k) balances. By taking on the burden of consolidation for you, we seek to turn a complex and time consuming process into a simple and efficient one. Even if the end result requires the maintenance of outside assets in a separate bucket, as long as we are aware of their existence, they will be incorporated into the management of your overall asset allocation.
I have seen this problem arise time and time again, especially with clients in, or nearing, retirement. At that point in life you should be enjoying life rather than chasing account statements month after month. This process of simplification has added benefits later on, making estate plan changes and wealth transfer planning easy to implement.
With April 15th on the horizon, this might be a great time to take inventory of all your outstanding baggage. After dropping off that big envelope of year end statements to your CPA, consider keeping a copy for yourself and asking Sand Hill how we can help.
Articles and Commentary
Information provided in written articles are for informational purposes only and should not be considered investment advice. There is a risk of loss from investments in securities, including the risk of loss of principal. The information contained herein reflects Sand Hill Global Advisors' (“SHGA”) views as of the date of publication. Such views are subject to change at any time without notice due to changes in market or economic conditions and may not necessarily come to pass. SHGA does not provide tax or legal advice. To the extent that any material herein concerns tax or legal matters, such information is not intended to be solely relied upon nor used for the purpose of making tax and/or legal decisions without first seeking independent advice from a tax and/or legal professional. SHGA has obtained the information provided herein from various third party sources believed to be reliable but such information is not guaranteed. Certain links in this site connect to other websites maintained by third parties over whom SHGA has no control. SHGA makes no representations as to the accuracy or any other aspect of information contained in other Web Sites. Any forward looking statements or forecasts are based on assumptions and actual results are expected to vary from any such statements or forecasts. No reliance should be placed on any such statements or forecasts when making any investment decision. SHGA is not responsible for the consequences of any decisions or actions taken as a result of information provided in this presentation and does not warrant or guarantee the accuracy or completeness of this information. No part of this material may be (i) copied, photocopied, or duplicated in any form, by any means, or (ii) redistributed without the prior written consent of SHGA.
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All video presentations discuss certain investment products and/or securities and are being provided for informational purposes only, and should not be considered, and is not, investment, financial planning, tax or legal advice; nor is it a recommendation to buy or sell any securities. Investing in securities involves varying degrees of risk, and there can be no assurance that any specific investment will be profitable or suitable for a particular client’s financial situation or risk tolerance. Past performance is not a guarantee of future returns. Individual performance results will vary. The opinions expressed in the video reflect Sand Hill Global Advisor’s (“SHGA”) or Brenda Vingiello’s (as applicable) views as of the date of the video. Such views are subject to change at any point without notice. Any comments, opinions, or recommendations made by any host or other guest not affiliated with SHGA in this video do not necessarily reflect the views of SHGA, and non-SHGA persons appearing in this video do not fall under the supervisory purview of SHGA. You should not treat any opinion expressed by SHGA or Ms. Vingiello as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of general opinion. Nothing presented herein is or is intended to constitute investment advice, and no investment decision should be made based solely on any information provided on this video. There is a risk of loss from an investment in securities, including the risk of loss of principal. Neither SHGA nor Ms. Vingiello guarantees any specific outcome or profit. Any forward-looking statements or forecasts contained in the video are based on assumptions and actual results may vary from any such statements or forecasts. SHGA or one of its employees may have a position in the securities discussed and may purchase or sell such securities from time to time. Some of the information in this video has been obtained from third party sources. While SHGA believes such third-party information is reliable, SHGA does not guarantee its accuracy, timeliness or completeness. SHGA encourages you to consult with a professional financial advisor prior to making any investment decision.
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