Design. Execute. Monitor.
Investment Management Services
Our Investment Management Services (or Assets Under Management) can help you with the “Execute and Monitor” stage of your financial plan. Once your initial financial plan is created and a portfolio is designed, you are ready for implementation. Some people choose to perform the implementation of their plan as a “do-it-yourselfer.” Before you embark on that journey, please read about Doing Investment Management Yourself to understand the full complexities.
You may want to consider our Investment Management Services if any of these conditions apply:
- Are not comfortable with an investment account set-up, selling, buying and rebalancing a portfolio
- Don’t know how to effectively manage a withdraw strategy across a portfolio consisting of taxable, tax-deferred, and tax-free accounts
- Are approaching diminishing capacity, where it just isn’t feasible
- Don’t understand or are unhappy with your current Investment Management fee structure
- Want more meaningful quarterly reports providing insights on how you are doing with your Plan goals and objectives
If any of these apply to you, we are glad to assist with our Investment Management Services. Coupled with our On-Going Financial Planning service, we believe that you will experience a greater chance of success in reaching your Plan goals. We will provide you with very low and transparent fee schedules, meaningful quarterly reporting, and rebalancing based on your personal risk tolerance.
We build portfolios for long-term investors. All our portfolios have a few things in common:
- Fiduciary Model
- No commissionable products
- Low cost funds with long track records
- Periodic rebalancing
- Low management fees: Services fee schedule
- Professionally managed
- Outside Manager with decades of experience
- Custodian: TD Ameritrade
Investment Management Philosophies
There Must be a Plan
One of our basic principles is being unbiased and independent thinkers for our clients. We are not “asset gatherers”. Therefore, we do not perform Investment Management Services without a written Initial Plan. We believe investing is a well-defined strategy to meet YOUR specific long-term goals. An Initial Plan and On-Going Financial Planning provide the foundation and investment policy required to make sure we are investing your assets with your best interest at heart.
Generally, our investment management services are based on a globally diversified strategy involving a long-term, disciplined approach that manages risk through appropriate asset allocation. We recognize that each client’s needs and goals are different. Subsequently, portfolio strategies and underlying investment vehicles may vary. The following are common strategies we employ in client portfolios:
- Active Asset Management (Ex: mutual funds)
- Passive Investing (Ex: Exchange Traded Funds or ETFs)
- Hybrid – Passive Core plus Active Satellite
- 7Twelve® multi-asset portfolio design
See our article on Portfolio Design Active vs Passive
Modern Portfolio Theory (MPT)
MPT is an award-winning theory developed by Harry Markowitz in 1952. According to Investopedia, MPT is “A concept from finance that describes ways of diversifying and allocating assets in a financial portfolio in order to maximize the portfolio’s expected return given the owner’s risk tolerance.”
We subscribe to more of a MPT philosophy and not market timing or day-trading of individual equity selections, sectors, or geographies. The 7Twelve® multi-asset portfolio design is an implementation of MPT.
Three Key Portfolio Designs
1. Simple, Passive, and Strategic
Simplicity is the ultimate sophistication
– Leonardo Da Vinci
Several simple, passive, and low-cost global ETFs are available that track U.S. and international stock and bond markets, providing broad diversification. The portfolios are managed to a fixed asset allocation target and are rebalanced annually. Five risk levels ranging from 20% equity to 100% equity are available to match your risk tolerance, goals, and objectives. Tax-sensitive versions of all the global ETF portfolios are also available.
Actively managed satellite investments are also available and may be added to the core passive investments.
View/Download First Ascent Brochure
2. Complex, Passive, and Strategic
Complexity in a Simplified Package
– Yours Truly
Just because a multi-asset portfolio is complex, we can provide it in a simple package for easier implementation and management. For this portfolio design, we use the 7Twelve® portfolio strategy developed and owned by Dr. Craig Israelsen. It is based on the design philosophy of ultra diversification with low correlation among 7 asset classes and 12 funds.
The key premise of a multi-asset portfolio is that no single asset class is dominant year after year so 7Twelve® portfolios help balance out year to year performance while lowering overall risk.
3. The “Hybrid” Design
Core plus Satellites
– Author Unknown
Core / Satellite
A passive yet strong Core consisting of low-cost globally diversified ETFs may consist of either the funds available through First Ascent or a 7Twelve® personalized portfolio, depending on your risk tolerance, investing goals, and other specific requirements.
Decades of research has identified certain “factors” or attributes of stocks that may produce a larger return over a period of time. These factors can then be rotated on a monthly or quarterly basis to take advantage of market dynamics.
For retirees, satellite funds may be designed for cash withdrawals or emergency funds. Each individual is different. Depending on your needs, we can help you set up a satellite portfolio that complements your core portfolio to give you an active component to your overall portfolio.
Example of Core / Satellite
Retirement Planning and Safe Withdrawal Rates
One very important example of how a Core / Satellite portfolio design can be useful is in the area of a retiree’s portfolio. Much study has been given to Safe Withdrawal Rates. We won’t explore the details here, but the bottom line questions are:
- How much can you safely withdraw from your portfolio each year (to meet living expenses or retirement goals)?
- From which fund types should you withdraw from?
Setting up a Core / Satellite portfolio can be the foundation of a “bucket strategy” to help manage your retirement portfolio. For example, consider the “Core” to be a 7Twelve® portfolio and a couple “satellite” funds for cash withdrawals and emergency funds. Now you have a strategy to withdraw from the satellite accounts for your expenses or goals needs.
Annual rebalancing can put everything back to the original portfolio design.
Segregating Planning from Investing
One of our basic principles is being unbiased and independent thinkers for our clients. For this reason, we have chosen to utilize outside investment management firms.
By segregating our Planning process from Investment Management, we maintain the integrity of both worlds.
Outside Investment Managers
We have chosen to use outside managers to perform the buying, selling, and rebalancing of the assets. These outside managers have significant experience, long track records, and are very well known within the industry. They provide economies of scale that a small consulting firm such as ourselves, simply cannot provide. The result is better service for our clients AT A LOWER COST!
We pick and choose these money managers based on available portfolios to match your risk tolerance, investing objectives, and to personalize an investment strategy that is best for you.
First Ascent Asset Management, LLC
Asset management services provided by First Ascent Asset Management, LLC (FAAM). Neither Kastler Financial Planning nor FAAM takes possession of client funds or securities. Funds are held at custodian, TD Ameritrade. Trades are made on a discretionary basis.
Who is First Ascent Asset Management, LLC?
CEO Scott MacKillop started his career in financial services in 1975 working as an intern at the Securities and Exchange Commission while attending law school. He practiced law in Washington, DC for a little over 15 years, specializing in securities law, ERISA and venture capital transactions. After holding a number of executive positions, he founded First Ascent Asset Management, LLC and has written over 90 articles and papers on investment-related topics and has spoken at over 100 financial services conferences.
Patrick Krulik is the Chief Investment Officer (CIO) at First Ascent. He has worked in the financial services industry since 2005, beginning at Mt. Yale, where he served as an investment analyst. After holding a number of analytical positions, he now serves as CFA at First Ascent working closely with financial advisors to help them meet their clients’ objectives and goals.
By choice, First Ascent Asset Management, LLC only works with advisors, not directly with clients.
Neither Kastler Financial Planning nor the 3rd party outside managers holds your assets. All investable assets are held at TD Ameritrade, one of the largest custodians in the industry.
Past performance is not indicative of future performance. Investing involves substantial risk and has the potential for partial or complete loss of funds invested. Investments mentioned may not be suitable for all investors. Before investing in any investment product, potential investors should consult their financial or tax advisor, accountant, or attorney with regard to their specific situation.