Goals-Based Wealth Management: An Integrated and Practical Approach to Changing the Structure of Wealth Advisory Practices

Chapter 10Finalizing a Goals-Based Policy Allocation

This chapter is the final phase of the troika that together constitutes the strategic goals-based asset allocation process. We will still need to cover two important issues when we are through with this chapter, but our starting point was the need to develop an investment policy. We postulate that one cannot develop a goals-based investment policy without first creating the basic architecture within which we want to operate—this is what we covered in Chapter 8, with the various steps leading to the creation of goals-based modules. Our second step required us to match individual client needs and the assets required to meet them with the various modules we had thus created; this we did in Chapter 9. This final step involves pulling the modules together and proceeding from a series of modules to which some various assets amounts had been dedicated to an overall strategic asset allocation, which will form the basis of the ongoing management of the assets.

Two Possible Approaches

Before going further, it is worth taking a side-step to discuss an important variant on the theme. One can imagine two completely different designs within which one can handle family assets: the first is a single portfolio, a separately managed account, while the second is a combination of commingling structures, whether family dedicated—goals-based family partnerships would be an example—or commercially available, such as registered investment companies ...