"Navigating Toward Your Personal trueNorth"
To advise our clients trueNorth offers two levels of service:
Integrated Life Planning combines ongoing comprehensive financial planning with ongoing
investment management. This service is appropriate for those of you who don't have the time
or desire to self-manage your investment portfolio, and who seek not only an investment advisor,
but a partner in your financial life.
Here are just a few examples of the kinds of financial issues that we stand ready to work with you on:
•Should I refinance?
•Or do a Roth conversion?
•How is my portfolio positioned for potential inflation?
•Should I fund a GET program or a 529 plan for my children or grandchildrens’ college?
•When should I take Social Security?
•Do I have enough exposure to emerging markets stocks?
•Does it make sense to roll my 401(k) from my employer’s plan or leave it?
•Should I pre-pay my mortgage?
•How do I turn my nest egg into a retirement paycheck?
Financial planning is the long-term process of wisely managing your finances so you can achieve
your goals and dreams, while at the same time negotiating the financial issues that inevitably arise
in every stage of life. Financial planning is a process, not a product.
With planning as the foundation, we derive our investment recommendations. We implement and monitor
those recommendations via diversified portfolios of low-cost mutual funds and exchange-traded funds.
Our disciplined approach to portfolio design and maintenance prevents your emotions from driving your
investment decisions, either in a frightening bear market or an exciting bull market.
Life happens; goals and circumstances are always changing. We take those changes into consideration as
they come -- planning, serving as a sounding board, and referring you to outside experts if needed.
Our Integrated Life Planning service should provide you with considerable peace of mind.
Ongoing planning and portfolio management services include:
Goal setting
Setting goals provides a framework for decision making, and is fundamental to planning and preparing
for the future. Our tools guide you through a systematic goal-setting process that gracefully moves
you from a simple values-clarification exercise, through visualizing your future, to identifying specific
goals with priorities, timelines, and dollars attached. As life changes, we ask you to update your
goals so our advice is aligned with what you want.
Detailed cash flow planning
Understanding where the money goes is fundamental to financial planning. We work with you to compile
an accurate accounting of your current spending, and then develop a spending plan that directs more of
your dollars toward your highest priority goals.
Income tax planning
Tax consequences shouldn’t drive your financial decisions, but decisions should be reviewed for the
optimum tax treatment as taxes are a major expense for most of our clients. We advise you on tax
planning opportunities available given your specific circumstances with the goal of minimizing your taxes paid.
Education planning
If you’re saving for your childrens’, grandchildrens’, or your own education, we quantify the savings
required, and identify the education funding vehicle that best meets your needs for tax efficiency, control,
or flexibility.
Insurance planning
There are numerous risks that can wreak havoc with the best-laid plans. Our job is to help you identify
these exposures and discuss if you want to accept, reduce, or transfer these risks. We help you determine
the right type and amount of insurance, if appropriate, and refer you to licensed insurance agents.
Retirement planning
Funding retirement is usually the largest financial challenge our clients face. If you’re years away,
we define how much you should be saving each year for retirement. If you’re within 10 years or less, we
run scenarios to help you understand the actions that might be needed to get you to your retirement goals:
working longer, delaying Social Security, saving more while working, spending less while retired, for example.
If you’re in retirement, we monitor whether you’re spending at a level that is sustainable, or running the risk
of depleting your savings. Running multiple scenarios and using a Monte Carlo probability analysis tool are
key parts of our retirement planning process.
Estate planning
Estate planning is done to ensure that during life, and at death, your assets go to the people and
organizations you want in a tax-efficient manner. It’s also done to ensure your wishes for end-of-life
care are clear, and to transfer responsibilities in the event of your incapacity. We educate you on estate
planning issues, and refer you to competent estate attorneys to have the necessary documents drafted.
Asset allocation
The asset allocation decision (how much of your portfolio to place in low risk/low return assets like cash,
CDs, and bonds, and how much of your portfolio to place in high risk/high return assets like stocks) is the
most fundamental decision you will make as an investor. We educate you on the historical risk and reward
characteristics of various asset allocations, and help you select an allocation that is sensible given your
spending needs, your risk tolerance, and your time horizon. We’ll document that decision in an Investment
Policy Statement, and revisit that decision periodically based on changing circumstances.
Custody of assets
Our clients’ assets are held at the institutional division of Charles Schwab, which provides us access
to a wide variety of no-load mutual funds, exchange-traded funds, bonds, CDs, etc., with reasonable
transaction costs. We accept a limited power of attorney to make investment trades on your behalf, but
monthly reporting is done by Schwab -- providing you with independent verification of securities and pricing
on a regular basis.
Security selection
We use broadly diversified, low-cost, no-load mutual funds for the equity (stock) positions of your portfolio,
and cash, bond funds, and bond ladders for the fixed income positions. We also use what we call diversifiers –
REITs, and natural resource and commodity funds. Our portfolios include both index funds and actively managed
funds, and are designed to provide the long term benefits of diversification. For clients with taxable accounts,
we may employ tax management strategies such as using new deposits to rebalance, placing rebalancing trades
in tax-deferred accounts, using tax-free municipal bonds and bond funds, placing index positions in taxable accounts,
and harvesting tax losses.
Monitoring the portfolio
We review the transactions in your portfolio each business day. On a periodic basis, we review your portfolio
to create cash for distributions if necessary, invest cash if necessary, or replace securities if necessary.
We also rebalance your portfolio if it strays materially off your asset allocation targets. Rebalancing
is the process of reallocating the securities in your portfolio to return to your original asset class targets.
Rebalancing forces an investor to buy low and sell high, and is contrarian in nature -- therefore very
hard for individual investors to do in turbulent markets.
Portfolio distributions
If you are taking withdrawals from your portfolio, we determine the optimum account and the optimum source
for the distributions (maturing bonds, interest payments, cash from fund distributions, or equity profits);
we manage the process of turning your nest egg into a retirement paycheck.
Retirement Scenario Planning
This limited-scope financial planning engagement is designed for clients who are planning retirement
within the next 1-10 years and are looking for a reality check, and for clients who have been retired for
some time and may be unsure of their financial position after the 2008-09 financial crisis and recession.
The planning process is focused on running multiple long term projections. If you’re preparing for retirement,
these scenarios help you understand what is possible: what trade-offs might need to be made, and what you can
do to better prepare yourself financially for leaving the workforce. If you’re already retired, the planning
process helps you understand how your assets are likely to hold up against your planned spending, and provides
advice on repositioning your portfolio given your age, resources, spending habits, and goals.
The components of this service include:
Detailed cash flow planning
A good estimate of what you will spend when you retire is the fundamental input of retirement planning.
We work with you to compile an accurate accounting of your current spending, and a robust estimate of
planned retirement spending.
Goal setting
A transition time, such as retirement, is a natural time to re-ask yourself: what is important to me,
and what does that mean for where my resources go? Our tools guide you through a systematic goal-setting
process that gracefully moves you from a simple values-clarification exercise, through visualizing your future,
to identifying specific goals with priorities, timelines, and dollars attached.
Analysis of current financial position
We outline your strengths, weaknesses, and challenges when it comes to retirement readiness or sustainability.
Asset allocation
The asset allocation decision (how much of your portfolio to place in low risk/low return assets like cash,
CDs, and bonds, and how much of your portfolio to place in high risk/high return assets like stocks) is the most
fundamental decision you will make as an investor. We educate you on the historical risk and reward characteristics
of various asset allocations, and help you select an asset allocation that is sensible given your spending needs,
your risk tolerance, and your time horizon.
Long term projections
The heart of retirement planning consists of long term projections: a model of your financial life from now
through at least age 95 which tests whether your current assets, planned savings, and planned retirement
lifestyle are sustainable through a long life expectancy.
Identification of key assumptions
The long-term projections we run are heavily dependent on assumptions we make about future rates of inflation,
future tax rates, future rates of return on different asset classes, and your life expectancy, to name a few.
We make sure you understand the assumptions underlying these projections so you feel confident about the results.
Scenario planning
We run multiple scenarios of these projections, so that you can test different paths, and get a handle on
what trade-offs might be necessary to both fund your most important goals and ensure your long term financial
security.
Monte Carlo analysis
Monte Carlo is a mathematical model for computing the odds or probability of an outcome. We use this tool to
calculate the probable outcomes of the long term financial projections while modeling variations in the annual
rates of return of the nest egg.
Financial decisions in retirement
We discuss and model the major issues of the retirement years: budgeting for health care costs and
inflation on those costs, the risk of a long life expectancy, deciding when to take Social Security,
the type of pension payout to take, if applicable, and how to take distributions from your investment
accounts to fund your living expenses.
Specific investment recommendations
We make recommendations on your investment portfolio. We’ll provide specific advice on mutual funds to
hold in all of your accounts, including your employer retirement plans such as 401(k)s and 403(b)s, to get
you to your target asset mix in a tax- and expense-efficient manner. We specify the quantities of each fund,
and provide you with an outline of how to reposition each account to implement our recommendations.
All our investment recommendations will be for index funds where possible.
Retirement Scenario Planning is a stand-alone service: it provides retirement and investment planning
recommendations but does not require nor encompass an ongoing relationship. It is a good fit for those
who want to test-drive working with a financial planner, or for do-it-yourselfers who have the time and
interest in managing their financial life but want a professional review of their situation.
We also offer a carve-out of this service for people who have selected a specific Continuing Care Retirement
Community (CCRC) for their next move, and want to understand the impact of that decision on their long term
financial security before making a final commitment.
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