Case Study: Independent, Professional Woman Seeking Second Opinion

Setting:

Our client has been career focused since college. She set her sights on a leadership position within a software company, and has been working steadily to achieve that goal. Fortunately, she has made good decisions over time and has built a solid investment base as her career has progressed. However, she came to us seeking another set of eyes on her overall financial plan and investments.  She also wanted to know if she could do more today (was she actually living too conservatively), or did she perhaps need to save more?  She is unmarried and on a path of continued career growth, so given her busy schedule, she is also looking to delegate investment management and financial planning to a trusted advisor.

How Did We Help?

We met with our client a few times to confirm that our firm's services matched her needs, our investment philosophy was in alignment, and that we genuinely enjoyed good communication and rapport.  We decided to move forward together. During the discovery phase of our on-boarding process, we not only helped consolidate and summarize her current financial position, we were also able to identify immediate planning opportunities to help from a tax perspective. She had large capital gains from her own company's stock position.  We discovered a nearly equivalent long-term capital loss position in her portfolio that we could harvest and use as a tax offset.  The result?  Increased diversification (out of her company's stock position) and no taxes owed on the appreciable gain.

As we continued through the financial goal planning process, she developed confidence that she was on the right path to secure her financial future. While discussing her expectations of retirement and some of the worries that "kept her up at night", we were able to show her that she was, in fact, on track to meet those goals.  She then felt comfortable articulating and addressing other goals.

Despite her high level of education, she did not have a strong knowledge of investments, but had always been a good saver. Her job and lifestyle keep her busy so she welcomed the opportunity to consolidate and delegate the details of investment management.  We first conducted an investment seminar to educate her further on our philosophy, and worked together to develop an investment plan tailored to meet her near-term and long-term goals.

Given her career progression, a portion of her compensation now comes in the form of stock options and restricted stock options (RSUs). We help her assess the timing of the stock grants, the vesting schedule and the overall tax implications. We regularly meet and consult with her CPA to plan and execute the most tax-efficient strategies such as 83(b) elections, maximizing her HSA account, and confirming adequate taxes are withheld on bonus payments to avoid tax penalties.

Initially, she felt her estate plan was in good order. She had listed her parents as beneficiaries on her accounts. Through our education process and review of her estate plan, she learned of many opportunities to add contingent beneficiaries and include other family members and charities of her choice. Ultimately, she updated her will, Powers of Attorney and Medical Directives. She was also able to take advantage of the new estate planning law in Texas which allows her to name a beneficiary of her home using a Transfer on Death Deed (allowing this asset to avoid probate).

We confirmed she had adequate and affordable life, disability and health insurance in place. Her group life insurance coupled with a small level term life policy were sufficient to cover her needs and philanthropic goals.  We also suggested an umbrella policy for asset/litigation protection.

Result:

Our client continues to work hard and live a busy lifestyle. By engaging our services, she has a clear financial  direction, and more time and confidence to pursue her charitable work and hobbies. She is appreciative of the ongoing investment management and tax oversight. We stand ready to help her navigate as she develops new interests and goals.