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Detroit Five Star award winner

Alliance of Comprehensive Planners (ACP) Core Concepts

By: Bert Whitehead, JD, MBA, Founder of the Alliance of Comprehensive Planners

www.acplanners.org

Most of the concepts used today in Personal Financial Planning were developed within the financial industry primarily to sell financial products to consumers. The concepts were drawn from investment research and analysis primarily using large financial institutions. The evolution of principles which were designed for real people began in the early 1970’s. Real people differ from financial institutions in three primary ways:  real people live in houses; real people pay taxes; and real people die. These three realities render much of traditional investment and financial theory (which works well in an institutional environment) inadequate when applied to personal financial planning issues.

Endogenous/Exogenous

Identifies financial issues which are within the control of individuals (such as savings and spending) versus those not in the control of individuals and therefore speculative (e.g. interest rates and stock market performance). This distinguishes good financial habits from speculative market timing.

Money Personality

This utilizes the fear vs. greed dichotomy which are the basic emotions attributable to investor motivation to take financial risk, so clients can identify the impact of their personal investment style.

Risk Analysis

This concept differentiates ‘risk tolerance’ widely used to measure the amount of pain an individual can presumably endure without changing course, and ‘risk analysis’ which analyses the amount of risk which is appropriate in an individual’s specific situation. Risk analysis is designed for advisors to open the conversation to discuss how much investment risk is appropriate for a client in the context of other risks and responsibilities in an individual’s current situation.

Goal Setting

Integrates realistic objectives, timetables, and means with the outcome anchored with visualization exercise.

Financial Lifecycle

Benchmarks personal financial progress with appropriate earning and wealth ratios which are common to specific age ranges and investment portfolio development.

Functional Asset Allocation

Provides a framework for establishing an investment method incorporating a balanced approach using interest earning investments (to provide ongoing liquidity), leveraged real estate investments for personal use (as well as possible investments), and functional diversification of equities to provide long-term growth.

Asset Location Strategy

Incorporating the optimum tax treatment for each asset class to minimize income tax exposure within an individual’s investment portfolio, focusing on best use of tax deferred accounts, real estate leverage and unique tax advantages to reduce current taxes and future capital gains, as well as structuring equity investments to maximize qualified dividends and capital gains and shield highest expected returns with Roth IRA’s.

 

 

 

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*Winners appearing on this page do not pay a fee to be considered or to win the Five Star Award. Professionals with a digital profile have paid a promotional fee.
The Five Star Wealth Manager award, administered by Crescendo Business Services, LLC (dba Five Star Professional), is based on 10 objective criteria. Eligibility criteria – required: 1. Credentialed as a registered investment adviser or a registered investment adviser representative; 2. Actively licensed as a registered investment adviser or as a principal of a registered investment adviser firm for a minimum of 5 years; 3. Favorable regulatory and complaint history review (As defined by Five Star Professional, the wealth manager has not; A. Been subject to a regulatory action that resulted in a license being suspended or revoked, or payment of a fine; B. Had more than a total of three settled or pending complaints filed against them and/or a total of five settled, pending, dismissed or denied complaints with any regulatory authority or Five Star Professional’s consumer complaint process. Unfavorable feedback may have been discovered through a check of complaints registered with a regulatory authority or complaints registered through Five Star Professional’s consumer complaint process; feedback may not be representative of any one client’s experience; C. Individually contributed to a financial settlement of a customer complaint; D. Filed for personal bankruptcy within the past 11 years; E. Been terminated from a financial services firm within the past 11 years; F. Been convicted of a felony); 4. Fulfilled their firm review based on internal standards; 5. Accepting new clients. Evaluation criteria – considered: 6. One-year client retention rate; 7. Five-year client retention rate; 8. Non-institutional discretionary and/or non-discretionary client assets administered; 9. Number of client households served; 10. Education and professional designations. Wealth managers do not pay a fee to be considered or placed on the final list of Five Star Wealth Managers. Award does not evaluate quality of services provided to clients. Once awarded, wealth managers may purchase additional profile ad space or promotional products. The Five Star award is not indicative of the wealth manager’s future performance. Wealth managers may or may not use discretion in their practice and therefore may not manage their client’s assets. The inclusion of a wealth manager on the Five Star Wealth Manager list should not be construed as an endorsement of the wealth manager by Five Star Professional or this publication. Working with a Five Star Wealth Manager or any wealth manager is no guarantee as to future investment success, nor is there any guarantee that the selected wealth managers will be awarded this accomplishment by Five Star Professional in the future. For more information on the Five Star award and the research/selection methodology, go to fivestarprofessional.com. 2,987 Detroit area wealth managers were considered for the award; 347 (12 percent of candidates) were named 2019 Five Star Wealth Managers. 2018: 3,069 considered, 322 winners; 2017: 1,836 considered, 356 winners; 2016: 1,961 considered, 630 winners; 2015: 2,238 considered, 627 winners; 2014: 3,448 considered, 658 winners; 2013: 2,762 considered, 749 winners; 2012: 2,658 considered, 745 winners.