Five Star award winner Christine Isham

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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This award was issued on 5/1/21 by Five Star Professional (FSP) for the time period 08/10/2020 through 03/19/2021. Fee paid for use of marketing materials. Self-completed questionnaire was used for rating. This rating is not related to the quality of the investment advice and based solely on the disclosed criteria. 3260 Detroit-area wealth managers were considered for the award; 274 (8% of candidates) were named 2021 Five Star Wealth Managers. The following prior year statistics use this format: YEAR: # Considered, # Winners, % of candidates, Issued Date, Research Period. 2020: 3105, 284, 9%, 5/1/20, 8/1/19 - 3/20/20; 2019: 2987, 347, 12%, 5/1/19, 8/21/18 - 3/19/19; 2018: 3069, 322, 10%, 5/1/18, 8/30/17 - 3/19/18; 2017: 1836, 356, 19%, 5/1/17, 8/24/16 - 2/24/17; 2016: 1961, 630, 32%, 4/1/16, 10/22/15 - 3/9/16; 2015: 2238, 627, 28%, 5/1/15, 10/22/14 - 3/9/15; 2014: 3448, 658, 19%, 5/1/14, 10/22/13 - 3/9/14; 2013: 2762, 749, 27%, 5/1/13, 10/22/12 - 3/9/13; 2012: 2658, 745, 28%, 5/1/12, 10/22/11 - 3/9/12.

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Wealth managers do not pay a fee to be considered or placed on the final list of Five Star Wealth Managers. The award is based on 10 objective criteria. Eligibility criteria-required: 1. Credentialed as a registered investment adviser (RIA) or a registered investment adviser representative; 2. Actively licensed as a RIA 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 FSP, 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 FSP's consumer complaint process. Unfavorable feedback may have been discovered through a check of complaints registered with a regulatory authority or complaints registered through FSP'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. FSP does not evaluate quality of services provided to clients. The 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 clients' 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 FSP 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 FSP in the future. Visit www.fivestarprofessional.com.