Investment Management
We manage your investments in accordance with your plan.
That sentence is the whole job, and it means more than it sounds like. Managing money in accordance with your plan means doing the best we can to earn the most return for the amount of risk that's right for you. It also means the benchmark isn't the S&P 500. Sometimes your investments should earn more than that index. Sometimes they should intentionally earn less. It depends on what you actually want out of your life, what assets there are to make it happen, the taxes, and how long each dollar has before you'll need it.
Where it sits
One way in. Then the portfolio, on its own or inside the full relationship.
Every relationship here begins with The Keystone Method: about six months, one flat fee, refundable in full at any point. Invest is one of its six stones, and the other five decide how the portfolio gets built: what the income has to be, which account pays first, what the tax plan needs held in place, what the estate documents say about who the money is for. At the end of it we decide together whether the management continues at all, and in which shape.
Your portfolio managed in accordance with the plan, planning sessions in spring and fall, the plan and tax strategy kept current, a call whenever life moves, and someone to ask about anything involving money.
The same management on the same published schedule, with no minimum and one review a year, for households where, at the end of Keystone, the portfolio is the only job.
Which one fits is decided together at the end of Keystone, once we can both see what your picture needs. Nobody chooses upfront.
Two filters every dollar goes through
So the real answer to "what does investment management mean here" is a description of the process.
Anything you've set aside that you won't spend in the next couple of years should probably be invested, with a few exceptions. Before we decide how, each dollar goes through two filters.
The first filter is your own risk tolerance. Think of it as a spectrum with an infinite number of places to stand between the two ends. The more risk you take, the more return you can expect over time. Landing in the wrong place costs you either way. Too far toward risk and a market downswing scares you into pulling money out at the worst moment. Too far toward caution and you're leaving return on the table, usually for nothing more than a lack of precision. Turn the dial up a little and the same money earns more without keeping you up at night. Finding your spot on that spectrum is the first thing we do together.
The second filter is time horizon: how long these dollars have to live before they're used for something. For someone twenty-five years from retirement, this one's simple. Everything is for retirement and the horizon is as long as it gets. Close to retirement, and in it, it gets nuanced. Some of the money will be spent next spring, some next fall, and some has thirty more years to live. Those dollars can't all be invested the same way.
The tax plan bends this second filter too. If we're doing Roth conversions, we may hold certain assets in place because we're going to pay the conversion tax bill out of other assets, and that changes the horizon on those other assets. This is why the investments get decided at the same table as the plan and the taxes. Pull any one of them out of the room and the other two get worse.
Then the actual managing begins
Once every dollar has been through both filters, there's a second layer of work: managing the underlying investments to earn the best return we can for the risk each portion is allowed to take.
Picture your portfolio as something you can zoom in on. Zoomed all the way out, there's the allocation layer: large-cap U.S. stocks, mid-cap, small-cap, international developed markets, emerging markets, and so on, each with a job. Zoom in on any slice and you're looking at how that slice is actually invested, and there are a few layers to go before you reach the individual funds.
Most of those slices are invested through low-cost index funds. That's a strong bias of ours, because in most asset classes the index is very hard to beat and paying to try isn't worth it. A few asset classes are different. In U.S. small-cap and emerging markets, for example, there's more room for a skilled manager to outperform the index, so we tend to lean toward active management there and hire a strategist for that portion. We pay for strategists where they earn it.
One layer above all of that sits the judgment call that's ours as your advisor: slight tilts. A little overweight to one asset class, a little underweight to another, based on what's happening in the world. Never a bet on the market's direction, and never a reason to abandon the allocation. Small, deliberate leans inside the plan.
Put those layers together and you have an investment thesis for your money, and an ongoing strategy that updates so it's always doing the job it was built to do.
What it includes, and what it leaves out
Investment Management is the portfolio and one review a year. Every dollar stays in accordance with the plan Keystone built: the allocation held, the slices rebalanced as the market moves them, the strategists kept where they earn it and replaced where they stop, and the tilts adjusted as the world changes. The managing runs all year. The review is the meeting: once a year we sit down together and check the portfolio against the plan it was built for, and against anything in your life that has moved.
The planning sessions in spring and fall, the plan and the tax strategy kept current as life changes, and a call whenever something moves belong to Wealth Advisory. For plenty of households the portfolio really is the only job once Keystone is done, and this is the right fit. Above roughly $500,000 in managed assets the two cost the same, so the choice there is about rhythm: one review a year, or the planning kept current through it. If life changes enough that the plan needs reopening, a sale, a death, a move, a new income, moving to Wealth Advisory is one conversation.
Accounts don't all have to move. The fee applies only to what's managed, what moves is decided during Keystone, and an account that stays put, a 401(k) still at work is the usual case, still gets planned around.
If you've managed your own money until now, one more thing is worth saying plainly. You did the saving well. The years ahead are full of decisions you haven't had to make before, which account pays you first, what a pension election should be, how much to convert and when, and those get made inside Keystone, with the portfolio built to serve them. Whether anyone should manage the money after that is a question we answer together at the end, and some people take the system home and keep doing it themselves.
What it costs
The same published schedule, with no minimum.
- The fee
- 1.00% of managed assets a year, on the first $2 million, with lower rates above
- It starts the month your money is managed, usually near the end of Keystone, and it's the whole cost of the management. The only thing alongside it is the expense ratios inside the funds themselves.
Wealth Advisory runs on the same schedule with the planning included, and its fee for the year is the larger of the advisory fee or $5,000, so above roughly $500,000 in managed assets the two cost the same. The full schedule, with the brackets above $2 million, is on the pricing page.
If an advisor manages your money today, this replaces that fee. If you manage it yourself, this is new cost, and the Explore Call is the place to ask whether the work is worth it for you.
Accounts are opened in your name. Securities are offered through Cambridge Investment Research, Inc., a broker-dealer, and advisory services are offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser. Cambridge and Talley Wealth are not affiliated.
Before you decide
Questions people ask.
Bring the rest to the Explore Call.
Why isn't the S&P 500 the benchmark?
Because the S&P 500 is one asset class, large U.S. companies, and your money has more jobs than that. A portfolio built for income next spring should not look like an index fund, and a portfolio for a thirty-year horizon may reasonably hold more risk than the index does. The benchmark is whether the money is doing what the plan needs it to do.
Do I have to do The Keystone Method first?
Yes. Tax, investment, estate, and cash-flow decisions shape one another, and advising on any one of them at a fiduciary level means understanding all of them first. Keystone gets the things you probably need done, done, and builds that whole-picture understanding. A portfolio managed without it would be incomplete work.
Do all of my accounts have to move?
No. The fee applies only to what's managed, what moves is decided during Keystone, and an account that stays put still gets planned around.
What about money I'll need in the next couple of years?
That money mostly shouldn't be invested, or should be invested very conservatively. The time-horizon filter is exactly the tool for it. Near-term dollars are held where a bad year in the market can't reach them.
Do you pick stocks?
No. We choose the allocation, choose how each slice is invested, hire an active strategist where one earns their keep, and apply slight tilts. Individual stock picking isn't part of the job.
Can you manage my 401(k) where I work?
Generally not while you're still contributing to it. We plan around it, and it comes into management when you leave or retire. See retirement planning for how the pieces fit.
Does the $5,000 minimum apply here?
No. The minimum belongs to Wealth Advisory, where the fee for the year is the larger of the advisory fee or $5,000. Investment Management has no minimum, and above roughly $500,000 in managed assets the two cost the same.
Can I have my investments managed without the ongoing planning?
Yes. That's Investment Management: your portfolio managed in accordance with the plan Keystone built, one review a year, on the same published schedule with no minimum. Wealth Advisory adds the planning, with sessions in spring and fall. We decide which fits together at the end of Keystone.
The whole picture, in three numbers
The next conversation
Where to start
An Explore Call. Fifteen minutes, by phone, with the question that's on your mind. If you've managed the money yourself and want to know whether handing it to anyone makes sense, that's a fine question to bring.