GUIDING PRINCIPLES
Goal Oriented: Research shows that we are most fulfilled when our resources have a purpose. Effective financial planning starts with goal setting, followed by risk control, and finally by growth objectives.
Client First: Investment advice should avoid conflicts of interest at all costs. Ten Talents Asset Management is fully independent and is not incentivized to sell any investment products. Advisory fees are structured as a percentage of assets so that incentives are aligned between client and advisor for growth. The fiduciary standard underpins everything we do at Ten Talents Asset Management. Put simply, the fiduciary standard means that client interests must be placed ahead of all other concerns.
Communication And Education: Too often, financial decision making resembles crisis management. Having a plan for periods of volatility before the storm hits is crucial. Clients and advisors should be aligned on investment strategy in both good times and bad. Regular communication about markets and investment strategy is a must. Investor education can further improve outcomes. Clients should expect to learn something about investing from their advisors and become better investors themselves along the way.
INVESTMENT PHILOSOPHY & FINANCIAL PLANNING
Investing success is driven by a proper understanding of what matters and what doesn’t. Too often financial advice takes the form of products being sold to clients. Clients who arm themselves with information and work with like-minded advisors will maximize their chances of success.
INVESTMENT PHILOSOPHY
Risk And Asset Allocation: A proper understanding and willingness to take on risk must be put in place before return-seeking objectives. Without a proper risk framework, advisors and clients open themselves up to poor decision making in market downturns. Each portfolio is fine-tuned to the appropriate level of risk using diversified groups of asset classes- foreign and domestic stocks, investment grade and high yield bonds, and cash alternatives.
Costs Matter: Fees directly reduce investment returns and decrease the ability of our portfolios to enjoy compound growth over time. While investors can’t eliminate fees, reducing advisory and fund fess appropriate directly improves returns.
Advisor fees average around 1% of assets under management per year. Ten Talents Asset Management is structured to allow clients direct access to top-tier proven investment strategies without a corporate bureaucracy injecting itself into the financial planning process. Because of this streamlined approach, Ten Talents Asset Management improves on the industry standard fee structure and charges 0.65% of assets.
Fund fees are stacked on top of advisory fees and average over 1% of asset annually. Fund fees, however, can be significantly reduced by focusing on passive index funds. Passive funds charge a fraction of their active counterparts’ fees by simply tracking broadly diversified groups of securities instead of hiring portfolio management teams in search of elusive outperformance.
Research And Data Driven: Each investment in client portfolios and each part of the financial planning process should be rooted in financial research and/or historical market data. Because markets move in cycles, investors can and should apply the lessons of the past. Those lessons include forecasting volatility among different asset classes, setting return targets, understanding the relationships between different investments in the same portfolio, and more.
Decision Making Matters: Buying low and selling high sounds like a great strategy until you have to buy in the middle of a recession or sell when it feels like everyone in the world is printing money in the markets. Markets at their extremes almost always prompt a wave of bad investor behavior. Sticking to the plan at the extreme points often means going against the trend of the markets. However, selling at the bottom is among the most common and most devastating mistakes an investor can make. Poor decision making at market extremes is the most common reason why investors underperform market returns.
Doing The Little Things Right: Effectively implementing a plan, having a clear approach to risk, reducing costs, investing with data, and reducing behavioral errors together will get you 90% of the way there. The remaining 10% is being smart about tax advantaged accounts, trading infrequently and with purpose, and keeping cash balances fully invested.
FINANCIAL PLANNING
Holistic Financial Planning: Sleeping well at night means having a financial plan that gives you confidence in achieving your goals, prepares you for retirement, and efficiently navigates taxes and insurance.
Tax Efficiency: Minimizing taxes is a key contributor towards achieving the goals set out in your financial plan. Our investment strategy is focused on lowering taxes through utilizing tax-efficient ETFs and minimizing trading. Further tax optimization can be realized through a review of your charitable giving and access to capital to meet future liabilities.
Retirement Planning: Everyone wants to retire. Everyone’s retirement looks different. Planning for income needs throughout different stages of life requires a customized approach. We plan for retirement using market history as our guide to ensure clients are prepared to navigate changing life circumstances throughout retirement.
Insurance: The goal of investing is to make the market work for you to realize upside. Insurance protects individuals from life’s downsides. Ensuring clients’ financial plans are adequately prepared for both the upside and downside cases is a key component of financial planning at Ten Talents Asset Management. Insurance policies should focus on cost efficiency and take into account all potential future liabilities.
Client-specific planning needs- Beyond taxes, retirement, and insurance, financial planning at Ten Talents Asset Management can encompass a range of topics as needed for each unique client circumstance. Estate planning, employee benefits analysis, education planning, debt management, charitable giving, and more will be included in your comprehensive financial plan.