Case Study: Independent Investment Advisor
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SITUATION: Since 2000, a successful independent technology consultant had his retirement investments managed by another investment advisor who acted as investment manager. Every year, the consultant had been informed by this investment advisor that his IRA assets had been doubling every 7 years, but in early 2014, the consultant started to question that premise. He decided to identify an independent advisor to provide him with objective advice without conflicts of interest inherent with the management of his personal assets. Another of our clients introduced the consultant to our firm, and soon after, he engaged with our firm.
SOLUTION: We recommended focusing on metrics and/or performance analytics. Based on historical data metrics enable him to clearly understand how well his investment advisor performed. We would then determine if restructuring of his portfolio would be necessary.
The client agreed with the assessment and gave approval to move forward.
ACTION: Furuya & Co. collected the monthly brokerage custodial statements for the client’s personal IRA accounts since 1999. We reviewed every monthly statement, entering the information into a spreadsheet template (for our cloud-based reporting system).
Upon the completion of the spreadsheet of the historical data, Furuya & Co. uploaded the data into our firm’s cloud-based, graphically-friendly performance reporting system. On a real-time basis, the system presented our client how well his portfolio performed against its benchmark.
RESULTS: The client immediately found the answers he wanted. Since inception, his retirement assets underperformed the comparable benchmark by 100%.
With the client’s input and agreement, Furuya & Co. crafted an Investment Policy Statement (that sets forth the investment objectives, risk profile and general guidelines for investment decisions for his retirement assets.
Since 2016, we were retained as a portfolio strategist and oversight for the consultant’s assets receiving a fixed quarterly fee for our services, which included:
- Implementation and oversight of the Investment Policy Statement
- Oversight – selecting, monitoring and replacing, if necessary – of the third-party investment vehicles and third-party investment managers
- On-going due diligence on existing and potential investments
- Third-party performance reporting
Upon completion, the client had us transfer the funds from his prior investment advisor’s management into less-expensive custodial accounts managed by third-party institutional investment managers.
The case study presented is a real description of an actual client relationship. We have protected the identity of the client and their occupation. Given that many of our clients experience similar life events, the case study is designed to depict the value proposition Furuya & Co. brings to the table. Each client we work with is unique. There is no “cookie cutter” set of solutions. We bring our full set of resources to the table to solve, educate, implement, and monitor.