“How to Save an Extra 1% on Your Portfolio”
At True Wealth Advisory Group, we built and utilize a proprietary tool called True Portfolio Cost Analysis to help our clients uncover and ultimately mitigate the three biggest costs of Ultra High Net Worth client portfolios:
- Expense Ratios: Although you typically don’t “see” them, virtually every product in the portfolio, whether a mutual fund, exchange traded fund (ETF), or separate account, has an embedded cost or what is typically referred to as an expense ratio. In our experience, even a quite competitive expense ratio is typically at least 0.50%. At True Wealth Advisory Group, our typical expense ratio is half that: 0.25%. Hence, we often demonstrate a 0.25% expense ratio savings to clients.
- Underperformance: What percentage of U.S. equity managers outperformed their respective benchmarks from 2001-2016? Would you believe that only ~8% did (to see the study click here)? Despite that, most investors have a majority of their equity portfolios in not just expensive, but also (well) underperforming strategies. At True Wealth Advisory Group, we utilize an extremely high proportion of low cost vehicles that very efficiently track the markets. Accordingly, by closing the underperformance gap we typically find 0.25% in portfolio savings for clients.
- Taxes: We find that clients’ advisors very rarely optimize tax-loss harvesting on behalf of their clients. When done professionally and systematically, doing so can add very significant after-tax returns. In this manner, we often find at least 0.50% in portfolio savings for clients.
A typical Ultra High Net Worth client can often add an additional 1% to their annual portfolio return by being incredibly efficient and effective in these three areas.
As a courtesy, we would be happy to perform this analysis for or continue this conversation with you (or someone you know); if that suits you, please click here or simply respond to this email and we will contact you shortly.
True Wealth Advisory Group is registered with Hightower Securities, LLC, member FINRA and SIPC, and with Hightower Advisors, LLC, a registered investment advisor with the SEC. Securities are offered through Hightower Securities, LLC; advisory services are offered through Hightower Advisors, LLC.
This is not an offer to buy or sell securities. No investment process is free of risk, and there is no guarantee that the investment process or the investment opportunities referenced herein will be profitable. Past performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced herein may not be suitable for all investors.
All data and information reference herein are from sources believed to be reliable. Any opinions, news, research, analyses, prices, or other information contained in this research is provided as general market commentary, it does not constitute investment advice. The team and Hightower shall not in any way be liable for claims, and make no expressed or implied representations or warranties as to the accuracy or completeness of the data and other information, or for statements or errors contained in or omissions from the obtained data and information referenced herein. The data and information are provided as of the date referenced. Such data and information are subject to change without notice.
This document was created for informational purposes only; the opinions expressed are solely those of the team and do not represent those of Hightower Advisors, LLC, or any of its affiliates.