Services

GROWTH TIME ALIGNMENT

At BWM, one of our main phases within Investment Services is working with our clients to achieve a ‘Growth Time Alignment.’ We work with our clients to best understand their current situation, their needs, and their desired outcomes. Through Time Targeted Growth, we seek to improve a client’s probability of reaching a goal by weighting the asset classes that offer the best historical advantage over the client’s time horizon. Thus, we built growth portfolios that use game theory algorithms that seek to improve a client’s probability of reaching a time-based goal.

We create a portfolio customized specifically to meet your unique needs, with the most cost- effective strategy in mind. At BWM, we implement a defined income portfolio in an attempt to match specific investments to a client’s future spending needs. When creating your portfolio, we instrument the following services…

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CASH FLOW MATCHING

We understand that accounts may have unique cash flow needs and may benefit by holding different fixed-maturity securities. Given this, we engineer the portfolio to match the specific cash flows you desire with the fixed-maturity securities.

FLEXIBILITY

We build each client’s portfolio with fixed-maturity securities so that they have the flexibility to change their portfolio as their financial plan evolves. This is in contrast to annuities and other income-producing products that have surrender charges and fees that may restrict your clients.


PRINCIPAL PROTECTION

We believe it is essential to protect the principal for anyone who will rely on their fixed-income investments for spending needs. To deliver predictability, we hold investment-grade fixed maturity securities to maturity, so that you can seek to protect principal investment while generating yield along the way.
When creating a Financial Plan and Income Portfolio that best suits your needs, we take into consideration The Critical Path.

Guiding Portfolios to Last a Lifetime

The Critical Path® is a decision making framework and reporting system that intuitively reflects the progress that an investor’s portfolio is making towards a specific goal or their projected lifetime spending needs. 

Step 1: Collect Financial Planning Information

Since the Critical Path acts as the vehicle to display a portfolio in the context of the financial plan, we first need to collect the core financial planning information. Some pieces of information include: Age
  • Goal and the goal’s time horizon
  • Investable assets
  • Net desired cash flows desired
  • Net desired cash flows to purchase today

Step 2: Test the Plan

Using the financial planning data that you provide, we create the your Critical Path, run a historical audit and provide the historical probabilities of success for the proposed financial plan and investments. By showing investments in the context of the financial plan, the feasibility of your goals are shown in a historically significant manner.

Step 3: Invest to the Financial Plan

Once the Critical Path is constructed, the team begins investing with the goal of delivering a representative portfolio within an Investment Policy Statement.

Step 4: Navigate Market Swings and Plan Changes

After implementing the portfolio, clients receive an annual Critical Path report that shows where they are relative to their Critical Path along with recommendations that are intended to improve the financial plan’s probability of success. We work with you to help make the necessary decisions on your Investment Plan, to best help reach you to your ultimate goals.

BWM Advisor Approach to Investment Advice

Our investment philosophy is rooted in research. Markets are fickle in short periods (1-3 years), but offer great opportunity for the deliberate, patient long term investor.

We do:

  • Seek to use the capital markets in the manner they have worked best historically
  • Seek to add value by building portfolios that target higher expected returns in a cost-effective manner
  • Use a dynamic, market-driven process with a flexible trading strategy
  • Seek to manage the tradeoffs that matter for performance—balancing competing premiums, diversification, and costs
  • Encourage investors to stick to an investment plan exercising patience in the midst of market turbulence and momentum
  • Rebalance. This strategy forces us to methodically sell high (assets that have performed well) and buy low (assets that are out of favor).

We do NOT:

  • Time markets by high trading in and out of holdings in a given year
  • Act as speculative traders
  • Predict the future, even with an informed view.

At BWM we believe that retirement should be considered an absolute goal, rather than a relative one. Pre-retirees seek to retire and stay retired. By prioritizing retirement goals in the planning process, funds can be established to offset retirement risks.

Thus, in the Retirement Planning process, we revolve our practice around the Modern Retirement Theory (MRT). MRT is a comprehensive retirement planning process created by Jason K. Branning, CFP® and M. Ray Grubbs, Ph.D to offer customized solutions for each individual retiree.  The goal of this proprietary process is a retirement plan that is secure, stable, and sustainable for the retiree’s lifetime. 

 

WHAT IS MODERN RETIREMENT THEORY?

MRT Model encompasses the following premises to build a retirement plan: 

Absolute Goal 

Retirement is an absolute goal, not a relative one.

Individualized Focus

Planning and executing retirement funding should focus on individuals rather than historical data or group statistics.

Outlook Ambiguity

MRT acknowledges that future events are always unknowable to individuals.

Income

MRT seeks to provide retirement funding that is simultaneously secure, stable and sustainable. This model is also called the 3-S Income.

Retirement Sheet

Retirement Sheet represents assets or cash flow items that will affect the retiree. Retirement funding should consider how best to utilize an individual’s entire balance sheet, not just his or her portfolio, as well as off balance sheet items like Social Security and pensions.

Funding Priority

A hierarchical priority of retirement funding can be established to offset retirement risk.

At BWM, we utilize this model to help our clients achieve their desired results. By revolving our Retirement Planning practice around MRT, we prioritize goals around the “unknown” – market declines, health events, etc. while also gaining a complete understanding of the “Core 4” foundations: Base Fund, Contingency Fund, Discretionary Fund, Legacy Fund. 

ALIGNING INCOME AND EXPENSES

The MRT process also strives to match Base Expenses with Base Income. Base Income should be stable, secure, and sustainable throughout the retirement horizon. We help our clients build their Base Fund through the following steps: 

  1. Determine Monthly Retirement Expenses.
  2. Determine Social Security timing & strategy.
  3. Match Base Expenses against Base Income & determine income deficit.
  4. Cover deficit by converting assets (IRAs, 401ks, Investment Accounts, etc.) into income producing holdings. Remaining Base Income should be created using bond ladders, annuities (SPIAs, DIAs) or potentially other contractually guaranteed options.
  5. Calculate the Critical Path®.

Our Fees

BWM offers services to new clients with investment assets of at least $500,000 (or total net worth of $1 million). Most often BWM charges an asset-based fee that is billed in arrears quarterly. New clients with at least $1 million in assets managed are assessed an advisory fee of 1%. Request our ADV Part 2 for specific on fees.