In this example, let’s consider a fictional client we’ll call the Evans family. Dr. John, 52, is in private practice, and his wife Nancy, 49, is an engineer with Ford. They have two children. Dr. and Mrs. Evans plan to retire in 15 years. They both have 401k plans where they work now, plus 401k plans from prior employers and $50,000 saved for their children's college in three after-tax mutual funds.

Rebuilding a plan in line with goals

After getting to know their goals, objectives, and risk tolerances, we would put together a plan of action. Our strategies would include the following:

Dr. and Mrs. Evans each roll their old 401k accounts into IRAs that we can independently manage, choosing from top-ranked no-load mutual funds available in the marketplace. We manage their current 401k accounts as well. We review all of their current holdings, then reallocate the entire portfolio in an integrated fashion, choosing from the current 401k options. Each account itself may not be completely diversified, but the overall portfolio certainly is. For instance, the investment choices in John’s 401k plan contain a few great stock funds, but poor bond fund choices. So we may have his 401k account reallocated so that he is 100% invested in various stock funds, then use his IRA and Nancy’s IRA to fill in the gaps in diversification with various types of bond funds and other non-stock alternatives that we select ourselves.

Each quarter we send the family a consolidated statement showing their holdings from all accounts, how they are allocated, and how they are growing (after our fees are deducted) versus an appropriate benchmark. John and Nancy are able to track the growth of their wealth quickly and easily.


We start by reviewing current holdings and researching available options.


We reallocate their portfolios in line with our strategy, considering cost, performance, and tax incentives.


Every quarter, we produce a consolidated statement for Dr. and Mrs. Evans so they can easily track their portfolio’s performance.

Taking care of the whole family

With two kids headed to college in the future and a mortgage to pay off, we help them assess the adequacy of their life-insurance coverage. Although we don’t sell life insurance, we can analyze current coverage and suggest alternatives. Since interest rates have come down significantly since they first bought their home, we also counsel them to refinance their mortgage.

As for the family’s college savings, it turns out that unfortunately the $50,000 in mutual funds was worth $75,000 when they purchased the funds at a high point in the stock market. We explain that they could sell the mutual funds to “harvest the loss” of the $25,000, and use those dollars to lower their future tax bills, while placing the proceeds in the Michigan 529 plan. In the 529 plan, $10,000 of each yearly contribution is deductible from Michigan income taxes (saving $425), and the future earnings will be tax-free if used for higher education expenses anywhere in the country.

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