People’s Financial Advisor Advice Leverages Cambridge’s Tax Driven Functional Asset Allocation
Technology enables middle-income American to benefit from the Cambridge Functional Asset Allocation that guided thousands of families to financial independence over the past 30 years.
Buena Vista, CO, October 13, 2009 --(PR.com)-- People’s Financial Advisor (PFA) www.peoplesfinancialadvisor.com, a leading provider of online fiduciary financial planning services, today unveiled the use of the Cambridge Functional Asset Allocation in its online advice services.
Functional Asset Allocation (FAA) is a model developed for use by personal financial advisors who work with ‘real people’ as opposed to pensions, foundations, and the very wealthy. It includes Real Estate as a legitimate asset category as well as Interest Earning (bonds and cash) and Equities. The model is tax-driven and stresses ‘asset location’ (i.e. qualified or non-qualified accounts).
Mr. Robert Schumann, Chief Advice Officer at People’s Financial Advisor explains: “We call our strategy "Functional Asset Allocation" because, when working with families and individuals, each category serves an important function, or purpose, beyond simple diversification. For example, while Real Estate is recognized as a separate asset class by most money managers, the value of your personal residence is more than a financial calculation. A great deal of your home's value is in your own enjoyment. Likewise, Functional Asset Allocation takes into account the reality that taxes are a driving force in Middle America.”
Functional Asset Allocation is portrayed on a Pyramid instead of a Pie Graph. The multi-dimensional Pyramid has three advantages over a pie graph:
1. Illustrates how individuals build wealth as measured by Net Worth.
2. Portrays All assets including home and personal property.
3. Categorizes All assets by two additional factors of function and lifestyle risk.
Functional Asset Allocation focuses on the annual growth of a client’s ‘total marketable net worth,’ rather than quarterly investment portfolio returns. Each asset category (Interest Earning, Real Estate, and Equities) has specific, distinct functions in a portfolio. When properly balanced, a functional portfolio should protect a client from deflation as well as inflation, and yet enable the portfolio to achieve higher market returns from equities.
Mr. David Ron, Co-Founder & CEO of People’s Financial Advisor said: “Traditional asset allocation models take into account only money that can be invested in the stock market. An integrated financial plan must include people’s home which is most often the largest single financial asset families have.”
Mr. Ron added: “The Functional Asset Allocation model is a great tool that helps people visualize their financial assets in a logical way. The Pyramid illustrates and stresses the need to establish solid “foundations” and build other types of financial assets thereafter.”
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Functional Asset Allocation (FAA) is a model developed for use by personal financial advisors who work with ‘real people’ as opposed to pensions, foundations, and the very wealthy. It includes Real Estate as a legitimate asset category as well as Interest Earning (bonds and cash) and Equities. The model is tax-driven and stresses ‘asset location’ (i.e. qualified or non-qualified accounts).
Mr. Robert Schumann, Chief Advice Officer at People’s Financial Advisor explains: “We call our strategy "Functional Asset Allocation" because, when working with families and individuals, each category serves an important function, or purpose, beyond simple diversification. For example, while Real Estate is recognized as a separate asset class by most money managers, the value of your personal residence is more than a financial calculation. A great deal of your home's value is in your own enjoyment. Likewise, Functional Asset Allocation takes into account the reality that taxes are a driving force in Middle America.”
Functional Asset Allocation is portrayed on a Pyramid instead of a Pie Graph. The multi-dimensional Pyramid has three advantages over a pie graph:
1. Illustrates how individuals build wealth as measured by Net Worth.
2. Portrays All assets including home and personal property.
3. Categorizes All assets by two additional factors of function and lifestyle risk.
Functional Asset Allocation focuses on the annual growth of a client’s ‘total marketable net worth,’ rather than quarterly investment portfolio returns. Each asset category (Interest Earning, Real Estate, and Equities) has specific, distinct functions in a portfolio. When properly balanced, a functional portfolio should protect a client from deflation as well as inflation, and yet enable the portfolio to achieve higher market returns from equities.
Mr. David Ron, Co-Founder & CEO of People’s Financial Advisor said: “Traditional asset allocation models take into account only money that can be invested in the stock market. An integrated financial plan must include people’s home which is most often the largest single financial asset families have.”
Mr. Ron added: “The Functional Asset Allocation model is a great tool that helps people visualize their financial assets in a logical way. The Pyramid illustrates and stresses the need to establish solid “foundations” and build other types of financial assets thereafter.”
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Contact
www.peoplesfinancialadvisor.com
Bob Schumann
(720) 897-7966
http://www.peoplesfinancialadvisor.com
Bob Schumann
(720) 897-7966
http://www.peoplesfinancialadvisor.com
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