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Goals-Based Wealth Management + Website: An Integrated and Practical Approach to Changing the Structure of Wealth Advisory Practices


Take a more active role in strategic asset allocation

A Practical Guide to Goals-Based Wealth Management is a manual for protecting and growing client wealth in a way that changes both the services and profitability of the firm. Written by a 35-year veteran of international wealth education and analysis, this informative guide explains a new approach to wealth management that allows individuals to take on a more active role in the allocation of their assets. Coverage includes a detailed examination of the goals-based approach, including what works and what needs to be revisited, and a clear, understandable model that allows advisors to help individuals to navigate complex processes. The companion website offers ancillary readings, practice management checklists, and assessments that help readers secure a deep understanding of the key ideas that make goals-based wealth management work.

The goals-based wealth management approach was pioneered in 2002, but has seen a slow evolution and only modest refinements largely due to a lack of wide-scale adoption. This book takes the first steps toward finalizing the approach, by delineating the effective and ineffective aspects of traditional approaches, and proposing changes that could bring better value to practitioners and their clients.

  • Understand the challenges faced by the affluent and wealthy
  • Examine strategic asset allocation and investment policy formulation
  • Learn a model for dealing with the asset allocation process
  • Learn why the structure of the typical advisory firm needs to change

High-net-worth individuals face very specific challenges. A Practical Goals-Based Wealth Management focuses on how those challenges can be overcome while adhering to their goals, incorporating constraints, and working within the individual's frame of reference to drive strategic allocation of their financial assets.

An Integrated and Practical Approach to Changing the Structure of Wealth Advisory Practices




Part 1: The Integrated Wealth Management Challenge

Chapter 1: Many interrelated disciplined

Multiple Sources of Capital

Expanding on the Corporate Analogy

Multiple Interactions

Educating Future Generations and Wealth Transfers

The Make or Buy Decision

The Creation of a Wisdom Council

Summary and Conclusions

Chapter 2: An Example of a Crucial Interaction: Tax-efficiency

The Tax Bite and its Impact on Compound Returns

A New Analysis of Capital Losses

An Expanded Definition of Active Management

Applicability to Both Asset and Security Decisions

Abandoning the Murky Middle – the Barbell Portfolio

The Potential Role and Limits of Derivative Strategies

Summary and Conclusions

Chapter 3: The Need for a Financial Interpreter (Given the Complexity of the Investment Process)

What Makes Markets Work?

Asset Classes, Sub-asset Classes and Strategies

Developing Reasonable Expectations

Performance Analysis and Reporting

Summary and Conclusions

Part 2: Investment Policy Formulation – Goals-Based Allocation

Chapter 4: A Brief Journey through Institutional Theory

Five Important Features of the Typical Institutional Investment Organization

A Quick Detour via Asset Liability Management

Summary and Conclusions

Chapter 5: Mapping Institutional and Individual Issues

The First Crucial Difference

A Second Important Difference

A Different Way of Defining Risk

The Law of Large Numbers


Summary and Conclusions

Chapter 6: Goals-Based Strategic Asset Allocation

The Basic Principle

Initial Theoretical Objections

An Academic Imprimatur

A Few Simple Principles

It Changes Everything

An Interesting Implication

Summary and Conclusions

Part 3: Goals-Based Wealth Management Implementation

Chapter 7: Dealing with the Implications of the Process

Covering a Set Number of Bases

Mapping Asset Classes and Strategies to Goals

Understanding Limitations

Dealing with Client Objections

A Three-phase Process

Summary and Conclusions

Chapter 8: Creating Goals Modules

Developing General Capital Market Expectations

Describing Sufficiently Generic and Specific Goals

Creating Constraints Appropriate to Each Goal

Optimizing the Composition of Each Module

A Possible Example

Summary and Conclusions

Chapter 9: Working to Understand Client Goals and Goal Allocations

Identifying Crucial Initial Client Constraints

Determining Whether Any Constraint Is a Show Stopper

Time Horizon and Required Probability of Success

Settling on the Appropriate Module

Sizing Assets Needed to Meet Each Goal

A Possible Example

Summary and Conclusions

Chapter 10: Finalizing a Goals-based Policy Allocation

Two Possible Approaches

Working from Assets and Modules to a Whole

Description of Deviation Ranges

Our Original Example, Modified and Completed

Summary and Conclusions

Chapter 11: Managing the Portfolio Tactically

The Complexity in the Absence of a Systematic Tool

Introducing the Concept of a Tilt Model

Five Possible Variations on the Same Theme

A Major Pitfall

A Possible Example

Summary and Conclusions

Chapter 12: Portfolio Reporting

The Current Challenge

A Simple Analogy

Adding Taxes Makes Things Even More Complex

Summary and Conclusions

Part 4:  Managing an Advisory Practice (And How that Can Impact the Sustainability of Advisory Firms)

Chapter 13: The Currently Typical Firm Structure

Many Chiefs and Few Indians

The Root of the Challenge

Contrary Examples in the Legal and Medical Fields

A Simple Illustration

Summary and Conclusions

Chapter 14: Teams versus Individuals

Too Many Disciplines for Anyone to Master All of Them Fully

Specialists When Left Alone Lead to Silos

The Crucial Role of the Team Coach

Only One Individual Can Play That Role

Summary and Conclusions

Chapter 15: An Alternative Structure

The Primordial Role of the Advisor

The Missions the Advisor Should Not Accept

The Difference between Must and Does Not Need to Be Tailored

Imagining a Different Firm and Process Architecture

The Kind of Leverage that Can Be Built

Dealing with Objections

A Difficult Decision

Summary and Conclusions


About the Companion Website

About the Author