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"…we guided her through our comprehensive financial planning process, which Anna agreed was needed to give her the peace of mind that a well-thought out plan can provide."


Anna - Financial Planning & Investment Management Case Study

Learning to take a proactive role in understanding her family’s finances and investments after an unexpected loss.

Anna’s Background

Anna has worked part-time and has been responsible for paying the household bills. However, she is not familiar with their investment assets. Anna has two children, a daughter, Megan Ann, who is a junior in college, and a son, Jack, who is a sophomore in high school.

We worked closely with Anna to address her concerns, questions and issues and took a pro-active approach to guiding her step by step towards a plan that would meet her family’s needs.

How did Foster & Motley Help?

We began by helping her identify and consolidate their multiple investment accounts, including her late husband’s company retirement account. Fewer accounts were easier for Anna to track, and resulted in less mail.

In order to address Anna’s near-term income concerns, we established electronic links between her investment accounts and her bank checking account so that she would have a stream of income to pay bills.

Next, we guided her through our comprehensive financial planning process, which Anna agreed was needed to give her the peace of mind that a well-thought out plan can provide. The financial planning process produced the following results:

  • We created a 5-year outline that identified all of her expenses and the sources of income available to meet those expenses.
  • We assisted Anna and her attorney in updating her estate documents and the re-titling of the investment accounts, so that her children were protected in the event of her death.
  • We assessed Anna’s insurance needs and recommended the appropriate updates.
  • Our team reviewed the family’s college savings accounts and made recommendations geared towards protecting the principal since her son was only 2 years away from attending college.
  • We also conducted a long-term analysis to determine whether Anna would need to work in order to maintain her lifestyle through her retirement years. In Anna’s case, we determined that while she could afford to remain at home while her son completed high school, we recommended that she seek part-time work to best protect her savings.
  • As part of the long-term analysis, we also incorporated tax planning, with the goal of optimizing/minimizing Anna’s taxes.
  • We worked with Anna to identify an optimal mix of stocks and bonds, incorporating her near-term income needs, long-term retirement (growth) needs, as well as her tolerance for market risk.

Our portfolio managers also provided investing advice and solutions to Anna, which included:

  • We worked with Anna to create her Investment Policy Statement, the written document that guides all investing decisions and includes details such as the specific amount of withdrawals needed; the appropriate mix of stocks, bonds, alternatives and real estate, aligned with her tolerance for risk; and any trading restrictions that she might have (such as prohibiting the purchase of tobacco stocks).
  • We helped Anna consolidate her assets at a single custodian and began managing her accounts.
  • Our portfolio advisers continue to work on her account and provide and on-going rebalancing of her investments to conform with her targeted allocation.
  • We meet with Anna every 6 months to review her portfolio, and discuss any changes. During those meetings we stay abreast of all of her income needs and any changes to her risk tolerance. Any significant changes in her situation merit a change in her investment policy statement.
  • In between meetings, Anna also receives detailed quarterly reports from Foster & Motley, which outline all of her investments and their performance. Anna also receives monthly statements from her custodian. The separate reporting from us and the custodian gives Anna peace of mind that her assets were protected from fraudulent activity.

The Case Study is hypothetical in nature, for illustrative purposes only, and should not be considered investment advice. The information is intended to illustrate services available at Foster and Motley, Inc, and is not intended as a testimonial or endorsement of Foster & Motley, Inc. as an investment advisor. The Case Study does not necessarily represent the experiences of other clients, does not reflect actual investment results, nor is a guarantee of future results. The investment strategies discussed are not appropriate for every investor and take into consideration a client’s investment objectives and financial needs. Clients should review with their Foster & Motley, Inc. Financial Advisor the terms, conditions and risks involved with specific services and products.