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Description of Integrated Wealth Management, 2nd Edition

Newly revised and updated, Jean Brunel's best-selling text on advising high-net-worth portfolio managers is now available.

The guru of wealth management provides you with unique insight into how to make strategic, long-term decisions in the best interests of your clients.

Includes two new chapters on behavioural finance in the strategic asset allocation process; and investing in hedge funds and alternative investments.

Integrated Wealth Management emphasizes how you, the high-net-worth portfolio manager must follow a different set of rules, from your institutional counterparts. The author gives you the "step by step" tools necessary to make long term decisions that will be in the best interest of your clients.

Private wealth management is a new, discrete discipline, and not just a variation on the traditional investment management theme. The factors necessitating this new discipline include taxation, using options and risk strategies, individual cash flow needs and investor psychology. As an investment advisor, you need to challenge conventional wisdom or you will be putting your client's legacy at risk.

Integrated Wealth Management: The New Direction for Portfolio Managers answers such key questions as:

- How do I create "after-tax alpha" for my client?
- How do I define an appropriate asset mix that makes sense over time?
- What are the costs associated with tax-efficiency?
- How do I best define an achievable goal for my client?
- What strategies of the "active versus passive management debate" apply to taxable wealth?
- Am I over-estimating my client's tolerance for risk?
- What can I do to assess volatility for decision-making purposes?
- Why do so many investment theories ignore taxes - and why is that so dangerous?

In Integrated Wealth Management, five major sections address the foundation of a new paradigm for wealth management: opportunities and issues, planning, implementing, supervising, and monitoring a wealth management strategy.

The author, Jean Brunel, CFA is the managing principal of Brunel Associates, a firm offering wealth management consulting services to high-net-worth investors. He is the editor of The Journal of Wealth Management and has participated in various task forces for the Association for Investment Management and Research. A Chartered Financial Analyst, Mr. Brunel has over 25 years experience in investment, including Chief Investment Officer of JP Morgan's Global Private Bank and of U.S. Bancorp's Private Asset Management Group.

The Journal of Wealth Management offers practical and substantive analysis on investment strategies for high-net-worth, taxable portfolios. It provides detailed, comprehensive research from practitioners and academics on the art and science of private portfolio management.

Title Information

ISBN:

9781843742661

Pages:

200 pages

Format:

Paperback

Product Code:

131163

Publisher:

Euromoney Institutional Investor

Published:

01/04/2006

Edition:

2nd Edition

Press and Industry Reviews

Industry praise for the first edition:

"Jean [Brunel], the 'Lewis and Clark' of wealth management - has mapped the territory of asset allocation, tax efficiency, risk, and investment choices with insight and clarity."
- Charlotte B. Beyer, CEO, The Institute for Private Investors

"This ground-breaking and authoritative book will show portfolio managers the route to a more effective wealth management strategy...The author brilliantly discusses the new paradigm of wealth management along with its process and phases....This book is a must for every portfolio and wealth manager looking for 'new direction'."
- Greg N Gregoriou, State University of New York (Plattsburgh), USA

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Contents of Integrated Wealth Management, 2nd Edition

Acknowledgments
The author
Foreword

The foundations of the new paradigm
Introduction: changing the wealth management paradigm
The need for a new paradigm
Formulating the new paradigm
Illustrating the new paradigm
Introducing behavioural finance
Moving to the new paradigm
A road map for this book

1 The wealth management process
The process is iterative
The importance of investment education
The four distinct phases in the wealth management process
Understanding opportunities and issues
Planning a wealth management strategy
Case study: when there is more than one client
Case study: when there are insufficiently clear roles of each family member
Implementing the wealth management plan
Supervising and monitoring progress
Summary and implications

2 Understanding investor psychology
Appreciating that we are dealing with individuals is not a new idea
A historical perspective on behavioural finance
Principles of behavioural finance
Living with the consequences of decisions
Summary and implications for wealth planning

3 Understanding tax efficiency
Defining our terms
The different forms of taxation
Taxes matter
The U.S. tax framework
The costs of being tax-efficient
The mechanics of tax efficiency and time horizon considerations
Static versus dynamic tax efficiency
Summary and implications

4 Five principles of tax efficiency
Challenge conventional wisdom
Volatility may be valuable
Two types of transactions
Focus on the whole portfolio
Portfolio drift is not trivial
Summary and implications

5 Multiple asset locations
Tax codes and multiple accounts
A feasible set of wealth structure
Wealth planning alternatives
Five criteria to evaluate wealth planning solutions
Seven wealth planning management alternatives
An illustrative case study
Dynamic asset location
Sumary and implications

6 A tax-efficient portfolio construction model
Value added and portfolio activity
An alternative design: core and satellite
Summary and implications

Understanding the opportunities and the issues

7 Defining the capital market opportunities
How the past speaks to us
Defining asset classes and strategies
Summary and implications: lessons on risk

8 The need for capital market forecasting
Defining an achievable goal
Reacting to surprises or disappointments
Education
The value added to a systematic process
Forecasting: purpose and inputs
Forecasting: three major principles
Summary and implications

9 Redefining active management
The background: the active/passive debate
The actual performance of active managers
Active tax management
Summary and implications

10 Low-basis stock
Defining the problem
Understanding stock risk
Applying the model to individual circumstances
Reducing a concentrated exposure
Summary and implications

Planning a wealth management strategy

11 Strategic asset allocation: moving beyond the traditional approach
Flaws in the 'efficient frontier' framework
The cost of getting there
The cost of staying there
Summary and implications: adopting multiperiod analysis

12 Goal-based asset allocation - incorporating behavioural finance in the strategic asset allocation process
Behavioural finance findings
Four fundamental goals
Interaction between income and capital preservation
Creating the building blocks
An alternative design
Case study
Periodic portfolio rebalancing
Unintended benefits
Summary and conclusions

13 Integrated wealth planning: investment policy
Starting the process
Investment philosophy
Constraints
Family dynamics and governance
Modelling needs
Applying the iterative process
Discussing governance
Summary and implications
Statement and investment policy

Implementing the wealth management plan

14 The market timing fallacy
Defining market timing
A traditional view of market timing
A different approach
Summary and implications

15 Alternative assets - their roles in balanced portfolios
A highly heterogeneous universe
An important caveat: different return distributions
Non-traditional strategies in different market environments
A 'first cut' solution: simple approach to portfolio optimisation
Has time run out for so-called hedge fund managers?
Methodology
Absolute Return strategies
Trading strategies
Summary and implications

16 Tax-efficient portfolio management
Physical and derivative decision sequences
A global equity management problem
The problem with the traditional investment process
Rethinking the problem
A possible solution: segregating security selection from asset allocation
Summary and implications

17 Tax-efficient security selection
The fundamentals of an investment transaction
An analytical framework
The three-dimensional approach
Fixed-income issues
Summary and implications

18 Style diversification: an impossible challenge?
The traditional pre-tax case
Style timing
Specialist versus generalist analysis
An important caveat
Summary and implications

19 Manager selection and managing multimanager stables
The institutional model
The taxable investor problem
Manager research
Building and administering a manager stable
Summary and implications

The supervising and monitoring process

20 Computing and assessing after-tax returns
Knowing what to ask for
The CFA Institute performance presentation standards
Measuring after-tax performance
Assessing performance
After-tax performance benchmarking
Summary and implications

21 From portfolio manager to wealth manager
The central role of the institutional portfolio or mutual fund manager
A new role: wealth manager
Summary

Bibliography