Some clients arrive at Fiduciary with stock portfolios which have large allocations to a few stocks with significant, unrealized capital gains. While they understand the benefits of reducing the concentration risk through a more diversified portfolio, they are also concerned about triggering large tax payments from selling the highly appreciated securities.
While Fiduciary maintains a firm-level perspective on what it views as an ideal asset allocation and investments to maximize returns for different levels of expected risk, our approach is customizable for the needs of individual clients, including optimizing tax efficiency.
In situations such as the one described above, we develop a custom investment plan for the client that takes into account their tax exposure, our views on the attractiveness of the specific securities they already own, other securities that can be added to the portfolio to enhance the risk/return profile of their portfolio and other factors. As part of our process we work with the client to determine the best approach that fits their overall life goals and tax planning.