Portfolio Management Services
Marathon Mission® offers ongoing portfolio management services based on the individual goals, objectives, time horizon, and risk tolerance of each client. We create an Investment Policy Statement for each client, which outlines the client’s current situation (income, tax levels, and risk tolerance levels). Portfolio management services include, but are not limited to, the following:
- Investment strategy
- Asset allocation
- Risk tolerance
- Personal investment policy
- Asset selection
- Regular portfolio monitoring
We evaluate the current investments of each client with respect to their risk tolerance levels and time horizon. Risk tolerance levels are documented in the Investment Policy Statement, which is given to each client. We provide discretionary and non-discretionary investment advisory services to clients. The advisory contract established with each client sets forth the discretionary authority for trading. Where investment discretion has been granted, we generally manage the client’s account and make investment decisions on your behalf.
We plan to assure that investment decisions are made in accordance with our fiduciary responsibilities without consideration of our own economic, investment or other financial interests. Our policy is to seek fair and equitable allocation of investment opportunities/transactions (including initial public offerings “IPO’s” with a limited supply) that we identify as being appropriate and prudent.
Pension Consulting Services
We provide advice to pension plans and their trustees in the areas of:
- Identifying investment objectives and restrictions
- Allocating plan assets to various objectives
- Selecting investment choices for plan participants
- Monitoring performance of investments and make recommendations for changes
- Make recommendations for other service providers, such as custodians, administrators and broker dealers
Business owners and plan trustees rely heavily on the expertise of their pension consultant, and are often reluctant to change their 401k/profit sharing plan once it has been established. This is understandable considering plan changes have a direct impact on employees and can be a cause of a short term disruption in productivity. Many trustees don’t have a real sense of the total costs and fees that reside inside the plan, and are often shocked to find out they are paying far more than they thought.
Years ago the 401k/profit sharing plan space was dominated by insurance companies. This was mainly because they were among the few companies that could provide employers with 401k investment choices from multiple fund families. As the years have passed, the landscape has changed. Technology advancements have leveled the playing field to the point where mutual fund companies and broker dealers can now offer the same flexibility at a significantly lower and far more transparent cost.
Insurance companies charge up to .5% or more per year for their record keeping and other costs. In today’s environment new technology exists and is being used by mutual funds and broker dealers to reduce this expense down to a fraction of this cost by tying it to the number of participants and not the overall value of the plan. To combat this growing cost disparity, insurance companies have been adding lower cost index funds to their 401k options in an effort to get the overall average expense ratios down. Unfortunately, this gives the illusion that their plan is lower cost. In many cases the cost of owning these funds inside of an insurance company sponsored 401k is more than double the cost of owning the exact same fund inside a more efficient plan.
If you currently have a pension plan and you have not had a cost analysis done in recent years, it might be a good idea to have an independent evaluation. This is especially true if your plan is currently with an insurance company. Having a firm such as ours look at it removes any bias or potential conflict of interest. We operate as fiduciaries and must legally act in your best interest. This is the same responsibility that plan trustees have with employee participants. There has been considerable press about pension costs and what is reasonable. There is a growing trend of lawsuits brought by employees against companies that have not addressed this and other plan issues.
Financial Planning
Why do we save? Why do we put our hard earned money at risk? For most of us, it is the only way we will ever be able to achieve the goals that we have set for ourselves and our families. The average annual cost of tuition, room and board at a private college in the 2020 academic year was about $53,980.
Here is a link for more information: https://www.collegedata.com/. Education costs have been rising faster than the general inflation rate for years, which makes it even more difficult to save the money needed to cover the costs. As a result, more and more of our children are graduating with insurmountable debt.
If that wasn’t enough, we also need to save money for our retirement. The amount that we need to save to retire makes college look inexpensive. With the exception of government work, most defined benefit plans are gone. We can no longer expect to work at a company for 30 or 40 years and walk away with a guaranteed monthly payment that will allow us to continue our lifestyle. Today, 401k plans are the norm. The onus is on us to save for our retirement. Here is a link to a site where you can learn how much you would need to save on your own to replicate a New York State pension: https://www.empirecenter.org/publications/pension-calculator/.
At Marathon Mission®, we use industry leading software to help us answer the age-old questions of “will I run out of money?”, and “can I afford this?” In recent years we have seen amazing advancements in computing ability and technology in the financial planning field. We can now take into consideration numerous factors such as: federal and state taxes, social security, pensions, investments, inflation, risk tolerance, health care, vacation homes, varying rates of return using portfolio standard deviation, and the list goes on. The result of all of this data crunching and predictive analytics provides a probability analysis that we could only dream about a decade ago.
There are six steps to the financial planning process:
- Establishing and defining the client-planner relationship
- Gathering client data including goals
- Analyzing and evaluating the client’s current financial status
- Developing and presenting recommendations and/or alternatives
- Implementing the recommendations
- Monitoring the recommendations
The main financial planning areas that we focus on are:
- Investment planning
- Retirement planning
- Insurance planning and risk management
- Education planning
- Tax planning
- Estate planning
- Employee benefits planning