Subscription Services: A Case Study

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The couple’s financial picture was complex, but at the same time, not outside of what wealth advisors are confronted with every day. Here’s a snapshot:

  • They had one large joint investment account, two 401ks with existing employers, three 401k/403bs with previous employers, two traditional IRAs, one Roth IRA, one 529 plan and nine other investment accounts at three different custodians.
  • They were building a new home for $800,000 and had allocated $400,000 in cash for a down payment and mortgaging the balance.
  • Selling their current home, without an agent, was under consideration.
  • The wife was the larger earner, and it was uncertain whether her disability policy was adequate.
  • While both were maxing out their 401ks, one spouse had recently decided to put half into the Roth 401k, costing them over $4,200 in taxes.
  • The couple has two children and a 529 education fund, but as it was administered outside of their home state, they were not getting the eligible tax deduction.
  • They had gaps in their home auto policies and no umbrella liability coverage.
  • They had not gotten around to implementing wills or trusts.

These circumstances demonstrate how the traditional wealth management model and AUM fee structure are wholly inadequate to address the challenges faced by individuals in families. In the above case study, a wealth advisor could principally be engaged in only the investment accounts. Meanwhile, the clients’ financial concerns extended well beyond investments.