Get excellent grades in P3OF test with these Latest Topics and Practice Test

Our Exin P3OF Latest Topics with Test Prep are precise of the P3OF actual test. A total pool of P3OF practice test is kept up with in an information base of inquiries. We add and update new Questions and Answers on the customary reasons for contenders to retain the most current substance.

Exam Code: P3OF Practice exam 2022 by team
P3OF Portfolio, Programme and Project Offices Foundation

Multiple choice examination questions
50 questions per paper with one mark available per question
40 minutes duration
30 marks required to pass (out of 50 available) – 60%
Closed book.

The P3O® certification scheme has been developed to offer two levels of certification, Foundation and Practitioner. AXELOS has accredited PeopleCert as our Examination Institute (EI) and PeopleCert then accredits a network of Accredited Training Organizations (ATOs), including their trainers and course material. The ATOs and accredited trainers offer P3O training courses and examinations.

The purpose of the Foundation certification is to confirm that you have sufficient knowledge and understanding of the P3O guidance to interact effectively with, or act as an informed member of, an office within a P3O model. The Foundation certification is a pre-requisite for the Practitioner certification.

The Portfolio, Programme and Project Offices (P3O®) guidance provides advice, supported by discussion and examples, on how to develop a governance structure that helps optimize an organizations investment in change alongside its Business as Usual work. P3O qualifications are currently offered are two levels: Foundation and Practitioner. The primary purpose of the syllabus is to provide a basis for accreditation of people involved with P3O. It documents the learning outcomes related to the use of P3O and describes the requirements a candidate is expected to fulfil in order to demonstrate that these learning outcomes have been achieved at each qualification level.
The target audience for this document is:
 exam Board
 exam Panel
 APMG Assessment Team
 Accredited Training Organizations
This syllabus informs the design of the exams and provides accredited training organizations with a breakdown of what the exams will assess. Details on the exam structure and content are documented in the P3O Foundation and Practitioner Designs.

The purpose of the Foundation qualification is to confirm that a candidate has sufficient knowledge and understanding of the P3O guidance to interact effectively with, or act as an informed member of, an office within a P3

The candidate should understand the key principles and terminology within the P3O guidance. Specifically the candidate should understand the:
 High-level P3O model and its component offices
 Differences between Portfolio, Programme and Project Management
 Key functions and services of a P3O
 Reasons for establishing a P3O model
 Differences between types of P3O model and the factors that influence selection of the most appropriate model
 Processes to implement or re-energize a P3O
 Tools and techniques used by a P3O
 Purpose and major responsibilities of the defined roles

Level Topic
Key PPM definitions:
1. PPM
2. Portfolio, programme and project
3. Portfolio, programme and project management
4. Business as Usual
What a P3O is:
1. Definition of P3O
2. The potential elements of a P3O model and their definitions Understand key concepts relating to the Overview, Principles of a P3O model and its elements including the Introduction to P3O.
Specifically to identify:
Key concepts of a P3O:
1. The objectives of and differences between portfolios, programmes and projects
2. The objectives of and differences between portfolio, programme and project management and how they help to deliver change The organizational context of P3O:
1. The relationship between Business as Usual, change and PPM
2. How the elements of a P3O model align to portfolio, programme and project lifecycles
How a P3O provides a decision-enabling/deliverysupport model and how each P3O model element helps to deliver change What a P3O is:
1. The relationships between the elements in a P3O model and the organization
2. The objectives and key functions of each P3O model element

Portfolio, Programme and Project Offices Foundation
Exin Portfolio, pdf
Killexams : Exin Portfolio, pdf - BingNews Search results Killexams : Exin Portfolio, pdf - BingNews Killexams : How to Build a PDF Portfolio

Ken White began his writing career in 1972 as a reporter for a local Florida newspaper. With a career in public safety as a police officer, firefighter and emergency manager, his fiction has also been published in magazines such as "Alfred Hitchcock's Mystery Magazine." White studied history and psychology at Mercer University.

Tue, 07 Aug 2018 18:51:00 -0500 en-US text/html
Killexams : How to Diversify Your Portfolio With Alternative Investments

With public markets down in 2022, investors’ interest in alternative investments, or alts, such as hedge funds and private equity, has spiked.

Alts can perform in a fashion uncorrelated to stocks and bonds, offering diversification and the potential to inject positive performance into a plain-vanilla portfolio during times of market strain. Simple 60%-stock/40%-bond portfolios have suffered a brutal pummeling in 2022, as evidenced by the 20% year-to-date decline of the Vanguard Balanced Index fund (ticker: VBIAX), which tracks a 60/40 composite index of the stock and bond markets.

Thu, 29 Sep 2022 06:51:00 -0500 en-US text/html
Killexams : The Benefits of Portfolio Income Insurance

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Tue, 04 Oct 2022 12:00:00 -0500 en text/html
Killexams : 60/40 Portfolios: Down, And Likely To Get Worse
DIY disaster


The late, great John Bogle, founder of Vanguard, did a lot for the retail investor, including creating the concept of the 60/40 portfolio mix. What he couldn't do while he was alive was to stop those investors from turning a good idea that worked for a while into something that would one day stoke over-confidence, and blind investors and financial advisors to the inherent weaknesses the so-called "balanced" portfolio.

Here is the slippery slope that has been that 60/40 mix so far in 2022.

60/40 mix year to date


And below, you can see the annual return for that same mix of 60% S&P 500 (SPX) and 40% Barclays Aggregate Bond Index (BBUSATR), re-balanced annually. It won't take much for 2022 to surpass 2008 as the worst-performing year for 60/40 since 1997.

60/40 annual total returns


What - no more roses and puppy dogs?

While it would be easy to dismiss this year's nearly 20% decline in that asset mix as just a blip on the radar, I'm here to tell you it's not that simple. For balanced investors and the Wall Street machine that has made "60/40" a familiar phrase to many, the reckoning is in progress. And this time, the reason this traditional asset mix has seemingly always turned itself around quickly is no longer likely. The stock market is in bad enough shape, with the S&P 500 again hovering in 20% decline territory. But this time, the bond market is not cooperating to save balanced investors.

Federal Reserve interest rate policy appears to be aimed at breaking the "easy money" era created by ... the Federal Reserve! Unless they do a mea culpa and reverse course on rates soon, bond rates could edge higher for a while longer. That, and the precarious position faced by S&P 500 investors (and stock market investors overall) combine to create a potential no-win situation for the 60/40 crowd.

Complacency - brought to you by your local financial advisor

As someone who has spent three decades in the financial advisory space and experienced it from the inside and out, I think there are some additional worries for 60/40 investors that are not as obvious as falling stock and bond markets. You see, the industry has committed so deeply to the stock/bond allocation concept, and had investors pour so much money into it as a "long-term, set it and forget it" investment mix, pivoting from that position as quickly as they need to in 2022 might be difficult.

That's what happens when you don't see the writing on the wall. After all, the 10-year U.S. Treasury Bond has spent the majority of the past decade under a 3% yield. That means rates had fallen for many years prior, which inflated bond returns so high that they looked like equity returns. I believe many investors, be they clients of financial advisors or self-directed ones, are just getting familiar with the idea that bonds can drop in price significantly, and not recover for years.

This comes at a time when so many investors of my generation, the baby boomers, can least afford to have both parts of their balanced portfolio misfiring at the same time. And what are Wall Street cheerleaders for 60/40 portfolios doing? Some are shoveling "advice" like "just hang in there," "corrections are healthy," and "be a long-term investor." That's like saying french fries are healthy, and that 60-year-olds should ignore the next 10-20 years, while "everything works itself out" in the markets. Hogwash!

Data by YCharts

The chart above shows the history of five-year "rolling" total returns for one of the longest-tenured balanced funds, the Vanguard Balanced Index.

This is indeed a picture that has helped promote complacency. For nearly all of this century, you could invest in a 60/40 mix and usually produce a five-year return of 6%-12%. Only during the Global Financial Crisis did you take a "goose egg" for a five-year period. But remember, this chart does not show a historically overvalued stock market at the same time an inflation-fighting cycle of interest rate levitation is in its early stages. That is what we have now.

Keys to a modern investment allocation

So, if you agree with me that 60/40 and other balanced portfolios are on the outs as a go-to core portfolio, what can you do as an alternative? As someone who has devoted about two decades to solving this inevitable problem for investors, let's start with my "big 3" things you can do to start to turn your 60/40 ship around. Hint: it has nothing to do with changing what's in the 60/40 mix.

Markets are in a "regime change"

It starts with embracing the regime change that is rapidly occurring in financial markets. If you can acknowledge that, you have taken the first step toward giving yourself a fighting chance as markets begin to reward very different behaviors than in the past decade. No longer can you simply buy stocks or an index fund and hold them without taking on historically high risk.

These are not our parents' markets. They are driven in large part by "indifferent" investors: index funds and high-frequency traders. Index funds don't care what they buy and sell. They are simply trading to meet the demands of investors who add or remove assets from their funds. To the astonishment of many investment veterans, index funds have yet to suffer massive outflows. At some point in this cycle, that is likely. And, when that happens, it won't matter what you own if its swept up in a wave of index selling.

High-frequency traders, hedge funds, and the dramatic increase in retail investor day trading is another new factor that can create more friction for 60/40 types than in the past. Market gyrations are being augmented by the increase in investment capital that is more concerned about "scalping" a small price movement than what it is they are trading. This all throws a wrench into the way markets trade.

Here is a picture of what the change in fortune for 60/40 portfolios looks like. The chart below shows the exact return path of DFA Global Allocation 60/40 I (DGSIX), Blackrock 60/40 Target Allocation Institutional (BIGPX), and Vanguard Balanced Index I (VBAIX). These three popular mutual funds all use that "classic" allocation approach, and the chart shows their returns since the market peak on Feb. 19, 2020, as the COVID-19 pandemic began to disrupt our lives.

The total return of all three funds over that 31-month period ranges from about 2%-4%. If you paid an advisor to buy you one of these, you broke even or lost money. And as noted above, this does appear to be anything close to the bottom of this market cycle.

Data by YCharts

The Fed isn't likely to pivot - but you can

I would characterize the current market climate for stocks and bonds as "the end of the beginning." The first eight months can be summarized as follows: the stock market fell, then rallied, but gave back the rally. And it never truly challenged the series of lower lows and lower highs that have occurred in the S&P 500 Index since the top on Jan. 4 of this year.

Meanwhile, bond yields have spiked, particularly at the short end of the yield curve. While there is an argument to be made that rates have gone too far, too fast, the Fed appears committed to stopping inflation from being persistently high at all costs. My chart work tells the same story: Rates can always pull back down temporarily after such a sharp upward move. However, the weight of the evidence from my view is that higher rates, and probably much higher rates, are in store before this cycle ends. In other words, do not expect some Fed "pivot" where they see the economy cracking and step in again to save the day.

Instead, the pivot you should be focused on looks as follows.

Profit from down stock and bond markets

It annoys the heck out of me when I hear big Wall Street pundits say things like "all you can do is raise some cash." I have been using a variety of "bear market" ETFs for many years and stress-tested them thoroughly. The results? I am confident that there is wide variety of moves investors can make in portfolios to defend against bear markets in stocks and bonds, and even exploit sustained market declines for their benefit. I call it "flipping the script." Simply put, if the market is going down all year for this year and perhaps much of next year, why not consider owning ETFs that by their mandate and prospectus, exist to profit from such a scenario?

My suspicion is that the main reason so many investors do not know about these instruments, or don't know how to use them, is that there are too many folks in the advisory industry whose livelihood depends on "set it, forget it, and rebalance quarterly" to continue making a fat living. Seeking Alpha is an ideal place to research and learn to understand an array of "bear market beaters."

Tactical management

As I noted above, the balanced portfolio mix is complicated by the change in the mix of market participants. I can remember back about 25 years ago when I too was a devoted "strategic asset allocator." But tactical management - i.e. rotating more rapidly among different types of ETF sectors, themes, and between offensive and defensive positions - is entering its golden era. The markets simply don't allow you anyone but the very patient and risk-tolerant to invest without regard to short- to intermediate-term market volatility.

60/40 could be a "buy" again, but from what level?

There will reach a point in this market cycle where bond rates are sky-high and showing signs of topping out. That might occur in the vicinity of when the stock market is carving out the lows for this cycle. But rather than count on that happening, as so many investment pros with crossed fingers are currently doing, be proactive in meeting the bear where he lives. After all, he might stay a lot longer than you think. It's one thing to start the next bull cycle with 90 cents of the dollar you started with. It's another to do so with only 70 cents, perhaps much less.

Markets have changed. Change with them.

Don't make the critical error that so many investors in past market cycles have made. Do not just sit there and wait for "the bottom." The last two sustained market declines each saw the S&P 500 fall roughly 50% from peak to trough. And it was years before they even recovered to where they started.

Now, with bonds joining in the festival of red ink, there exists the possibility that the recovery of 60/40 and other balanced portfolio mixes could take much longer than in past recoveries. And to repeat, we are likely at the end of the beginning of this cycle. Sadly, for some investors this was the easy part. The next phase could be the one that takes the existing portfolio storm and turns it into a category 4 hurricane.

The tools are there - learn to use them

There are ways to not only defend but capitalize on whatever happens from here. Investors simply need to avail themselves to the modern tools made available to them, in large part through innovative ETFs that have already been stress-tested in bear markets.

But, above all else, the first step is to acknowledge that this is a regime change in the way markets work. It is a psychological hurdle that some investors will leap over, while others continue in a state of denial. Choose wisely, get educated, and act with conviction. These are not the markets of yesteryear. And your 60/40 portfolio is no longer your friend.

Mon, 26 Sep 2022 09:54:00 -0500 en text/html
Killexams : Model portfolios a drop in the bucket No result found, try new keyword!Drop in the, um, bucket list? The performance of a number of model portfolios that leverage the bucket strategy recently was put under a microscope by Christine Benz, Morningstar’s director of ... Thu, 15 Sep 2022 20:37:00 -0500 text/html Killexams : Do You Have Too Many Stocks In Your Portfolio? How to Tell

SmartAsset: How Many Stocks Should You Hold In a Portfolio?

For most household investors, your portfolio is generally a mix of three main asset classes: stocks, bonds and banking products. By banking products, we mean anything ranging from a savings account to a certificate of deposit that you hold with your depository institution. The balance that investors strike with these products is between growth, stability and liquidity. Simply put: Stocks offer growth but at the expense of volatility, especially over the short term. Bonds offer less growth, but more security and less volatility. And banks offer high security with potentially high liquidity depending on your product, but almost no growth.

With this balance, the first question for most investors is: How many stocks should they own? Let’s break down how heavily invested you should be in stocks when compared with bonds and other security-oriented assets.

If you’re unsure how many stocks to invest in, a financial advisor can help you balance your portfolio. 

Heavy Market Investments, Fewer Individual Equities

When it comes to investing in stocks, you can generally take two approaches:

Funds are portfolios that you invest in, like mutual funds and ETFs. A fund will hold a large number of assets in its portfolio, from a few dozen to potentially hundreds. When you buy shares in the fund, you receive a share in the total performance of that underlying portfolio.

This means that by investing in a stock-oriented fund, you get a share of ownership in all of the stocks that the fund holds. This gives your portfolio the protection of a well-diversified series of investments. Assuming that it has been well built, no one or two companies can tank the fund’s performance as a whole. But that diversification will also dilute any single company’s gains. You don’t risk outsize losses, but you can’t collect outsized returns either.

Buying individual equities means that you have invested in a single company’s stock. For example, instead of buying a technology-oriented mutual fund, which might invest in 50 different companies on the NASDAQ exchange, you would simply buy shares of stock in Apple (AAPL). This has the opposite risk profile of a fund. If the company’s stock price falls, you are exposed to all of those losses. If the stock price does very well like, for example, Apple’s has, you will collect all of that growth.

Financial experts heavily debate just how many individual stocks you should hold in a portfolio in order to strike the best balance between risk and reward. Depending on which research you pull, you can find arguments suggesting that anywhere between 10 and 60 individual stocks will make up a well-diversified series of investments. However, for investors looking for a rule of thumb, we would suggest considering this from a budget-first perspective:

Invest with funds. Achieve diversification by investing in well-balanced mutual funds and ETFs. Find ones that have a good track record of performance and, if you don’t have a good sense of what funds would work for your portfolio, a well-indexed S&P 500 fund is one of the best investments you can make under any condition. Invest in these funds with your long-term money. This is the portion of your portfolio that you can’t afford to lose, and for most investors should represent the majority of their assets.

Speculate with stocks. Your speculation money, the money that you can afford to lose if things go badly, should go into individual equities. Research these companies well and invest based on the fundamentals, not for a quick-hit gain, but don’t be afraid to take some risks. That’s how you can get surprising growth after all.

This approach should leave you with a portfolio that emphasizes well-diversified funds, leavened with a few individual equities.

Importantly, the specific number of equities in your portfolio matters less than the value of your investment. Whether you have bought heavily into one company or spread your money around to 10 or 20 of them, the important factor is that you buy individual equities with speculation capital. You will have already diversified your portfolio with your investment capital, so the exact number of individual equities you buy will be less important.

How to Balance Your Portfolio Over Time

SmartAsset: How Many Stocks Should You Hold In a Portfolio?

The other important question is how you balance stocks as an asset class against safer assets like bonds. Essentially, what should your asset mix be? Financial professionals suggest that investors should build their portfolios on a time-based method. The longer you have to invest, the more aggressive your portfolio should be and the more it should be weighted toward stocks. The less time you have to invest, the more conservative your portfolio should be and the more it should be weighted toward bonds and other safe assets.

Most financial advice places this in the context of retirement savings. For example, say you begin to invest at age 25. It would not be unreasonable for you to have a portfolio with 90% or even 100% stocks. You have the time to take advantage of the stock market’s long-term growth, and the time to let your portfolio recover from any market losses.

As you age, many advisors recommend shifting that balance. So by age 40 you might hold a mix of 70% stocks and 30% bonds. This would let you continue to gain value, while exposing your portfolio to less market volatility because you have less time to regain those losses. By the time you are 65 and nearing retirement, your portfolio may want to have flipped entirely, now reflecting 90% or 100% safe assets and few, if any, stocks.

This is, in general, the prevailing wisdom. However, it’s worth noting that some financial advisors depart from this approach. They recommend, instead, a heavier investment in market-oriented funds for a longer time. Under this approach you would invest heavily in well-indexed mutual funds or ETFs and would maintain this profile for most of your working life, only shifting heavily to safe assets when you’re within five to ten years of retirement.

The logic behind this alternative approach is that, historically, the stock market tends to recover losses within a period of years. Specifically, except for the Great Depression and Great Recession, over the past 100 years the stock market has taken a median 12 to 14 months to recover from strong downturns. As a result, mid-career workers who have invested in the market overall have time to recover their losses and continue gaining value before retirement.

This is not necessarily a widespread theory, but it has traction. Still, it’s important to note that this approach only works for investors who buy and hold long-term assets like index funds. It does not apply to investors who invest significantly in individual equities.

Bottom Line

SmartAsset: How Many Stocks Should You Hold In a Portfolio?

How you balance stocks in your portfolio is a matter of risk tolerance and investing timeline. A good rule of thumb is to buy funds with your investment money and individual stocks with your speculation capital, and to hold more of your portfolio in stocks the longer you have to invest.

Tips for Investing

  • A financial advisor can help you balance a portfolio. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

  • If you don’t have a lot to invest or you’re just starting out, you might want to consider a robo-advisor. Robo-advisors, which are entirely online, offer lower fees and account minimums than traditional financial advisors.

Photo credit: ©, © Studio, ©

The post How Many Stocks Should You Hold In a Portfolio? appeared first on SmartAsset Blog.

Fri, 07 Oct 2022 01:14:00 -0500 en-US text/html
Killexams : Advice industry tilts toward model portfolios as surest path to building scale

As portfolio management becomes increasingly commoditized, the use of model portfolios is seen as the surest way to gain scale at the firm level.

A new report from Cerulli Associates cites the trend toward a planning-oriented service model as “a powerful impetus for the adoption of model portfolios.”

The driving force favoring model portfolios comes down to time management, according to Brad Bruenell, associate analyst at Cerulli.

By his calculations, advisory practices that are customizing portfolios on a per-client basis spend on average 29.5% of their time focused on investment management.

Those firms applying practice-level resources to build a series of custom portfolio models spend on average 18.5% of their time on investment management.

“This saved time can be put toward client-facing activities, which is a particularly important activity, for example, for younger advisers that are focused on asset gathering and building a book of business,” Bruenell said.

While it might seem like a slam dunk to just embrace models either in-house or outsource investment management altogether, nothing is that simple, according to Vance Barse, founder of Your Dedicated Fiduciary.

“From a business management perspective it makes sense to scale the asset management, but when it comes to servicing clients my view is models aren’t necessarily in the client’s best interest when it comes to taxable accounts because that portfolio should be managed unique to each client’s tax profile,” he said. “I don’t know how advisers can scale without model portfolios, but when you consider the extra time and efficiency standpoint, it makes more sense to outsource, and that’s what a lot of advisers do because they’re in the business of gathering assets. Bottom line, financial advisers should be managing taxable accounts.”

Tim Holsworth, president of AHP Financial, also sees a time and place for models and outsourced investment management.

“We’ll develop our own portfolios with ETFs and mutual funds, but when we use individual stocks we tend to go to separate managers,” he said. “I’m a big fan of that for portfolios with $300,000 or more to invest because you typically want $100,000 minimum with each manager.”

Holsworth said clients typically pay about 35 basis points for the separately managed account.

“It’s more efficient, more personal attention, better return overall, and you don’t have to worry about embedded gains and people liquidating and all the problems that come with a fund,” he added.

The Cerulli report acknowledges various levels of investment management outsourcing and in-house model portfolios.

“The effective use of model portfolios can increase adviser efficiencies and service offerings in both maturing and fully mature practices in a variety of ways depending upon the preference of the practice,” Bruenell said. “We anticipate this trend will continue to gain traction among advisers in the future as they seek to Excellerate their scale and service differentiation.”  

Paul Schatz, president of Heritage Capital, said all signs point toward increased use of model portfolios and outsourced asset management. But he isn’t convinced it’s the only way to work with clients.

“The trend is definitely moving towards outsourcing portfolio management because it has totally been commoditized,” he said. “While it’s not free, it’s awfully close. Many or most RIAs and brokers realize they are better at being a financial concierge, cruise director or quarterback than managing the real assets. Offloading this allows advisers to focus on client acquisition, servicing and retention. My sense is that home offices also prefer this from a compliance standpoint. Like most things in the industry, this will continue until there is another sea change and the pendulum swings back.”

Kashif Ahmed, president of American Private Wealth, said simplifying portfolio management is key to being able to focus on the broader business of financial planning.

“The fact is most advisers are pivoting to delivering financial planning, and not just focused on investment management,” he said. “As talented as any adviser is, the reality is they are not as capable at the investment selection, ongoing management and rebalancing as an entity that exists solely for this purpose. There really is no reason for an individual adviser to be doing this.”

Thu, 13 Oct 2022 03:24:00 -0500 en-US text/html
Killexams : Figuring out the tax impact on clients’ portfolios

We hear a lot these days about the need to Excellerate efficiency. Something as small as a leaky faucet or a misadjusted lawn-sprinkler head could have a sizable impact on water usage and bills. With vehicles, the wrong tires or a dirty air filter can decrease fuel efficiency. Similarly, not paying attention to investment taxes over time can have a detrimental impact on a client’s wealth and retirement savings. 

Russell Investments’ 2022 Value of an Advisor survey found that investors in non-tax-managed equity products face significant tax drag. This tax drag is the cost that taxes levy on investment returns and after-tax wealth. Over the five years ending Dec. 31, 2021, investors in non-tax-managed funds lost, on average, 2.14% of their return every year to taxes. As investors and advisers continue to emphasize both the costs and the value of advice, giving up 2.14% annually is nothing to sneeze at.

It’s important to look at how this cost impacts the dollar value of a portfolio. Let’s consider a $1 million investment, invested over 10 years, that generates 7.5% annual return. This investment would eventually grow to $2.06 million. But when you consider the cost of taxes and the 2.14% that is lost annually to tax drag, that $1 million initial investment is now worth $1,840,000 — a difference of almost $220,000. It’s clear that the cost of taxes adds up over time.


Most people don’t enjoy looking at tax documents, so it’s not surprising that this isn’t the first thing advisers and investors consider when it comes to investing. But tax drag is real, and those tax documents are likely to be a treasure trove of information. Saving any portion of that 2.14% tax drag is akin to finding free alpha in the markets.

Start with the Form 1040, and focus on a few key items: interest, dividends and capital gains. Every client situation is different and there’s no hard-and-fast rule on what is just right or too high, but the higher these numbers are, the greater the likelihood an investor is paying more in taxes than they need to.

Take a deeper look to check for the following:

Interest. Is most of the interest tax-exempt? If yes, then the client’s portfolio is more likely to achieve a better after-tax outcome. If most of the interest is taxable, the impact on the investor’s after-tax wealth could be sizable. Interest is taxed as ordinary income and could trigger the net investment income tax, which can generate a tax rate as high as 40.8% on the interest received. In addition, fixed-income funds producing this taxable interest could be generating higher trading activity to achieve a higher total return, which could be adding taxes through realized capital gains. It’s worth digging further if an investment is generating a lot of taxable interest.

Dividends. Not all dividends are created equal. A large portion of dividend-generating stocks pay out what are referred to as “qualified” dividends, which are taxed at a lower capital gains rate. But some stocks only pay out “nonqualified” dividends, which are taxed as ordinary income. The tax impact between these two different types of dividends is sizable and it’s important to analyze the type of dividends that each investment pays out.

Capital Gains. Many investors know that capital gains have a lower applicable tax rate, but few realize that this lower rate only applies to long-term gains. Many investors are unaware of the capital gains they’re realizing in a given year and whether they are long-term or short-term capital gains. A deeper dive into both Form 1040 and Schedule D will help identify the types of gains an investor is paying taxes on and how much.

Looking at a 1040 and identifying which investments are creating excess taxes for clients is only the first step. It’s also important to look at the 1099 forms that fed into the 1040. Every mutual fund and brokerage account is required to send these to investors annually, and from these you can hone in on the source of the tax pain. Once you do that, addressing the problem becomes a simpler exercise.


It’s not just an investor’s assets that advisers should focus on. There are many things that occur as we go through the stages of life and move closer or into retirement that can amplify the cost of taxes due to investments. Consider the following list of seven sources of taxable assets as a way to help guide more meaningful conversations with your clients:
• The sale of real estate
• The sale of a business
• Deferred compensation
• An inheritance
• Insurance proceeds
• Trusts
• Current taxable assets

Investors need good advice, particularly amid today’s volatile markets, especially when it comes to the impact that something as mundane as taxes can have on their portfolios, and their ability to accumulate more meaningful after-tax wealth. A financial advice practice focused on generating better after-tax outcomes and embracing tax management is better positioned to help the high-net-worth clients of today and tomorrow.

Rob Kuharic is director of tax managed solutions at Russell Investments.

Tue, 04 Oct 2022 05:25:00 -0500 en-US text/html
Killexams : How Model Portfolios Can Free Up Advisors' Time

The use of model portfolios can free up time advisor practices spend on portfolio management, according to a new report from Cerulli Associates. Used appropriately, they allow practices to reallocate time toward other highly valuable functions, such as delivery of financial planning services and asset gathering.

Cerulli expects the industry’s gradual and steady transition to a financial planning-oriented service model to be a powerful impetus for the adoption of model portfolios.

For example, advisor groups that create individually tailored portfolios or practice-level custom models — insourcers, according to Cerulli — could significantly reduce their time commitment by switching to model portfolios. Currently, those who create portfolios customized for each client spend 29.5% of their time on investment management, and those who utilize custom models 18.5% of their time. Model portfolio use would allow both groups to reduce that time commitment to less than 10%. 

“This saved time can be put toward client-facing activities, a particularly important activity,” Cerulli associate analyst Brad Bruenell said in a statement. “For example, for younger advisors that are focused on asset gathering and building a book of business.”

Wed, 12 Oct 2022 18:58:00 -0500 en text/html
Killexams : Betterment Launches 4 Crypto Portfolios

Robo-advisor Betterment on Wednesday launched its cryptocurrency offerings — four diversified portfolios branded as Crypto Investing by Betterment.

The digital platform will offer the portfolios, available to retail investors and to financial advisors to make available to their clients, alongside its traditional investing products.

Betterment described the the curated offerings in a press release, noting that the platform features a diversified collection of cryptocurrencies, including Bitcoin and Ethereum, offering broad exposure to the crypto landscape, including decentralized finance and the metaverse.

Offerings includes cryptocurrencies that transact sustainably or those on networks with a path to sustainability, such as Proof of Stake Ethereum, according to Betterment.

“We are excited to introduce a crypto product that helps to simplify this emerging asset class,” said Betterment CEO Sarah Levy. “Expert-built portfolios, coupled with educational content, will guide interested Betterment customers into digital assets. Our aim is to be a trusted partner to our customers and empower them to make crypto a part of their long term investing strategy.”

Wed, 12 Oct 2022 18:58:00 -0500 en text/html
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