How are Client Portfolios Constructed at U.S. Trust?
Traditional asset allocation models can often provide — at best — an imperfect fit for investors. That's why our portfolio construction process starts with a detailed understanding of who you are. This discovery process helps us to get a clear picture of:
- The nature of your assets and your risk profile
- The status of your wealth structuring plan
- Your cash flow needs to meet your lifestyle, wealth transfer goals and debt servicing costs
- The structure of your liabilities and the currency in which they have to be paid
- Your family governance and/or decision-making processes
This information is critical when developing an approach that includes both your clear-cut, quantifiable financial goals and the qualitative goals that financial success will allow you to fund, such as your lifestyle, your philanthropies and your family's pursuits. During this process we also take into account the importance of investor psychology and how it changes during various stages of market activity; why diversification matters more than ever, despite periods when all markets sink or rise; how risk budgeting can help improve returns; budgeting liquidity to help ensure cash flow; and asset location as a way to pursue tax efficiency.
Inherent in this thinking is the understanding that our clients have wealth from a variety of sources. The result of all these factors is an iterative process that creates a strategic asset allocation and portfolio construction plan that aligns with your goals and helps meet your needs over time.