Investment Management
Whether you have existing investment needs or require a full portfolio construction, Dalewood Wealth Management will monitor and manage your investment with prudence and diligence. As a Registered Investment Advisor, we take our fiduciary responsibility seriously.
How will DWM invest my money?
Every investor’s needs will be different. This is not a controversial statement but makes this a tricky question. At a very high level, the investment evaluation and selection process will follow these steps:
Needs: We will start by evaluating what goals, obligations, and uncertainties exist for you in both the long and short term.
Existing Investments: It’s not uncommon for investment professionals to onboard new clients, only to sell and reinvest within their own model portfolio. DWM does not believe management value comes from completely reinventing the wheel but from thoughtful modifications and rebalancing when appropriate.
Asset Allocation Model Selection: Many of our clients will have their investment needs met using one of our curated model portfolios. These diversified portfolios have been selected to minimize costs and emphasize risk-adjusted returns. The particular models will be selected based on the aforementioned needs assessment as well as an evaluation of existing assets.
Customization: Model portfolios aren’t going to cut it for everyone. Sometimes investment needs are far more complicated than a simple ratio of stocks to bonds. The advantage of being a small RIA: flexibility.
Some factors that might necessitate more in-depth investment selection:
-Short-term liquidity needs
-Income or Estate Tax considerations
-Ethical or religious convictions
-High risk aversion
-Seeking alternatives to equity and fixed income
-Preference for individual stocks and bonds over funds
Where will my money be held?
We are part of the Charles Schwab Advisor Services system, meaning your investments will be “housed” with Charles Schwab. Charles Schwab is the largest brokerage firm in the world with over $9.57 trillion in assets under management (as of July 2024). If you have questions about the safety of your funds under Schwab, please visit their this page on their website for additional information.
By being granted discretionary authority over your Charles Schwab account, Dalewood Wealth Management will be able to monitor and manage your investments. We can also assist with distributions, money transfers, and tax withholding on distributions.
How much does investment management cost?
Dalewood Wealth Management is a fee-only Registered Investment Advisor. We are paid a percentage fee based on the amount of money being held under our management. Our goal is to keep fees as low as possible without compromising the quality of service. For a breakdown of our pricing, please see page 7 of our ADV Part 2A.
In addition to the advisory fee charged by DWM, it’s crucial to note that nearly all funds (i.e. ETFs, Mutual Funds, etc.) come with a commission (or sales load) and/or an annual expense ratio. Fortunately, many large brokerage firms like Charles Schwab have eliminated commissions for most online transactions; however, it’s still important to be mindful of funds’ built in annual expenses. The difference of a few basis points in annual fee can make a big difference in the long run, so it’s important to weigh this carefully when we make investment selections.
If you still have questions about how our pricing works or the general pricing conventions in the investment industry, please get it in touch! For additional information on how management fees might impact your investment portfolio, please follow this link from the SEC’s Office of Investor Education and Advocacy.
Why do I need someone else to manage my investments?
You don’t necessarily. Investing isn’t rocket science. If you’re investing for a common goal such as retirement or education, there are ample resources online to help you invest appropriately. That said, there’s also an ocean of dated and/or less-than-sound investment advice on the internet.
In our view, the crux of whether or not to manage your own investments comes down to three primary considerations: (1) your foundational understanding of how investments work and when they’re used; (2) the ability/desire to thoroughly research investment strategies and selection; and (3) the time and energy to monitor and rebalance your portfolio over time.
Consider the following questions when deciding whether you want to manage your own portfolio:
Does your portfolio emphasize absolute return or risk adjusted return? Given your goals and financial situation, which is more appropriate?
How is the market capitalization in your portfolio balanced? For example, if your money is in a fund that tracks the S&P 500—which is almost entirely large-cap—how can you add more mid and small cap to the mix? How much should you add?
What is the average expense ratio of your portfolio and is the expense ratio of each holding appropriate? (You know that fancy Artificial-Intelligence-Fueled-Biomedicine-Space-Exploration Specialty fund you’ve been holding onto for years??? You might be surprised how much you’re paying to hold it.)
Does your portfolio emphasize value or growth, and how will that impact your long-term goals?
For municipal bonds, have you calculated the after-tax return on other fixed-income investments? For example, are taxable corporate bonds providing better yield than munis even after accounting for taxes?
If interest rates are expected to rise, how will you modify the average duration of your bond holdings?
What else do I get with that annual fee?
If you are an investment management client, you have the option to go through the full financial planning process at no additional cost. We will meet annually to review and update the plan. Also, as the tricky financial questions of life arise, you will have a professional to consult with as needed. For example: We’re thinking about buying this home, can you run an analysis to see how loan size will affect our future? (In extreme circumstances, DWM may require additional hourly fees for ad hoc planning, but that will be assessed and discussed prior to any services rendered.)
Tax preparation services will be introduced on a limited basis for 2025—with the aim of ramping up each year thereafter. Advantaged pricing will be available to clients who have a certain level of assets under our management. See p. 9 of our ADV Part 2A.