The Individual Balance Sheet
Economic (Holistic) Balance Sheet An economic balance sheet builds on the idea of a traditional balance sheet that many readers are likely already well acquainted with. The economic balance sheet pertains to individuals and families and goes beyond physical assets…
Financial Stages of Life
The following segment gives a brief overview of the various economic stages of life a wealth management client will pass through. Wealth managers who have been in business for many years will have a feel for these stages of life…
Relationship among Human Capital, Financial Capital and Economic Networth
$$ \text{Net wealth} = \text{Total Wealth} – \text{Liabilities.} $$ This can be thought of as similar to the fundamental accounting equation, in that: $$ \text{Equity} = \text{Assets} – \text{Liabilities} $$ Only in this case, the fundamental accounting equation pertains to…
Characteristics of Human Capital and Financial Capital
Insurance is a risk transfer mechanism. It is said to reduce the total wealth of the insured, which makes sense, as it represents a kind of amortized payment schedule of the present value of a predetermined risk event. Some risks…
Study Notes for CFA® Level III – Private Wealth Management – offered by AnalystPrep
Reading 7: Overview of Private Wealth Management Los 7 a: Contrast private client and institutional client investment concerns Los 7 b: Discuss information needed in advising private clients Los 7 c: Identify tax considerations affecting a private client's investments Los…
Estate Planning Tools
Various tools exist for the mitigation of wealth transfer taxes. Common tools include: Trusts. Foundations. Life insurance. Companies. This reading will focus on trusts, the various types of trusts commonly used, and their benefits concerning estate planning. Trusts A trust…
Managing and shifting wealth
An estate refers to all the property a person owns or controls. The property in one's estate may consist of financial assets (bank accounts, stocks, bonds, or business interests), tangible personal assets (artwork, collectibles, or vehicles), immovable property (residential real…
Wealth Transfer Planning
Many business owners find it difficult to free up capital that has been tied up in business assets, making liquidity a challenge, and often complicating wealth transfer efforts. Many strategies exist to help alleviate this issue: Initial public offering (IPO)….
A Private Equity Management Strategy for Concentrated Positions
Staged Diversification and Completion Portfolios Staged diversification refers to selling the concentrated position, paying the tax, and reinvesting the proceeds in a diversified portfolio. This is often done over several years and has the advantage of spreading out the tax…
Managing Concentrated Positions in Public Equities
The three main types of concentrated positions include: Public company shares. Private company ownership. Real estate. This learning outcome statement focuses on public equity ownership. There is no singular definition for a concentrated position in public equities. Anything that inhibits…
