Investment Advisory Services
Beacon's fee-based investment advisory services are an integral component of our overall goals driven approach to advising our clients. We seek to provide you with returns that are consistent, competitive and reflect your specific objectives.
We work with clients to build an Investment Policy Statement. The Investment Policy Statement (IPS) is a written plan that we create together, to help guide your long-term investment goals. A written investment policy allows you to clearly establish your investment time horizon and goals, your tolerance for risk and the prudence and diversification standards that you want the investment process to maintain. A written investment policy also allows us and you to avoid ad hoc decisions based on short-term market conditions.
Understanding who you are as an investor is the foundation of the Beacon investment process.
The following components are key to our investment philosophy:
Asset Allocation - Beacon uses a sophisticated multi-tiered approach to asset allocation. The initial level of diversification is among the three basic asset classes, which are equities, fixed income investments and cash equivalents. An additional tier of diversification adds alternative investments — such as real estate and inflation hedges — which do not correlate closely with the stock or bond markets. This overall degree of diversification is effective as a strategy to help minimize the two major investment risks — inflation (loss of purchasing power) and volatility (loss of principal).*
Controlling Cost - We believe the cost of your investments is critical in portfolio construction. Portfolios are constructed to represent the asset classes and markets we target at the least expensive cost, relative to fund quality.
Managing Risk - We pay particular attention to mitigating the risk in portfolios. The three main areas that we focus on are volatility, downside risk, and broad, or beta, exposure. We measure these on an individual account level and the overall portfolio for all of our investment advisory clients. As we re-balance portfolios, consideration is given to how certain asset classes will affect the overall volatility and performance of the portfolio.
Impact of Taxes - We construct portfolios with the impact of taxes in mind. We consider the differences between types of accounts that a client may hold: taxable, tax-deferred retirement vehicle, trusts and not-for-profit foundations. Each of these accounts may have differing tax consequences so it is important that a tax strategy exists that takes all of your investments into consideration. We also employ a tax loss harvest strategy when appropriate.
Consider the Big Picture - Your major investment decisions should take into account all other important elements of your finances and your life.
Understanding who you are as an investor is the foundation of the Beacon investment process. The investment process is based on two keys to success:
CONSIDER THE BIG PICTURE. Your major investment decisions should take into account all other important elements of your finances and life.
PUT STRATEGIC BEFORE TACTICAL. Research studies have demonstrated the importance of strategic asset allocation over the long-term. Historically, choosing what percentage of your assets to put in different asset classes (such as equities, fixed income, international or alternatives) has a greater impact on portfolio returns than either market timing or the selection of individual investments.
First, your financial advisor will help you analyze your objectives, time horizon, and risk tolerance using a specialized questionnaire. This will lead to the creation of your customized investment strategy and an asset allocation model reflecting your feedback.
Beacon uses a sophisticated multi-tiered approach to asset allocation. The initial level of diversification is amongst the three most basic asset classes, which areequities, fixed income investments, and cashequivalents. Alternatives add an additional layer of diversification.
For equities, additional diversification is achieved through different market capitalizations (large cap, mid cap, small cap), styles (value, growth, blend), and geographic regions (domestic, international, emerging markets). For fixed income investments, further diversification is gained by maturity, credit quality, industry groups, and geographic regions.
An additional tier of diversification adds alternative investments - such as real estate, commodities, managed futures, and inflation hedges - which do not correlate closely with the stock or bond markets. This additional layer of diversification will help to dampen the volatility of your portfolio and potentially enhance returns.
Splitting your assets among different asset classes may help you weather the storms that are part of the investing cycle. For instance, bonds and cash may add stability and balance to your portfolio while equitities may add growth. Commodities may help to protect you from a significant increase in inflation, while managed futures could help in the event of a significant downturn. A properly balanced portfolio with non-correlated alternatives can help insulate you from severe market fluctuations.
*Asset allocation and diversification do not assure a profit or protect against a loss in a declining market.
Core / Satellite Approach
We believe creating an efficient portfolio means maximizing return for a given level of risk. The strategy behind our Core/Satellite approach to investing is to allocate the major portion of a portfolio's assets to core investments, providing passive exposure to the broad market. The remaining funds are placed in opportunistic satellite investments, where active management skill may measurably improve performance, and alternative investments, which are typically non-correlated to other asset classes. The resulting core/satellite portfolio may keep pace with the broader market averages, while providing the potential to earn better-than-market returns.
The bulk of your investments are in a strategic core set of passively managed ETFs and mutual funds. They are comprised of diversified investments with a clearly defined long-term strategy, the core remains relatively constant and is rebalanced over certain intervals.
Complementing the core, satellite investments help you exploit opportunities that are not reflected in your core portfolio. We work with you to identify and seize investment opportunities that may increase your overall returns and dampen the volatility of your portfolio.
Our success is tied to your success:
Our business model allows us to focus on developing long-term relationships built on personal attention and an understanding of your long-term financial goals and desires.
Our experienced financial advisors work with you to create, update and implement your financial plan and are responsible for your investment success and overall satisfaction with Beacon Financial Partners.
Our experience in corporate and small business benefit consulting can help you achieve a balance between highly competitive benefits program and maintaining the bottom-line results you seek.
25825 Science Park Drive, #110 Cleveland, OH 44122
Tel: (216) 910-1850
Fax: (216) 910-1899