Writer: Steve Dinnen
So, just how is your money managed? What do the people you have asked to care and nurture it do to ensure that you can sleep without worrying that a zero or two will fall off your account statement overnight?
Turns out they have a process. You should expect this. It will vary from firm to firm, but to give you an idea of how it should operate, we talked to Jason Gunkel (pictured), chief investment officer at financial planner firm Syverson, Strege & Co. Here’s his explanation of how his West Des Moines firm handles clients.
Syverson Strege is first a planning organization, so they’ll ask new clients a lot of questions about their goals, their timeline, their aversion to – or tolerance of – risk. They deploy software and crunch numbers to size up where you land, or should land, as a conservative, moderate or aggressive investor.
“We try to put as much science behind our portfolio building as is possible,” Gunkel said.
Let’s say all this assessment pegs you as what the firm calls a dynamic moderate investor – you’re willing to accept some risk but don’t want to go too far out on a limb. With that information, Gunkel can build your portfolio. As such an investor, the company divvies your money up among five asset classes of stocks and bonds, then further divides it among nine sub-asset classes, such as developed international stocks and emerging market stocks. As is common with wealth management firms, Syverson Strege assigns the task of finding individual selections to professionals outside money management firms, such as Nuveen or PIMCO.
The universe for this is large – some 25,000 different securities that could be individual securities, exchange-traded funds, bonds or mutual funds. In especially large accounts, the firm can bring into play individual securities.
Gunkel heads a five-man team at Syverson Strege that makes up their investment committee. They meet monthly to measure performance and make any adjustments. Accounts are programmed so that the firm can make changes for an individual, or for a class of investors, or for their entire roster of clients.
Clients and planners meet twice a year and will review portfolio performance at least once. Then they can go home and hopefully get a good night’s rest.
