Valenta Boosts U.S. Northwest Wealth Management Firm's AUM by Over $4M With Expert Planning
Valenta Boosts U.S. Northwest Wealth Management Firm's AUM by Over $4M With Expert Planning
Who We Helped: U.S. Northwest Wealth Management Firm
The client, a prominent wealth management firm in the U.S. Northwest, needed expert help with financial planning and advice for a prospective customer who recently inherited $3 million in assets (including real estate, retirement funds, and brokerage accounts). The customer was dissatisfied with their current financial advisor's communication style and higher AUM fee.
The financial advisor sought Valenta's paraplanning team's expertise to prepare a financial plan showcasing multiple financial scenarios that highlighted the advisor's approach to managing the customer's assets, while providing enough information to help make a well-informed decision regarding real estate assets.
The Challenges
The firm faced key operational and decision-making challenges when onboarding the new high-net-worth customer:
- The client's customer did not know how much to spend on the house.
- The customer did not know how their current portfolio was structured across asset classes.
Customer Goals
Financial Goals Created by Valenta:
- Reallocate assets into a risk-adjusted diversified portfolio.
- Ascertain cash management needs to determine emergency fund requirements.
- Analyze the appropriateness of any credit facilities.
- Determine the correct application of risk transfer using insurance (life, home, auto).
- Assess estate planning requirements to determine how well they align with goals and objectives.
- Create an investment plan to maximize education funding and mitigate taxes.
- Examine retirement plans to ensure that tax buckets are maximized.
- Conduct long-term cash flow planning for retirement funding.
Identifying Inefficiencies
Manual processing, delayed decision loops, and systemic bottlenecks created elevated operational risks, capping volume expansion and shifting critical bandwidth to daily overhead.
Customer Solution & Approach
Valenta's paraplanning (Financial Planning Admin) team started the process with a brainstorming session with the advisor to learn more about the client and customer's financial goals. Valenta conducted meticulous data gathering, scenario modeling, and portfolio analysis:
Data Collection & Analysis
Meticulous data gathering and baseline analysis of financial information was conducted for assets, liabilities, protection, income, and expenses.
Scenario Planning
Scenario planning included comparing strategies for home purchases and rental property income utilization, with research on market conditions and tax implications.
Strategic Financial Planning
Strategic financial planning encompassed education funding, retirement savings optimization, portfolio analysis, recommendations for maximizing returns, and estate planning assistance.
Asset Classes Analyzed:
.webp)
Scenario Modeling & Analysis:
Home Purchase using Savings ($700K)
Purchasing a home using savings of $630,000.
Home Purchase by mortgage ($700K)
Purchasing a home of $700K with a 20% down payment and 80% mortgage (30-year loan at 3.65% IR). Emergency fund $90K. Saving $400K into brokerage at 5.00% return ($20,000/year income).
Home Purchase by mortgage ($1MM)
Purchasing a home of $1MM with a 20% down payment and 80% mortgage ($800K at 3.65% IR). Emergency fund $80K. Saving $350K into brokerage at 5.00% return ($17,500/year income).
Rental Property Sale & Purchase ($1MM & $700K)
Sale of rental properties net of taxes ($1MM). Buying rental property of $1MM receiving $36K/yr rental income (indexed at 2%). Purchasing $700K home on 80% mortgage. $90K emergency fund. Saving $400K into brokerage generating $20,000/year income.
Sell Rental Property to invest proceeds & buy $700K home
Purchasing a $700K home on 80% mortgage (3.65% IR). Having $90K emergency fund. Saving $1.4MM into a brokerage account at 5.00% return generating $70,000/year income.
Key Business Outcomes & Results
COI Partner Connections
Real estate agentTo get the best possible market value for the properties the client plans to sell and buy.
Mortgage BrokerTo get the best possible interest rate quote for the mortgage.
Insurance AgentGet the best quote on Homeowners Insurance (HOI).Key Performance Gains
- A $4 million increase in AUM through comprehensive financial planning and research, increasing our client's income year on year.
- A swift turnaround in delivery of the financial plan within 2 weeks via a streamlined process, surpassing the usual 4 to 6-week timeline.
- The advisor prioritized investment consulting and client communication over financial planning research, freeing up time to focus on higher-value tasks.
- The financial advisor introduced the client to his COI, resulting in high client satisfaction and reciprocal referral potential for future business.
- Success with this client gave our client the confidence to target high-net-worth individuals, backed by Valenta's skilled paraplanning team.
BUSINESS IMPACT & RESULTS SUMMARY
+$4 Million AUM
Increase in Assets Under Management through comprehensive financial planning.
2-Week Turnaround
Swift delivery of financial plan vs standard 4 to 6 weeks.
$5,000 / Yr Savings
Flat rate 0.90% AUM fee and optimized mutual fund investment fees.
3 Weeks Payback
Rapid payback period post-implementation & validation.