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Case Study: Advantages of an Independent Financial Advisor Thumbnail

Case Study: Advantages of an Independent Financial Advisor

The case studies presented are real descriptions of actual client relationships. We have protected the identity of the clients by changing names and locations. Given that many of our clients experience similar life events, the case studies are designed to depict the value proposition Simon Quick Advisors brings to the table. Each family we work with is unique. There is no “cookie cutter” set of solutions. We bring our full set of resources to the table to solve, educate, implement, and monitor.


Mr. Brown is a prominent medical entrepreneur that had a long-standing relationship with the private wealth management division of a prestigious investment bank. Over time, he felt his portfolio was becoming disconnected from his investment objectives. There was little discussion with his advisor regarding issues of risk and liquidity. Most of the calls he received were to pitch him on the latest fund sponsored by the investment bank. He conveyed a concern that his current advisor lacked objectivity and seemed more interested in selling him product as opposed to guiding him to his long-term goals. He set out to identify an independent advisor to provide him with objective advice without the conflicts of interest inherent in the sale of internal investment products.

Key Issues to Solve

• There was no strategic plan in place for the portfolio. The client was heavily weighted in illiquid partnerships.

• There were a series of future capital calls to be met.

• The risk characteristics of the portfolio were well in excess of the client’s objectives.

• Portfolio performance was not reported on the brokerage account statement.

• The client needed a thorough, independent third party evaluation of the portfolio.

Our Approach

We started by deconstructing the portfolio into asset classes, illustrating the current allocation percentages for the client. We examined the offering documents for each of the partnerships to understand the objectives and risk characteristics of each illiquid investment, focusing especially on the use of leverage inside the investments. We sent the municipal bond portion of the portfolio to one of our advisors to evaluate credit risk and interest rate sensitivity. We evaluated each of the underlying equity managers, conducting both quantitative and qualitative due diligence. Our team built a cash flow and liquidity spreadsheet, taking into account future capital calls, partnership distributions, redemption dates, interest, and dividends. We compiled this information into a detailed report to serve as a foundation for a discussion about restructuring the portfolio. After presenting the report, we worked with Mr. Brown to build a holistic investment policy statement to govern the management of his assets. We built a five-year rebalancing timeline that realigned the portfolio with his risk tolerance and liquidity needs. We hired an outside manager to oversee the fixed income portfolio, adjusting credit quality and maturities to a more conservative posture. We restructured his equity portfolio, aimed at improving diversification and increasing dividend income. Mr. Brown, who in the past had struggled with the aggregation of his many different accounts, now receives a quarterly report from Simon Quick outlining performance for each of his investments and underlying managers, including those held with outside custodians.

Please Note: The above hypothetical case study is offered to illustrate the benefits that Simon Quick Advisors’ customized approach can provide. Please note that actual client experience could vary, and there can be no assurance that Simon Quick Advisors will be able to deliver the same type of results referenced in the case study. The scope of any financial planning and consulting services to be provided depends upon the terms of the engagement, and the specific request and needs of the client. Simon Quick Advisors does not serve as an attorney or insurance agent. Simon Quick Advisors does not prepare estate-planning documents or sell insurance products.