Our Approach to
Wealth Management
At Marsh Wealth Management, we believe that the cornerstone of successful investing is a well-diversified portfolio that is regularly rebalanced and tuned to your risk tolerance.
Research shows that jumping in and out of the market — sometimes called “active investing” or “timing the market” — simply doesn’t work. The Mid-Year 2023 US SPIVA scorecards showed that “a majority of [active] large-cap managers outperformed in only 3 of the last 23 years.”
That’s why we practice a more “strategic” style of investing based on a few key fundamentals:
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We know that financial markets reward the long-term investor.
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We practice smart diversification by constructing globally diversified portfolios.
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We don’t try to outguess the market. Markets are inherently efficient.
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We resist chasing past performance.
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We separate emotions from investing, knowing that emotions lead to poor decisions.
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We look beyond the daily headlines and keep a long-term perspective.
The Fragile Decade
The five years leading up to retirement and the five years after retirement are known as the Fragile Decade. This is when market downswings can most negatively impact how long your retirement assets will last. Consider this example:
John and Sue retire at age 65 with $500,000 in identical balanced portfolios and plan to withdraw $25,000 annually, adjusted for 3% inflation.
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John retires as the markets go down. He averages an 8% return but runs out of money by age 83.
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Sue retires in a market rally. She averages the same 8%, with her corrections coming in later years. Her portfolio at age 90 is $1.6 million.
Why the disparity? Markets don’t give averages; they give you actual returns that work out to an average. The order in which you earn that average really matters. If the market has a downswing in your Fragile Decade, it can forever change the trajectory of your retirement.
Investment Strategies
The risks inherent in the Fragile Decade underscore the critical nature of retirement income planning. The old way of investing for retirement was to keep a little pile of money at the bank, invest the rest in market, and hope that you have enough to last your lifetime. But that strategy does not account for the potentially devastating impact of market corrections.
Another approach, often used by advisors not well versed in retirement distribution strategies, is to invest by account type, treating IRA’s one way and brokerage accounts another way. But this approach does not manage the sequence of returns risk of market corrections early in retirement.
At Marsh Wealth Management, we use a more sophisticated planning philosophy that helps manage the multiple unknowns of the markets. We segment your money into three different buckets — Now, Soon, and Later — based on your investment time horizon, your risk tolerance, and your income needs.
By structuring your investments according to time and purpose, the Marsh Wealth Management team can help you limit the impact of the inevitable market rollercoaster. Invest more conservatively for assets needed early in retirement. Invest with more growth for assets needed later in retirement.
Diversification is another critical wealth management strategy for limiting market losses. Asset classes — large cap, mid cap, small cap, value, growth, domestic, international, long bonds, short bonds — all have different risk characteristics, and they function differently in different economic environments. A truly diversified portfolio is paramount to managing market swings.
Independent Investment Custodian
Sadly, we’ve all read about investment advisors who bilk unsuspecting retirees out of their life savings. That’s why it’s important to state unequivocally that we do not hold any of your assets. Instead, we use Charles Schwab as an independent custodian for investment accounts we manage on your behalf. They hold over $7 trillion in assets and service almost 34 million accounts. You will receive monthly electronic or paper statements directly from Charles Schwab, and you will have 24/7 online access to your accounts through their online login portal.
The Importance of Working with a Registered Investment Advisor
Marsh Wealth Management is a fiduciary Registered Investment Advisor (RIA). There is an important difference between an RIA and a broker dealer. In the broker dealer world, the advisor works for the “house,” who provides training, supplies marketing support, and pays for their pencils. In return, the advisors use the tools pre-designed to give the house an advantage. This doesn’t mean that they don’t care for their clients’ wellbeing or that they have questionable moral character. They are simply constrained by a set of products pre-approved by their employer as part of a system designed to reward selling rather than providing conflict-free advice. Broker dealers are generally compensated by commissions; legally under the new Regulation BI, they have to recommend products they believe are in your best interest, but it falls short of a full fiduciary duty of care.
In the Registered Investment Advisor world, there is no “house,” and we buy our own pencils. We have unbiased access to virtually all investments, and we use an independent custodian to hold client assets. We are required by law to put our clients’ interests ahead of our own. This is known as the “fiduciary” standard of duty. Since we are paid a flat percentage of assets rather than commissions on trades, we are not incented to churn your account with needless activity. We are also not paid through revenue sharing arrangements with fund families, so we have no incentive to offer one fund family over another. Our flat fee structure effectively puts us on the same side of the table with you. If you grow, we grow.
Our Fee Schedule
We offer fee-only fiduciary management strategies, as a percentage of assets. We do not receive income from trading commissions or 12b-1 mutual fund marketing fees.
Total Assets Under Management
Annual Fee
$200,001 – $500,000
1.0%
$500,001 – $1,000,000
0.9%
$1,000,001 – $3,000,000
0.8%
$3,000,001+
0.55%
This fee covers a breadth of holistic and fully customized wealth management services. In addition to managing your investments, we guide you through tax-planning, Social Security implementation, Medicare review, the IRA Required Distribution process, and more. And of course we check in with you regularly to make sure your wealth management plan is still aligned with your goals.
