Research

Objective Manager Selection

We have yet to find any one firm that can successfully manage assets in all the different asset classes. This is precisely why we rigorously monitor the entire universe of investment managers, selecting those we believe can perform best over the long-term. We strongly feel that those advisors who pick stocks on behalf of clients or use their firm’s own proprietary funds are conflicted and not able to always act in the best interest of their clients. At Independence by Convergent™, we recommend only what is most appropriate for you.

Unconstrained Manager Selection

Traditionally, advisors select managers simply to represent a specific part of the asset allocation. These advisors give the managers strict instructions to stick to their part of the asset allocation for fear of negatively impacting the overall asset allocation. Independence by Convergent™ believes managers should have the freedom to seek opportunities when they see them. We select managers that can also make moves to avoid risks they see without worrying about whether they are tracking exactly to the benchmark.

Asset Allocation – And Location   

Although your overall portfolio should be allocated to match your targeted allocation, each of your individual accounts does not need to look the same. Not all investments are taxed the same way. Interest income is taxed at income tax rates, while stocks are taxed at capital gains tax rates that are much lower than income tax rates. Likewise, not all accounts are taxed the same way. Some accounts are taxable, while others offer either tax-free or tax-deferred growth.

Asset location is the process of putting the investments in the accounts with the goal of maximizing your total return and minimizing your tax liability. In building your recommended portfolio, we need to understand your entire tax situation including: your current tax rates, whether you are subject to AMT, what carry forward losses you have, other sources of income, etc. We evaluate this information to make sure your portfolio is built to maximize tax-free growth and minimize any taxes. Determining your appropriate asset location depends on the taxability of your accounts, your tax rates, the prevailing tax code, and the tax and return profile of the investments in your portfolio.