Client Overview

Client Name: Michael and Sarah Johnson
Age: 46
Marital Status: Married
Annual Income: $185,000
Net Worth: $1,250,000
Investment Horizon: 19 years

Risk Profile

72
Moderately Aggressive
Risk Capacity: High
Loss Tolerance: 25%

Portfolio Summary

Total Portfolio Value $673,831
Domestic Equity 65.5%
International Equity 22.8%
Fixed Income 8.7%
Cash 3.0%

Investment Objectives

Primary Goal: Retirement
Target Annual Return: 8.2%
Target Retirement Value: $3,500,000

Investment Objectives

Asset Allocation Targets

Total: 100%

Rebalancing & Monitoring

Investment Restrictions

Current vs Target Allocation

Domestic Equity
International Equity
Fixed Income
Cash
Alternatives

Allocation Breakdown

Asset Class Current Target Variance
Domestic Equity 65.5% 55.0% +10.5%
International Equity 22.8% 25.0% -2.2%
Fixed Income 8.7% 15.0% -6.3%
Cash 3.0% 3.0% 0.0%
Alternatives 0.0% 2.0% -2.0%

Rebalancing Recommendations

SELL Domestic Equity
$70,752 Reduce overweight position by 10.5%
BUY Fixed Income
$42,451 Increase allocation to target 15.0%
BUY International Equity
$14,824 Increase allocation to target 25.0%
BUY Alternatives
$13,477 Add alternatives allocation per target 2.0%

Tax Efficiency Considerations

Tax-Loss Harvesting Opportunities: Available in VEA position
Estimated Tax Impact: $1,245 in capital gains
Recommended Account Priority: Execute rebalancing in IRA first

INVESTMENT POLICY STATEMENT

Client: Michael and Sarah Johnson Date: May 30, 2024
Advisor: Robert Chen, CFP®, CFA Next Review: November 30, 2024

I. INVESTMENT OBJECTIVES

The primary investment objective is retirement planning with a long-term investment horizon of 19 years. The portfolio aims to achieve a target annual return of 8.2% while maintaining appropriate risk controls consistent with the client's risk tolerance profile.

II. RISK TOLERANCE AND PARAMETERS

The client has been assessed with a Moderately Aggressive risk tolerance with a risk score of 72/100. The client can tolerate potential losses of up to 25% during adverse market conditions. This risk profile supports a growth-oriented investment approach with measured exposure to volatility.

III. ASSET ALLOCATION TARGETS

Domestic Equity: 55%
International Equity: 25%
Fixed Income: 15%
Cash: 3%
Alternatives: 2%

IV. REBALANCING GUIDELINES

The portfolio will be rebalanced quarterly or when any asset class deviates from its target allocation by more than 5%. Rebalancing will prioritize tax efficiency and will be executed first within tax-advantaged accounts when possible.

V. INVESTMENT RESTRICTIONS

The following investment restrictions apply:

  • No individual security position shall exceed 8% of the total portfolio
  • Excluded sectors: Tobacco, Firearms
  • ESG preferences will be considered in investment selection
  • Derivatives usage is not permitted
  • Minimum credit rating for fixed income: A-

VI. PERFORMANCE MONITORING

Portfolio performance will be reviewed quarterly against the benchmark: 60% S&P 500 / 40% Bloomberg Aggregate Bond Index. Performance will be evaluated over rolling 3-year periods with tolerance for short-term variance within ±3% of benchmark returns.

VII. FIDUCIARY ACKNOWLEDGMENT

Summit Wealth Advisors acknowledges its fiduciary responsibility to act in the best interests of the client. This Investment Policy Statement will be reviewed and updated as needed based on changes in client circumstances, market conditions, or investment objectives.

Client Signature
Date: ___________
Advisor Signature
Date: ___________