By LouAnn Schulfer, AWMA®, AIF®
Accredited Wealth Management AdvisorSM
Accredited Investment Fiduciary®

When we meet with prospective new clients, our process includes a review of their existing accounts and investments.  Coincidently, two of the new couples that I’d met with recently had something glaringly in common within their portfolios that alarmed me as much the first time as it did the second time that I saw it.  All of the investments, from account to account, were the same.

In each case, the clients had multiple accounts.  There were IRAs, ROTH IRAs, non-retirement accounts, and an inherited IRA.  A prudent process would assess the time horizons, liquidity needs, distribution requirements and taxation of each account.  The investments should align with those factors and other objectives specific to each client. An IRA inherited by a non-spouse for example, has distribution requirements mandated by the IRS.  The investment of that account should be friendly to the distribution option elected by the beneficiary. For many people, a ROTH IRA has the longest time horizon in their portfolio, therefore it should be more growth oriented and may not need fully liquid investments.  Non-retirement accounts are subject to annual taxation. In addition to managing for performance, tax strategies can benefit the account owner, particularly those in high tax brackets.

We often refer to investments as “vehicles”, because they can get us from financial point A to financial point B.  Just like the automotive vehicles in our garage, different vehicles are designed to do different things. My SUV is a great daily driver and our vehicle of choice for road trips.  My ’69 Camaro is purely for short bursts of fun and enjoyment. My husband’s truck is perfect for plowing our snow and hauling things. Having three Jeep Grand Cherokees would not make sense just like three identical investments would not make sense in your ROTH IRA, non-retirement account and inherited IRA.  

Review your portfolio.  Just like different vehicles have different purposes, so should the investments within your accounts.  

LouAnn Schulfer is co-owner of Schulfer & Associates, LLC Wealth Management and can be reached at (715) 343-9600 or [email protected].  www.SchulferAndAssociates.com

Securities and advisory services offered through LPL Financial, a Registered Investment Advisor.  Member FINRA/SIPC. 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for an individual.