The Bahnsen Group at Morgan Stanley

Transcription

1 The Bahnsen Group at Morgan Stanley

2 800 Newport Center Drive Suite 500, Newport Beach, California / Main / fax morganstanleyfa.com/thebahnsengroup David.Bahnsent@morganstanley.com

3 The Bahnsen Group Philosophy The Bahnsen Group at Morgan Stanley has built a stellar reputation delivering world-class investment strategies and wealth management experiences. We help affluent investors become, and stay, financially organized, and provide premier services to those who have entrusted us with their financial well-being. The investment approach is driven by a commitment to several investing principles that the team Senior Portfolio Manager, David Bahnsen, has adopted and applied throughout his career in wealth management. These principles include a commitment to the primacy of cash flow in evaluating the relative attractiveness of various investment options. We aim to invest for growth and generate income; but we also want to help produce growthof-income, the element we believe is most frequently ignored by investment professionals. The state of the current market cycle can hardly be described as a secular bull market, and we do not believe clients will be served well with a generic buy and hold approach. We are tactical asset allocators, and we strongly believe in the contrarian approach that seeks to capitalize on market sentiment that moves too far for or against a given investment approach. Our approach is found in the construction of each customized portfolio for every client of our group. We benchmark ourselves against the number zero, believing that clients primarily hire us to help protect their capital throughout a full market cycle. From there, we seek to deliver consistent returns in line with each individual s needs and aspirations not an arbitrary index that has no relevance to that client s financial goals. Finally, we measure our investment success in risk-adjusted terms, seeking to optimize the returns we deliver relative to the risk and volatility we assume. Our focus on dividend growth investing, the emerging markets, and alternative investments are all corner-stones of our investment process. More important, the philosophy of The Bahnsen Group is our passionate commitment to the idea that a successful wealth management strategy comes from knowing our clients, and truly understanding their needs. We are very proud of the services we have delivered to our clients over the years, and strive for continued success in the years and decades to come. The Bahnsen Group 3

4 Our Services The Bahnsen Group at Morgan Stanley views Wealth Management as the combination of Investment Consulting, Advanced Planning, and Relationship Management. These elements represent a list of services we offer to clients as part of our core offering of Advanced Planning work. We integrate these services with our investment process and relationship management work to provide clients a cohesive, holistic experience and financial outcome. Many of these services are done within our highly-specialized network of professionals. retirement planning Lifestyle review and budgeting Risk review Pension and Social Security analysis Retirement income planning Beneficiary review Healthcare & Medicare planning 4 Morgan Stanley

5 Comprehensive Wealth Management executive compensation management family needs planning Concentrated stock services (monetizing, hedging) Stock option strategies Restricted securities (liquidation and risk management alternatives) business succession planning Education planning Planning for support of aging parents Special needs child assessment and planning banking & lending estate planning support Business needs review Cash management and capital needs assessment Business valuation Succession plan documents Succession plan funding insurance & liability management Mortgages Securities-based lending Portfolio Loan account Wills Powers of attorney Healthcare directives Trusts Gifting Charitable giving Asset titling Estate tax funding Family meeting Goal protection: life insurance, long-term care Income protection: disability insurance, business overhead insurance Liability insurance: umbrella coverage, keyman insurance

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7 Meet the Professionals David L. Bahnsen, CFP, CIMA Managing Director Senior Portfolio Manager Wealth Advisor Brian T. Szytel Vice President Portfolio Manager Financial Advisor David directs the Group s investment strategy, portfolio management, and advanced estate planning strategies practice. He holds numerous financial licenses and designations including those of Certified Financial Planner and Certified Investment Management Analyst. Previously with UBS Financial, David joined Morgan Stanley as Senior Vice President in 2007 and has since been promoted to Managing Director. He consistently ranks as one of the firm s top financial advisors and is a member of the firm s exclusive Chairman s Council. David is also active in a number of not-for-profit organizations. He is an active board member of the Lincoln Club of Orange County, a Blackstone Faculty member of the Alliance Defense Fund, and Senior Fellow of Economics and Finance at the Center for Cultural Leadership. On Wall Street: Top 40 Advisors Under 40 (2014) Barron s: America s Top 1,200 Advisors (2014) David.Bahnsen@MorganStanley.com Investment strategy and relationship management for select clients Over 10 years of financial advisory experience including UBS and Citi Smith Barney Bachelor s in Business and Economics, University of California at Santa Barbara Series 7, 66 and 31 securities licenses California Life and Health insurance license Brian.Szytel@MorganStanley.com The Bahnsen Group 7

8 Cynthia M. Holland Client Service Associate Robert E. Graham, CRPS Financial Advisor Kimberlee Davis Financial Advisor Professional Details Over 15 Years of operations and client relations experience Former Senior Managing Associate of the PFM Group Master of Business Administration, Pepperdine University Multiple awards for leadership and client relations Areas of Focus Cindy guides executive group administration, is responsible for all noninvestment operations, and executes our wealth management processes towards cultivating client relationships Professional Details Corporate retirement plan, consultation, analysis and implementation Former Advisor with UBS Financial Services Bachelor s degree in Business, Indiana University Series 7 and 66 securities licenses Chartered Retirement Plans Specialist SM (CRPS ) California Life and Health insurance license Robert.E.Graham@MorganStanley.com Professional Details Over 25 years of corporate legal and finance experience Formerly worked as a Chief Financial Officer, Investment Banker, Corporate Securities Lawyer and Business Consultant Bachelors of Science in Foreign Service, International Finance and Economics, Georgetown University, Washington D.C. Juris Doctor, Georgetown University Law Center, Washington D.C. Series 7 and 66 licenses California Life and Health Insurance License Areas of Focus Financial Planning Kim is a financial advisor overseeing financial planning services for the Group s clients, working with them to create robust and specific financial plans to enable them to achieve their long-term financial goals. She also has her own financial advisory practice providing financial and investment advisory services to affluent individuals and businesses. Kimberlee.Davis@MorganStanley.com Morgan Stanley

9 Deiyadin Pernas Branch Analyst Michelle Y. Leivas Client Service Associate Jacqueline O Hare Client Service Associate Professional Details Four years of honorable service in the United States Air Force Bachelor s degree in Economics from University of California, Berkeley Series 7 and 66 licenses Areas of Focus Deiya focuses on client performance reports, portfolio analysis, navigating and leveraging Morgan Stanley s research and executing trade orders. Deiyadin.Pernas@MorganStanley.com Professional Details Administrative operations Immediate client contact Daily administrative solutions Over 13 years of industry experience, including UBS and Seidler & Co. Group senior member David s assistant Michelle.Leivas@MorganStanley.com Professional Details Over 11 years extensive Morgan Stanley operations background Brian Szytel s assistant Areas of Focus Account Operations Jackie directs client account operations and oversees monthly account operations, check payouts, transfers and journals. Jacqueline.O Hare@MorganStanley.com The Bahnsen Group 9

10 Our Process 7 days 14 days 45 days 90 days discovery meeting investment plan meeting mutual commitment meeting 45-day follow-up meeting regular process meeting Complete discovery process Presentation of investment plan Confirmation of commitment Organization of paperwork and general housekeeping Review of progress and implementation of advanced plan investment plan advanced plan Diagnostic of current situation, our recommendations for moving forward and details on our investing approach Comprehensive evaluation of the entire range of financial needs with our recommendations for moving forward the bahnsen group the professional network professional network meeting Team of carefully selected professionals, each with a high level of knowledge and skill in key financial areas Our team of specialists with the firm applies our expertise to evaluate all aspects of your financial situation and devise appropriate solutions

11 Our Formula WM = IC + AP + RM wealth management = Investment Consulting + Advanced Planning + Relationship Management ic = investment consulting Management of all investment elements to maximize the probability of clients achieving all that is important to them. Portfolio performance analysis Risk evaluation Asset allocation Assessment of impact of costs Assessment of impact of taxes Investment policy plan AP = WE + WT + WP advanced planning = Wealth Enhancement tax mitigation and cash-flow planning + Wealth Transfer transferring wealth effectively; maximizing charitable giving + Wealth Protection risk mitigation, legal structures and transferring risk to insurance company RM = FC + BM relationship management Our Value Add To You = Financial Concierge + Behavior Modification

12 Bahnsen Commitment 1. we promise that the advice we give you will be objective and free of conflict. We cannot promise that the advice will always work out perfectly, but we can promise that our interests will be aligned with yours, and that we will always be driven by what is best for you. 2. WE COMMIT TO BEIng unrelenting in our DRIve FOR information, PERSPECTIve, analysis, and RESEARCH as it pertains to the capital markets, investment strategy, and overall portfolio decisions that we make on your behalf. 3. You HAve a RIGHT TO TOTAL FEE TRAnSPAREnCY showing how we are compensated for the work we do for you, and we promise to explain those fees as clearly and as frequently as you desire. We earn our fees, and never shy away from discussing them. 4. You CAn expect IMMEDIATE RETurn PHOne CALLS and RESPOnSES from the appropriate member of our team handling your request or issue. 5. We ARE COMMITTED TO PROvIDIng PROACTIve COMMunICATIOn, not merely replying to your questions in reasonable time frames, but reaching out frequently to communicate about the work we are doing and issues that we believe warrant attention. 12 Morgan Stanley

13 6. You WILL RECEIve a PERSOnALLY WRITTEn WEEKLY COMMEnTARY FROM DavID BAHnSEn, addressing various conditions in the investment world, and presenting themes and topics that are relevant to you in a manner you can easily understand. 7. You CAn expect a RELATIOnSHIP THAT GOES BEYOnd PORTFOLIO MAnAGEMEnt. We are a full-service wealth management team, and seek to be your comprehensive financial concierge. We encourage you to reach out to any team member with questions about the depth and breadth of the services we provide our clients. 8. We WILL never HOund YOu FOR introductions TO YOur FRIEnDS and FAMILY. We want to earn those introductions with the services we deliver and service we provide. 9. We WILL not ARGue WITH YOu. You may or may not agree with some of the decisions we make, and we will always do our best to communicate our intentions, but we will not argue with you under any circumstances. 10. We work off your implicit trust. We assume our clients will choose to follow our advice because they trust us. We are committed to being good stewards of that trust. The Bahnsen Group 13

14 Bahnsen Principles 1. The fundamental FOundation OF THE RELATIOnship I have with clients is based on trust. I seek to continually earn and maintain that integrity by always telling the pure, unvarnished truth, and in return, ask clients to depend on or rely on me as it pertains to long-term outcomes and strategies for getting to those outcomes. I realize, the basis on which I ask for your loyalty is not the assertion that I will always be right about a given investment decision (and certainly not the timing of one), but rather that I will work tirelessly towards achieving the results I have committed to, and that I have put your interests above all else. 2. One OF THE MOST IMPORTAnt ingredients in the wealth advisory relationship is the plan that serves as its basis. Investment management in and of itself is not an end to itself; it is a means to the end of an agreed upon plan. Clients that utilize our services to their full extent are clients that allow us to produce comprehensive financial and estate strategies, and do our work towards those planning objectives. 3. THE REAL DEFInITIOn OF MOnEY is purchasing power. $1 million, if insufficient to buy a burrito, is not more desirable than $100 that can buy 50 burritos (everyone intuitively should know this). Currency is not money; it is the product used to exchange money. The objective of investing is not to create or preserve a fixed dollar amount; it is to facilitate the adequate ability to purchase what one wants with their funds. Therefore, to ignore inflation in defining risk is financial malpractice. 4. We favor asset allocation when it comes to constructing client portfolios. Meaning, we want to optimally mix stocks, bonds, cash, and a host of various asset classes. We do not believe we can put all of our client money in just stocks, or all of our client money in just bonds, and get the results clients need. While the mix of various assets needs to be determined by the risk tolerance and performance needs of each individual client, we do incorporate an understanding of the long-term benefits equities have provided relative to bonds when it comes to this asset allocation process. 5. PROPERLY DIversified investment STRATEGIES that have expected rates of return which surpass the safe rate (say, a short-term treasury or CD yield) will have volatility. In fact, the expectation for a rate of return higher than the safe rate is a by-product of that volatility. To confuse volatility with risk is a cardinal error, and results in all kinds of investment mistakes. I aim to manage client assets to avoid the permanent erosion of capital, and I even manage client assets to somewhat limit volatility (for psychological reasons). However, I do not manage client assets to eliminate volatility. To do so would also mean eliminating the possibility of a return. 6. THE SHORT-TERM DIRECTIOn of the markets and the relative performance of a given investment in a short-term window cannot be consistently predicted or timed. In fact, any financial plan that requires the consistent and accurate timing and prediction of the short-term direction of the markets is a deeply flawed financial plan. What ought to be controlled within a portfolio is the behavior of the investor (avoidance of the big mistakes, primarily panic and euphoria), as well as valuation and consistent adherence to an investment discipline. We attempt to add value through tactical allocation of assets that is valuation-based, not timing-based. The rest, as they say, is futile 7. SHORT-TERM TIMIng of the markets is not something anyone has ever been able to do consistently. Of course, dumb luck exists, but the odds for such dumb luck with the stock market are much lower than other gambling alternatives. I believe in valuation-based weighting of assets in a client portfolio, but to time an entrance into the stock market or an exit out of the stock market based on my 14 Morgan Stanley

15 perception of how the market may react to a news headline is dramatically outside of my own philosophy and investing world view. I believe current events are unpredictable (by definition).i certainly believe the market s response to current events is REALLY unpredictable. This principle can be summarized as follows: We do not do market timing. 8. THE FEE MY CLIEnTS PAY is for the Wealth Management experience we deliver. We define this as a combination of Investment Management, Advanced Planning, and Relationship Management. We believe the most important component our clients pay us for is the guidance we provide in difficult market periods (which is different than saying we magically make clients immune from difficult market periods). Advising our clients to avoid the big financial mistakes is worth the entire fee as I see it, and then some. This is not to say that the portfolio management, financial planning and client service are not important we obsess over these things. However, the unique value-added will always be in behavior modification. 9. I HAve SEEn MORE MISTAKES made from investors believing that this time it is different than anything else in my career. I do not believe that a permanent destruction of the profit motive (and therefore the capital markets) is coming, and so I do not manage money as if I do. I expect periods of uncertainty, and in fact am grateful for them because they add to the equity risk premium which means they add to the long-term expected return of the equity investor. I believe in staying rational during periods of uncertainty, and not turning short-term volatility into the permanent erosion of capital. Put differently, history is important to my asset management philosophy. 10. At THE end OF THE DAY, I will have various short-term outlooks on the market and I will have various intermediateterm outlooks on the market, but my long-term perspective on the market is, always and forever, an optimistic outlook. This is because I believe in the profit motive, I believe in free markets, and I believe the ability of markets to (eventually) price these things. Ultimately, the progress of human history is to the upside. There were 300 million middle class people around the world in There are over 2 billion today.* Whether it be the ongoing advances in technology, medicine, and innovation, or just the nature of the human spirit itself, I believe in the fundamentals of market advancement as a by-product of the profit system. Therefore, I am a long-term optimist, and I am such, because I am a realist. *Source: Reuters Global Middle Class Report, Dec. 2012

16 Life insurance, disability income insurance, and long-term care insurance are offered through Morgan Stanley Smith Barney LLC s licensed insurance agency affiliates. These products may not be available in all states and are limited to U.S. citizens and permanent resident aliens only. Residential loans are not available in Guam, Puerto Rico and the Virgin Islands. Loans are subject to credit approval. Other restrictions may apply. Morgan Stanley Private Bank, National Association underwriting guidelines will apply. Loans are subject to credit application and loan approval. Rates, terms and programs are subject to change without notice. David L. Bahsen is a Financial Advisor with Morgan Stanley Wealth Management and Portfolio Manager participating in the Morgan Stanley Portfolio Management program. The Portfolio Management program is an investment advisory program in which the client s Financial Advisor invests the client s assets on a discretionary basis in a range of securities. To learn more about the Portfolio Management program, please contact your Morgan Stanley Financial Advisor. The Portfolio Management program is described in the applicable Morgan Stanley Wealth Management ADV Part 2, available at or from your Financial Advisor. Express Credit Line is currently offered through Morgan Stanley Wealth Management LLC. All credit facilities are subject to the underwriting standards and independent approval of Morgan Stanley Wealth Management LLC. The Express CreditLine account is a securities-based loan, which can be risky and is not suitable for all investors: Funds that are drawn cannot be used to purchase, carry or trade in securities, including, without limitation, to repay margin debt, and cannot be deposited into a Morgan Stanley Wealth Management or other brokerage account. Portfolio Loan Accounts are provided by Morgan Stanley Bank, N.A. 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