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Summit Capital Advisors (Summit) located in (Old Town) Tacoma, WA, provides specially designed Wealth Advisory Services for Soon-To-Be Affluent, Affluent (those individuals that have investment assets of $300,000 to $3,000,000) and Wealthy (those individuals whose investment assets exceed $3,000,000) individuals and their families. These services include the following:
- Investment Management
- Comprehensive Financial Planning
- Retirement Accumulation and Distribution Planning
- Family Estate Planning, Trust Services, and Philanthropic Planning
- Diversification Strategies for High-Equity Concentrations
- Stock Option Exercise Planning
- Income Tax Preparation
Affluent and Wealthy individuals and their families face highly complex wealth advisory needs. Through Summit’s experience and network of financial and legal professionals, we provide value-added guidance and solutions to these various complex financial issues.
TABLE OF CONTENTS
WHAT WE DO
Summit provides Personalized Wealth Advisory Services including Investment Management, Comprehensive Financial Planning, Stock Option Exercise Planning, as well as Income Tax Preparation in a fee-only format. The firm’s objective is to deliver customized and innovative financial advice that is unequaled in terms of quality, from which the client can derive maximum value.
Summit expects to achieve its objective by providing all firm members with extensive, ongoing internal and external education by utilizing leading edge financial information, management, technology, hardware and software, while capitalizing on our extensive national and local networks of other financial professionals and by creating new services not offered by our competitors that are of value to the client.
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INVESTMENT MANAGEMENT SERVICES
Summit offers customized Investment Management Services to individuals and institutions. Investment portfolios are developed to match the client’s return and risk requirements, which are determined by the clients’ completion of a Risk Tolerance Questionnaire, with the guidance of a Summit advisor. Each type of investment portfolio is managed to achieve both short and long-term investment objectives.
INVESTMENT PROCESS
Investment Research:
Summit performs extensive research as to how to structure investment portfolios. Emphasis is placed on developing portfolios that have historically achieved high returns, but with lower than normal risk.
- TD Ameritrade
- Morningstar
- Association of Investment Management & Research
- Various Investment Organizations
Sources of Current and Historic Worldwide Financial Market and Economic Data include:
- Investment Newsletters, Newspapers, Periodicals, Research Publications, and Professional Journals
- Portfolio Managers
Client Education:
Education is very important to us. Summit is dedicated to educating each client about the different investment portfolio types and how they relate to market volatility, time horizons, and investment returns. It is our goal to ensure that the client understands and agrees with our investment philosophy. Furthermore, we assist each client in selecting a risk tolerance level with which they are comfortable. Ultimately, an investment portfolio is designed to meet the client’s objectives.
Performance Evaluation:
Investment management clients receive monthly account statements. These statements details the portfolio performance during the month just ended. While providing much detailed information, these statements are easy to read and understand.
Selection of Portfolio Managers for Multiple Manager Accounts:
At Summit, portfolio managers are selected first, then the investment vehicle. By constantly researching and identifying both the strong and weak characteristics of portfolio managers and their investment process, we are assured that our clients are receiving the highest quality management talent.
In addition to private account management, Summit is recognized for its expertise in selecting mutual funds. Over the years, Summit has developed strong relationships within the mutual fund industry. As a result, Summit is able to leverage these relationships to benefit our clients. Also, our clients are offered on a no-load basis, (also known as load-waived), funds that would otherwise carry a commission load. Furthermore, the institutional funds used by Summit may significantly lower expense ratios.
MUTUAL FUND PORTFOLIOS
Lower Volatility Portfolios:
Our Lower Volatility Portfolios consist of a number of different investment portfolios each designed to meet a specific client need. These portfolios are designed for those investors seeking steady returns, with significantly less volatility than the overall market. To meet this objective, portfolio simulation and quantitative analysis are used to screen potential investment opportunities. Many of the funds selected for this portfolio historically have experienced far less downward movement than the overall market. Our Lower Volatility Portfolios combine traditional funds with non-traditional funds that, when combined, historically have exhibited a weak correlation to the overall market. In each portfolio, every combination of funds is equally-weighted and rebalanced at least annually or when substantial amounts of new monies are added.
Global Asset Allocation Portfolios:
Summit believes that value in the various investment markets is the long-term determinant of asset prices and recognizes that mis-valuations occur regularly, providing opportunity to enhance performance by active management. Summit blends different types of investments having various capitalization sizes (large and small) and investment styles (value and growth) within each asset class. Summit also determines, through the analysis of current and historic worldwide financial market and economic data, which asset classes and investment styles are under-valued, fairly-valued, and over-valued. Summit attempts to capitalize on these mis-valuations by weighting higher percentages of the client’s portfolio to the investments that offer the greatest value.
Part of our global asset allocation investment philosophy is to provide broad diversification by using a variety of different asset classes with low correlations to each other. Low correlations of return between asset classes and investment styles help to mitigate performance volatility, which in turn decreases risk while perhaps increasing return. The major asset classes used in our Global Asset Allocation Portfolios include:
- Short-Term Domestic Debt (Fixed Income - maturities of 4 years or less)
- Long-Term Domestic Debt (Fixed Income - maturities of 4 years or more)
- Long-Term International Debt (Fixed Income - maturities of 4 years or more)
- Domestic Equities
- International Equities
- Real Estate Equities
Ultra-Speculative Portfolio:
Summit’s Ultra-Speculative Portfolio focuses on buying high growth stocks, mutual funds, and to a lesser degree growth stocks that are, in effect, mutual funds. These high growth investments include not only such hot growth areas as the Internet, technology, biotechnology, and telecommunication companies, but also include liquid venture capital, emerging market country companies, small developed country international stocks, and aggressive hedge type investments, among others. We call this option the “Ultra-Speculative Portfolio” because frequently the prices for these securities make little sense based upon traditional valuation methods. When in favor, these securities show a tendency to generate spectacular returns. However, potential losses on some of these securities could approach 60% or even more. Predominantly, we utilize mutual funds as the vehicle to acquire these types of securities, although at times, individual equities are used. The mutual funds used could be diversified funds, sector funds, index funds, and perhaps even leveraged funds. We strongly recommend to our clients that no more than five to ten percent of their portfolios be invested in an Ultra-Speculative Portfolio. Minimum account size is $100,000.
COMPREHENSIVE FINANCIAL PLANNING
INITIAL DEVELOPMENT:
After a client completes an extensive data questionnaire and delivers all relevant financial documents, Summit will develop a comprehensive financial plan. It will address the following areas:
- Preparation of financial statements including federal income tax projections
- Basic finance issues, such as debt structure, liquidity and cash flow issues
- Development of Investment Strategies including hedging and tax-sensitive strategies
- Income Tax Strategy Optimization, including providing alternative financial and legal structures
- Education funding
- Retirement planning as well as accumulation and distribution strategies
- Estate tax reduction analysis and philanthropic decision-making
- Trust Services through one of our independent trust company strategic alliances, if applicable
- Survivor needs analysis
- Risk Management/Asset Protection, including analysis of all insurance coverage
- Stock option exercise strategies, if applicable
RECOMMENDATIONS:
As part of the financial planning process, Summit develops specific recommendations addressing each of the above-listed areas. During this first part of the process, the client will meet with a Summit advisor approximately four to seven times, typically within the first year of the client relationship. Each meeting will vary between one to two hours, depending upon the complexity of the client’s situation.
Once the recommendations are made, Summit will assist in the implementation of the recommendations where possible. A few examples include:
- Assisting with loans, including mortgages and personal loans with private banking departments of banks and, when necessary, introducing a client with commercial loan needs to an appropriate banking officer
- Providing a banker with appropriate financial information to arrange or renew a loan for the client.
- Sending financial information to attorneys so they can prepare the necessary estate documents, including wills, trusts, powers of attorney, health care proxy, and living wills
- Sending tax information to accountants, such as bonus payments and gain and loss information on the sale of securities, etc. in order to prepare the tax return and make appropriate estimated tax payments
- Requesting information on the policy status of life insurance and annuity policies on behalf of the client (This information would include such items as death benefits, cash values, surrender charges, beneficiaries, tax basis, investment return, etc.)
- Requesting the tax basis of securities on behalf of clients
Our objective is not necessarily to reduce the complexity of the client’s financial situation, because sometimes it does make sense to utilize trusts and other strategies to reduce taxes and achieve family friendly objectives. Rather, our goal is to save the client the time and the energy that it takes to manage his/her complex situation, so that they are free to focus more closely on matters that mean the most to them.
ONGOING SERVICE:
During the first twelve months of service, as well as all ensuing years that Summit is retained, the client is entitled to unlimited phone calls, meetings, service, and advice for their retainer fee. For the second and all subsequent years, retainer fees are adjusted, depending on the complexity of the client’s situation. However, if the client has placed the greater of $250,000 of assets under management or at least 50% of all investable assets with Summit, a financial planning retainer fee will not be charged after year one.
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DIVERSIFICATION STRATEGIES FOR HIGH EQUITY CONCENTRATIONS
This service is designed to assist clients who have a large percentage of their net worth in one stock. While the simple solution is to sell the stock and pay the taxes owed, it may not be the most optimal one. There are a number of alternatives that can be utilized to maximize value. However, since many of the strategies are long-term in nature, finding the one most comfortable for the client entails a significant amount of planning around the overall financial goals of the client. Summit will review with each client a myriad of strategies including; gifting to family members, charitable-giving strategies, hedging through the use of puts and calls, also known as equity collars, tax loss harvesting or the transfer of a highly appreciated security into a diversified private equity pool of securities, also known as an exchange fund.
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STOCK OPTION EXERCISE PLANNING
Summit’s Comprehensive Financial Planning service is designed to assist clients with stock options in publicly-traded companies or those in the pre-IPO stage. Stock options come in two varieties – Non-qualified and Qualified. Qualified stock options are more commonly know as Incentive Stock Options or ISOs. The rules differ dramatically for both.
We will discuss the rules for the type of stock options clients have and the types of strategies that can be used to maximize their value to those that hold them.
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RETIREMENT ACCUMULATION AND DISTRIBUTION PLANNING SERVICES
Many of our clients are interested in receiving guidance regarding retirement planning services. They especially want to know how much they need to accumulate, when they can retire, how to spend down their assets in the most tax-efficient manner and finally to properly distribute their assets to their heirs upon their death. Summit’s retirement accumulation and distribution planning services address all these areas and more.
Summit assists each client during this stage of their life in a number of ways including:
• Counseling each client with regard to how to invest and accumulate monies for retirement during their employment years
• Performing extensive retirement calculations both before and during retirement to determine if the clients’ assets will be adequate to live on
• Advising each client as to what assets to spend down
• Guiding each client through the complex regulatory environment as how to distribute these assets from IRA’s and other retirement plans in the most tax-efficient manner
• And finally, facilitating the planning and transfer of the assets to the client’s heirs.
Summit also counsels each client in other retirement matters such as long-term care insurance, residential needs, estate planning issues including documents such as a will, a power of attorney, a health care power of attorney, a living will, and a testamentary letter.
This service is part of the comprehensive financial planning service.
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INCOME TAX PREPARATION
Summit offers income tax preparation assistance to individuals. This is a separate fee service. The areas of service include, but are not limited to, the following:
- Personal federal, state and local income tax preparation
- Calculation of federal, state and local estimated quarterly income tax payments
- Securities cost (tax) basis calculations
- Audit Management
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