I’ve been thinking a lot about strategies to improve efficiencies in managing client assets. What brought me to this point was the price of oil falling below $70 a barrel. You see, I had exited my oil position several months earlier after the price rose to $71 from $35; it was one of those times to take some profits off the table. Now, I’m considering getting back in. My challenge is doing this for several clients without entering the trades one account at a time. TradePMR, my custodian, offers the capability of creating model portfolios, assigning each account to a model, then buying the new position in each account with a few clicks of a button. A better option may be to create a “basket.” With a basket you can purchase a security for several accounts and each client receives the same price. However, some accounts need 3%, some 4% and some 5%. To facilitate this, I have created three account groups: conservative, moderate, and aggressive. Then, I can create a basket for each account group as they have a different allocation percentage for oil.

The Tax Angle

Another account group I created is entitled “taxable accounts.” At the end of the year, I need to know what the tax ramifications are for each taxable account. For instance, if an account has a $10,000 gain, is there a position I can sell to create a loss and minimize the tax due? The information I need consists of interest and dividends, realized and unrealized capital gains, for the year and whether the gains are short or long term. The bottom line is that I don’t want my clients getting a big tax bill.

My question to you is, how are you managing this process in your practice?

Finance or Pay Cash

I presented an updated financial plan to a client this week. As I wrote last week, the decision is whether to finance or pay cash for a new home. The client has no debt at this time. Financing came out slightly better, but we’ll see what the client decides. The presentation included a Historical Plan Summary with past plan data for comparison purposes and a scenario merger. The merger combines key data for all three scenarios in one consolidated report so the client can easily see how they differ. Again, we’ll see what they decide.

Profits From the Dollar

I also unwound my bearish dollar position this week. This is another example of taking some profits off the table. Who knows, maybe the greenback will stage a comeback, at least temporarily.

Finally, I’d like to wish you all a Merry Christmas and thanks for reading!