Complicated Finances


Mr. E, an investment manager, accumulated $70 million several years ago and decided to manage his own investments with the help of his assistant. He doesn’t, however, have the time to dedicate to monitoring performance. He works with a dozen different investment firms and has several venture capital investments.

Mr. E needs to review his portfolio to determine how his investments are performing in light of recent market conditions. He often has been forced to sell investments to generate cash. He has also made some bad investments along the way and believes he is paying too much in taxes, because his CPA doesn’t fully understand his investment situation. While Mr. E’s attorney has prepared a family partnership, he has never executed the document or funded the partnership. This delay has significant estate tax ramifications. In addition, he has lost at least $2 million from loans he guaranteed for friends without proper documentation.


Tolleson Wealth Management analyzes Mr. E’s complex investment portfolio and roster of money managers. We find that he is too highly concentrated in growth stocks, and that more than half of the managers are consistently underperforming the market. We decide to reallocate a portion of Mr. E’s portfolio to municipal bonds and replace the underperforming managers with two new money managers. At the client’s request, we consolidate all of his accounts with a prime broker and make them accessible over the Internet. He now has a more stable portfolio that is generating the income he needs. He receives quarterly reports detailing the performance of his portfolio and managers, and Tolleson Wealth Management continually monitors the money management firms he hired.

Fully aware of his investment situation, we are able to advise Mr. E on tax savings and handle the planning with his CPA. We help him establish a holding company for his private investments. This allows him to invest more discreetly, and provides a more efficient management structure in addition to tax savings. Tolleson Wealth Management reviews the family partnership with Mr. E and meets with his attorney to implement it. Due to recent changes in tax law, we recommend a change in the strategy that seeks to increase the tax savings.

Mr. E wants his assistant to continue managing his bill paying. Because the process is complex, Tolleson Wealth Management works with his assistant to develop better procedures and implement a different accounting system. We also work with his outside banker and Tolleson Private Bank to ensure that, on future loan guarantees, Mr. E will receive proper documentation and retain proper collateral rights in the event of default.

Mr. E is considering the purchase of an airplane. We can help him determine the best structure for the transaction, procure the necessary insurance, maximize the tax structure, and even find the pilot.

Tolleson Wealth Management and Mr. E speak frequently to keep him up to date on the status of his investments.

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This presentation has been complied by Tolleson Wealth Management (“TWM”). Past performance is no guarantee of future results. No representation is being made that any account will or is likely to achieve profits or losses.  All investments involve risk, including the loss of principal. TWM’s advisory fees are described in Part 2a of our Form ADV. This material has been prepared and is distributed solely for informational purposes only and is not a solicitation or an offer to buy a security or instrument or to participate in any trading strategy. This report may not be reproduced, distributed or transmitted, in whole or part, by any means, without written permission from TWM. If you have any questions regarding this presentation, please contact your TWM representative.