Hi again Ken,
An interesting question was raised over on the AIM board at Investors Hub that sort of fits with yours. Here it is and my reply:
JD writes -
Emergency Protection
How can I protect my AIM programs in the event of my sudden demise or incapacitation? I want to protect my accounts from possible significant losses in such an emergency. I could engage a financial manager, but I don't like paying as much as 1.5% every year for this protection. Another option is to switch to very conservative funds or ETFs, but this method limits growth. I'd appreciate any comments of references on this matter. Thanks!
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My reply -
Good morning JD, Re: Keeping an AIM portfolio alive into the Future.......
Some of the answer would be dependent upon how the account and positions are currently structured. Is it mostly individual company stocks (your comment would make me think so)? That might make it harder to find a bank trust department, investment advisor or mutual fund family who would be able to step in while maintaining an existing portfolio.
Another question I'll ask is do you have a family member who is also interested in investing who would be willing to take on duties to continue your efforts? Most brokerages will allow you to add someone with limited power of attorney for your account so they can make trades for you. This might solve your problem while affording you the opportunity to teach AIM to another generation. A "Family Office" doesn't need to be a formality, just a convenient arrangement.
I happened to meet four bright and experienced investment advisors who were all approaching the point they no longer wanted to work for one of the big brokerage firms at about the same time. They were looking for a sound fiduciary model for their high net worth clients' core portfolios that would be at least as good as owning an S&P500 Index fund and be more proactive to true market conditions. They wanted to "hang their own shingle" and start an advisory company for their clients, moving them from the big firms to their new RIA. That was in 2000. They saw big storm clouds on the horizon and wanted to reposition their clients before the first raindrops fell. These four were on average about 15 years younger than I and that looked interesting, too.
I was looking at this same question at that time. AIM had done a great job for me, the AIM Users had grown to a healthy group of investors with all sorts of novel ideas but my immediate family was either uninterested or too young to bring on board. I'd been on my own for a very long time and didn't see myself even remotely fitting into the Three Piece Suit world going forward. I liked what I was doing but thoughts of estate planning were on my mind and I realized, like you, there were limited ways for me to address my situation.
It turned out my goals and theirs were running on parallel tracks for slightly different reasons. By satisfying their desire for something new for their clients core positions I was also creating something that satisfied my own requirements for perpetuation of my investment efforts. While there were some delays in seeing all this come together, we eventually, in 2003, had the basics in place. In 2008 we formalized everything with a new investment advisory with a significant portion of total assets under management being monitored basically with Mr. Lichello's AIM concept as the strategy.
Not all of this story will be helpful. I hope you see that others have had to face this dilemma as well. Maybe others will chime in on how they plan on addressing "succession planning" with their investments.
Best wishes,
OAG Tom |
