Print
The Core Concepts of the ACA System™
The holistic approach.
Transformation takes place in the context of relationships, not transactions. It is through the ongoing relationship with the client, the active participation of the client, and the integration of that client's finances, goals, and values that the advisor can guide the client to financial independence and peace of mind.
The prevalence of financial dysfunction.
Clients often think they are doing the right thing even when their choices are inappropriate for their goals. Frequently these choices are the result of incorrect information or understanding. They may also be the result of paradigms rooted in childhood or purely emotional associations. We believe one role of a holistic financial advisor is to correctly diagnose and treat financial dysfunction.
The primacy of the endogenous view.
A leading cause of financial dysfunction is an exogenous view - thinking that factors outside yourself control your financial future. We believe that the factors over which clients can exert some control - factors like how much they earn, how much they save, how much they pay in taxes, and how well their investments are diversified - are much more important to their financial independence than those factors they cannot control - factors like where interest rates are heading, what the market is doing, or what is happening in the world at large.
The progression of the Financial Life Cycle.
We believe that individuals progress through a series of stages in their financial development and that completing the fundamentals of a stage is crucial to success in later stages. It is frequently this unfinished business from prior stages, or difficulty in making the transition from one stage to the next, that prompts someone to seek out a financial advisor.
Functional Asset Allocation.
This is our revolutionary approach to asset allocation in the real world. Its premise is that each asset category serves an important function or purpose in people's lives and that understanding these unique functions allows the use of assets to be optimized. Real estate, in the form of the personal residence, is a prime example. It usually represents the largest and most profitable investment a family has, provides the best protection against inflation, and adds value beyond a financial calculation because of the personal enjoyment derived from its use. Yet most money managers do not include it when constructing an asset allocation strategy.