Bullfinch Wealth as the wealth management platform

Bullfinch Wealth is a comprehensive, wealth management software designed to provide advisors with the tools they need to aggregate, allocate, optimize and monitor their clients' portfolios. Slated to go live in mid-November 2009, Bullfinch Wealth will help financial advisors to more efficiently manage the diverse assets of their clients.

"You will be very excited about the advanced capabilities and integrated nature of Bullfinch Wealth, that will help you to improve efficiency and overall level of service,".

"Bullfinch Wealth was designed from the ground up, not only to take advantage of the latest technologies and development standards, but to move away from the patch-work style of integration that characterized many first generation applications. As a result, Bullfinch Wealth is well positioned to provide the continual monitoring capabilities that are needed to effectively manage diverse portfolios on an ongoing basis. As the industry shifts to a fee-based model, this capability offers a significant advantage."

With integrated collaboration, workflow, monitoring and report generation tools, Bullfinch Wealth was designed to help financial advisors work more efficiently, to improve their level of service and strengthen their role as a trusted advisor. Among its many advanced features, Bullfinch Wealth offers an intelligent "Alert" monitoring system that alerts advisors to changes in their client's portfolios, such as those that are out-of-balance as a result of market changes, as well as event-driven alerts such as a bond maturing or corporate actions. Through its comprehensive Advisor Dashboard, it also includes a set of tools, to determine priorities and allowing advisors to focus their time on addressing the most important issues.

Stock Tax Implications

Capital Gains Tax Implications

When you sell a stock you obtain a capital gain.

In order to determine the capital gains tax you are subject to you should find the difference between the price at which you have sold the stock and your basis in the stock. After deducting them you will get your profit or loss.

The basis represents the price at which you have purchased the stock. If you haven't bought the stock, but have inherited it, the price of the stock at the time the owner has died is taken as the basis.

There are cases in which the difference can be a negative number. As a result you have incurred a loss. This loss can be turned into your advantage by offsetting the capital gains taxes.

Types of Capital Gains

Basically there are two types of capital gains. The first one is short-term capital gains, whereas the second one is the long-term capital gains.

1. Short-Term Capital Gains

Capital gains of a short-term character are those that have been in the possession of the investor for less than a year. The profit that is obtained is taxed at the same rate as an ordinary income. This rate is typically 25% or more of the profit you have acquired.

As you will see in the preceding lines, long-term capital gains taxation is more favorable so we recommend the holding of a stock for more than a year.

2. Long-Term Capital Gains

Capital gains of a long-term character are those that have been in the possession of the investor for more than a year. If you fall in the 25% income tax bracket or higher you will be liable to 15% tax rate on your stock profits. If you are in the 15% income tax bracket or lower, you will be charged as little as 5%.

As you can see, Uncle Sam has a far more favorable attitude toward long-term capital gains. Therefore, we recommend the holding of stocks for more than a year.

Dividend Tax Implications

If you receive dividends from your stock you are liable to taxes. The current tax rate of 15% is about to expire in 2008. Investors hope that this rate will be renewed after it expires. If not renewed, the dividends you receive will be subject to a tax rate equal to rate you are charged for your ordinary income.

If you are unwilling to pay taxes on your dividends you can consider the option of making the stock a part of a retirement plan. You should include the option of making automatic dividend reinvestment.

Additional Tax Advices

Once you are sure that your capital gains fall in the long-term category, you can see whether you are experiencing capital losses from any of your stocks. These losses can be turned into your advantage by using it to offset any capital gains.

On the other hand, you should not get rid of a stock just because it has lost its positions and you want to offset capital gains. You may dump a stock that may provide you with profits.

The selling of losing stocks for the purposes of offsetting capital gains is one of the reasons why the market decreases with the nearing of the end of the year.

IRS's Wash Rule

Many investors have intentionally sold a losing stock in order to offset capital gains and later again purchase the same stock. As a result the IRS has taken the necessary moves to limit such practices. It is referred to as the wash rule.

The rule forbids you to sell and buy one and the same stock within a 30-day time period for the purposes of claiming capital loss. If you, however, break this rule the IRS has the right to reject the claimed by you capital loss. As a result you will lose the capital gains offset.

Financial Advisor Compensation - Fees and Commission

Financial advisors provide their clients with an objective view of their financial situation and thus offer them valuable advices on the type of investment strategies they should follow in order to achieve their financial goals. Additionally, they compensate for the time or knowledge that some investors lack.

Financial advisors can be categorized by the professional designations they possess and the types of reward structures they require in return to their services.

Commission Structure

Financial advisors may be compensated by one of the following ways:

1. Fee Only Financial Advisor

A financial advisor that charges you only a fee will leave the constructed by him plan to be executed by you. The only product that such financial advisors offer is the plans for achievement of financial goals.

Some of the advantages of hiring such a financial advisor include the construction of a comprehensive plan, which is the major product they offer to clients. Additionally, they provide you with objective recommendations that are driven by the commission you will pay to him/her. Finally, by hiring a financial advisor, who is on fee only, you gain the advantage of personal interactions in which you will get thorough understanding of the constructed plan.

On the other hand, fee only financial advisors have their drawbacks. The fee you will be charged will greatly exceed the one you will be charged by the other types of advisors. The fact that the client should execute the plan on their own may be viewed as a difficulty by many inexperienced investors. Finally, since in the course of time both market conditions and needs of investors change, adjustments on the plan should be made, which may represent an additional expense.

2. Fee Plus Commission(Percentage of Assets) Financial Advisor

This second method of compensating a financial advisor includes not only the construction of the plan, but also its execution. So, the fee is paid for the construction of the plan, whereas the commission for its execution.

Additionally, the fee may be replaced by a percentage of the assets that are under the management of the financial advisor.

Some of the advantages of the fee plus compensation advisor include the fact that not only a plan is provided but also it is executed by the advisor. Additionally, the latter provides other products in addition to the plan's development and execution, such as different types of insurances.

On the other hand, the objectivity of the financial advisor is under question. Additionally, since advisors with this compensation structure provide house products, they may not be very suitable for your financial situation. Finally, the financial advisor may be lured by the higher commission offered by some products and in his/her attempt to get that commission may overlook equally good products with lower commissions.

3. Commission Financial Advisor

Under this model, the financial advisor's compensation constitutes only of the commission s/he gets from the products you have purchased through him/her. As a result it is suitable to qualify such a financial advisor as a salesperson since his main activity is the selling of different products to his/her clients.

The Bullfinch Framework

Overview

Bullfinch WM Platform is designed on a robust, flexible, modular, layered architecture that allows you to introduce new modules, channels, business processes, and external interfaces based on its specific needs. The product can be easily interfaced with other back office systems, broker-dealer systems for order execution, and fund distribution systems for fund subscriptions and redemptions.

The architecture and data model of Bullfinch WMS are designed in a manner to offer optimum performance, scalability and ease of maintenance. This highly flexible product can be linked with other surround systems, thereby, reducing the costs and complexity of migration.

Advantages of Framework

• Pre designed business process
• High degree of configurability
• Robust, Flexible, Modular
• Minimize development and customization effort
• Fast implementation

Development Tools

Bullfinch has been developed with all state of the art software tools to make user experience a more flexible, reliable and robust architecture. Microsoft .NET Framework 3.5 and Microsoft Visual Studio .Net 2008 has been used as its development platform to provide an extra-ordinary Graphical User Interfaces at its Front End. The Back End Database has been designed with the popular and widely accepted Microsoft SQL Server 2005.

Design Pattern

Model View Presenter (MVP) design pattern is adapted to develop Bullfinch application. The advantage of this pattern is that there is a clear separation of responsibilities between the user interface, application logic and domain layers. This makes the code streamlined and reusable

Portfolio Management Services

A portfolio in securities market refers to basket of securities that a person has invested into. Sometimes this includes Debt Instruments, Mutual Funds and even Bank Balance in addition to regular equities. The person designated to manage the portfolio is called Portfolio Manager. The Portfolio Manager advises, manages and administers the securities and funds on behalf of the entrusting client. The service is offered by a portfolio manager under a specific license from Securities and Exchange Board of India. This service is very similar to the one provided by Mutual Fund Managers. The difference between a Portfolio Management Service (PMS) and Mutual Fund (MF) is that of customization. In most cases MFs have preset schemes and investors join and exit those schemes at various points of time at prevailing Net Asset Values (NAV). In PMS, the client and the portfolio manager chart out specific needs of the client and the manager manages the portfolio in accordance to those needs. Sometimes the portfolio manager may also have separate ready schemes for client to choose from. As a result of this customization, client, with his specific needs, benefits. The service level in the form of reporting transactions, holdings statements etc., also are comparable or even better than that of a mutual fund.

In short, a Portfolio manager manages client's wealth more efficiently; reduce risk by diversfying across assets, sectors and funds, and improvise on returns. Expert Portfolio Manager's endeavour to find best of avenues to achieve optimum returns at managed levels of risk.

This service could also be called as "transparaent collective investments" where you get an upper hand and more ways than one.

Benefits of PMS

• Constant Portfolio Monitoring
• Professional Management
• Diversification
• Defines the customized risk and return
• Transparency
• Flexibility
• Disciplined approach in Investing

Bullfinch Features / Benefits

Key Features

• Robust, Flexible, Scalable Framework
  
• Real time Order Processing & Risk management
  
• 360 degree customer view with smooth navigation 
  
• Relationship based statements and Client Reporting 
  
• Control reports and MIS across / within asset classes
  
• Multi-entity, Multi-branch and Multi currency capability

Business Benefits

• Increase client retention       
•   proactive, personalized communication based on alerts


• Includes comprehensive view/reports      
•     To track drifts and portfolio performance

• Gain additional assets under management 
• Identify under performing held-away assets for    conversion to more appropriate firm products          
• Increase firm’s book of business - 360-degree client views


• Reduce risk by building compliance into the wealth management workflow
• Improve advice consistency by setting management ranges, firm-endorsed products based on wealth tiers

Activities in Wealth Management

Activities in Wealth Management

• Portfolios Restructuring & Engineering 
  
• Products Selection & Monitoring 
  
• Tactical & Strategic Asset Allocation 
  
• Account/Asset Consolidation 
  

Philanthropy:

To give money is an easy matter in any man's power. But to decide to whom it give it, and how large and when, and for what purposes and how, is neither in every man's power nor an easy matter. Hence, it is that such excellence is rare, praiseworthy, and noble. 

Aristotle (384 - 322 BC) 

Bullfinch Suite - Overview

If you are interested to know what is the offering by KGfSL for Wealth Management, I hope this post will answer your question.

Bullfinch (PMS) is a versatile system with investor servicing modules and web-interface for managing your client’s investment needs.

Cater to your client’s specific requirements with the help of our solution for

• Discretionary Portfolios
  
• Non Discretionary Portfolios
• Advisory Services

Covers comprehensive set of asset classes:

• Equities, Derivatives, Mutual Funds, Debt (Bonds)
  
• 3rd party PMS, Structured Products, Commodities 

Service your customers with:

• Relationship Manager’s Dashboard to allow your RMs to get a 360◦ view of their clients and track their portfolios and performance
  
• Customer’s Portal to allow your customers to view their specific reports

        Functional Block Diagram 

• An End-to-end Portfolio Management & Accounting Suite
  
• Enable Client, Entity accounting across various asset classes 
  
• Wide Investment options within a single unified platform
  

Wealth Management Solution from KGfSL

Wealth Management

• Experience the flexible, reliable and robust architecture


• Instant, fast and accurate in evolving market conditions


• Monitor your asset performance constantly
  


• Unified view and analysis across asset classes
  


• Sound decision-making advise based on information and analytics
  


• Improve productivity through easy-to-access information, and efficient collaboration tools
  

Understanding Private Wealth Management

A process based approach for accumulating, protecting and growing our private clients' wealth. Some of the ingredients of this process are.

• Investment Policy Design & Asset Allocation:

The most critical decision behind investment success is arrived at on the basis of a scientific process developed in-house.

• Investment Manager Selection :

The second most critical decision behind investment success is arrived at on the basis of a comprehensive and transparent manager selection process designed in-house. As an Independent Wealth Management Firm we our able to source the best investment managers for our private clients.

• Investment Performance Monitoring:

A robust reporting system which helps us to track the performance based upon the state of the art and accurate performance measurement techniques.

• Risk Management:

Based upon proprietary quantitative models developed in-house we are able to optimize the return per unit of risk taken by our private clients.