What We Offer: 


 Offerings: Consultation   Planning   Asset Management   Decision Support   Tax Prep

 Components: Planning   Risk   Employee Benefits  Tax   Investments   Retirement   Estate                 

What Is It?


Risk management is the process of analyzing exposure to risk and determining how to best handle such exposure.  In many cases, the solution to managing risk is purchasing insurance or hedging.  But, in other cases, the appropriate form of risk management is to do nothing.  PWA helps you decide the strategy that is right for you.


Why Is It Included In The Program?


One of the easiest ways for a financial plan to fail to achieve its goals is to fail to properly manage the risk associated with the components of that plan.  You could have been successful in saving for a down payment on your dream house for 5 years, only to accidentally injure someone in an auto accident and get sued for a million dollars in punitive damages (most people don't realize that their auto liability insurance may only cover the first $100,000 of that award).  So much for that house.  Now you're looking for a bankruptcy attorney instead.  There are numerous threats to a financial plan.  In order to minimize the risk of failure, they must each be addressed.


How Do We Do It?


We examine your current situation and lifestyle and determine the threats to your financial goals.  Some of these threats would be catastrophic in nature (income provider dies, the auto accident described above, etc.).  Others would be minor.  Some have a high probability of occurring, others a low one.  The principles of risk management help to decide what to do about particular risks.  Consider the chart to the right which segments threats into four potential categories:

We help you manage these types of decisions as well as those pertaining to your portfolio, retirement, and estate.  Some threats are handled through insurance, some through hedging, some through proper planning, and others through behavioral change.  In the case of insurance, we'll analyze the need for life, health, disability, long-term care, homeowners, auto, and umbrella policies.  We do not believe insurance is the best risk-mitigation strategy in all cases, but it is necessary in some.  We'll also manage your portfolio based on your risk tolerance and employ financial techniques that can limit or reduce (but never remove) your downside risk.  Would you be willing to sacrifice approximately 1% of your return each year to guarantee your stock portfolio never falls by more than 20% in any given year?  Some people may, but it's unlikely that a stock broker or asset manager focused on maximizing your return would ever off you that opportunity to hedge (which is a real opportunity in the options market).


Do You Really Need Help With It?


Managing risk is one of the more difficult things for most people to do.  The natural reaction is to avoid the activity that introduced the risk, or ignore the risk totally.  Many people are hesitant to buy insurance because they're afraid of being scammed.  Having an unbiased advisor that doesn't profit from your policy decisions and who isn't incented to take extraordinary risks in your investments can be beneficial not only to your finances, but also to letting you sleep peacefully.  PWA is that unbiased advisor, and we want to help you.


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