Investment Management

We’ve built our investment process around the requirements of the Uniform Prudent Investor Act (UPIA). For trustees and fiduciaries, investing is an area with the potential for personal liability because of their duty to comply with the UPIA.

Obligations of the UPIA

  • Consider general economic conditions
  • Carry a duty to monitor
  • Identify the role of the investments in context of the overall trust and other resources
  • Understand needs for liquidity and determine the objective of preserving vs appreciating the capital
  • Maintain duty to diversify the investments of the trust
  • Consider the effects of inflation or deflation over the long term
  • Manage assets in sole interest of the beneficiaries
  • Only incur costs appropriate and reasonable in relation to the assets
  • Consider the tax consequences of investment decisions or strategies

We’ve found that both fiduciaries and individuals benefit from having these measures incorporated into the management of their assets. Here’s how we do it:

UPIA and How We Manage

Establishment of an Investment Policy Statement and Risk and Return Expectations
Consider role of the investments in context of overall trust and other resources – As part of the initial onboarding process, we create an Investment Policy Statement (IPS) that identifies assets, objectives and goals. The IPS is then used as guideline for our investment decisions so we can help you achieve your long-term goals.
Consider needs for liquidity, preservation vs appreciation of capital – Goals help define the appropriate level of risk that should be taken, whether that be preserving or growing your assets. Within the Investment Policy Statement we’ll provide an investment portfolio recommendation that is consistent with your expectations for risk and return.

We also are sensitive to your liquidity needs, as required cash on hand can change based on circumstances. We help meet your liquidity needs either through income generated from the portfolio or cash being generated in an efficient manner.

We will work with you to stay informed of financial or health changes that could lead to an updated investment recommendation.

Portfolio Investment Diversification

Diversification – Our portfolios are created and evaluated for diversification across asset classes, sectors, equities, interest rates, credit, and volatility. There are exceptions under unique circumstances, but we take care to avoid overconcentration in any specific area or single investment.

Risk & Correlation – As part of our portfolio creation and management process, we use Modern Portfolio Theory (MPT) concepts, such as correlation analysis, beta, and volatility, to monitor diversification and its impact on risk. MPT was founded on research demonstrating that investment risk is best managed at the portfolio level (as opposed to the individual asset level) through proper diversification of underlying assets.

Cost Management

Ensure overall costs are reasonable – Our portfolios are built to be low cost. We work to ensure expenses are minimized by using zero-transaction fee securities and low expense ratio ETFs.

Additionally, we seek other ways to reduce your costs by eliminating ACH fees, IRA maintenance fees, and overnight check fees. We avoid commissions by operating under a fee-only fiduciary standard and our rates are competitive.

Prudent Administration in Portfolio Management

Duty to monitor – We regularly monitor our portfolio’s performance and risk to ensure the investment is appropriate for your needs.

Consider general economic conditions – Analyzing a portfolio’s performance is not enough. Our investment team regularly reviews fundamental economic conditions such as interest rates, equities, credit, and market sentiment.

Consider effect of inflation or deflation – We stay informed on inflationary or deflationary pressures in the economy. Our goal is to at least maintain or increase the real value (nominal value minus inflation) of your investment assets over the long term.

Consider tax consequences of investment decisions or strategies – A surprise tax bill is never fun. We know you are sensitive to the potential tax liabilities that can occur from selling or rebalancing investments. When appropriate, we help identify potential tax saving opportunities available within the portfolio.


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Financial Planning

The economic and political environment is ever-changing with laws and provisions that impact your assets, investments, health care, and insurance. At Prudent, we help organize and simplify your life through a financial planning process tailored to you.

Define Your Direction
Your Prudent advisor will help you identify where you’re headed financially. We’ll work with you to gather the necessary information to begin planning. You’ll obtain a better sense of your current situation, and we’ll identify areas and opportunities that can enhance your financial outlook.
Establish Your Goals
Having defined your direction, it’s time to refine it. Your advisor will work with you to establish realistic and achievable objectives for you and your family. The financial planning process can be overwhelming; we’re here to guide you during this step. Areas for possible goal setting include:
  • Retirement
  • Education
  • Significant Life Events
  • Travel
  • Insurance
  • Insurance
  • Debt Elimination
  • Emergency Reserves
  • Asset Accumulation
  • Long-term Care Planning
Leverage Our Technology
Throughout the planning process, you’ll leverage our technology partner resources and utilize our financial tools to update data or track your goals. Our online feature set include:
  • Retirement Analysis
  • Education Planning
  • Social Security Modeling
  • Long-Term Care Insurance Modeling
  • Investment Sector and Style Breakdown
  • Tax Estimates
  • Budgeting
Protect Your Legacy
With your goals in place, our advisors will create and execute your plan to extend the life of your assets and protect your legacy. For actively managed accounts our investment management team will:
  • Manage Investments
  • Monitor Legislative Changes
  • Provide Economic Market Commentary
  • Discuss Liquidation Tax Implications
Additional services may also include:
  • 529 Accounts
  • ABLE Accounts
  • Life Insurance
  • Long-term Care Insurance
Build Your Team
Our 20 years of managing assets for trusts and estates brings a network of attorneys, professional fiduciaries, and accountants you can trust. For those with existing networks, we’ll integrate as needed. We’ll help you coordinate:
  • Successor Trustees
  • Estate Administration
  • Beneficiary Assignment
  • Tax documentation
  • Trust and Estate Reporting
Create Your Plan
Our expertise with trusts and estates will help you create an effective financial plan. Let us help you create your future, today.

Portfolio Evaluation

Concerned about performance or whether a portfolio is taking too much risk or too little risk? We offer portfolio evaluations for professional fiduciaries and individuals who are concerned about their portfolio’s makeup.

Our assessment analyzes the following areas of your portfolio:

  • Asset Allocation
  • Diversification
  • Credit Risk
  • Sector Exposure
  • Key Costs
  • Other Important Factors

For trusts or retirement accounts that have continuous outflows, we also provide an asset depletion analysis to determine longevity of assets.

Our reports can help you determine if your portfolio aligns with your investment objectives. Contact us to see if you qualify for a complimentary portfolio evaluation and/or asset depletion analysis.

Special Needs Trusts Planning

Our experience managing investments for Special Needs Trusts gives us unique insights into both private and court-supervised SNTs.

From the beginning, we’re here to support you, as the trustee. Using our existing connections, we can help you find attorneys to draft the trust. We can also work with your existing team or help you find other needed resources, such as accounting, healthcare, Medicare compliance, or fiduciary support services.

Why Create a Special Needs Trust

A Special Needs Trust (SNT) is an excellent way for beneficiaries with disabilities to enjoy the benefit of trust assets while still remaining eligible for essential needs-based government benefits. For example, the irrevocable SNT can preserve benefits while providing asset protection and administrative advantages to minors and those who lack the legal capacity to handle their own financial affairs.

The creation of an SNT is often the result of a personal injury or medical malpractice settlement. It’s designed to compensate the injured party and hopefully provide financial resources to last a lifetime. During settlement discussions, we work with attorneys and trustees to determine the optimal allocation between a structured settlement and a cash settlement. Using a life care plan, we’re able to model financial needs while taking into account inflation, anticipated future needs, and fluctuating market returns.

Trustees and the UPIA

Trustees have a legal obligation to invest SNT assets according to the Uniform Prudent Investor Act (UPIA), a uniform trust and probate law enacted by almost all states. We understand that the liability you, as the trustee, assume is substantial and often not well known.

Our advisors are instructors in the Trustee Certification Program at California State University, Fullerton, so we understand the UPIA and how it applies to trustees. Our entire investment process is built around the UPIA and supporting fiduciaries. Our portfolios for Special Needs Trusts are built for diversification, and our ongoing reviews are set up to help you stay compliant with the UPIA requirements to monitor returns, risk, and diversification.

Unique Beneficiary Needs

The nature of a Special Needs Trust means that the needs of the beneficiary can be substantial. Taxation of SNT disbursements varies depending on the SNT’s structure. Whereas first-party trusts are taxed at the grantor level, third-party trusts are taxed at the trust level. Understanding these differences is key in optimizing the tax efficiency of investments. Our history and expertise in working with SNTs allows us to manage SNT’s investments in a tax-sensitive manner.

Our years of collaboration with fiduciaries and attorneys have cultivated a sensitivity to the concerns, fears, and vulnerabilities of SNT beneficiaries. We feel it a privilege to assist trustees in maintaining and enhancing the quality of life for beneficiaries throughout their lives.

Expert Witness

Due to our familiarity with the Uniform Prudent Investor Act and its role within the California Probate Code, we are a trusted expert for attorneys seeking assistance in litigious cases.

Prudent’s managing partners, Jeremy Lau and Ted Ong, have assisted law firms in forensic investment analysis and portfolio UPIA- compliance. Their institutional background and history with professional trustees and public guardians/administrators give them unique insight into the law’s requirements for appropriate portfolio management. Ted and Jeremy are frequent lecturers on the Uniform Prudent Investor Act for the Probate Attorneys of San Diego (PASD), the National Guardianship Association (NGA), and the Professional Fiduciary Association of California (PFAC) and serve as instructors of the Management of the Investment Portfolio course at Cal State Fullerton.

We provide expert witness work in the following areas:

UPIA Compliance

  • Diversification Analysis
  • Risk Tolerance Assessment
  • Cost/Expense Evaluation
  • Tax Opportunities

Forensic Investment Research

  • Portfolio Construction Evaluation
  • Asset Allocation Assessment
  • Income Analysis
  • Portfolio Risk Diagnostics

To inquire: