WHO WE SERVE

       
We make a good partner–working with you and working for you.
Close working relationships with our clients and their advisors
Industry-leading technology and reporting resources
Recognition as the safest large U.S. bank1

Working with You
We understand and respect the important role other advisors play in furthering our mutual clients' goals. To that end, our wealth management professionals form strong working partnerships with our clients' attorneys, accountants and other trusted advisors helping to ensure that each client's strategy is both comprehensive and seamlessly executed.

Working for You
We also offer an array of investment, asset servicing and specialized banking services in direct support of many of the nation's leading professional firms, financial advisors and other institutions. In addition to custody and investment resources, for instance, we offer deposit and escrow arrangements, customized credit, and access to our larger organization's capabilities in areas such as foreign exchange and capital markets. As a result, our professional and institutional clients can leverage the vast capabilities of BNY Mellon and the specialized skills and experience of a wealth management leader, in the way that most directly addresses their organizations' unique needs and requirements.

For more information, please Contact Us.

Financial Risk Audit - BNY Mellon Wealth Management

SCROLL DOWN

Risk Audit

     
Uncover the risks and opportunities in your portfolio.

Investors often say they're comfortable with their portfolio strategy, until we assess their holdings and financials, revealing a more accurate and often surprising view of their true situation. Turns out 99% of the thousands of portfolios we’ve reviewed over the years have hidden risks. Could your portfolio be one of them?

The following examples highlight some of the hidden risks and missed opportunities we see in investor portfolios. Could any of these scenarios exist in your portfolio?

 
Assessing your financial situation from a macro perspective allows us to see how everything is—or isn’t—working together.
Coordinating investment decisions across the different structures and within your wealth plan can help optimize your portfolio.
Without proper diversification, you could be missing opportunities or exposing your portfolio to unnecessary risks.
Reviewing your investment holdings closely may uncover risks as well as opportunities.
Understanding what you are really paying for is the first step in making sure you receive the value you expect.

PORTFOLIO

Assessing your financial situation from a macro perspective
allows us to see how everything is—or isn’t—working together.

Is your financial plan fragmented or integrated?

Decisions are often made irrespective of each other, resulting in a portfolio that isn't positioned for long-term success.

Select a circle below to expand each discipline of the integrated plan.

Hedge
Funds
Large
Cap
Fixed
Income
Investment
Accounts
International
Real
Estate
Small,
Mid Cap
IRAs
Private
Equity
Emerging
Markets
Brokerage
Real
Estate
Wills
Education
Executive
Wealth
Insurance
Concentrated
Positions
Family &
Legacy
Retirement
Plans
Philanthropy
Trusts &
Estate
Mortgages
Business
Financing
Hedging
Strategies
Lines of
Credit
INVESTMENTS
TRUSTS AND
FAMILY
DEBT

FRAGMENTED PLAN

Investment porfolios and wealth plans are often created based on circumstances, including family business interests, specific opportunities that have emerged over time, or direction from multiple advisors.

INVESTMENTS

Do all your managers and advisors understand your investment strategies and decisions, and their impact on each other?

TRUSTS AND FAMILY

Is your planning coordinated among your accounts and advisors to ensure you reach your goals?

DEBT

Have you considered both assets and liabilities and how they can best work together?

INTEGRATED PLAN

Investors often make the mistake of treating investments, trusts and debt as unrelated disciplines—a mistake that could hinder reaching long-term goals.

Do you know your true allocation?

Many investors' impressions of their total asset allocation may not be the reality, resulting in a portfolio far different than imagined—or intended.
VS
You might think your portfolio is allocated one way. Look closer at your multiple accounts. Your true allocation may be quite different from what you expected.

Will your current allocation meet your future needs?

You may want your portfolio to provide income throughout your retirement and may consider a conservative allocation to bonds to provide that income. But are bonds built to last? Here's what could happen to a $5 million bond portfolio—and that needed income—in 20 years.

  • Before taxes, the portfolio grows to $8.5 million
  • Taxes reduce it to $7.5 million
  • After spending ($250,000 per year) it's just $1.3 million
  • Inflation could take the rest after only 19 years2

STRUCTURAL

Coordinating investment decisions across and within your
wealth plan can help optimize your portfolio.

Are you positioning your assets in the optimal location?

Investors often mistakenly have the same plan for every entity or don’t consider an account’s purpose when allocating investments. Understanding how your portfolio is structured is critical for portfolio success.

Is your Portfolio Reaching its full potential?

It is important to take a comprehensive look at your portfolio in order to gauge its cohesiveness. Often you'll uncover missing asset classes, similar plans for all entities or accounts, or an investment plan that doesn't match the entities' objectives. The bottom line? You need to avoid these mistakes in order for your portfolio to reach its full potential and for you to achieve your goals.

Is your portfolio structured to mitigate taxes?

You may not think about how taxes will impact your portfolio's growth. Consider the 20-year impact on a $5 million 60% equity/40% bond portfolio.

  • Prior to the American Taxpayer Relief Act of 2012, the projected value of a $5 million portfolio was $11.4 million
  • But with today’s rates, you'd have $1.1 million less3

DIVERSIFICATION

Without proper diversification, you could be missing opportunities
or exposing your portfolio to unnecessary risk.

Is your portfolio properly diversified?

Diversification—both across and within asset classes—is critical to portfolio success.4

Select an asset class from the charts or legend below to expose the value of strategic and comprehensive diversification.

Incomplete Portfolio

Portfolios often are missing or underexposed to certain asset classes.

Diversified Portfolio

Appropriate exposure across a range of asset and sub-asset classes is critical to your investment success.

Is your portfolio properly diversified to capture opportunities and mitigate risk?

No asset class is consistently a top or bottom performer.5

Select an asset class from the table to highlight the variability in annual performance over the past 10 years.

< Lower Performing
Higher Performing >

Are sector concentrations putting your portfolio at risk?

You could have sector bets that negatively impact your portfolio returns.6

Select a sector from the chart to highlight its performance.

  INVESTOR PORTFOLIO
  S&P 500
< Lower Performing
Higher Performing >

Is your portfolio positioned to outpace inflation?

Inflation can have a negative impact on the "real value" of your portfolio. Consider inflation's impact on the future purchasing power in today's dollars of a $5 million bond portfolio over 20 years.

  • Before inflation, $5 million grows to $8.5 million
  • With 2% inflation, the real value is $5.7 million
  • And at 4%, the real value is only $3.8 million, 24% lower than the
    initial investment7

HOLDINGS

Reviewing your investment holdings closely may uncover
risks as well as opportunities.

Do you have concentrated holdings?

High concentrations can greatly increase your portfolio’s volatility and may happen without your full knowledge.

2%

1

MANAGER

3%

2

MANAGER

5%

3

MANAGER

High Concentrations

Often in multiple-manager portfolios and mutual funds, managers may be buying the same stocks, which can lead to portfolio concentrations.

Your Portfolio

Overlap across mutual funds, managers, retirement assets, executive stock compensation and individual purchases can lead to dangerous and unknown concentrations.

Do you know the risks in your bond portfolio?

Looking at and understanding the components of a bond portfolio can help uncover risks.

Often investors believe that bonds are their safest investments. High concentrations in municipal bonds of a single state, while exempting income from state taxes, can increase a portfolio's volatility.

A portfolio with an Average A- rating may still have a significant allocation to below investment grade bonds. Beneath the surface, your seemingly safe portfolio may have more risk than you realize.

Long-duration portfolios are more sensitive to interest rate volatility and could experience greater changes in value.

Sample Bond Portfolio

  • Current Value $5.8 Million
  • Average Maturity 15.8 Years
  • Average Duration 9.7 Years
  • Average Coupon 5.08%
  • Average Yield 3.25%
  • Average Rating A-
  • Number of Holdings 52

Are your bonds' values sinking in this rising rate environment?

Changes in interest rates can impact your portfolio's value. Consider the 1-year impact of a $5 million bond portfolio as interest rates fluctuate.

  • Should rates drop 1% your value will increase to $5.3 million
  • Steady rates mean a moderate growth to $5.1 million
  • But when rates rise 1% your portfolio will decrease to $4.9 million
  • And with a 2% rise your portfolio will fall to approximately $4.7 million8

COST

Understanding what you are really paying for is the first step in
making sure you receive the value you expect.

Have you qualified and quantified your fees?

Fees and other costs are the literal price you pay to achieve your objectives. Not all costs may be clear, and you may have multiple layers. Being clear about exactly what you are paying will help you ensure your comfort with the value you receive in exchange.

Perceived Fees
Actual Fees
Some Possible Fees
  • Custodian
  • Brokerage
  • Hedge
  • Fiduciary
  • Account
  • Administration
  • Transaction
  • Management
  • Tax Preparation
  • Base
  • Co-Trustee
  • Mutual Fund

Do you have hidden bond markups?

Many investors incur significant markups in their bond transactions, aside from normal bid ask spread.

You
Your
Broker/Dealer
Interdealer Broker

$100.00

Bond Price

+$0.75

You Pay

$100.75

INDIVIDUAL BUYER

You contact your broker to purchase a bond.

Your broker may purchase the bond from another dealer and you may incur a markup as the bond is passed along to you.

While you may not be aware of hidden markups, they can add up quickly.

You
Institutional Buyer
1
Broker/Dealer

$99.50

Bond Price
2
Broker/Dealer

$100.00

Bond Price
3
Broker/Dealer

$100.50

Bond Price

You Pay

$99.50

INSTITUTIONAL BUYER

An institutional buyer may be able to purchase a bond at a better price.

The buyer will solicit offers from multiple brokers and negotiate prices on volume.

The buyer selects the best price.

This means you’ll get a much better rate.

In this example, you pay $1,250 more on $100,000 worth of bonds.

You Pay

$101,250

Individual Buyer
You Pay

$100,000

Institutional Buyer

Is there hidden risk in your portfolio?

Let’s discuss your investment strategy and uncover its potential for risk. Take the next step: select one of the options below to contact one of our wealth management experts or learn more about our approach.

Give us a call.

1-866-271-3550

Have one of our wealth management
experts contact you directly.

Let's Talk

Explore our web site to learn more about our wealth management approach

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A new type of relationship for a new era.
1
Based upon combining Global Finance World's Top 50 Safest Banks, September, 2014 and SNL Financial "Largest Banks and Thrifts in the U.S. by Total Assets," September, 2014.
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