Asset Location is Just as Vital as Asset Allocation

This story first appeared in Private Asset Management magazine June, 2015

By Stephanie Bartup

Affluent investors and family offices need to put as much thought into the location of where their investments are being held as they do to the allocation of their portfolio assets, the president and CEO of Argos Family Office has told PAM.

Paul Vogel, who heads up the multi-billion dollar family office, advised that wealthy families should consider individual state laws concerning income tax levels, investment and trust holdings with the same level of care that they give to the makeup of their portfolios.

“In the US, there are many states which offer favorable income tax environments for investors; families need to look at their after-tax return rather than the pre-tax numbers, as there can be a huge difference,” he said. “In many cases, this equates to hundreds of thousands of dollars a year. The allocation and location talks needs to happen at the same time, during the planning stages of an individual’s financial management.”

“There are a lot of income tax-friendly states in the US for both individuals and trusts; but investors need to be aware of which entity the investment is being made through, as this can dramatically alter the bottom line post-tax profit they might receive,” said Vogel.

Read more in Private Asset Management magazine