Why MP Wealth Advisory is moving beyond the 60/40 investment model

Senior wealth advisor highlights role of discretionary management

Why MP Wealth Advisory is moving beyond the 60/40 investment model

For the past 25 years, MP Wealth Advisory has relentlessly followed one goal: to effectively serve its clients with top-tier knowledge in financial planning and investment management.

MP Wealth, which is one of Wealth Professional’s 5-Star Advisory Teams for 2022, covers all bases when offering advice. Its a business that is supported by knowledgeable advisors in a variety of fields, including estate planning, insurance, and discretionary portfolio management.

The practice, which serves a select clientele, has expanded dramatically because of fresh referrals provided by content clients. The practice's AUM increased by 18% over the previous year, which can be attributed to outstanding performance from discretionary mandates.

“It has been our view for a number of years that the 40/60 bond-stock portfolio is unlikely to generate appropriate levels of return and is likely to increase levels of portfolio volatility going forward,” Darren Pastro, senior wealth advisor and senior portfolio manager at MP Wealth Advisory, Wellington-Altus Private Wealth, told WP. “That was clear to see during the first four months of this year, when both stocks and bonds suffered significant declines.”

MP Wealth was able to assist its clients in avoiding most of the devastation by doing away with bond durations and dramatically increasing cash balances in portfolios, while skillfully controlling downside equity risk utilizing a proprietary internal algorithm.

To counter the abundance of unfavorable news stories, MP Wealth prioritizes keeping in touch with clients through scheduled meetings and impromptu phone calls. It publishes articles on a range of subjects every quarter to assist in making sense of the markets.

“Today and in future environments, we believe true risk management should involve not just holding various asset types that have historically been inversely correlated, but also reducing exposure to negatively performing asset classes,” Pastro says. “Unfortunately, a large part of our industry is unwilling to acknowledge the pitfalls of the traditional balanced portfolio.”

To see WP’s full interview with MP Wealth in an interactive digital format, click here.