Investing for High Net Worth Individuals

At Freedom Financial Partners, our mission is to deliver exceptional wealth management to affluent individuals and business owners by utilizing a sophisticated, client-focused approach that combines fiduciary excellence with innovative investment solutions. To fulfill this commitment, we have developed a disciplined process that balances cost efficiency, tax management, and personalized client service—enhanced through our strategic partnership with Fiducient Advisors, a leading outsourced Chief Investment Officer (OCIO).

Understanding High Net Worth Investor Classifications

High net worth investing begins with understanding the regulatory classifications that determine access to sophisticated investment opportunities. These classifications are designed to ensure investors have the financial capacity and knowledge to understand complex investments:

Accredited Investor ($1M+ net worth or $200K+ annual income)

• Access to private placements and hedge funds
• Can participate in certain private equity opportunities
• Eligibility for alternative investment platforms

Qualified Client ($2.2M+ assets under management)

• • Access to performance-based fee arrangements

• Enhanced investment advisory services
• Broader range of hedge fund strategies

Qualified Purchaser ($5M+ investable assets)

• Access to 3(c)(7) funds with higher investor limits
• Premium private equity and venture capital opportunities
• Institutional-quality alternative investments

Each level opens additional doors to sophisticated investment strategies that can enhance portfolio diversification and return potential.

Our Investment Process: Built for Client Success and Beyond Simplicity

Our approach stands apart from “one-size-fits-all” solutions that many firms offer. High net worth investors — especially those with complex financial situations or distinct objectives — require more nuanced strategies. Our integrated use of active and passive ETFs, alternative investments, SMAs with individual bonds, and completion funds enables:

• Customized portfolio construction that accounts for concentrated positions, legacy planning, and liquidity needs
• Advanced tax management aligned with personal or business asset complexities
• Access to private and illiquid asset classes for diversification and enhanced return potential
• Bespoke solutions for business owners, including succession planning and pre-/post-liquidity event strategies

This approach allows us to keep expense ratios below industry averages, manage taxable gains more efficiently, and ensure high liquidity for our clients.

The Role of Alternative Assets

Our selective incorporation of hedge funds, private equity, credit, and real estate not only adds diversification but targets sources of return that are often unavailable in public markets. Partnering with Fiducient Advisors ensures institutional-level due diligence and ongoing oversight, allowing clients to benefit from:

• Access to non-correlated return streams, reducing portfolio volatility
• Targeted exposure to growth and income opportunities beyond traditional stocks and bonds
• Careful monitoring tailored to client risk/return objectives

Hedge Funds: For strategies that seek to generate returns uncorrelated with traditional markets and provide downside protection.
Private Equity: To access growth opportunities in private companies and add long-term capital appreciation potential.
Private Credit: For enhanced income and diversification through direct lending and specialty credit strategies.
Private Real Estate: To capture income and appreciation from commercial and residential properties, offering inflation protection and further diversification.

Sophisticated Fixed-Income Management through SMAs and Completion Funds

Our commitment to delivering tailored, tax-efficient, and diversified investment solutions extends to our use of Separately Managed Accounts (SMAs), particularly for clients seeking direct ownership of individual bonds and enhanced portfolio customization.

What Are Separately Managed Accounts?

SMAs are professionally managed portfolios where you directly own the underlying securities—such as individual bonds—rather than shares of a pooled fund. This structure provides:

• Personalization: Portfolios can be customized to reflect your unique investment objectives, risk tolerance, tax situation, and tailoring credit/maturity risk to unique goals or cash flow needs
• Transparency: You have full visibility into your holdings and real-time oversight of portfolio changes
• Tax Efficiency: Direct ownership enables optimization of after-tax returns, including tax-loss harvesting and control over capital gains realization
• Control: You can tailor your portfolio to exclude or include specific securities or sectors, aligning investments with your values and goals

The Role of Individual Bonds in SMAs

By holding individual bonds within an SMA, you benefit from:

• Customizable Maturity and Credit Exposure: Portfolios can be structured to allow for precise control over income, duration, and credit quality—ideal for clients concerned with liquidity, safety, or legacy transfers
• Income and Capital Gains Management: Direct bond ownership allows for strategic management of income distributions and capital gains, supporting both income and tax objectives
• Reduced Shared Liquidity Risk: Unlike pooled vehicles, your assets are not commingled, providing greater control over liquidity and trading decisions

Enhancing Diversification with Completion Funds

While SMAs with individual bonds offer customization and control, they can sometimes lack broad diversification — especially in fixed-income markets where minimum investment sizes may limit access to certain sectors or issuers. This is where completion funds come in:

• • Broader Diversification: Completion funds are specialized mutual funds or commingled vehicles designed to complement SMA portfolios, providing exposure to segments of the bond market that may be difficult to access with individual bonds alone—such as certain credit sectors, international bonds, or niche strategies
  • Portfolio Flexibility: These funds help fill gaps in sector or duration exposure, ensuring your overall fixed-income allocation remains balanced and aligned with your investment policy

• Active Management and Precision: Completion funds are actively managed to adapt to market changes and can hold hundreds of bonds, reduce issuer-specific risk and allow for more precise management of interest rate sensitivity
• No Additional Management Fees: In many cases, completion funds used within SMAs do not carry extra management fees and are reserved exclusively for SMA clients, avoiding the liquidity pressures of retail mutual funds

How This Approach Benefits You

Why High Net Worth Portfolios Demand More

For HNW individuals, assets are rarely limited to a simple mix of stocks and bonds. Business interests, real estate, trusts, and philanthropic goals all demand coordinated, flexible, and proactive portfolio management. Your approach—leveraging both innovative solutions and Fiducient’s institutional expertise—ensures:

• • Holistic risk management: Addressing single-stock or business concentration, estate and charitable objectives, and multi-generational wealth
  • Continuous process improvement: Institutional-quality research and a robust investment committee directly inform portfolio construction, oversight, and adaptation to market conditions

Fiduciary Excellence in Action

As fiduciaries, we are dedicated to acting in our clients’ best interests at every step. This means:

• Maintaining rigorous oversight of all investment decisions and processes
• Selecting investments based on thorough, unbiased research
• Regularly reviewing and updating our investment policy to reflect changing markets and client needs

The Strategic Value of Our Fiducient Partnership

Recognizing that robust investment research and committee support are critical to our process, we engaged Fiducient Advisors as our OCIO. Their team of Chartered Financial Analysts and specialists brings deep market insight, advanced analytics, and institutional-grade research to our investment committee. This collaboration enables us to:

• Make more informed, timely investment decisions
• Enhance risk management and regulatory compliance
• Continuously improve our portfolio construction and monitoring

By outsourcing much of the research and operational complexity to Fiducient, our advisors can focus more on what matters most: building relationships and delivering comprehensive financial planning tailored to each client’s unique goals.

A Client-Centric Approach

Our partnership with Fiducient Advisors reflects our unwavering commitment to fiduciary standards and client success. By leveraging their expertise, we ensure that your portfolio benefits from the latest research, best practices, and a disciplined investment process—while our team remains dedicated to providing the high-touch, personalized service you deserve.

If you have questions about our investment process or how our collaboration with Fiducient enhances your experience, we welcome the opportunity to discuss it further. Your trust is our highest priority, and we are committed to helping you achieve your financial goals with confidence.

 

Important Disclosures

Investment Advisory Services: Freedom Financial Partners is a registered investment adviser acting in a fiduciary capacity. This material is provided for informational and educational purposes only and should not be construed as investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services.

Risk Disclosures: All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. Market conditions, interest rates, and economic factors can significantly impact investment performance. Diversification does not guarantee against loss.

Alternative Investment Risks: Alternative investments, including hedge funds, private equity, private credit, and real estate investments, involve substantial risks that may be greater than those associated with traditional investments. These risks include but are not limited to: limited liquidity, use of leverage, lack of transparency, complex fee structures, and limited regulatory oversight. Alternative investments are suitable only for qualified investors who can bear the risk of loss and have limited need for liquidity.

Investor Qualification Requirements: Access to certain investment opportunities requires meeting specific investor qualification standards as defined by federal securities regulations, including accredited investor, qualified client, or qualified purchaser status. Investment minimums and suitability requirements apply. Not all strategies are suitable for all investors.

Third-Party Relationship Disclosure: Freedom Financial Partners has engaged Fiducient Advisors as our outsourced Chief Investment Officer (OCIO). This relationship involves shared responsibilities for investment research, due diligence, and portfolio management oversight. Compensation arrangements between our firms are detailed in our Form ADV Part 2A. The use of a third-party investment adviser does not diminish our fiduciary obligations to our clients.

Separately Managed Accounts (SMAs): SMAs involve direct ownership of individual securities and may result in higher transaction costs, tax consequences from individual security sales, and concentration risk from holding fewer positions than diversified funds. The benefits of tax-loss harvesting may be limited based on individual circumstances.

Fee Disclosure: Our fees for investment advisory services are described in our Form ADV Part 2A. Additional fees and expenses may apply for third-party investments, including management fees, performance fees, and other costs associated with alternative investments and completion funds.

Forward-Looking Statements: This material may contain forward-looking statements regarding market expectations, investment strategies, or economic conditions. These statements are based on current market conditions and are subject to change without notice. Actual results may vary significantly from expectations.

Additional Information: For complete information about our firm, services, fees, and potential conflicts of interest, please review our Form ADV Part 2A (our “Brochure”), which is available upon request or may be accessed at www.adviserinfo.sec.gov. Please contact us if you have any questions about our services or these disclosures.