In today’s unpredictable financial environment, high-net-worth families and business owners face unique challenges when it comes to protecting their wealth and maximizing tax efficiency. As markets fluctuate and tax laws evolve, finding strategies that both safeguard assets and optimize returns is paramount.
This week on Live Life Liberated, Sean Clark, Partner at Centura Wealth Advisory, and Chris Osmond, Chief Investment Officer, dive into a transformative approach: direct indexing. This personalized investment strategy not only provides flexibility and alignment with your financial goals but also unlocks the potential for significant tax advantages.
In this blog, we’ll explore the key insights from Sean and Chris on how direct indexing can help you navigate today’s markets while maximizing your portfolio’s efficiency.
What Is Direct Indexing?
Direct indexing is an innovative investment approach that allows investors to directly own individual stocks that replicate the performance of a specific market index, such as the S&P 500. Unlike traditional mutual funds or exchange-traded funds (ETFs), direct indexing uses Separately Managed Accounts (SMAs), which provide greater customization, control, and tax advantages.
In a typical mutual fund or ETF, an investor buys shares of a pooled portfolio of stocks. The downside of this approach is the lack of flexibility—it’s difficult to exclude stocks from specific sectors or adjust for personal values. However, with direct indexing, investors hold individual stocks within their portfolios. This offers several key benefits:
Tax Loss Harvesting: Direct indexing allows for efficient tax loss harvesting, which can offset capital gains and reduce taxable income.
Customizations for Values and Financial Goals: Investors can exclude industries or companies they don’t want to invest in (e.g., tobacco or fossil fuels) and tailor sector exposures to match their financial outlook.
Flexibility: Direct indexing allows for greater control over investment decisions, as investors can add or remove individual stocks at their discretion.
Let’s take a closer look at some of the primary benefits of direct indexing.
The Power of Tax Alpha
One of the key reasons that direct indexing stands out as a wealth management tool is its ability to generate tax alpha. Tax alpha refers to the incremental value that is added to an investment portfolio through strategic tax-efficient strategies, such as tax loss harvesting.
Tax loss harvesting is particularly beneficial in volatile markets, where the value of individual stocks can fluctuate dramatically. In these circumstances, investors can sell underperforming stocks at a loss, which can be used to offset other gains or income within their portfolio. This strategy can potentially add 0.5% to 2% to your annual returns.
Here’s a breakdown of how tax loss harvesting works in the context of direct indexing:
Identify Losses: The first step is to sell underperforming stocks to realize a loss. While it’s not ideal to sell stocks at a loss, this can be a beneficial move when it helps to offset taxable gains.
Offset Gains: The loss from the sale can be used to offset capital gains or reduce taxable income, lowering your overall tax liability.
Reinvest Strategically: To maintain exposure to the same sectors or industries, investors can replace the sold positions with similar securities (often referred to as “tax-efficient replacements”). This allows them to preserve their portfolio’s overall strategy without triggering the wash-sale rule, which prevents investors from claiming tax losses on positions they repurchase within 30 days.
For high-net-worth individuals, tax loss harvesting can provide a significant advantage, especially during periods of market turbulence. This proactive strategy helps investors reduce their tax burden and optimize long-term growth.
Personalized Portfolios for Unique Goals
Direct indexing isn’t just about tax optimization—it also offers exceptional customization options, allowing families and business owners to align their investment portfolios with their unique goals, values, and financial objectives.
Align with Your Values: Many investors want to ensure that their portfolios reflect their personal values. With direct indexing, you have the ability to exclude industries or specific companies that don’t align with your ethical or social principles. For example, if you prefer not to invest in tobacco or fossil fuels, direct indexing allows you to tailor your holdings accordingly.
Tailor Exposures to Your Financial Goals: High-net-worth families and business owners often have specific financial objectives—whether that’s prioritizing growth, minimizing risk, or investing in specific sectors. With direct indexing, you can fine-tune your portfolio to emphasize the sectors or companies that align with your investment strategy and outlook for the future.
Direct indexing enables a level of portfolio customization that traditional index funds and ETFs simply cannot match. Whether you’re focused on long-term growth or specific sector exposure, this strategy offers the flexibility to build a portfolio that is perfectly aligned with your financial goals.
Best Use Cases for Direct Indexing
Direct indexing has several key advantages, but it is particularly effective in certain scenarios. Here are the best use cases for this approach:
Maximizing Tax Benefits in Taxable Accounts: For high-net-worth individuals with taxable accounts, direct indexing is a powerful tool for maximizing tax benefits. The ability to conduct tax loss harvesting and strategically offset capital gains can have a significant impact on long-term portfolio growth. This is especially important for families and business owners who may face higher tax liabilities due to significant income or capital gains.
Preparing for Liquidity Events: Business owners who are approaching a sale or other liquidity events, such as an acquisition or IPO, can greatly benefit from direct indexing. The strategy can help optimize the management of newfound wealth after these events by offering greater tax efficiency and diversification. It also provides the flexibility to adjust exposures based on changing financial circumstances and goals.
Managing Concentrated Stock Positions: Many executives and business owners hold significant amounts of stock in their own company. Direct indexing offers a tax-efficient way to diversify these concentrated positions without triggering massive tax bills. By strategically selling portions of the company stock and reinvesting in a diversified portfolio, business owners can reduce risk and maintain tax efficiency.
Why Now?
In today’s volatile markets, wealth preservation and tax efficiency are more critical than ever. Global economic uncertainty, fluctuating interest rates, and ongoing market disruptions demand proactive and flexible wealth management strategies. Direct indexing offers a unique combination of personalization, tax optimization, and customization that traditional investment vehicles simply can’t provide.
For high-net-worth families and business owners, direct indexing is more than just a tool for tax efficiency—it’s an investment strategy that provides control, flexibility, and growth potential. By partnering with wealth management experts who specialize in direct indexing, you can take a hands-on approach to safeguard your wealth, manage risk, and optimize returns.
Connect With Centura
At Centura Wealth Advisory, we go beyond a traditional multi-family office wealth management firm to offer advanced tax and estate planning solutions which traditional wealth managers often lack in expertise, knowledge, or resources to offer their clients.
We invest heavily into technology and systems to provide our clients with fully transparent reporting and tools to make informed decisions around their wealth plan.
Connect with our team today to learn how we can help you navigate complex financial decisions and secure your financial future with confidence.
Disclosures
Centura Wealth does not make any representations as to the accuracy, timeliness, suitability, or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein. All such information is provided solely for convenience purposes and all users thereof should be guided accordingly.
We are neither your attorneys nor your accountants and no portion of this material should be interpreted by you as legal, accounting, or tax advice. We recommend that you seek the advice of a qualified attorney and accountant.
For additional information about Centura, please request our disclosure brochure as set forth on Form ADV using the contact information set forth herein, or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov). Please read the disclosure statement carefully before you engage our firm for advisory services.
https://centurawealth.com/wp-content/uploads/2025/01/Screenshot-2025-01-30-at-4.25.47 PM.png402608centurawealthhttps://centurawealth.com/wp-content/uploads/2024/07/Centura-Logo-Grey.pngcenturawealth2024-12-04 00:21:002025-01-31 01:07:51Ep. 104: How to Protect Wealth & Maximize Tax Efficiency for High-Net-Worth Families & Business Owners
Trust planning can be overwhelming, especially with tax laws that seem to change constantly. But understanding the ins and outs of grantor and non-grantor trusts is key to making smart decisions about your wealth and legacy.
In this episode of the Live Life Liberated podcast, Kyle Malmstrom from Centura Wealth Advisory and Adam Buchwalter from Wilson Elser break down the differences between grantor and non-grantor trusts, and how they can be used to optimize your income and estate tax strategies.
What Are Grantor and Non-Grantor Trusts?
At the most basic level, trusts fall into two categories when it comes to taxes: grantor trusts and non-grantor trusts. Both types of trusts are designed to move assets out of your taxable estate, but they handle taxes in very different ways.
A grantor trustis treated as if the grantor (the person who creates the trust) still owns the trust’s assets for tax purposes. This means that all the income generated by the trust is reported on the grantor’s personal tax return.
“A grantor trust is, in essence, invisible to the grantor. All income is reported on the grantor’s personal tax return, while the trust grows tax-free.” – Adam Buchwalter, Wilson Elser
While the grantor pays taxes on the income generated by the trust, the trust itself is not taxed on the money it earns. The key benefit here is that the trust can grow without being burdened by taxes, helping assets compound over time.
In contrast, a non-grantor trust is a separate tax entity. It gets its own tax identification number and must file its own tax returns. Non-grantor trusts are taxed at their own rates, which are generally higher than individual rates, and any income the trust generates is taxed within the trust.
The Upside of Grantor Trusts
Grantor trusts can be a great way to accelerate wealth growth, especially for those looking to pass wealth on to future generations without the drag of taxes.
“Because the grantor pays the taxes, the trust can grow faster without the drag of taxes. This payment is not considered an additional gift to the trust.” – Adam Buchwalter
By paying the taxes on the trust’s income, the assets in the trust are free to grow without being diminished. This can be especially helpful when you’re looking to pass down wealth to heirs, as it allows the trust to accumulate more value over time. It’s also a powerful tool in estate and asset protection planning.
That said, there are some things to keep in mind. Legislative proposals, like those in Senator Elizabeth Warren’s bill and President Biden’s Green Book, could change how grantor trusts are taxed. These changes might limit the benefits of grantor trusts, particularly for future contributions.
Why Go With Non-Grantor Trusts?
Non-grantor trusts offer a different set of benefits that can be especially helpful for individuals in high-tax states or those looking to maximize their tax efficiency.
“By domiciling the trust in a state like Nevada, where there’s no state income tax, you can save millions on transactions like the sale of a business or stock.” – Adam Buchwalter
For example, if you live in a high-income tax state like California, a non-grantor trust can help you avoid those state taxes by setting up the trust in a state with no income tax, such as Nevada or Delaware. This can lead to significant savings, particularly when selling assets like a business or stocks.
Non-grantor trusts also tend to be more insulated from changes in tax laws. While grantor trusts are more directly affected by tax law changes, non-grantor trusts are taxed as separate entities, which can provide more stability in the face of potential legislative shifts.
Why the Time to Act Is Now
Given the potential changes in tax regulations, now is the perfect time to consider your trust planning options. With proposals that could impact the tax treatment of grantor trusts, it may be wise to set up or fund your trust before any new legislation is passed.
“This may be your last planning opportunity. Talk to your advisors now to ensure your trust is set up properly and aligns with your goals.” – Kyle Malmstrom, Centura Wealth Advisory
Talking to your financial and legal advisors now can help ensure that your trust is set up in a way that takes full advantage of current tax rules. Whether you’re setting up a new trust or making changes to an existing one, getting proactive now can protect the benefits you currently enjoy.
Trust Strategies Tailored to Your Family
No two families are the same, and your trust planning should reflect your unique financial situation. Whether your focus is on minimizing taxes, preserving your wealth, or supporting charitable causes, it’s important to have the right strategy in place.
A custom trust strategy can help optimize your income tax savings, minimize estate taxes, and support your philanthropic goals. The right advisors will help you navigate the complexities of trust planning and ensure that your strategy fits your family’s needs.
Connect With Centura
At Centura Wealth Advisory, we go beyond a traditional multi-family office wealth management firm to offer advanced tax and estate planning solutions which traditional wealth managers often lack in expertise, knowledge, or resources to offer their clients.
We invest heavily into technology and systems to provide our clients with fully transparent reporting and tools to make informed decisions around their wealth plan.
Centura Wealth does not make any representations as to the accuracy, timeliness, suitability, or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein. All such information is provided solely for convenience purposes and all users thereof should be guided accordingly.
We are neither your attorneys nor your accountants and no portion of this material should be interpreted by you as legal, accounting, or tax advice. We recommend that you seek the advice of a qualified attorney and accountant.
For additional information about Centura, please request our disclosure brochure as set forth on Form ADV using the contact information set forth herein, or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov). Please read the disclosure statement carefully before you engage our firm for advisory services.
https://centurawealth.com/wp-content/uploads/2025/01/Screenshot-2025-01-30-at-4.46.03 PM.png544819centurawealthhttps://centurawealth.com/wp-content/uploads/2024/07/Centura-Logo-Grey.pngcenturawealth2024-11-13 00:40:002025-02-19 17:45:57Ep. 103: Grantor vs. Non-Grantor Trusts: Tax Strategies for Wealth Preservation
Inflation & Labor Data: With inflation data continuing to decline, illustrated by the latest headline and core PCE data of 2.1% and 2.7%, respectively, the focus has turned to the labor market. September’s labor report included noise related to Hurricanes Helene and Milton and the Boeing strike, making it difficult to assess the latest reading of labor market health. The unemployment rate remains at 4.1%.
U.S. Election: Donald Trump was elected the 47th President, and markets are likely to experience short-term volatility as they adjust to the results and the subsequent implications for broader markets.
Fed & Monetary Policy: The Fed cut interest rates by 50-bps in September, with an additional 50-bps of cuts forecasted by Fed officials through the end of 2024. Monetary policy decisions continue to be data dependent, meaning markets have become more data dependent, creating volatility ahead of future Federal Open Market Committee (FOMC) meetings, including the next one on November 6.
Equity Markets: As of month-end, the S&P 500 is experiencing the best first 10 months of an election year since 1936. Additionally, the third quarter earnings season is off to a solid start, with positive, albeit slowing, quarter-over-quarter earnings growth.
Asset Class Performance
International markets fared the worst in October, with bonds, developed international equities, and emerging market equities all down over 4%. U.S. large cap equities were slightly down for the month and experienced volatility ahead of the November U.S. election but remain up 20% on a year-to-date basis. High yield bonds performed better than investment grade bonds in the U.S.
Source: YCharts. Asset class performance is presented using total returns for an index proxy that best represents the respective broad asset class. U.S. Bonds (Bloomberg U.S. Aggregate Bond TR), U.S. High Yield (Bloomberg U.S. Corporate High Yield TR), International Bonds (Bloomberg Global Aggregate ex-USD TR), U.S. Large Cap (S&P 500 TR), U.S. Small Cap (Russell 2000 TR), Developed International (MSCI EAFE TR), Emerging Markets (MSCI EM TR), and Real Estate (Dow Jones U.S. Real Estate TR).
Markets & Macroeconomics
3Q Earnings Season – Slower but Solid Growth
U.S. equity markets continue to surprise investors in 2024 with their solid performance. Even amidst the volatility and uncertainty in the lead-up to the U.S. Election throughout October, major equity indices, like the S&P 500 and Nasdaq-100, continued their run-up and reached all-time highs over the month, with both indices up 20% year-to-date through October 31. In fact, the S&P 500 experienced the best first 10 months of an election year since 1936, and this trend may continue depending on the election outcome.
Looking at third quarter (Q3) earnings data, 70% of companies in the S&P 500 have reported earnings as of month-end, with eight out of the eleven sectors reporting year-over-year growth. A lot of this has to do with the larger macroeconomic picture, where the U.S. is seeing a resilient consumer and a strong labor market, both of which have contributed to solid corporate profits. Additionally, the percentage of companies in the S&P 500 reporting earnings above consensus estimates is the predominant trend across most sectors, depicted by the green bars in Exhibit 1 below.
Exhibit 1: Earnings Scorecard
The S&P 500 is currently reporting 5.1% earnings growth as of month-end, and, if this trend continues through the end of earnings season, it will mark the fifth-straight quarter of earnings growth. The magnitude of growth, however, illustrates a slowing trend, compared to the 10.9% and 11.3% growth seen in Q1 and Q2 of this year, respectively. This slowdown in Q3 is largely being driven by the energy sector.
Source: FactSet. Data as of 11/01/24
With the slower growth trend in Q3 earnings, investors may be wondering why equity markets continue to reach new highs, and, while earnings are generally supportive of current market valuations, the S&P 500 remains relatively rich in today’s environment, placing even greater focus on future company earnings growth potential.
Prudent investors understand that markets don’t go up forever, nor do company earnings, and while we have witnessed solid performance in the ongoing Q3 earnings season, as well as in 2024 as a whole, it does not mean this trend will continue in perpetuity. The U.S. will have to contend with falling interest rates, a new political regime, and potential policy changes, all of which could have trickle-down effects on corporate earnings, making this and future earnings seasons ever-important to watch.
The Bottom Line: Thus far, third quarter earnings have been relatively solid, surprising investors to the upside, illustrated by above-estimate earnings growth, and while we are starting to see this growth moderate from recent quarterly trends, corporate profits remain on solid footing amidst an uncertain macro and fiscal backdrop.
Looking Ahead
U.S. Election, Fiscal Policy & Muni Markets
The 2024 U.S. Presidential election has shaped up to be one for the history books, with major policy decisions surrounding international trade, health care, and, perhaps most importantly, taxes, on the docket. The uncertainty surrounding these potential policy changes may concern some investors, but it is important to keep in mind that policy implementation takes time and is not a foregone conclusion given how close races across Congress have been.
One of the most important policy decisions that will have to be addressed is the Tax Cuts and Jobs Act (TCJA), which is scheduled to sunset at the end of 2025, unless the newly elected President moves to extend it. Choosing to extend all, or part, of the TCJA could impact corporate tax rates, individual income tax rates, alternative minimum tax (AMT) exemptions, to name a few, and most importantly, any extension is expected to increase the federal deficit. The Congressional Budget Office (CBO) estimates that, if extended, the TCJA could cause federal net debt-to-GDP to increase to nearly 132% by 2034, as illustrated in Exhibit 2, from the current level of approximately 98%.
Exhibit 2
Source: J.P. Morgan Asset Management. Data as of 10/31/24
These potential tax changes offer investors the opportunity to assess their tax ramifications and diversify their fixed income exposure, particularly in the tax-exempt, or municipal, bond market. Municipal bonds are issued to fund local projects and agencies, including initiatives related to schools, parks, airports, and toll roads. The interest on municipal bonds is typically exempt from federal, often state, and even local taxes, making them attractive for higher-taxed individuals and entities. Unlike the federal government, municipal governments are not facing the same level of fiscal challenges as they are required to have a balanced budget, making them a potentially important diversifier as the federal deficit expands.
It does not appear either party in the U.S. is equipped to deal with the rising federal deficit, and, while worrisome, investors should focus on what they can control: managing risk and exposure of their investments. Diversifying exposure by looking to other areas of fixed income, like municipal bonds, can help provide greater stability and manage risk related to fiscal and tax policy decisions on the horizon.
Remember, policy changes take time and require collective government action, and, while investors wait for any changes to occur, they can enjoy elevated tax equivalent yields across the municipal curve and a strong outlook for fixed income amidst the falling interest rate and fiscally challenged environment.
The Bottom Line: With voting for the U.S. Election closed and markets digesting the results, the focus will begin to turn to fiscal policy, particularly as it relates to tax policy and the 2017 Tax Cuts and Jobs Act. Given continued rising fiscal deficits, the timing may be appropriate for investors to consider diversifying exposure across the entire fixed income spectrum, including in municipal securities, which are currently offering higher income advantages relative to historical averages, and, in many cases, traditional fixed income on a tax-adjusted basis.
Capital Markets Themes
What Worked, What Didn’t
•International Markets Had Tougher October: International markets, including both developed international and emerging markets equities, performed the worst for the month of October, down over 5% and 4%, respectively.
•Municipal Bonds Outperform Taxable: Municipal bonds underperformed in October but outpaced taxable bonds by 100 bps, with high yield municipals delivering the strongest performance and highest yield advantages.
Large vs Small Cap Equity
Growth vs Value Equity
Developed vs Emerging Equity
Short vs Long Duration Bonds
Taxable vs Municipal Bonds
Investment Grade vs High Yield Bonds
Source: YCharts. Data call-out figures represent total monthly returns
On Alternatives
Supply/Demand Dynamics in Multifamily Real Estate
The multifamily real estate market is currently experiencing a historic wave of new supply in 2024, with over 671,000 units projected to be completed this year according to RealPage, the highest level since 1974. This supply/demand dynamic is illustrated in Exhibit 3, where deliveries in the multifamily sector have outpaced absorption since 2022 when the Fed started raising interest rates. While this current surge in supply is meaningful, it is likely to be temporary, as the increased cost of financing due to higher interest rates have halted new construction projects. Experts project multifamily supply will start to dry up after 2025, causing the supply/demand dynamic to shift once again.
Exhibit 3
Source: J.P. Morgan Asset Management. Data as of 9/30/24
The current oversupply within multifamily severely hampers rent growth, which benefits tenants, but restricts the property’s ability to drive revenue growth. Coupled with higher interest rates, operating expense growth has outpaced rent growth, a trend that is expected to continue until supply dwindles in 2026.
While the multifamily sector is trying to absorb the excess supply hitting the market, demand remains somewhat strong, due in large part by the lack of home affordability across the nation. Along with high interest rates, mortgage rates have also been historically high, with the 30-year mortgage rate around 6.7%, causing home affordability to reach a 10-year low, both illustrated in Exhibit 4. In fact, the median price of a home in the U.S. is currently around $420,000, a 32% increase over the past 5 years.
While the home affordability metrics are grim, they create a significant tailwind for multifamily housing as the double-whammy of high mortgage rates and low home affordability have priced many tenants out of single-family homes, pushing them into multifamily housing instead.
It may be a bumpy ride along the way as supply/demand dynamics shift back into favor, but beyond 2025, we expect properties to perform well and rent growth to pick back up in the multifamily sector, particularly as the Fed continues to cut interest rates.
Exhibit 4: Home Affordability vs. Mortgage Rate
Source: YCharts. Data as of 10/31/24
The Bottom Line: The multifamily real estate sector is currently experiencing a surge of new supply, hampering rent growth amid rising expenses due to high interest rates, labor costs, and insurance. Demand remains robust as home affordability in the U.S. has reached a 10-year low. These supply and demand dynamics are expected to shift after 2025 when the influx of new supply falls off a cliff.
Asset Class Performance Quilt
Markets are ever-changing, making diversification across asset classes and sectors a critical component to portfolio construction. As illustrated below, a Balanced 60/40 portfolio provides greater consistency of returns and less volatility over time.
Source: YCharts. Asset class performance is presented using market returns from an exchange-traded fund (ETF) proxy that best represents its respective broad asset class. Returns shown are net of fund fees for and do not necessarily represent performance of specific mutual funds and/or exchange-traded funds recommended by Centura Wealth Advisory. The performance of those funds may be substantially different than the performance of broad asset classes and to proxy ETFs represented here. U.S. Bonds (iShares Core U.S. Aggregate Bond ETF); High Yield Bonds (iShares iBoxx $ High Yield Corp Bond ETF); Intl Bonds (Invesco International Corporate Bond ETF); Large Growth (iShares Russell 1000 Growth ETF); Large Value (iShares Russell 1000 Value ETF); Mid Growth (iShares Russell Mid-Cap Growth ETF); Mid Value (iShares Russell Mid-Cap Value ETF); Small Growth (iShares Russell 2000 Growth ETF); Small Value (iShares Russell 2000 Value ETF); Intl Equity (iShares Core MSCI EAFE ETF); Emg Markets (iShares MSCI Emerging Markets ETF); and Real Estate (iShares US Real Estate ETF). The return displayed as “60/40 Allocation” is a weighted average of the ETF proxies shown as represented by: 40% U.S. Bonds, 12% International Stock, and 48% Large Blend.
Disclosure: CCG Wealth Management LLC (“Centura Wealth Advisory”) is a registered investment advisor. Advisory services are only offered to clients or prospective clients where Centura and its representatives are properly licensed or exempt from licensure. Insurance products are implemented through CCG Insurance Services, LLC (“Centura Insurance Solutions”). Centura Wealth Advisory and Centura Insurance Solutions are affiliated. For current Centura Wealth Advisory information, please visit the Investment Adviser Public Disclosure website at www.adviserinfo.sec.gov by searching with Centura Wealth Advisory’s CRD #296985.
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Managing significant wealth comes with complexities that go beyond basic financial planning. For ultra-high-net-worth families—those with a net worth of $20 million or more and annual incomes exceeding $2 million—building a lasting legacy requires a strategic and personalized approach. At Centura Wealth Advisory, Derek Myron and Sean Clark specialize in crafting solutions tailored to the unique needs of business owners, C-suite executives, and other high-net-worth individuals.
In a recent episode of the Live Life Liberated podcast, Derek and Sean shared insights into Centura’s distinctive service model, their approach to investment and tax strategies, and how they help clients optimize their wealth to create long-term financial security.
Tune in below:
Understanding the Unique Needs of Ultra-High-Net-Worth Families
Traditional financial planning isn’t enough for those with complex wealth. Business ownership, real estate investments, and tax-efficient wealth transfer require a deeper level of expertise.
Centura Wealth Advisory takes a holistic approach to financial management, ensuring that every aspect of a client’s financial picture is optimized. Whether planning for the sale of a business, structuring generational wealth transfers, or maximizing tax efficiency, their strategies go beyond cookie-cutter solutions.
“Our service model is designed to help ultra-high-net-worth families not only manage their wealth but also maximize its impact, both for their lifetime and for future generations,” Derek explains.
The Liberated Wealth Planning Process: A 5X Approach
One of the cornerstones of Centura’s strategy is their Liberated Wealth Planning Process, which aims to deliver five times the return on costs by focusing on tax mitigation, balance sheet optimization, and strategic investment planning.
Sean breaks it down:
“We’re not just managing assets. We’re integrating a full-picture approach that includes investment planning, tax strategy, estate structuring, and business transition planning. The goal is to create efficiencies that significantly increase the value we provide.”
This process helps clients retain more of their wealth by minimizing unnecessary taxes and ensuring assets are working as effectively as possible.
Helping Business Owners Plan for Their Next Chapter
Many of Centura’s clients are business owners preparing for a sale or transition. These transitions require more than just financial projections—they need a clear roadmap for maximizing liquidity while minimizing tax burdens.
“We specialize in helping entrepreneurs who are considering selling their companies. Our planning ensures that when they do exit, they’re in the best financial position possible,” Derek says. “That means structuring deals wisely, considering tax implications, and ensuring their wealth is aligned with their long-term goals.”
By addressing everything from estate planning to reinvestment strategies, Centura helps business owners confidently move into the next phase of their financial lives.
Balancing Personalization with Exclusive Investment Access
One of Centura’s key differentiators is what Derek calls the “Goldilocks” approach—being small enough to provide highly personalized service but large enough to offer clients exclusive alternative investment opportunities.
“A lot of firms are either too small to offer meaningful opportunities or too large to provide truly customized strategies,” Sean explains. “We bridge that gap by ensuring our clients get both.”
These alternative investment opportunities can include private equity, real estate, and tax-efficient vehicles that go beyond traditional stock and bond portfolios. The goal is to maximize returns while maintaining a strategy aligned with each client’s risk tolerance and long-term vision.
Transparency and Trust: The Foundation of Client Relationships
At Centura, building long-term relationships based on trust and transparency is a top priority. From the first client meeting through ongoing wealth management, communication and clarity remain central to their process.
“We want clients to know exactly what they’re getting from us at all times,” Derek emphasizes. “That means clear reporting, open discussions about investment strategies, and a process that prioritizes their best interests.”
This commitment to transparency ensures that clients feel confident in their financial strategies and trust that Centura is always acting in their best interests.
Key Takeaways from the Discussion:
Specialized Planning for Business Owners: Centura helps entrepreneurs maximize their wealth before and after selling their businesses.
The Liberated Wealth Process: Designed to provide a 5X return on costs through strategic tax and investment planning.
Exclusive Investment Access: Personalized services paired with alternative investment opportunities.
The “Goldilocks” Firm Philosophy: Large enough to access meaningful opportunities, small enough for personalized attention.
Transparency and Trust: A client-first approach that ensures clarity in planning and execution.
For ultra-high-net-worth individuals looking to optimize their financial strategies, Centura Wealth Advisory offers a unique blend of expertise, personalized service, and exclusive opportunities. By focusing on long-term wealth preservation and tax-efficient planning, they help clients turn financial success into a lasting legacy.
Connect With Centura
At Centura Wealth Advisory, we go beyond a traditional multi-family office wealth management firm to offer advanced tax and estate planning solutions which traditional wealth managers often lack in expertise, knowledge, or resources to offer their clients.
We invest heavily into technology and systems to provide our clients with fully transparent reporting and tools to make informed decisions around their wealth plan.
Centura Wealth does not make any representations as to the accuracy, timeliness, suitability, or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein. All such information is provided solely for convenience purposes and all users thereof should be guided accordingly.
We are neither your attorneys nor your accountants and no portion of this material should be interpreted by you as legal, accounting, or tax advice. We recommend that you seek the advice of a qualified attorney and accountant.
For additional information about Centura, please request our disclosure brochure as set forth on Form ADV using the contact information set forth herein, or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov). Please read the disclosure statement carefully before you engage our firm for advisory services.
https://centurawealth.com/wp-content/uploads/2025/02/iStock-1917771195-3.jpg8361253centurawealthhttps://centurawealth.com/wp-content/uploads/2024/07/Centura-Logo-Grey.pngcenturawealth2024-10-24 06:16:232025-02-07 06:22:43Ep. 102: From Planning to Profit: The Centura Wealth Approach
What’s the secret to cultivating a workplace where people are empowered, engaged, and driven to succeed?
At Centura Wealth Advisory, it all starts with a commitment to core values and a leadership approach rooted in trust and open communication.
Krystal Puryear, SHRM-CP, Director of People and Culture, and Nicole Hubbs, Talent Acquisition Specialist, share how Centura has built a thriving culture by focusing on transparency, excellence, integrity, passion, and respect.
From using Radical Candor to foster trust and autonomy to creating opportunities for employee growth and innovation, this conversation provides valuable insights for any business leader or HR professional looking to strengthen their organizational culture.
Tune in below to learn more.
The Role of Core Values in Shaping a Thriving Work Environment
At Centura Wealth Advisory, core values play an essential role in creating an engaging and empowering workplace. Krystal, who oversees all things People and Culture, emphasized how the company’s values shape its workplace dynamic: “We have a set of core values that really define who we are as an organization. These values are the foundation of everything we do and the way we interact with our team members.”
The core values of Centura include transparency, excellence, integrity, passion, and respect—values that guide their day-to-day operations and contribute to a culture where employees feel supported and encouraged to reach their full potential.
The Power of Radical Candor in Building Trust and Autonomy
A standout aspect of Centura’s leadership approach is the use of Radical Candor. This method, popularized by Kim Scott, emphasizes clear and direct communication, while also showing care and respect for individuals. Krystal and Nicole discussed how Radical Candor helps create a culture of trust and autonomy, where employees feel empowered to share their opinions and take ownership of their work.
Krystal explained, “Radical Candor allows for open communication between all team members and helps us foster trust. It also gives our employees the autonomy to make decisions and innovate. When they feel trusted, they’re more likely to take ownership and contribute in meaningful ways.”
This trust-building approach encourages employees to take initiative, ask for feedback, and embrace opportunities for growth—ultimately contributing to the company’s success.
Executive Coaching and Leadership Development
One key element of Centura’s success is its investment in leadership development. Both Krystal and Nicole shared how the company emphasizes coaching and mentorship to foster leadership growth within the organization.
Nicole highlighted the value of executive coaching: “We believe in investing in our leaders. Whether they’re new to a leadership role or have been in the position for a while, we provide executive coaching to help them continue developing their leadership skills.”
This commitment to leadership development is crucial to creating an environment where managers and leaders can inspire their teams and lead with confidence.
Open Communication and Social Events for Team Bonding
Building trust and transparency extends beyond formal leadership training. At Centura, open communication is encouraged at every level of the organization. This commitment to communication is not just about talking—it’s about listening and making space for honest feedback. As Krystal explained, “We value open and honest communication, and we always try to create opportunities for our employees to have their voices heard.”
In addition to open communication, Centura fosters strong relationships through social events and team-building activities. These events allow employees to connect on a personal level and strengthen bonds within the team. Nicole shared how social events help reinforce trust and create a sense of community: “We have regular social events and activities that help strengthen relationships within the team. It’s all about creating a sense of belonging and camaraderie, which ultimately drives engagement.”
Hiring for Culture Fit: Aligning Talent with Company Values
One of the most important aspects of Centura’s culture-building approach is identifying and hiring talent that aligns with the company’s core values. Nicole, who plays a key role in talent acquisition, discussed how she ensures that candidates align with Centura’s culture during the hiring process: “When we hire, we’re not just looking for skills—we’re looking for people who will embody our core values. It’s about finding talent that’s a good fit for the culture, which is critical to maintaining a positive work environment.”
By ensuring that new hires are a strong cultural fit, Centura sets the stage for long-term success and fosters a cohesive, collaborative workforce.
Encouraging Employee Autonomy and Innovation
A key part of Centura’s culture is empowering employees with the autonomy to make decisions and take initiative. By creating an environment where employees are encouraged to think creatively and innovate, Centura fosters a sense of ownership and responsibility.
Krystal shared how the company gives employees the freedom to grow and take risks: “We encourage autonomy because we believe that when employees have the freedom to make decisions and explore new ideas, it leads to greater innovation and productivity. It also helps them develop a sense of ownership in their work.”
This approach not only leads to higher levels of engagement but also drives innovation within the company, enabling Centura to continuously improve and adapt to changing market conditions.
The Diamond Team Model: Enhancing Collaboration and Career Development
Centura’s Diamond Team model plays a significant role in enhancing collaboration, knowledge sharing, and career development. Krystal explained: “The Diamond Team model encourages cross-functional collaboration and allows employees to work on diverse projects. It’s a great way for individuals to learn new skills, share knowledge, and grow their careers within the company.”
This model promotes a collaborative environment where employees from different departments can come together, share ideas, and contribute to the company’s success. It also supports career growth by providing employees with opportunities to gain experience in different areas of the business.
Upcoming Team Events and Celebrations
To further strengthen employee engagement and appreciation, Centura regularly organizes team events and celebrations. These events give employees a chance to relax, bond, and celebrate their achievements together. Krystal and Nicole shared some of the upcoming events planned to show appreciation for the team: “We always look for ways to celebrate our team. Whether it’s a holiday party or a team-building retreat, we want to make sure that everyone feels appreciated and valued.”
These events help reinforce the company’s commitment to creating an engaging and supportive workplace where employees feel recognized for their contributions.
Key Takeaways:
Centura Wealth Advisory’s success is driven by a commitment to core values, a leadership approach rooted in trust, and a focus on employee empowerment. By fostering open communication, encouraging autonomy, and investing in leadership development, Centura has created a culture where employees are engaged, motivated, and passionate about their work. Whether you’re a business leader or an HR professional, the insights shared by Krystal and Nicole provide a roadmap for building a thriving organizational culture that drives success.
Connect With Centura
At Centura Wealth Advisory, we go beyond a traditional multi-family office wealth management firm to offer advanced tax and estate planning solutions which traditional wealth managers often lack in expertise, knowledge, or resources to offer their clients.
We invest heavily into technology and systems to provide our clients with fully transparent reporting and tools to make informed decisions around their wealth plan.
Centura Wealth does not make any representations as to the accuracy, timeliness, suitability, or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein. All such information is provided solely for convenience purposes and all users thereof should be guided accordingly.
We are neither your attorneys nor your accountants and no portion of this material should be interpreted by you as legal, accounting, or tax advice. We recommend that you seek the advice of a qualified attorney and accountant.
For additional information about Centura, please request our disclosure brochure as set forth on Form ADV using the contact information set forth herein, or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov). Please read the disclosure statement carefully before you engage our firm for advisory services.
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Markets in the summer months are historically sleepy as individuals go on vacation and gear up for a new school year, but the third quarter brought anything but sleep to investors worldwide. Equities were marred with bouts of negative activity throughout the quarter – markets experienced a historic 180% surge in the VIX to an intraday high of 65.7 on August 5, yet, despite the volatility, both stocks and bonds pushed higher to end Q3. The market’s resilience caused the month of September to post its first gain in five years. While initially overreacting to adverse events, markets quickly put them in the rearview mirror as the S&P 500 witnessed the best nine-month start to a year since 1997, which also coincided with the best start to an election year ever, all while registering its 42nd all-time high of the year. The busy quarter witnessed the following:
Yen Carry Trade – On the heels of the Bank of Japan’s rate increase announcement, global hedge funds that capitalized on the arbitrage opportunity presented by zero long-term rates in Japan for years, realized the music was about to stop in early August. Quickly unwinding their trades, Japan’s Nikkei stock market experienced the largest single day loss dating back to “Black Monday” in 1987, resulting in a single-day decline of 12.4% on August 5.
Softening Labor Market – The Bureau of Labor Statistics announced an 818,000 revision lower for the prior 12-months jobs added through March of 2024. The labor reports for June, July, and August confirmed softening with the revised additions of 118,000, 61,000, and 142,000, respectively. Every month in the quarter came in below expectations, as the unemployment rate continued to rise – ending at 4.2% through August.
Assassination Attempts – Former President Trump survived two assassination attempts in the quarter as the Presidential race picks up steam, further adding to the market’s anxiety amid election uncertainty.
Candidate Swap – President Biden dropped out of the Presidential race, paving the way for Vice President Kamala Harris to grab his bid. Since Harris’s party nomination, Democrats have seen a sharp reversal of fortunes, and now hold a slight advantage in the polls as of 10/1.
Fed Rate Cut– In line with traders’ expectations — though surprising to many economists and investors — the Fed aggressively cut rates in September for the first time since 2019, front-loading their easing cycle with a 0.50% reduction in their overnight borrowing rate. This led many to question the Fed’s perception of the economy and whether the central bank could manufacture a soft landing and avoid a recession.
Port Strike– As of 12:01 am Eastern Standard Time on October 1, a union labor strike forced ports on the Eastern US and Gulf Coasts to shut down, threatening the economy. JPMorgan Chase & Co. anticipate the closures will result in economic losses between $3.8 billion to $4.5 billion per day, and will likely cause supply chain disruptions and perhaps transitory inflation. Oxford Economics projects a week-long strike would take about a month to clear the shipping congestion.
Israel-Iran – Iran fired nearly 200 missiles into Israel escalating tensions in the Middle East. Israel cited it would retaliate, and this pledge caused Gold (GLD) prices to reach record highs, a U.S. stock market sell off, losses in Crude oil (USO), and a gain in defense sectors.
In face of the strife and a broadening out in earnings growth, the Fed signaled the start of its easing cycle in July, pointing markets to their first rate cut at the September FOMC meeting. While markets experienced hurdles throughout the quarter, economic growth, fueled by resilient consumer spending, continued to surprise to the upside, and investors chose to focus on these positives, causing both the S&P 500 and bonds, as measured by the Bloomberg U.S. Aggregate Index, to advance more than 5% over the quarter. This solid performance in the face of market angst and during a historically slow period demonstrated that investors’ animal spirits are alive and well.
Market Recap
Equities – After contracting 3.62% in the second quarter, rate cut speculation supported higher returns among the profit-hungry and interest-rate sensitive small caps. The Russell 2000 led the way, up 9.27% in 3Q. Lagging their small cap counterparts, the S&P 500 witnessed a broadening out of market participation away from the Magnificent Seven on its way to a 5.89% return for the quarter, and a 22.08% advancement for the year.
Bonds – Amidst moderating yet conflicting economic growth signals, bond yields fell aggressively during the quarter in anticipation of the first Fed rate cut. Entering July, the yield on the 10-year U.S. Treasury dropped sharply from 4.48% to 3.66%, leading up to the looming rate cut in mid-September. Generating fewer headlines over the quarter, the Treasury market continued to grapple with robust U.S. debt issuance and weakening demand for U.S. Treasury securities. We believe supply absorption concerns will likely continue to apply upward pressure on yields, illustrated by yields slightly reversing course to close the month of September. The 10-Year U.S. Treasury closed the quarter at 3.81%. The Bloomberg U.S. Aggregate Bond Index rose 5.20% in the quarter, erasing the negative 0.71% return in the first half of 2024, finishing up 4.45% through September 30.
Source: YCharts. The Bloomberg US Aggregate Index was used as a proxy for Bonds; the Bloomberg US High Yield 2% Issuer Capped Index was used as a proxy for High Yield Bonds; the Russell 2000 Index was used as a proxy for Small Cap Equities; and the MSCI ACWI Ex USA Index was used as a proxy for Foreign Equities. All returns are based on total return levels as of 09/30/2024.
Economic data remains mixed, and base case expectations still call for the Fed to successfully achieve a ‘soft landing’ and avoid recession. However, as the Federal Reserve’s attention shifts from price to job stability, the path of monetary policy will likely be driven by the health of the labor market.
Economy: The Consumer Surprises
In contrast with the nation’s revised first quarter GDP growth of 1.6%, which was held down by softer consumer spending of 1.9%, the second quarter surprised to the upside. A lift in personal income fueled a resurgence of consumers’ penchant to spend, as spending jumped to a 2.8% pace, and an 8.3% increase in business investment helped push U.S. growth higher at a 3% annualized pace. Building on the first two quarters of 2024, as of September 27, 2024, the Atlanta Fed’s GDPNow model for Q3 has been revised from 2.9% to 3.1%, indicating a stable, albeit moderating economic growth engine. This revision reflects the sustained trends of a resilient consumer and further business investment, though an economy hindered by negative residential investment.
August’s Labor Market Report registered the 44th consecutive month of job gains. Estimates called for 161,000 jobs in August, and the market once again surprised to the downside with the addition of 142,000 jobs and further downward revisions to June and July’s reports to 118,000 and 61,000, respectively. Conversely, the unemployment rate retraced slightly to 4.2%, which is still nearly 1% higher than the 55-year low of 3.4% in April 2023. The deterioration of the labor market has quickly grabbed the attention of the Fed, as softness became evident across several pockets of the economy.
The Bureau of Labor Statistics announced an 818,000 revision lower for the prior 12-months jobs added, through March of 2024, reflecting weaker job growth than anticipated. Since peaking in 2022, job openings (JOLTs) have continued to trend lower, bouncing around from month-to-month. For example, job openings fell to their lowest level since January of 2021 to 7.71 million in July, only to reverse course back above eight million in August, bringing the ratio of job openings to those unemployed down to 1.13:1. While the ratio of 1.13:1 is above historical levels, the ratio has fallen significantly from nearly two job openings for every job opening in 2022, indicating the labor market is showing signs of tightening. Over the course of the year, the number of open jobs has trended lower, while the number of unemployed job seekers has trended higher, as evidenced by the additional 991,000 unemployed persons from January to August.
Since the Fed embarked on its tightening journey and increased rates, the strength and resiliency of the labor market gave them confidence to keep rates higher for longer. Ultimately, the Fed would like to see wage growth continue to trend lower from its current, elevated level of 3.83%. Given the slowing pace of hiring and the increase in unemployment figures, labor market stability has become a primary concern for the Fed. Fears surrounding further labor market weakening cast doubt on the Fed’s ability to avoid a recession and produce a soft landing. The surge in late July Unemployment Claims helped fuel the market selloff in early August that witnessed the S&P 500 enter a nearly 10% correction, although claims have since retraced. Unemployment Claims (both Initial and Continuing) are released weekly and provide the most up to date insight on the health of the labor market. As mentioned, Initial Claims have fallen from 250,000 on July 27 to 218,000 on September 21, while Continuing Claims have been range-bound between 1.73 million and 1.87 million since the start of the year. Both of these levels are nowhere near levels seen in prior periods leading up to a recession, though remain important to monitor.
Inflation
The Fed appears to be in a position to win the war on inflation. However, we would not be surprised to see a few battles lost from month-to-month as pricing pressure moves towards the Fed’s 2% target. All inflation measures are below wage growth of 3.8%, with both of the Fed’s preferred inflation measures (PCE) coming in at 2.7% or lower. Core inflation, as measured by CPI and PCE, remains stickier: core CPI stayed at 3.2% year-over-year, while core PCE saw a slight uptick in August to 2.7%.
Further evidence of falling price pressures should provide Federal Reserve Chair Jerome Powell the confidence to continue down the path of monetary easing, supporting further rate cuts. Threatening the falling trend in inflation measures are the recent port closures across the Eastern seaboard and the Gulf. We are paying close attention to these closures and hoping for a quick resolution. A prolonged strike could result in serious supply chain constraints, potential price increases for goods, and a slowing in economic output.
Fed Starts Strong Out of the Gate
The Federal Open Market Committee (FOMC) elected to lower rates by 0.50% (50 bps) at their September meeting, while leaving the size of future rate cuts open. The Fed’s decision to cut rates was largely expected. The surprise centered around the size of the Fed’s cut and the subsequent updates to their Summary of Economic Projections (SEP). This surprise was best illustrated by the Fed’s updated median projection for total rate cuts in 2024, which increased from a mere 0.25% of cuts projected in the June SEP to a total of 1.00% worth of cuts in the September SEP, signaling to markets that interest rates would be cut at a more accelerated pace than initially expected.
Many expected the Fed to start slow with rate reductions, pointing to the health of the overall economy. A larger cut can indicate the Fed believes the economy is deteriorating quickly and that they waited too long to cut rates; however, the Fed has downplayed this rhetoric, stating that a 50 bps cut was warranted due to the strength the economy has exhibited.
The Committee held its projection for 2025 at 1.00% (100 bps) of cuts, indicating a slower pace of change as the Fed adopts a more patient data-dependent position after front-loading their easing in the final four months of 2024. Barring any exogenous event or resurgence of inflation, we believe Powell’s plan is to settle into a predictable cadence in terms of size and timing as we transition into 2025. We believe the Federal Reserve will align further rate reductions with their quarterly meetings and updated Summary of Economic Projections to the tune of more traditional 0.25% policy changes. We fully anticipate the Fed will hit its policy target for 2024 with 100 bps of cuts. However, the question remains whether they will do so in the form of one more 0.50% or elect a more traditional policy change and reduce the terminal rate by 0.25% in November and December: we are in the latter camp.
Centura’s Outlook
The Fed’s goal to lower inflation to its 2% mandate and avoid recession is still our base expected outcome. However, the Fed will need to monitor the state of the labor market deterioration closely if they are to fully avoid an economic contraction.
Successfully delivering lower inflation and monetary policy normalization should bode well for equities and bonds, however, as always, there are several potential risks looming and investors should proceed carefully.
By most measures, the S&P 500 is overvalued. According to FactSet, as of September 27, the forward 12-month Price-to-Earnings Ratio (P/E) is 21.6x, which is higher than both the 5-year and 10-year averages of 19.5x and 18.0x, respectively. Current valuations pose a risk to the market, as negative sentiment can lead to sharper selloffs. Also posing a risk to the overall market is the concentration of the Top 10 largest stocks in the S&P 500. According to JPMorgan Asset Management, the 10 largest constituents represent 35.8% of the index, as of August 31, while contributing to 28.1% of the earnings. Concentrations of this magnitude make the index vulnerable to significant changes stemming from those underlying companies, which is one of several reasons we favor global diversification across a multitude of asset classes – both public and private.
In the face of higher borrowing costs, corporate profits remain resilient, illustrated by the fourth consecutive quarter of positive earnings growth by the S&P 500, rising 5.1% in the second quarter. As of September 27, FactSet estimates third-quarter earnings to expand at a slower pace, only advancing 4.6% year-over-year. We are encouraged by the positive earnings growth trends, though the second quarter saw investors punish negative earnings surprises more than they rewarded positive beats. Relative to the five-year average, stocks that beat earnings guidance in 2Q rose less (0.9% vs. 1.0%), while those companies that missed guidance fell nearly double the 5-year average (-4.3% vs. -2.3%), indicating the market appears overvalued, and investors are overreacting to news and resetting expectations.
Since 2023, the Magnificent Seven have been responsible for most of the market’s earnings growth, increasing 31%, versus the 4% contraction of the remaining 493 companies’ earnings in the S&P 500 last year. While third quarter earnings for the 493 companies are expected to be flat for 3Q, we remain optimistic by the fact that JPMorgan is expecting the remaining companies outside the Magnificent Seven to catch up and accelerate earnings throughout the remainder of the year. Both the Magnificent Seven and the S&P 500 ex-Mag Seven are expected to experience double-digit year-over-year earnings growth in the fourth quarter of 21% and 13%, respectively. A broadening of earnings growth should bode well for increased market breadth and carve a path for higher broad-based returns on equities, outside of the Magnificent Seven.
Persistent, elevated rates will continue to cause issues for certain companies, such as small caps, though earnings are expected to grow broadly through the remainder of 2024 and 2025; the Fed’s pivot to lowering rates should alleviate some of the pressure on company financials.
While equities generally produce positive returns during election years, we expect volatility will likely increase as we approach the election through October and early November. The recent political turmoil has created a great deal of market uncertainty, particularly given the differing policy initiatives of both candidates. In the face of uncertainty, we generally avoid making changes to investment portfolios in advance of an election, as the policy expectations could change greatly. Markets tend to rally once the election has concluded. We encourage clients to avoid making rash decisions and stay invested, as we are strong believers that long-term investment outcomes are improved by time in the market, rather than timing the market. We suggest investors concerned with historical market behavior leading up to, and after an election, listen to the podcast we recorded with Michael Townsend, Managing Director, Legislative and Regulatory Affairs at Charles Schwab & Company.
The stock market’s resilient momentum, a more favorable rate environment, a potential post-election rally, and expected earnings growth all serve as potential tailwinds to push equities to further highs. However, a fair amount of uncertainty and risks pose headwinds for markets. Outside of further labor market deterioration or a resurgence of inflation leading to a Fed policy misstep, significant geopolitical risks are present and could result in additional volatility, especially if there are escalations in the Middle East, Eastern Europe, or China. For instance, on October 1, Iran fired nearly 200 missiles into Israel escalating tensions in the Middle East. Israel cited it would retaliate, and, as a result, Gold (GLD) prices reached record highs, U.S. stocks sold off, Crude oil (USO) experienced losses, and investors flocked to safe haven investments and sectors.
Real estate tends to be an interest rate-sensitive asset class; as rates continue to move lower, we anticipate a pick-up in activity and a subsequent reversal of valuations over the next several years. We may not have found the bottom of the real estate market cycle quite yet, though based on improving fundamentals and discussions with our real estate partners, we may be bouncing off the bottom, from a valuation adjustment perspective. Access to nearly-free credit post-pandemic resulted in record numbers of new construction, particularly in commercial real estate sectors like multifamily and industrials. As a result of the Fed’s rate hiking cycle, those new constructions screeched to a halt as the cost to borrow and build has been unfeasible. However, 2024 is still expected to deliver more than 650,000 multifamily units, the most since 1974. Like most goods, price is determined by supply and demand, and real estate is no different. Currently, demand, or absorption, is failing to keep pace in multifamily, applying downward pressure on rents. Furthermore, new higher-quality inventory generally attracts higher rents, forcing older vintage properties to offer rent concessions to remain competitive and applying downward pressure on net operating income (NOI). On the opposite side of the ledger, expenses have outpaced income, particularly the cost of insurance and labor.
We believe we are approaching the light at the end of the tunnel. While valuations may trend sideways over the next 12-18 months, we are optimistic that increased activity resulting from lower interest rates, combined with supply concerns evaporating as we enter 2026 and few-to no new construction starts, should bode well for private real estate in the long-term, with 2024 and 2025 vintages potentially producing strong results at disposition. We continue to remain extremely cautious and selective, focusing on select submarkets, signs of possible distress, and attractive risk-adjusted returns.
Private equity, particularly lower middle market buyouts, appears to have stabilized, potentially presenting attractive investment opportunities relative to public market alternatives. Current yield levels still present challenges for private equity valuations, though, like real estate, lower rates should lead to increased exit activity and higher valuations moving forward. With limited private equity exit opportunities since mid-2022 and our expectation for increased activity, we favor managers specializing in co-investments, GP-led secondaries, and late-stage primaries that offer the potential for superior risk-adjusted returns in this environment, a potentially quicker return of capital, and generally lower fee structures.
Private credit is predominantly floating and tied to a base rate such as the Secured Overnight Financing Rate (SOFR) and closely linked to the Fed Funds overnight rate, as such the asset class has benefited from the Fed’s restrictive monetary policy, though we believe the asset class remains attractive. However, yields on private credit will start to come down as the Fed continues to cut rates, though with a lag to the Fed’s timing as the floating rate on private loans does not adjust immediately. Rather, there is a delay before the loan terms reset lower. Should our Fed rate path expectations prove accurate, we expect private credit to continue to produce a high level of income, particularly on a relative basis.
While the third quarter brought both hurdles and strong market performance, we remain laser-focused on long-term objectives and minimizing volatility in the short-term amidst this data-dependent backdrop.
Thank you for your continued confidence and support. If you have questions or concerns, please contact your Centura Wealth advisor.
The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.
The views expressed in this commentary are subject to change based on the market and other conditions. These documents may contain certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.
All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability, or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.
Centura Wealth Advisory is a registered investment advisor. Advisory services are only offered to clients or prospective clients where Centura Wealth Advisory and its representatives are properly licensed or exempt from licensure. 12255 El Camino Real, St. 125, San Diego, CA 92130.
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Managing a successful business requires more than just revenue growth—it demands strategic financial oversight, tax optimization, and precise estate planning. If you are not fully capitalizing on your business’s financial strategy, you could be missing out on significant opportunities.
That is why Live Life Liberated is celebrating its 100th episode with a value-packed discussion.
In this episode, host Derek Myron interviews Jonny Borok, a highly experienced fractional CFO, about how these financial experts help business owners achieve investment and estate planning goals with greater precision.
Now, let’s explore what a fractional CFO is, why business owners should consider hiring one, and how they play a critical role in wealth management.
What Is a Fractional CFO?
A fractional CFO is a highly skilled financial executive who works with companies on a part-time or contract basis. Unlike a full-time CFO, who is a permanent employee, fractional CFOs provide strategic financial oversight without the cost of a full-time salary.
They help businesses with:
Financial planning and forecasting
Cash flow management
Tax strategy and reporting
Investment and estate planning
Cross-disciplinary collaboration with wealth managers and tax strategists
For businesses with $5 million or more in revenue, a fractional CFO can bring the expertise needed to optimize financial strategy while freeing up leadership to focus on growth.
Why Business Owners Should Consider a Fractional CFO
Many business owners struggle with financial complexity, whether it is managing cash flow, reducing tax burdens, or planning for long-term wealth preservation.
A fractional CFO provides:
Strategic oversight – Aligns business goals with smart financial planning.
Cross-industry expertise – Brings best practices from various industries.
Tax efficiency – Works with tax strategists to minimize liabilities.
Estate planning insights – Ensures business assets transition smoothly to the next generation.
By working alongside wealth managers, accountants, and legal experts, a fractional CFO helps ensure that every aspect of your financial life is coordinated.
How Fractional CFOs Support Investment and Estate Planning
Estate planning and investment strategies go hand in hand. Business owners often accumulate substantial assets, but without proper planning, much of that wealth could be lost to taxes, legal fees, and inefficient structuring.
Here is how a fractional CFO can help:
1. Optimizing Tax Strategies
Identify tax-saving opportunities through entity structuring.
Implement deductions and deferrals to reduce taxable income.
Work with estate planners to minimize estate and gift taxes.
2. Improving Financial Reporting for Smarter Decisions
Establish reliable financial systems to track assets and liabilities.
Provide transparency for investors, partners, and future heirs.
Ensure accurate reporting for tax compliance and wealth preservation.
3. Enhancing Liquidity and Cash Flow Management
Find ways to unlock capital without disrupting operations.
Manage debt and financing strategies for long-term sustainability.
Ensure cash reserves align with business growth and personal wealth goals.
4. Coordinating with Wealth Managers and Legal Teams
Align investment decisions with estate planning goals.
Structure business ownership for smooth succession planning.
Protect business and personal assets from legal risks.
Who Benefits Most from a Fractional CFO?
This strategy is ideal for:
Business owners who need financial leadership but do not want to hire a full-time CFO.
Entrepreneurs with complex tax and estate planning needs.
Companies preparing for a sale, merger, or transition.
Families looking to structure multi-generational wealth.
Whether you are looking to scale your business, optimize taxes, or safeguard your legacy, a fractional CFO can provide the expertise to make smarter financial decisions.
Final Thoughts: The Power of a Unified Financial Strategy
A fractional CFO is more than just a financial consultant—they are a key partner in your overall wealth strategy. By collaborating with wealth managers, tax strategists, and estate planners, they ensure that every financial decision aligns with your long-term goals.
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Many small business owners miss out on significant tax savings each year simply because they’re unaware of certain deductions. One of the most overlooked opportunities is the Qualified Business Income (QBI) deduction. This powerful tax break, introduced in the 2017 Tax Cuts and Jobs Act, allows eligible business owners to deduct up to 20% of their qualified business income—but many fail to claim it due to poor planning or lack of proper advisory support.
In a recent episode of Live Life Liberated, hosts Greg Klipstein and Samantha Lawrence break down the QBI deduction, explain why it’s often missed, and discuss how business owners can maximize their tax savings.
Read on to learn more.
What Is the QBI Deduction?
The QBI deduction was created as a response to corporate tax cuts that primarily benefited large businesses. The goal was to ensure small business owners—who employ over 75% of the U.S. workforce—could also receive tax relief.
Eligible business owners can deduct up to 20% of their qualified business income, significantly lowering their taxable income. However, not all businesses qualify, and certain income limitations and restrictions apply.
Who Qualifies?
Sole proprietorships
Partnerships
S corporations
Some real estate investors
Who Doesn’t Qualify?
C corporations
High-income earners in specified service trades (lawyers, doctors, consultants) above income thresholds
Despite its potential, many businesses fail to claim this deduction. Why? Let’s explore the most common reasons.
Why Do Business Owners Miss the QBI Deduction?
Many small business owners either don’t know about the deduction or assume it doesn’t apply to them. Here are the biggest reasons why it’s often overlooked:
1. Incorrect Business Structure
One of the main reasons businesses miss out on the QBI deduction is because their entity type doesn’t qualify. C corporations, for example, are not eligible. Some S corporations may also miss out if they don’t allocate income correctly between salaries and distributions.
2. Poor Tax Planning
Many business owners focus only on year-end tax preparation rather than proactive tax planning throughout the year. Without a strategy, they may exceed income limits that phase out the deduction.
3. Lack of Proper Advisory Support
If your accountant or tax advisor isn’t actively looking for ways to minimize your tax burden, you could be losing money. Some advisory teams don’t fully understand how to structure businesses to maximize deductions like QBI.
4. Failure to Amend Past Tax Returns
Did you miss the deduction in prior years? You may still have time to correct it. Businesses can amend previous tax returns and claim unclaimed deductions, putting real money back in their pockets.
How to Ensure You Maximize Your QBI Deduction
To take full advantage of the QBI deduction, business owners need a proactive approach. Here’s how you can ensure you’re getting the most out of this tax break:
1. Work with a Knowledgeable Tax Advisor
A tax professional who specializes in small business taxation can help identify whether you qualify and how to structure your income to maximize the deduction.
2. Review Your Business Structure
If your current structure isn’t allowing you to claim the deduction, it may be time to restructure your business entity. Switching from a C corporation to an S corporation or partnership might make sense.
3. Monitor Income Levels
Since the QBI deduction phases out at higher income levels, keeping taxable income below the threshold is key. Tax-efficient strategies, such as retirement contributions or reinvesting in the business, can help manage taxable income.
4. Correct Missed Deductions
If you didn’t claim the QBI deduction in previous years, it may not be too late. Talk to your tax professional about amending past returns to recover lost savings.
5. Consider the Bigger Picture
Missing the QBI deduction could be a sign that you’re also missing other tax-saving opportunities, such as retirement plan contributions, business expense deductions, and depreciation benefits. A holistic tax strategy is essential.
Should You Reevaluate Your Advisory Team?
If your current CPA or financial advisor hasn’t discussed the QBI deduction with you, it might be time to find a better advisory team. Many business owners don’t realize they’re overpaying in taxes simply because their advisory team isn’t proactive enough.
A strong tax and financial team should:
Regularly review tax-saving opportunities with you
Help you structure your business for maximum deductions
Advise you on income thresholds and tax-efficient strategies
Ensure you don’t leave money on the table
Take Action Today
The complexity of tax laws often leads to missed opportunities, but the QBI deduction is too valuable to ignore. Don’t let poor planning or lack of advisory support cost you thousands in unnecessary taxes.
To learn more about optimizing your tax strategy, tune in to Live Life Liberated with Centura Wealth Advisory. Listen to the full episode here.
Connect With Centura
At Centura Wealth Advisory, we go beyond a traditional multi-family office wealth management firm to offer advanced tax and estate planning solutions which traditional wealth managers often lack in expertise, knowledge, or resources to offer their clients.
We invest heavily into technology and systems to provide our clients with fully transparent reporting and tools to make informed decisions around their wealth plan.
Connect with our team today to learn how we can help you navigate complex financial decisions and secure your financial future with confidence.
Disclosures
Centura Wealth does not make any representations as to the accuracy, timeliness, suitability, or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein. All such information is provided solely for convenience purposes and all users thereof should be guided accordingly.
We are neither your attorneys nor your accountants and no portion of this material should be interpreted by you as legal, accounting, or tax advice. We recommend that you seek the advice of a qualified attorney and accountant.
For additional information about Centura, please request our disclosure brochure as set forth on Form ADV using the contact information set forth herein, or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov). Please read the disclosure statement carefully before you engage our firm for advisory services.
https://centurawealth.com/wp-content/uploads/2025/02/iStock-2189657642.jpg14142120centurawealthhttps://centurawealth.com/wp-content/uploads/2024/07/Centura-Logo-Grey.pngcenturawealth2024-09-05 00:59:002025-02-20 01:10:35Ep 99: Is Your Business Missing Out on Thousands in Tax Savings?
At Centura, we’re proud of our team and company culture. Why?
Everyone on our team has their own North Star. They center around serving our clients, our community, and their aspirations.
Wondering what our team has to say about Centura? We’ve already asked. Read on to learn more about us, what we do, and what our culture is like here at Centura Wealth Advisory.
Why Centura Wealth Advisory?
Chris Osmond, Chief Investment Officer at Centura Wealth Advisory, describes what makes Centura different from our competition.
Watch the video below or read on to learn more.
There are many reasons why advisors choose to join a new firm.
Chris remarks, “Of course, economics plays a role in their decision. You need to be able to care for your family, retire someday, etc. But, there are also a few other factors that lead advisors to join a new firm.”
One of the major factors Chris Osmond describes is “the opportunity cost of spending two-thirds of your time doing the administrative work that no one wants to do or worry about software contracts that need to be negotiated. The operational and logistic tasks take away from actually producing and spending time doing what you do best.
The business development area is where advisors typically shine; bringing in new clients, adding value, and enriching clients’ lives. At Centura, we provide infrastructure to help alleviate the cumbersome administrative tasks for our advisors, so they can do what they do best.”
What is Your Favorite Part of Centura’s Company Culture?
Click the link or read on to hear about Samantha’s favorite part of Centura’s company culture.
According to Samantha Lawrence, Associate Advisor, her favorite part about company culture are the Fridays. Why? Samantha explains:
“While at Centura, we do plan large events for the whole company, the routine Fridays are what make Centura great. Fridays are fun at Centura. We aim to make our employees excited to come to work and excited for their weekend. And we want Centura to be a place where our employees are excited to be here on a Friday afternoon.”
What is the Company Culture like at Centura?
Zoe Singh, Associate Advisor, describes the company culture at Centura. Click the link to learn more.
We take pride in the culture we’re creating here at Centura Wealth Advisory. Zoe describes the culture as “like a family in a way, we want to be close to everybody…I get questions about how I’m doing at work, but also how I’m doing in my personal life.”
“Working here for five years, I’ve seen a family-like environment, where everyone cares about each other. Managers care about their employees, and the whole team is really focused on the experience of new people coming in.”
At Centura, we want to make every new member of our team feel welcome. It’s important to us to have a positive work culture. After all, you’re spending so much of your day with the people you work with.
Final Thoughts
Headquartered in San Diego, California, Centura is passionate about our client’s objectives and owns the fiduciary responsibility of protecting their interests.
We strive to be the best in our chosen lines of business, not the biggest.
https://centurawealth.com/wp-content/uploads/2024/08/iStock-1322908184.jpg12992309Magdi Cookhttps://centurawealth.com/wp-content/uploads/2024/07/Centura-Logo-Grey.pngMagdi Cook2024-08-23 19:30:392024-08-23 19:31:38Centura’s Company Culture: Hear From Our Team
Multifamily real estate has long been recognized as a resilient and potentially lucrative asset class. In a recent episode of Live Life Liberated, Chris Osmond, CFA, CAIA®, CFP®, Chief Investment Officer at Centura Wealth Advisory, sat down with Rob Ireland, Managing Director at Continental Realty Assets (CRA), to explore the advantages, strategies, and market trends shaping multifamily investments today.
In this discussion, they break down how strategic real estate investments can enhance portfolio diversification, reduce tax liabilities, and capitalize on long-term housing demand.
The Strategic Benefits of Multifamily Investing
According to Rob Ireland, multifamily real estate remains a strong investment choice due to its necessity-driven demand. “You don’t necessarily need a place to work anymore. You don’t necessarily need to have a brick-and-mortar store to sell your product, but you need a place to live,” he explains.
Some key advantages of investing in multifamily real estate include:
Tax Efficiency: Investors can leverage depreciation, cost segregation analysis, and capital gains treatment to enhance returns.
Steady Demand: Housing is a fundamental need, with supply constraints further driving long-term demand.
Resilience in Market Cycles: Multifamily real estate has historically outperformed other commercial real estate asset classes.
Navigating Market Challenges & Opportunities
Despite current economic fluctuations, CRA remains optimistic about multifamily real estate. “Single-family homes are simply unaffordable for many,” says Ireland. “There’s a $680 delta between the cost to own a home and the cost to rent, so demand for multifamily housing remains strong.”
However, the market is not without challenges. Ireland notes that “high financing costs have slowed down new housing developments, which will compound the supply-demand imbalance in the coming years.” For investors, this creates an opportunity to acquire assets at a discount before the market corrects.
Centura & CRA: A Strategic Partnership
One of Centura’s guiding principles is ensuring strong alignment between investors and asset managers. “When we make any investment, particularly in alternatives, we want to establish a win-win-win outcome: a win for our clients, a win for our asset managers, and a win for Centura,” explains Osmond.
CRA’s rigorous market research and data-driven approach align well with Centura’s investment philosophy. “We look at job-to-permit ratios, affordability metrics, and economic trends before making any acquisition decision,” says Ireland. “We treat every market like a stock analyst would approach equities, ensuring we invest in the right locations at the right time.”
The Long-Term Outlook for Multifamily Investing
As interest rates stabilize and new supply dwindles, Ireland sees significant upside for investors in the coming years. “We believe that in 2025 or 2026, some markets may see double-digit rent growth again,” he predicts.
Quoting Warren Buffett, Ireland emphasizes, “Be fearful when others are greedy, be greedy when others are fearful. Right now is one of the best times in the last 20 years to invest in multifamily real estate.”
Learn More
For those interested in multifamily real estate investments and Centura’s approach, connect with Centura Wealth Advisory or reach out to CRA for more insights.
https://centurawealth.com/wp-content/uploads/2025/02/investing-in-multifamily-real-estate-with-rob-ireland-Episode-98.jpg14532064centurawealthhttps://centurawealth.com/wp-content/uploads/2024/07/Centura-Logo-Grey.pngcenturawealth2024-08-21 10:22:002025-02-26 22:12:42Ep. 98 Investing in Multifamily Real Estate with Rob Ireland