Carlson Capital Management

Integrated Wealth Management

Menu 
  • Our Firm
    • Who We AreFirmly grounded in foundational values, and intensely focused on each client’s well-being, Carlson Capital Management has been redefining partnership for more than thirty years.
    • Our TeamOur approach to wealth management is to surround you with a team of experts who work together to integrate all of the key financial disciplines into one plan.
    • HistoryKey events and milestones since the founding of our firm in 1987.
    • Community CommitmentIn the same way that we value the deep and lasting partnerships we have with our clients, we place a strong value on being partners in our communities.
    • Mission StatementOur team is guided by this mission each and every day. It’s what gets us up in the morning, and sometimes keeps us awake at night.
    • Zero Alpha GroupFounded in 1995, the Zero Alpha Group community is a national network of eight independent investment advisory firms.
  • Our Clients
    • Client ProfileOur clients are individuals, families, businesses and foundations with many varying goals and situations, but one thing in common – the need and desire for integrated solutions.
    • Fiduciary StandardsIntegrity, trust, expertise and care are hallmarks of the CCM experience. They are at the root of all we do and the essence of who we are.
    • Fee StructureOur independent, fee-based status allows us to focus on one simple thing: what is in the best interest of our client.
    • Make a ReferralThe majority of new clients come from referrals from current clients. Access information that introduces colleagues and friends to Carlson Capital Management.
  • Our Approach
    • Foundational ValuesOur deep commitment to each client we serve is built upon foundational values like honesty, hard work, and a strong sense of personal dedication.
    • Integrated ExpertiseOur unique, integrated approach to wealth management unlocks opportunities that our clients and their families deserve.
    • Disciplined PerspectiveOur long-term perspective provides the patience, guidance and discipline required for steady growth and protection.
    • Independent InsightOur independent, fee-based structure ensures the highest levels of objectivity, integrity, and fiduciary responsibility.
  • Services
    • Integrated Wealth ManagementOur Integrated Wealth Management approach surrounds clients with a team who apply their expertise to integrate all of the financial disciplines.
    • Carlson PortfoliosCarlson Portfolios offers a solution for clients whose situations are less complex than a traditional CCM Integrated Wealth Management client.
    • Retirement Plan ServicesComprehensive integrated retirement plan solutions.
    • Institutional Portfolio ServicesInvestment advisory and fiduciary consulting for foundations, endowments and associations.
    • Risk ManagementSome things in life are predictable, while others are random. Managing risk is as important as seeking opportunities.
    • American Center for PhilanthropyWe develop and implement a philanthropic plan that matches your desire to make a difference and leave a legacy.
    • CCM Tax & Trust AdministrationA commonly-held affiliate of CCM that provides tax return preparation services.
    • Carlson TrustProvides trust solutions for clients whose financial, family or business needs require the services of a professional fiduciary.
  • News and Resources
    • Recommended ReadingArticles and resources to give you access to our top picks in investment education, timely industry perspectives, interesting data and financial planning insights.
    • Articles and PublicationsA library of topical publications and articles written by CCM team members specifically for our clients.
    • CCM In the NewsA collection of articles, links and press releases featuring CCM, including interviews in publications and features in national industry rankings.
    • Video LibraryShort videos that introduce you to our team, our approach and the CCM story.
    • Women’s InitiativeResources and information related to CCM’s Women’s Initiative: Promoting the Financial Empowerment of Women.
    • Introduce CCM to OthersThe majority of new clients come from referrals from current clients. Access information that introduces colleagues and friends to CCM.
  • Contact Us
    • Request a ConversationTake the next step in learning more about our integrated wealth management services by requesting a conversation with one of our advisors.
    • Contact Our TeamEmail one of our team members directly or send a general inquiry to the firm.
    • Client Servicing ContactsFind the CCM team member who can help with your specific question or request.
    • Join a MeetingJoin your scheduled meeting with Carlson Capital Management.
    • LocationsWe always appreciate the opportunity to meet face-to-face in one of our offices or at a location convenient to you.
    • CareersLearn about employment opportunities and apply online.
  • Request a Call
  • Client Login

Portfolio Management—Beyond the Returns

Adam Hoffmann
Adam Hoffmann, CFP®, AIF®

Chief Investment Officer
507.321.4004
Email Adam

  Being able to apply my deep-rooted curiosity in a way that allows our clients to focus on what they truly enjoy doing the most, rather than having to worry about their financial well-being, is a wonderful thing.  

Professional Biography
Adam Hoffmann is a member of the firm's Management Team and serves as Chief Investment Officer at Carlson Capital Management. In this role, he leads the firm’s investment team in the areas of trading, investment research, portfolio design and technology support for investment applications. Adam oversees analysis and execution of investment strategies for new and existing client portfolios. He consistently communicates the firm’s investment philosophy and approach by writing for firm publications, presenting to new clients, and by participating in client meetings. Adam chairs the CCM investment committee, represents the firm with strategic partnerships in the investment community, and serves as the firm’s liaison to the Zero Alpha Group investment committee. Adam holds the Certified Financial Planner™ designation granted through the Certified Financial Planner Board of Standards and has served as a subject matter expert for the CFP Board, contributing to the development of examination questions for the CFP Certification Examination. He has also served as a presenter at industry events, providing other financial services professionals with continuing education credits in investment topics. In addition, Adam holds the Accredited Investment Fiduciary professional designation, awarded by the Center for Fiduciary Studies. The AIF designation affirms the highest in fiduciary standards of care for CCM clients.

Adam graduated cum laude with Honors Program distinction from Augsburg College, where he earned a Bachelors of Arts degree in Finance with a minor in Business Administration. While at Augsburg, Adam participated in four years of varsity football and was honored by his teammates by being elected captain for both his junior and senior seasons. He also earned all-MIAC and pre-season All-American honors.

Adam is a former member of the board of directors for the Just Food Community Co-op and past trustee for the First United Church of Christ Northfield. He and his wife Rachel grew up in Hastings, Minnesota and now live in Northfield with their two daughters.

Personal Thoughts
A strong sense of curiosity is a cornerstone to who I am and how I live my life. As a kid I used to be fascinated by how things work or why things happen the way they do. I often would take things apart to see what was happening ‘inside,’ frequently with limited success at being able to put them back together. Little has changed since then with regard to my curiosity, but fortunately my success rate of being able to put the pieces back together has greatly improved. I have always been driven by this desire to solve problems and learn more about the world around me.

There is a natural connection between this curiosity and managing portfolios. The investment world today is one of relentless change and evolution. With advances in technology, there is an endless stream of news available at our fingertips that constantly impacts asset prices, shapes investor behavior, and provides an unlimited supply of data and information to digest.

It is our job at CCM to absorb this information and provide guidance and knowledge back to our clients about what it all means and how it may it impact the world we know. The most important role we play in our clients’ financial lives is not only to understand the big picture – that is the Market and the global economic system – but to be able to translate how events and changes around the globe impact each individual client and their personal financial plan.

Being able to apply my deep-rooted curiosity in a way that allows our clients to focus on what they truly enjoy doing the most, rather than having to worry about their financial well-being, is a wonderful thing.

Adam and other members of the CCM Investment Team regularly post articles of interest including investment insights, recommended reading on timely topics, and articles on portfolio management which you can find here.

Adam Hoffmann
Adam Hoffmann, CFP®, AIF®
Chief Investment Officer

The shifting from summer to fall always fills me with an urge to prepare. It’s not necessarily clear what I’m preparing for, but slowly darkening days, cooling temps, and seeing the harvest being brought in across the farms in our area triggers something deeply rooted inside me to know that change is on the horizon and it’s time to get ready.

Professionally, there is a similar change in focus that occurs as October comes around, but, fortunately, the cause of this shift is more clearly understood. Each year as we enter the fourth quarter, CCM’s integrated team works in partnership to finalize and execute clients’ year-end tax plans. This is an exercise that includes not just the CPAs, but also the investment and financial planning teams, as we all have a role to play in the optimization of outcomes.

Although the CCM Investment Team is responsible for the research, construction, and trade execution that goes into the management of client portfolios, I learned early on in my career that although the returns that our clients experience truly matter to their financial outcomes, if we don’t properly prepare for the reality of how those returns are received, we are only doing part of our job.

Customized Approach

The Investment Team’s preparation for annual tax planning actually begins before any dollars are deployed into an asset allocation when a new client comes onboard at the firm. It’s our responsibility as a fiduciary and trusted partner to build portfolios using the optimal investment solutions to help meet each client’s specific needs. For most people, that will be through the utilization of mutual funds and exchange traded funds (ETFs) that allow for low-cost exposure to a globally diversified mix of stocks and bonds.

However, for others who may have legacy holdings that have been a part of their portfolio for a long time and carry high levels of appreciation, we may be unable to reallocate into these types of funds without incurring large, taxable gains.

For example, if someone was compensated with their employer’s stock throughout their career and was fortunate to experience strong growth, it doesn’t always make sense to just sell everything to start fresh. In these cases, we have other solutions, like direct indexing, that can allow us to maintain some or all of their highly appreciated positions while still accomplishing the goal of building a diversified portfolio. Addressing each client’s specific circumstances to meet their unique needs is a key to success.

Tax-efficient Funds

When selecting funds to include in a portfolio, it’s important to note that not all funds are created equally when it comes to taxation. Some mutual funds try to outguess the market by picking stocks or making tactical timing bets that can force upon their shareholders large and unwanted tax surprises if held outside of a retirement account. Morningstar calls this the tax-cost ratio.1 It can be thought of as the lost value of an investment caused by ongoing taxation of a fund. In one infamous example, due to a large portfolio strategy change, a widely known mutual fund distributed such a large capital gain at the end of 2018 that its after-tax three-year return is only about half of the pre-tax value.2 So, when pursuing these types of strategies, even if you win, you still may lose.

This is one reason we target mutual funds that actively try to reduce the impact these types of distributions can have on an individual’s tax situation. It’s also why we have a focus on using exchange-traded funds, as this structure can help to reduce the likelihood of taxable distributions even further.

Asset Location

Because we know that certain types of accounts like pretax IRAs, Roth IRAs, and individual brokerage accounts have different tax implications, rather than manage each account in a client household separately, we view accounts collectively in targeting our clients’ desired asset allocation. By locating certain types of assets in these various accounts, we can optimize the total after-tax return a client experiences. In one study conducted by Vanguard, it was concluded that managing a portfolio in this manner could add 0.74% to an individual’s after-tax return when compared to a portfolio that ignored the tax implications of their location decisions.3

Also, by locating assets strategically based on the specific needs of each of our clients and managing in view of the total portfolio, it can allow us to target our rebalancing efforts to reduce or eliminate current tax impacts. These are the types of benefits you can receive when you prepare.

Tax Loss Harvesting

No one enjoys having the value of their investments go down, but we know that bearing the risk of loss is one reason why we’re rewarded as investors. Especially in stocks, to capture the relatively high returns that we have experienced in the past and expect in the future, it comes with the knowledge that there will be periods of loss. And if the value of an investment goes below the purchase price, we can turn a negative into a positive by selling the first investment and buying something similar on the same day. The act of selling is what allows the loss to be used to offset gains, and the act of buying is what allows you to participate in the future recovery.

This isn’t always an applicable strategy for all portfolios during all market drawdowns, but when possible, it can add significant long-term value to after-tax returns. For example, with markets performing so strongly thus far in 2021 with relatively little downside volatility, there have been few opportunities to capture losses for most. Though in 2020, with the large global stock market drawdown in the first quarter, we were able to book tens of millions of losses for our clients, even though the returns for the year ended up sharply positive.

Conclusion

Proper portfolio management alone can’t solve tax-related issues, but improper management can certainly cause them. A thorough understanding of the interconnectedness of investments and taxes is key to achieving ongoing and reliable success up to and through retirement. As the old saying goes, it’s not what you make, it’s what you keep, and we work hard to help you keep what you earn.


  1. https://www.morningstar.com/content/dam/marketing/shared/research/methodology/678272-TaxCostRatioMethodology.pdf
  2. Morningstar Direct as of 9/30/2021. Calculated by comparing the difference of the Post-tax Return (Pre-liquidation) Annualized 3 year and the Total Return Annualized 3 year.; https://www.kiplinger.com/article/retirement/t041-c000-s004-hefty-fund-payouts-trigger-big-tax-hit.html
  3. https://advisors.vanguard.com/iwe/pdf/ISGQVAA.pdf

NOTE: The information provided in this article is intended for clients of Carlson Capital Management. We recommend that individuals consult with a professional adviser familiar with their particular situation for advice concerning specific investment, accounting, tax, and legal matters before taking any action.

PLEASE SEE IMPORTANT DISCLOSURE INFORMATION.

  • Twitter
  • LinkedIn

Published October 25, 2021 Topics: Integrated Wealth, Portfolio Management, Tax Planning

DO NOT DELETE

News & Resources

  • Articles and Publications
  • CCM In the News
  • Recommended Reading
  • Video Library

Topics

Active Management Alternative Investments Annual Returns Bond Portfolio Brexit CCM Women's Initiative Charitable Giving Dimensional Fund Advisors Discipline Diversification Economy Estate Planning Financial Advisors Financial Planning Financial Planning for Women Inflation Integrated Wealth Interest Rates International Investing Investment Insight Investor Returns IRAs Market Conditions Market Volatility Politics and Markets Portfolio Management Rebalancing Retirement Planning Tax Planning Tax Reform

Contact Us

Contact us for a complimentary discovery meeting or for a second opinion on your current financial plan.

Contact Us

Email Updates

Sign up here to receive CCM articles and updates by email:

Subscribe

  • Home
  • Our Firm
  • Our Clients
  • Our Approach
  • Services
  • News and Resources
  • Client Login
  • Careers
  • Contact Us

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. Please review other Important Disclosure Information related to this website.
 

© 2022 Carlson Capital Management, LLC, d/b/a Carlson Capital Management.