Managing risk

Managing risk

Some of you may have been concerned about the recent failure of Silicon Valley Bank (SVB) and any ripple effects on the banking system and the stock market. Before we get into the risk management lessons of SVB, we want to make sure our clients understand that their assets with us are secure. Accounts and assets at Schwab or TD Ameritrade Institutional (Schwab now owns TD Ameritrade) are protected in several ways in the unlikely event Schwab or Schwab Bank should collapse.

Customer Protection Rule: Mandates that broker/dealers do not commingle clients’ assets with the broker/dealer’s; in the unlikely event of the broker/dealer’s insolvency, clients’ investments in stocks and bonds are protected from creditors’ claims because the assets are owned by the client, not the brokerage. When the 2008 crisis caused the demise of several renowned brokerage firms, all of the assets remained intact in client accounts.
Securities Investor Protection Corporation SIPC: In the unlikely event that a broker/dealer goes out of business, SIPC ensures that clients keep their assets and facilitates the transfer of their account(s) to another firm, after which the account(s) can be moved to any firm the client chooses. Schwab also partners with Lloyd’s of London to provide additional protection (up to $150,000,000 per client, of which $1,150,000 is specifically for cash holdings).
• Federal Deposit Insurance Corporation FDIC: The cash balances in our clients’ accounts, which are automatically deposited at Schwab Bank via the Bank Sweep feature, are FDIC-insured (up to $250,000 of coverage per individual). Because Schwab uses a two-bank system to protect its clients, each individual client has up to $500,000 of FDIC coverage per account. All SVB account holders under the FDIC limit were unharmed and had access to their funds almost immediately.

Though the market value of our assets will fluctuate, the above measures do an excellent job of protecting us from losing our ownership of and access to our assets. The bottom line is while the recent bank failures are certainly news, there is little reason for most people to be concerned about the security of their assets.

Risk management lessons from the demise of Silicon Valley Bank

In its simplest form, Silicon Valley Bank (SVB) failed because its management made a fundamental risk management error: they did not diversify and match their holdings to their needs. They were too dependent on the tech sector and had too much invested in longer-term bonds.

In its simplest form, Silicon Valley Bank (SVB) failed because its management made a fundamental risk management error: they did not diversify and match their holdings to their needs.

SVB focused its business on technology companies. While the successful tech companies get plenty of press for becoming very valuable in a relatively short period of time, most don’t do well and many fail. 2022 was a tough year for tech companies, as the stock of Alphabet (Google), Meta (Facebook), Netflix, Tesla, and Amazon all finished the year down between 39% and 64%.

When things turned difficult for the tech sector, several companies withdrew from their deposits at SVB to keep their operations going. To meet these withdrawal requests, the bank had to sell some of its holdings. Because interest rates rose so much during 2022 and the bank was too heavily invested in longer term bonds, they were forced to sell the bonds at significant losses. When interest rates rise, the market value of bonds drop.

Both of the risks that killed SVB, poorly diversified or “concentrated” holdings and an over emphasis on long term bonds, are risks that are easily managed. Our clients have heard us utter two phrases frequently over the years: “invest, don’t speculate” and “stay diversified, patient and disciplined.” SVB leaned toward the speculative end of the spectrum, failed to diversify, and showed signs of a lack of patience and discipline. That’s not something our clients need to worry about.

MFT named to RIA Edge 100 and a “Best Place to Work”

Staff of fee-only financial planners Moisand Fitzgerald TamayoRIA Edge, a division of, named Moisand Fitzgerald Tamayo, LLC to its inaugural RIA Edge 100 compiled by Wealth Management IQ and Discovery Data. See detail on the list and methodology here.

“We’re not just looking for the firms that are growing the fastest or gathering the most assets,” said Mark Bruno, managing director of the Wealth Management Group at Informa, the parent company of “We developed the RIA Edge 100 to recognize the firms that are among the most successful in the business—while also growing in the right ways. These are the firms that are continuing to put clients first, while they invest in their businesses and their people as they navigate through a period of incredible growth.”

For the fourth time in the last five years, Moisand Fitzgerald Tamayo has been named one of the 75 Best Places to Work for Financial Advisors by InvestmentNews. According to the publication, “This year’s winning firms translate lofty workplace missions to the kind of daily experience that makes everyone want to stick around.” The annual list of top firms is compiled by Best Companies Group through anonymous online employee and employer surveys. The collected information is combined to determine the strengths of each of the firms that voluntarily participate in the program and each workplace is ranked on this data.

MFT making an impact

Charlie Fitzgerald and Juan Carlos Porras

Charlie and Juan Carlos Porras of the State House of Representatives.

Beyond what happens in our offices, MFT has a long tradition of making an impact on our profession and in our community.

Supporting Personal Financial Literacy in Florida: A year ago, Governor DeSantis signed a new law that requires all Florida public high school students complete a one-semester financial literacy course to graduate. For the past seven years, Charlie Fitzgerald and fellow members of the Financial Planning Association of Florida helped move this legislation on its path to becoming law. Recently, the FPA of Florida met with 30 lawmakers in Tallahassee to promote funding for the startup of the new curriculum. Charlie said, “Now that the law has passed, we have do all we can to help make this new course a success for teachers and students.”

News & Notes

Investing based on the news isn’t investing at all: A recent article from Dimensional pointed out once again that allowing news, especially bad news, to drive your portfolio decisions is risky. “Consider the events of the last three years alone: a global pandemic, the Russian invasion of Ukraine, spiking inflation, and ongoing recession fears. In other words, it may have seemed as if there were plenty of reasons to panic. Despite these concerns, for the three years ending February 28, 2023, the Russell 3000 Index (a broad market-capitalization-weighted index of public US companies) returned an annualized 11.79%, slightly outpacing its average annualized returns of 11.65% since inception in January 1979. The past three years certainly make a case for weathering short-term ups and downs and sticking with your plan,” said the author.

Average 401(k) balances down significantly in 2022: According to a CNBC report, the median account size of 401(k) participants at Vanguard was down 23% in 2022. The average account balance fell 20%. Far more additions were made to accounts than withdrawals, suggesting that many participants were poorly diversified or tried market timing.

Important Dates:

June 15
• Q2 estimated tax payment deadline
• Q2 estimated tax payment deadline for sole proprietorships, single-member LLCs, C-corporations, and multi-member LLCs that elect to be treated as a corporation

June 30
• Deadline to file Free Application for Federal Student Aid (FAFSA), for prior academic year

Form ADV and Privacy Policy: By now, you should have received a copy of page 2 of our 2022 firm disclosure brochure ADV Part 2A and our Privacy Policy in your client portal or by mail. We must provide this summary of any material changes and a copy of our firm’s Privacy Policy at least annually. If at any time you would like a full copy of our disclosure brochure, contact Sara Nash at ext. 114 or email her at [email protected].

Annual CFP Board Code of Ethics and Standards of Conduct Reminder: To comply with the Code of Ethics and Standards of Conduct of CFP Board, a variety of material must be disclosed to clients. Though the Code allows for some of this information to be disclosed orally, we make all this information available to you in writing via three documents. We will notify you in a timely manner whenever there is a material change or update to the information. For your convenience, the most recent version of all three documents is stored in your client portal. Hard copies may also be obtained simply by asking.

1. Our From ADV Part II which contains a description of services and products provided (we don’t sell products), how we are compensated (client fees only, no third-party compensation), how any related parties are compensated (no related parties are compensated), how you pay (direct, disclosed, and transparent fees only – no commissions), any public disciplines or bankruptcy (none), any referral compensation arrangements (We neither pay nor receive compensation for referrals. We are paid only by clients to serve only clients.), other material information, and a description of material conflicts of interest.
2. Your Wealth Management Agreement or Financial Planning Agreement, which describes the terms of our engagement.
3. Our Privacy Policy

Please remember to call us: When anything significant happens in your life, including changes in your finances, family, or health that could affect your financial plan, please let us know so that we can adapt our planning and portfolio work for you accordingly. Also, if you ever fail to receive a monthly statement for one of the Schwab Institutional or TD Ameritrade Institutional accounts under our management, please let us know so we may assure the respective custodian delivers your statements promptly.

Yours truly,
The Team at Moisand Fitzgerald Tamayo, LLC


 Contact Us

Moisand Fitzgerald Tamayo, LLC is an Orlando, Tampa and Melbourne, Florida based fee-only financial planner serving central Florida and clients across the country. Moisand Fitzgerald Tamayo, LLC specializes in providing objective financial planning, retirement planning, and investment management to help clients build, manage, grow, and protect their assets through all phases of one’s life and the many transitions in between. If you have any questions or would like to discuss anything further, please give us a call or send us a note. If you are not a client and wish to receive emails notifying you of new posts – no more than once per month – fill out the subscription information in the sidebar to the right. For more frequent updates, follow us on FacebookLinkedIn, or Twitter.  

Important Additional Information & Disclosures

Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Moisand Fitzgerald Tamayo, LLC-“MFT”), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. 

Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from MFT. 

Please remember that if you are a MFT client, it remains your responsibility to advise MFT, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. MFT is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. Tax advice is given only to clients and only when agreed to by MFT. A copy of the MFT’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request.

Please Note: MFT does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to MFT’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

Please Note: Limitations:  While MFT does NOT pay for recognition, awards, or publicity, neither rankings and/or recognition by unaffiliated rating services, publications, or other organizations, nor the achievement of any designation or certification, should be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if MFT is engaged, or continues to be engaged, to provide investment advisory services. Rankings published by magazines, and others, generally base their selections exclusively on information prepared and/or submitted by the recognized adviser. Rankings are generally limited to participating advisers. No ranking or recognition should be construed as a current or past endorsement of MFT by any of its clients.  ANY QUESTIONS: MFT’s Chief Compliance Officer remains available to address any questions regarding rankings and/or recognitions, including providing the criteria used for any reflected ranking.

Historical performance results for investment indices, benchmarks, and/or categories have been provided for general informational/comparison purposes only, and generally do not reflect the deduction of transaction and/or custodial charges, the deduction of an investment management fee, nor the impact of taxes, the incurrence of which would have the effect of decreasing historical performance results.  It should not be assumed that your MFT account holdings correspond directly to any comparative indices or categories. Please Also Note: (1) performance results do not reflect the impact of taxes; (2) comparative benchmarks/indices may be more or less volatile than your MFT accounts; and, (3) a description of each comparative benchmark/index is available upon request.


About Dan Moisand

Dan Moisand is a fee-only financial advisor with Moisand Fitzgerald Tamayo, LLC. He is a regular contributor for multiple outlets, including Florida Today, MarketWatch, and The Wall Street Journal. His writing and financial advice have also been featured in Financial Planning, Investment Advisor, Wealth Manager/Advising Boomers, Forbes, Smart Money, and The New York Times, among other publications. He is the only two-time winner of the Journal of Financial Planning’s “Call for Papers” competition and has been named a top financial planner and advisor by multiple publications. Investment News named Dan one of the “twenty most influential men and women” in the history of financial planning. He currently serves on the Board of Directors for the CFP (Certified Financial Planner) Board.


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