Financial Liability Portfolio Management

A Creative Solution to a Middle-Class Economic Dilemma

For more than a century, Americans have routinely sought financial counseling in three key areas: tax management, risk management and asset management. And, indeed, these three basic categories of financial management have reliably served the public. But times have changed.

Almost every newspaper contains a story that daily scrutinizes America’s most wide-spread addiction: an insatiable hunger for credit. The American Bankers study on credit card management reports that in a single year more than $5 billion in pre-approved credit card offers pour into mailboxes all across America; that’s more than $350,000 per family.

The notion of financial counseling has long been associated with the very wealthy. Asset management advisors, financial planners and stock brokers seeking clients with weighty portfolios are competing for less than 5% of the American population. If you account for those sizable investors with a propensity to change advisors (“Harold’s been our guy since 1958, we’re not changing”) the numbers are fractionally small.

Today, however, there is a growing population of middle-class Americans who would benefit from financial management services.  Many of these people aren’t even aware that such services exist.

This population has much in common.  They drive safe cars, live in nice neighborhoods, send their kids to decent schools, keep up health insurance payments, work hard and play by the rules.  Yet more than 70% of these people maintain that mounting creditor obligations have negatively affected their lives.  They have “money issues” that stem from their liability portfolio.

Today’s financial advisors, aware that personal financial creditor obligations have risen 300% in only ten years, recognize a need to confront this problem. But how can the professional management advisor assist a client with more than just a band-aid approach?  A real solution does exist:  Financial Liability Portfolio Management.

A Portfolio Demanding Management

Increasingly, families with combined annual incomes ranging from $80,000 to $180,000 find that their financial liability portfolio totals approximately one-times their income.  When your clients owe as much as they earn, their fiscal situation qualifies as a portfolio demanding of management.

In reviewing personal financial statements, a responsible advisor will assay the liability side of the ledger to determine if these obligations indeed constitute a portfolio requiring management.

Financial Liability Portfolio Management requires a high level of client maturity and commitment, and can succeed only if the client understands the risks of amassing a hefty liability portfolio.  Only those prospects willing to confront the realities of their financial situation and modify their spending habits can qualify for Financial Liability Portfolio Management.

This allows your clients to liquidate their creditor obligations, including their mortgages, in approximately eight years – without increasing payments or compromising credit standing.

Goal, Plan, Strategy and Process

A successful mission entails a well-defined goal, plan, strategy and process:

GOAL: Complete liquidation of the liability portfolio – including property loans – within a determined period of time and with the maximum savings in scheduled interest charges.

PLAN: An end-to-end, professionally administered program for liability portfolio management that includes technology, fulfillment/processing support, and plan execution buttressed by a superior level of client services.


STRATEGY: A professional, responsible approach to:  accelerate equity acquisition, save aggressively, act conservatively and retire comfortably.  Americans have dabbled at liability management on their own by milking their residential property as a farmer would milk a cow. Home equity loans have grown by more than 150% in just 48 months. A sound strategy might tap that already-leveraged asset to mechanically, mathematically liquidate all creditor obligations, including the leverage on the property.

PROCESS: Application of at minimum the following three steps

(A) Debt restructure financing through an exchange of short-term, high-interest obligations for long-term, low-interest notes, leading to a significant savings in cash-flow to the liability portfolio.

(B) Technology to calculate each of the client’s credit lines to identify what monthly

distribution of cash flow will produce the most rapid optimal result and total interest savings.

(C) Administrative services designed to allow clients merely pursue their careers and deposit their earnings in their own banks.  With its transparent client support, a program of liability portfolio management substantially differs from do-it-yourself debt reduction business models.


Drastic changes have taken the American family by storm, and if 2007 is anything like the last few years, dealing with credit obligations will top the list of New Year’s resolutions. Since credit card balances have increased ten thousand percent and family fixed expenses have ballooned two-and-a-half times in fewer than three decades (adjusted for inflation), you can be certain that your clients and your community would be all too happy to hear about Financial Liability Portfolio Management.

Download this article in PDF format: Financial Liability Portfolio Management


About Andy Schweitzer

Connecting the Dots: Insightful financial services commentary and market observations from around the globe.
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