Strategic Asset Allocation for a High-Net-Worth Client

As an investment advisor, you are tasked with developing a Strategic Asset Allocation (SAA) framework for a high-net-worth client, whose investment objectives include long-term wealth preservation, generation of consistent cash flow, and exposure to potential growth opportunities. The client has a risk tolerance that is moderate to high, with a time horizon of over 20 years.

Additionally, the client has expressed a particular interest in socially responsible investing (SRI) and wishes to incorporate Environmental, Social, and Governance (ESG) factors into the investment process. The current market environment is characterized by low interest rates and high equity market valuations, raising concerns about future returns.

Your task is to outline a comprehensive Strategic Asset Allocation plan for this client. Discuss your rationale for the chosen asset classes, the allocation percentages, and how the chosen approach accommodates both the investment objectives and the preferences regarding ESG factors. Furthermore, address how you plan to reassess the allocation over time in response to market changes and the client’s evolving needs.