Financial Planning and Wealth Management Case Studies
Finance5 Case StudiesUpdated Sep 2026
These five cases come from planning and advisory teams that manage household portfolios, cash plans, and lending reviews. Each one begins with records that do not agree. Some gaps are clerical. Others matter only when a number must be defended to a client, a regulator, or an auditor. Read them as a sequence of decisions. Notice where each team set a threshold, which evidence it accepted, and what it chose to leave open. The organizations are fictional, but the pressure points are familiar to anyone who has closed a quarter.
Case Study 1
Quarter-end fee variance across three record sets
Pell Harbor Wealth Advisory, a regional firm of 64 staff that bills household clients and keeps its own general ledger.
The situation
Pell Harbor Wealth Advisory bills its 2,300 household clients a quarterly fee calculated on average daily account value. Fees are invoiced by the firm's billing system, accrued in the general ledger from a monthly batch, and collected by debit from two outside custodians. In the third week after quarter end, Dana, the operations lead, found that accrued fee revenue exceeded custodian debits for the same period by 41,870 dollars. The gap was concentrated in 37 accounts that had moved between custodians during the quarter. Nobody had yet confirmed whether the ledger, the invoices, or the statements were wrong.
The challenge
The firm's controls were built for accuracy at month end, not for matching across systems. Reconciliations were signed off, but the sign-off only confirmed that the ledger tied to its own batch file. Nobody compared accruals against custodian debits account by account. The partner responsible for the book wanted the variance explained before the next billing run went out, and the team had little time to decide whether to reverse accruals, rebill, or hold.
Analysis
Teams grounded in Financial Planning and Wealth Management usually start by asking what each record claims to measure. The ledger accrual used a monthly average balance, the invoice used a billing-day balance, and the custodian statement showed cash actually withdrawn. A variance is expected unless those methods are aligned. Dana sorted the 37 accounts by transfer date and found that 29 carried a fee accrued on the old custodian's valuation for days after the move had settled. That pattern pointed to a cutoff problem, not a rate error, and the difference mattered because a rate error would have touched every account.
The more useful question is which control would have caught this before the billing run. The batch reconciliation compared totals only, so a timing error inside the total passed without comment. A better design matches accrual to custodian debit for every account after each transfer, with a tolerance fixed in advance. The team proposed 250 dollars per account or 0.5 percent of the quarterly fee, whichever is lower, with any breach needing a named reviewer's signature before invoices release. Evidence of that control is the exception log, the reviewer's initials on each item, and a rerun that shows zero open variances.
Actions taken
- Reverse the 29 cutoff-driven accruals in the general ledger and post them again using the new custodian's valuation date, with each journal entry linked to its custodian statement line.
- Hold client billing for the 37 transferred accounts until custodian statements are matched line by line, and issue corrected invoices only where a variance exceeds the agreed tolerance.
- Add an account-level comparison of accrued fees against custodian debits to the monthly close, using a tolerance of 250 dollars per account or 0.5 percent of the quarterly fee, whichever is lower.
- Require a named reviewer to sign every exception above tolerance, and retain the exception log, reviewer initials, and a zero-open-items rerun as closure evidence for the next audit cycle.
Results
The 29 accruals were reversed and reposted within the same close window. Of the 37 accounts, 31 cleared on re-matching, and six needed corrected invoices totaling 3,140 dollars, which the partner approved as credits. The residual difference in the ledger fell to 212 dollars, all of it rounding on one account that was documented and accepted. In the following quarter the account-level comparison ran after every custodian transfer and flagged two exceptions, both resolved before billing. The partner has asked that the same tolerance apply to the firm's other two custodians.
Questions for discussion
- Which of the three records would you treat as the reference point for this variance, and what evidence would change that choice?
- How would you set an account-level tolerance if the firm had no exception history to calibrate against?
- What would you need to see before accepting that a cutoff problem will not recur after the next custodian change?
Case Study 2
Liquidity forecast after a three-part revenue and cost miss
Ellery Point Advisors, a 38-client practice that builds rolling cash forecasts and scenario models for mid-sized manufacturers.
The situation
Tressel Castings, a manufacturer of machined parts with two plants, had approved a plan assuming 11 percent volume growth in its second year. In the first half, revenue came in 6 percent below plan, raw material costs ran 9 percent over, and average collection time stretched from 41 days to 58. The forecast now showed cash falling below the revolver's minimum liquidity covenant in the fourth month. Maren, the chief financial officer, asked Ellery Point for a revised forecast within ten days and a recommendation on whether to draw the revolver, defer capital spending, or change customer payment terms.
The challenge
The difficulty was that the three shortfalls had different causes and different timing. Part of the volume miss looked seasonal, but two large customers had shifted orders into later months. The cost overrun came from a supplier contract that reset its price index each quarter. The collection delay might have been a billing problem rather than a credit problem. Each explanation implied a different route back to covenant compliance, and the board wanted one recommendation, not three.
Analysis
The first task was to separate what the client controlled from what it did not. Volume recovery depended on two customers whose order timing was known only from purchasing contacts, so those orders were weighted by probability rather than treated as contracted. The supplier index is external, so the team modeled it using the last three quarterly resets and a stressed case above all of them. Collection days were tested against the aging report, which showed that most of the slowdown sat in invoices issued during the last 30 days. That pointed toward a billing delay that could reverse quickly, while a credit problem would not.
Three scenarios were built. The base case assumed volume recovers by the sixth month and collections return to normal. The downside case assumed one major customer delays and the supplier index stays high. The severe case combined both and required the revolver to carry the gap. Under the downside case, liquidity breached the 4,500,000 dollar covenant floor in the fourth month. The team set decision triggers before the board met: forecast liquidity below 6,000,000 dollars in any month would defer capital spending, and below 5,000,000 dollars would prompt a revolver draw. Writing them into the board paper kept the response independent of the next meeting.
- 1Diagnose the missSeparate volume, cost, and collection causes before modeling anything.
- 2Test assumptionsStress the supplier index and customer timing separately.
- 3Build three scenariosBase, downside, and severe cases with explicit triggers.
- 4Set response triggersDeferral at 6,000,000 dollars, revolver draw at 5,000,000 dollars.
- 5Report and monitorTrack liquidity against triggers and covenant headroom each month.
Actions taken
- Defer the 2,800,000 dollar equipment program by two quarters, keeping the two maintenance projects that protect production capacity and safety compliance.
- Ask the two largest customers to confirm second-half orders in writing, and treat any order not confirmed by the forecast date as zero in the downside case.
- Offer the ten largest receivables an early-payment incentive on invoices issued in the last 30 days, but only after billing confirms the delay was a timing error and not a dispute.
- Draw the revolver only if forecast liquidity falls below 5,000,000 dollars, and report the trigger, the draw amount, and remaining covenant headroom to the board in the same week.
Results
The board adopted the base case with the downside triggers attached. Within two months, the two largest customers confirmed about two-thirds of their second-half orders, and average collection time shortened from 58 days to 49. Liquidity stayed above the 5,000,000 dollar trigger throughout, so the revolver was never drawn. Deferring the equipment program kept 2,800,000 dollars in the business across two quarters. The supplier index reset above the base case but inside the stressed range the team had already modeled, so the response did not need to be reopened.
Questions for discussion
- Which assumption in this forecast would you most want independent evidence for before the board accepts it?
- How should a forecast treat a customer order that is probable but not contracted?
- At what liquidity level would you have drawn the revolver, and how would that threshold change under a looser covenant?
Case Study 3
Discretionary withdrawal flagged after a profile change
Marrow Lane Private Client Group, a 22-adviser practice that manages discretionary portfolios for families and small trusts.
The situation
The surveillance review flagged a discretionary account held for a family trust after three indicators fired within one month. A single holding had grown to 38 percent of account value. The risk profile had been changed from moderate to aggressive without a signed client form. Then a withdrawal of 612,000 dollars was requested to a payee the trust had never used. Ines, the compliance analyst, found the callback logged as complete. The number used for that callback belonged to the adviser's office, not to the trust. The adviser, Tomas, said the client had called him about the withdrawal.
The challenge
The question was whether these indicators reflected a legitimate change in the client's circumstances, a documentation lapse, or something that required reporting outside the firm. Tomas believed the trust was moving money to fund a property purchase. But the call was not in the notes, no purchase contract was in the file, and the withdrawal had come through a channel that skipped the standard callback verification. The team had to decide what to hold, what to document, and when escalation became unavoidable.
Analysis
The concentration was the easiest indicator to explain and the hardest to justify. A 38 percent position meant one price move would reshape the account's risk, and the profile change made that concentration harder to defend as accidental. The documentation gap mattered more. Without a signed profile change, the file held no evidence that the trust understood the new risk level. The team traced 18 months of activity and found the holding had grown mostly through reinvested dividends. That lowered the likelihood of intent, but it did not remove the duty to rebalance or to record the decision.
The firm's escalation rules were clear on paper. Any withdrawal above 250,000 dollars to a new payee required a callback at a number taken from the original account file, and any profile change required a signed form before it could affect trading. Neither control had caught the problem. The callback was logged as complete, but the number belonged to the adviser's office. Ines applied the escalation threshold: a control failure combined with a new payee and an unsupported profile change met the firm's definition of a suspicious pattern. She referred the matter to the chief compliance officer that day and recommended holding the withdrawal pending verification.
- Four days beforeRisk profile changed to aggressive without a signed form.
- Two days beforeHolding reaches 38 percent of account value after reinvested gains.
- Request dayWithdrawal of 612,000 dollars sent to a new payee.
- Next business dayCallback logged as complete using the adviser's office number.
- Third weekChief compliance officer receives referral and holds withdrawal.
Actions taken
- Hold the 612,000 dollar withdrawal and verify the payee relationship and purchase contract through a callback to a number taken from the original account opening file.
- Reverse the unsigned profile change, restore the prior moderate profile, and document the concentration review with a rebalancing plan approved by the supervising principal.
- Open a documentation exception on the adviser's file, review the adviser's other discretionary accounts for the same callback pattern, and record each result in the supervisory log.
- Report the referral under the firm's internal suspicious activity procedure within the required window, and retain the timeline, callback records, and reviewer notes as escalation evidence.
Results
The withdrawal stayed on hold for eleven business days while verification ran. The purchase contract was obtained, and the payee turned out to be a title company handling a property closing, so the transfer was released with a documented basis. The profile change was reversed and the concentration reduced over the following month under a rebalancing plan approved by the supervising principal. Review of the adviser's other accounts found two more callbacks logged to the office number. Both were corrected and reported. The firm now requires callback numbers to come from the original file, not from the adviser's system.
Questions for discussion
- What evidence would be enough to clear the payee relationship, and what would still leave the referral open?
- Where is the line between a documentation lapse and a control failure that requires reporting outside the firm?
- How should a firm weigh an adviser's account of a client call when the call was never recorded?
Case Study 4
Working capital facility for a concentrated distributor
Tallow Creek Credit Partners, a specialty lender of 18 staff that funds working capital for small and mid-sized distributors.
The situation
Ridgeline Provisions, a regional food distributor with two warehouses and 212 employees, asked for a 4,200,000 dollar revolving facility to fund inventory ahead of a new grocery contract. The company supplied three years of audited statements, a current debt schedule, and a customer concentration report. Revenue had grown about 14 percent in the last year, but the largest customer, a grocery chain, now accounted for 47 percent of receivables. Lisbeth, the credit analyst at Tallow Creek Credit Partners, was asked to recommend approval, modified terms, or decline before the next committee date.
The challenge
The growth story was credible, but the balance sheet had less room than the revenue suggested. Inventory days had risen from 36 to 52, the new contract would deepen the concentration, and interest coverage had narrowed across two annual periods. The committee needed to know whether the facility could be repaid from operating cash flow in a downside case, not only in the company's own projections, and which conditions would change the answer.
Analysis
The audited statements supported leverage of about 2.6 times trailing EBITDA, under the committee's ceiling of 3.0 times for this sector. But that EBITDA included a one-time gain from a warehouse sale. Without the gain, leverage moved above 3.0. The downside case removed the new contract, extended receivable days by 15, and held inventory at its higher level. Under those assumptions, operating cash flow covered scheduled debt service only 1.1 times, which left little room for a supplier price shock or a late payment from the grocer.
The decision turns on exposure limits more than on the company's story. The single-obligor limit is 6,000,000 dollars, and the request, added to existing exposure to the same grocery chain through a second borrower, would exceed it in the base case. A reduced facility of 3,000,000 dollars keeps the lender inside that limit. Approval would be conditional on three things: a borrowing base limited to receivables from customers outside the concentrated group, a covenant requiring the largest customer's share of receivables to fall below 35 percent within two quarters, and application of the warehouse sale proceeds to paydown. Missing the covenant would freeze new draws.
Actions taken
- Rebuild the leverage test on EBITDA without the warehouse sale gain, and show covenant headroom under the downside case beside the base case in the committee paper.
- Obtain monthly aging and inventory turn reports for the first two quarters, with a review trigger if inventory days remain above 48 for two consecutive months.
- Require written confirmation of the grocery contract's payment terms and volume commitments before the first draw, since that contract drives both the receivable build and the inventory need.
- Write the covenant reporting calendar, the freeze trigger for new draws, and the paydown schedule into the term sheet, and have counsel confirm the borrowing base definition before signing.
Results
The committee approved a 3,000,000 dollar facility with the borrowing base and concentration covenant. Ridgeline provided the grocery contract terms before the first draw, and they showed a 60-day payment period, longer than the company had described in its presentation. The team moved the inventory review to monthly. Two quarters later, the largest customer's share of receivables had fallen from 47 percent to 33 percent, inside the covenant level, and the warehouse proceeds had been applied to paydown as agreed. The committee now reviews the position each quarter.
Questions for discussion
- Would you accept the grocery contract's payment terms as evidence of repayment capacity, or require something more independent?
- Which downside result would lead you to withdraw an approval already granted, and who should own that decision?
- How should a lender weigh a borrower's growth story against an exposure limit that is already close to binding?
Case Study 5
Audit findings ranked by client harm and exposure
Orchard Lane Planning Group, a 27-person firm that manages planning engagements and client billing for household and trust clients.
The situation
An internal audit reviewed the firm's controls over client onboarding, trade approvals, and fee billing across 1,140 active households. The sample covered 80 files and found 9 onboarding files without a current risk tolerance form, 6 discretionary trades approved after execution, and fee schedules that differed between two systems for 14 accounts. The audit committee asked for ranked findings, named owners, and closure tests before its next meeting. Kwame, the head of operations, had inherited most of these processes and had not owned an audit response before.
The challenge
The findings were not equally serious. A missing form is a documentation gap. A trade approved after execution is a control breach with possible client harm, and mismatched fees compound quietly over time. Staff available for remediation were limited, and some owners overlapped. The committee wanted materiality explained in terms of client impact and financial exposure, and it wanted closure defined by evidence rather than by a status update.
Analysis
Ranking began with the two dimensions the committee cared about: potential client harm and quantified exposure. Post-execution trade approvals ranked first, not because the dollars were largest, but because the approval step exists to prevent harm and the sample showed it had been bypassed six times. The fee mismatch totaled 48,600 dollars across 14 accounts, which was material to revenue assurance but not to any single client. The onboarding gap ranked third. It weakened the evidence behind the control rather than the outcome, since four of the nine files later received a completed form. That order let the team explain why a smaller item ranked higher.
Each finding received one accountable owner, not a team. The trade approval finding went to Kwame, with the head of trading in a support role. Closure tests were written before work began. For trade approvals, the firm would sample 40 trades from the following quarter and require a pre-execution approval timestamp on every one, with no exceptions tolerated. For fees, closure required both systems to tie to one master schedule, with each account's variance under 50 dollars. For onboarding, closure required a current signed form in every active file, tested on a sample of 60. The thresholds were in the remediation plan, so closure could not be argued later.
- Rank findings Order by client harm first, then quantified exposure.
- Assign owners One named owner per finding, with a support role defined.
- Fix and document Correct the control and record what changed and why.
- Test for closure Run the predefined sample and close only on zero exceptions.
Actions taken
- Stop post-execution approvals by configuring the trading system to reject any order without a timestamped approval, and send every override to the chief operating officer for weekly review.
- Reconcile the 14 mismatched fee schedules to one master schedule, correct the 48,600 dollar difference with client notice, and confirm each account's variance is under 50 dollars.
- Collect current signed risk tolerance forms for the nine open onboarding files within the next client review cycle, and block new activations until each form is on file.
- Schedule closure testing for each finding at the end of the following quarter, using the sample sizes and zero-exception standard in the remediation plan, and report results to the audit committee.
Results
Trade approvals were blocked at the system level within the first week, and the override log showed no bypass in the following quarter. The fee schedules now tie to one master, with 11 of 14 accounts corrected and the other three confirmed correct after documentation review. Client credits of 39,200 dollars cleared most of the 48,600 dollar difference, and the remaining 9,400 dollars was written off with approval. The open onboarding files were completed over the cycle, but the closure sample of 60 showed one missing form, which kept that finding open for another cycle. The committee accepted two closures.
Questions for discussion
- If the dollar exposure were reversed, which finding would you rank first, and what would justify keeping the original order?
- How strict should a zero-exception closure standard be when the sample is small and the remaining risk is hard to quantify?
- Who should sign off a closure when the owner is also the person who made the fix?
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