Functional Capacity evaluates how capable wealth is of fulfilling its purpose when it is required.
Return, alpha, beta, volatility, benchmarks, income, tax efficiency, and net worth can all be useful. But they do not independently tell us whether wealth is prepared to fulfill its purpose at the required time.
Success depends on the Purpose assigned to the wealth.
A valuable resource may fail functionally if it is unavailable when required.
Functional Capacity evaluates whether the current Design has the ability to perform.
Every financial Purpose eventually reaches a moment when wealth must perform. Discovering a Design problem then is too late.
Purpose → Timing → Design → Function → Measurement → Refinement
Functional Capacity is not intended to be a static score. It is a framework for identifying opportunities to improve how wealth functions as circumstances change.
A standard for evaluating whether wealth is capable of fulfilling the purposes assigned to it.
It is not a replacement for performance, financial planning, a risk-tolerance score, a portfolio rating, a guarantee, or a proprietary product.
Traditional reviews often ask: How did the portfolio perform?
Functional Capacity adds: Is the wealth still capable of doing what we need it to do?
Explore the FrameworkFunctional Capacity is not intended to be a static score or label. Measurement should identify opportunities to improve how wealth functions.
Purpose may change. Timing may change. Resources, markets, tax law, family circumstances, and business circumstances may change. A Design that functioned well yesterday may need refinement tomorrow.
What does this wealth need to accomplish? When will I need it? What could prevent it from being available? What should change while there is still time?
Did the financial Design improve the client's ability to fulfill the purposes their wealth exists to serve?
Capital has purposes. Those purposes have timing requirements. Design should reflect them, Function can be measured, and measurement can guide refinement.
Functional Capacity is not a replacement for investment performance, financial planning, a risk-tolerance score, a portfolio rating, a guarantee, or a proprietary product.