While high-net-worth individuals are no strangers to hard work, they may find that their time and talent are busy maintaining a complicated portfolio rather than working towards the passions that got them where they are in the first place.
Many high-net-worth individuals don’t see the value or advantages of working with a private wealth management firm, but it allows you to work with someone who is just as capable and competent to ensure everything is properly carried out, along with allowing you to claim back some much-needed assets.
Working with a wealth management firm allows individuals to partner with a like-minded professional, with the opportunity to still provide any given amount of oversight. “People we work with may be working twelve hours a day and flying all over the place, and they can’t seem to get enough time,” says Brian Bissell, Senior Vice President at Whittier Trust. This allows people to get some time back and allocate it to other things like interests or family matters.
Bissel says that estate plans can put a strain on families. By working with a wealth management firm you and your family will have fewer worries, leaving less room for dysfunction over estate planning and asset allocation. It will also ensure that beneficiaries are properly planned out and are good stewards of your family’s wealth.
It’s also vital to keep in mind that these objectives may be unrelated to money. “People don’t often think about what they want their legacy to be, especially when they’re in wealth accumulation mode,” says Bissell. Figuring out what matters to you now is an important step in the foundation of your wealth planning strategy.
While you may already donate to particular organizations, engaging with a wealth management expert can assist you in developing a gifting strategy that works for you now and in the future. Looking at your portfolio through a tax perspective for assets to give. This can include making a charitable trust or DonorAdvised Fund to maximize your benefits.
Having a neutral third party when making decisions regarding balancing gifting wishes from your heirs’ expectations, can make the process easier and less biased. Whittier Trust offers a holistic approach that aims to “bridging the communication gap with the next generation.” In taking this approach passing things down from generations and sharing charitable passions becomes an easy and open conversion.
It takes time to navigate taxes and strategize for asset preservation, and failing to do so might result in huge tax payments. Bissel suggests that “Clients may not be aware of all the wealth preservation strategies available to them, especially when they’re still in growth mode and retirement is years on the horizon. But planning for the future well before retirement, the transition of a family business or the sale of highly-appreciated assets gives clients maximum flexibility.”
An irrevocable life insurance trust, for example, can be used to satisfy an estate tax debt. However, if you wait until your retirement years to start putting together an estate plan, securing insurance may be difficult. Working with a wealth management firm now can implement estate planning strategies before you even need them.
Peace of Mind
According to Bissell, the appropriate adviser can provide you a complete view of your money, giving you more confidence that your strategy represents your goals rather than a jumble of ill-advised assets.
“We all know the headache of gathering information for your CPA at tax time—the litany of hoops you have to jump through to secure the right documents. Your W-2, brokerage statements, charitable deductions, 1099’s from this place and that place. It’s maddening,” he says. These issues typically occur when working in a large team of advisors who lack communication, leading to investments at cross-purposes. We’ve witnessed several instances of inadvertently infringing wash sale laws, or worse, over-allocating to Wall Street darlings, putting you in danger.
A wealth management team may also handle the administrative details, enabling the client to concentrate on the big picture. Working with a financial manager can help with your family dynamic by handling necessary bills and other paperwork. With newfound flexibility after working with a wealth management firm, you can collaborate when you choose and get back some much-needed freedom, without wealth problems taking over your life.
For more information, you can download the full report here or visit Forbes to read more.