What is wealth management? (And is it something that would help you?)

A family’s financial journey is not a straight path from here to there — it’s a winding road that intersects with all aspects of finance, tax, and legal advice. Wealth managers help families navigate that journey.

Whether you are a recent retiree figuring out the next chapter of life or a hard-working business owner deciding where to go next in your professional career, you will want to work with a firm that has a firm grasp of all aspects of your family’s financial picture. The more complex a family’s situation, the greater the benefit.

Generally, a wealth manager talks to a family or individual, analyzes their current financial situation, considers their short- and long-term goals, and tailors a personalized strategy that uses a range of financial products and services.

How can a wealth management firm help with a family’s financial journey?

1. Financial Planning: Only 30% of Americans have a long-term financial plan, according to a Gallup poll on personal finance. Financial planning might mean figuring out how much you need to save in order to retire at a specific age, or deciding whether it is the right time to sell your business. It might mean determining where to invest an inheritance or proceeds from a business sale. Your financial plan is an ever-changing roadmap, so when making these decisions, it is critical for your wealth manager, accountant, and attorney to be on the same page.
2. Investment Management: Once you have defined your plan and goals, it is time to determine the risk you are willing to take and the time you have to achieve them. Think of this like driving from Tampa to Miami. You could drive a Lamborghini 100 miles per hour the whole way there and get there really quickly, but you’d also be significantly increasing your risk of crashing. If you have a family of five, you would likely choose a different vehicle to get you there safely. Your investment manager should be building your portfolio around the optimal “speed limit” and adjusting the route as traffic changes.
3. Estate/Legacy Planning: While working with clients over the years, I have seen some unfortunate events that could have been avoided with simple estate planning. Poorly written estate documents can accidentally cut out family members from an inheritance, can cause unnecessary tax bills, or can leave loved ones with legal battles. Talking to your family about estate planning may not be the most enjoyable experience, but it needs to be done. When your wealth management team is made up of financial planners, accountants, and attorneys, continuing your family legacy can be seamless.
4. Tax/Philanthropic Strategies and Planning: I have not met anyone who enjoys paying more than their fair share of taxes. To avoid this, it’s essential to have a plan that keeps taxes in mind. For example, there are tax implications for how and when you sell your business, how you leave money to your family in your will, and how you support the philanthropic causes you believe in. Having a team focused on every aspect of your family’s financial journey can make those decisions much easier.

Banner Clark is a Wealth Management Advisor for Sagace Wealth Management. He holds his CFP® license and would welcome the opportunity to discuss your specific wealth planning needs. You can contact him or schedule an appointment here.