Are You Ready to Partner with a Wealth Manager?
In my previous post – “What is Wealth Management” - It offered a definition found on Investopedia. Below you will find two excerpts to help set the tone for this article:
Wealth Management according to Investopedia:
“Wealth management is an investment advisory service that combines other financial services to address the needs of affluent clients.
Wealth management is more than just investment advice. It can encompass all parts of a person’s financial life. Instead of attempting to integrate pieces of advice and various products from multiple professionals, high net worth individuals may be more likely to benefit from an integrated approach.”
So, given the excerpts above, I feel it is my responsibility to let potential client know if they are a qualified candidate for my services. Here are some guidelines:
- For some, wealth management is a real need, for value can erode due to poor decision making or inactivity, and emotional challenges are part of any family wealth dynamic. For most, it is also a “Perceived Need” – meaning that only you know if you have reached your own limitations of a DYI approach.
- Don’t confuse opening accounts, paperwork, checkbook balancing, paying bills on time and even placing a trade online as Wealth Management. Yes, there is plenty of that, but the real value comes in the advice and advocacy received from the advisor based on what you state you want for yourself.
- Do you understand yield, cash flow, invasion of principal – and have the discipline to make sounds decisions in a down market? Retirement Income, to support retirement cash flow needs more than Social Security payments, is becoming more and more relevant as companies eliminate traditional pensions. Yes, retirees have bigger balances in rolled over IRAs to retire on, but with that comes the responsibility of sound decision making. Sequence of returns is real, the 4% rules is being phased out, and cash flow is the name of the game for the current retiree.
- Are you willing to be an active investor? When I say active, I DO NOT mean being reckless when it comes to risk, or day trading. Since most have been conditioned to “buy and hold” through their saving years, many do the same in retirement. For me, being a more active investor may mean Covered Call writing or buying a stock only for an upcoming dividend payment, and then selling the positions. These are just two examples of ways to improve cash flow in certain circumstances.
- Are you able to trust and rely on only one professional? Unfortunately, personal Wealth management has always been had a piece meal approach. One sees an attorney for a Will, has a CPA do tax preparation and filing, sees a mortgage professional for a mortgage. Whereas I am always willing to defer to a specialist when the situation calls for it, I have found it beneficial for clients to rely on me as their first place to seek advice, mainly because, as a CFP®, I have a fiduciary duty to work in their best interests.
The above are just a few considerations when contemplating working with someone. If you’d like to speak specifically about your situation, please schedule with me at www.pickandrollwmt.com.