Managing substantial wealth often requires specialized capabilities and expertise.
When it comes to the management of significant wealth, quality recommendations beat quantity. For families with sizeable portfolios, having access to sophisticated investment options, coordination between other professional services and even discussions about building a philanthropic legacy all require a suite of elevated services that you may not have considered inquiring about.
Browse the list below to explore some of the ways your advisor may be able to assist.
1. Curated investment access
Affluent individuals and families have unique needs and the potential to assume more risk than the average investor. With the help of an advisor specializing in complex portfolios, you may have access to a variety of products and investments tailored to your more elevated aspirations and risk tolerance.
Imagine your advisor as your very own private chef. Before you make any decisions, your chef can offer a “tasting menu” of curated investment options that go beyond the main index funds – private market opportunities or alternative investments that might be too specialized for most, for example. In other words, options that may not be right for everyone’s palate, but are crafted to suit yours.
Conversations of this nature not only open your portfolio to new opportunities but also alert your advisor to seek institutional access or investments that individual investors wouldn’t be able to take advantage of. These may come in the form of hedge funds, real estate, private equity, select private placements, and more.
2. Coordination with other professional services
With financial success comes increased complexity and uncommon risk factors as you work to grow your wealth, seek tax efficiency and preserve wealth for future generations. To navigate those intricacies, you will probably need to rely on other legal, tax, and risk management professionals beyond your financial advisor.
Your advisor is best positioned to construct the most comprehensive financial picture that you can utilize to further coordinate with other members of your existing professional team. Your advisor may also be able to refer and vet new specialists: portfolio analysts, trust and estate specialists, lawyers, and more.
When it comes to planning for the long-term future, longevity, and intergenerational wealth strategies will typically include a health and wellness component. It’s important to be aware that some advisors and firms have partnerships with wellness resources, such as healthcare concierges and long-term care vetting. To help prevent information oversaturation, your financial advisor should differentiate the need-to-know information from irrelevant details.
Not only can having alignment among the various professional services in your life provide you with access to detailed insights about your financial circumstances, but a comprehensive view can help guide your efforts over time and enhance your ability to monitor your progress toward your goals.
3. Liquidity and risk management
Liquidity management can be a delicate balancing act to ensure that you have access to lines of credit and the right amount of cash available to cover expenses and seize opportunities. Your advisor can help you navigate the right mix of cash, debt, and investments to meet your needs and goals.
When it comes to your illiquid assets – property, businesses, alternatives, or high-value collections – your advisor can consult on the best-fit tools, loans, and technologies to help you manage those assets and maintain the flexibility to take advantage of compelling opportunities in the event they arise.
A solid 78% of high-net-worth investors want evidence that a financial advisor’s recommendations match their risk profile. The right advisor can work with you to evaluate your risk tolerance in a way that’s both comprehensive and beneficial to your portfolio. That way, you’re better prepared to weather unfavorable market conditions and avoid inopportune liquidations – and the heavy tax consequences that could result. Knowledgeable advisors, too, will focus on more intricate elements like changes to complex legislation and tax codes.
By combining the details of your portfolio, your investment preferences, market scenario analysis, and diversification, your advisor can help you take a strategic and tailored approach to liquidity and risk management, plus take the best advantage of any potential tax efficiencies.
4. Philanthropic consultation
For many individuals with significant wealth, philanthropy can be a hugely rewarding enterprise. Recent data shows there are over 1.8 million nonprofits registered with the IRS. These organizations reflect every aspect of life, from arts and culture to health and education. Investing in a cause you care deeply about is one way to build a legacy and make a positive impact on the world.
To unite your passion projects with your financial picture, your advisor can provide consultation and planning on financial topics beyond investments. They can suggest the right charitable vehicles that would allow you to set up a scholarship, provide guidance on donating property, or even navigate the complexities behind real estate purchases and financial transfers with intricate tax considerations
Your advisor can also help you evaluate the philanthropic and charitable strategies that match your ambitions. This is likely to involve considering the various types of charitable trusts, private foundations, funds, and endowments; weighing up relevant tax and privacy considerations; crafting a strategic giving plan; involving your family and loved ones in key discussions; and more.
5. Broader lifestyle support
To enjoy complete and personalized lifestyle support, some ultra-high-net-worth families choose to engage a dedicated family office or a financial advisor who offers similar capabilities.
Typically, a family office is different from traditional financial advisory practices in that it offers a full-package approach to managing all the financial and investment needs of the families it serves – from insurance, tax planning, and charitable giving to wealth transfer planning and legacy planning (and in many cases, advanced budgeting and bill paying).
The benefit of a family office lies in engagement. A key responsibility of a family office involves educating your heirs and loved ones by equipping them with the knowledge to be active participants in the financial planning process. Beyond the financial aspect, a family office can also assist and help coordinate with career planning, property management, travel planning, and other elements that enhance your family’s life.
The insight of a trusted professional is key to building a holistic plan that addresses the unique needs, goals, and risks that can accompany significant wealth. Consider having a conversation with your financial advisor about whether any of these services could help you reach your financial goals.
Sources: assetmark.com; insight.factset.com; investopedia.com; amgfunds.com; issuelab.org
Alternative investment strategies involve greater risks and are not appropriate for all investors. Diversification does not guarantee a profit nor protect against loss. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.
A message from Advisor Perspectives and VettaFi: To learn more about this or other topics, please check out our most recent white papers.
Read more commentaries by Raymond James
