With October being National Financial Planning month, there is no better time than now to address lingering questions and seek answers from a trusted advisor that can be in your corner providing sound guidance and working with you to achieve your goals. Wealth management is not just about investing or insurance or taxes or estate planning – it is all of those things and more. It is paramount for an advisor to actually know each client and their desires to provide the best possible experience, and that comes with a healthy amount of questions to answer. What are your predispositions to wealth managers, if any? How do you view and perceive wealth? What are you working towards and how do you plan to make that a reality? All the answers to those questions provide helpful context for an advisor to curate the most meaningful relationship and guidance for every client. On a similar token, the client must have a clear understanding of what wealth management means to the advisor, so it is up to the trusted advisor to clearly set expectations and accountability measures at the beginning of the relationship for the client to understand what services to expect and how the process flows. A good advisor will instill confidence in each client to make necessary changes and appropriate future decisions to help meet targeted goals. The LGT Financial Advisors team uses foundational principles to build comprehensive strategies that best fit the needs of each client. The following are a few key areas of expertise that our clients find adds the most value to their overall wealth management program.
Financial Plan
The foundation of proper wealth management is laid by a comprehensive financial plan. We view the financial plan as a road map to help guide the decision-making process as both life and wealth progress. It is the duty of a trusted financial advisor to help maximize each client’s potential for meeting life goals through financial advice; therefore, financial planning is a process that includes monitoring and adjusting as life changes in order to stay on course. We believe a financial plan is not just about accumulating the most amount of assets, rather it is putting a plan in place so you can live the life that you want with the wealth you have accumulated. A good financial plan includes many facets that work together like a well-oiled machine on the tracks to living your best life.
Investment Management
Working hard for a consistent paycheck to spend and save is the beginning of the wealth management process. Once money is saved, the power of investing must be utilized. Rather than relying solely on earned income, investing can prove fruitful in building wealth and diversifying risk. We believe a structured investment policy, created and implemented as early as possible, is the most effective way to build significant savings. We also believe reviewing the policy and overall portfolio at least once per year with a trusted advisor will help ensure allocations are aligned with the stated goals. A dutiful advisor will provide a strategy that targets specific asset classes, with the underlying products subject to a rigorous due diligence process to implement top managers. The following is an example of how compounding growth can impact your wealth building process. Assuming an initial contribution of $8,000 at age 23, and $20,500 each year after for the next 42 years, the power of investing paints a much more promising picture compared to a No Growth scenario. 8% growth is assumed in the last column, with no withdrawals and reinvesting earnings. This scenario brings to light a $5.5M difference in wealth, just from a simple decision to save and invest early and often.
Retirement Strategy
Retirement is a topic that looks vastly different to just about every client, so a tailored strategy that fits the needs and wants of the retiree is ideal for living a happy life in those post-working years. For entrepreneurial business owners, retirement planning starts with a succession process for the business. Depending on the size of the business, it is imperative to start the succession plan as early as possible to mitigate employee tension, limit turnover, and continue uninterrupted business operations. Other aspects that are covered in a retirement plan include a social security analysis, cash flow projections, tax-efficient withdrawal strategies, and employer-sponsored retirement plan management.
Legacy Planning
The topic of death is not usually on the regular agenda of discussion items, so setting up a plan that centers around your end-of-life is usually not high on the “want” priority list, although it usually falls near the top of the “need” priority list. No matter your level of wealth or assets or even just desire, a simple estate plan can help lessen the burden of your loss on loved ones and avoid familial strife. Property ownership and beneficiary designations are two basic ways to start planning your estate. The more intricate components of an estate plan involve a living will, durable medical and financial power of attorney, HIPAA authorizations, trust creation and funding, and general directives. Estate planning can be an intricate process that is subject to tax regulation and prevailing laws, so understanding the implications of decisions now can create a significantly smoother wealth transfer process in the future.
Protection Planning
Insurance is a tool in the wealth management toolbox that seems to come under the most scrutiny. Insurance – whether it be life, long-term care, healthcare, Medicare, pet, etc. – cannot be avoided in the financial planning process, but we believe it should not be the sole outcome of a comprehensive wealth management program. The LGT Financial Advisors team typically performs an insurance needs analysis before incorporating a recommendation, if any, into a holistic plan. Insurance can be a high-cost item for a budget, so we take the time to understand the risks and pitfalls of where insurance should and should not be utilized.
Tax Strategies
Death & taxes – the only two surety’s we all have. While taxes are unavoidable, we believe a sound financial plan incorporates effective tax strategies to provide the most wealth for clients. Tax planning is mixed into each facet of the overall financial plan. For charitable giving opportunities it is common to use either the Qualified Charitable Distributions option or a Donor Advised Fund. When it comes to the timing of charitable giving there are decisions around front-loading the donations or spreading them out over time. For estate planning, there are current laws that are on track to sunset at the end of 2025 to take advantage of now to mitigate estate taxes later. A sound investment policy typically includes a rebalancing cadence and performing a rebalance without considering the tax consequences can be detrimental to overall returns. Formulating a withdrawal strategy for retirement planning purposes must rely on a plan to minimize the amount of income and capital gains taxes paid depending on the type of accounts used. The list goes on, but taxes continue to be a point of emphasis that we consciously help clients navigate.
Most financial planners or wealth managers have something unique to offer, but the challenge can be finding a trusted advisor that connects with exactly what is needed now and in the future. Good advisors will work very hard to prove their trustworthiness, but it is up to the client to accept and reciprocate that trust. Our team believes in meeting a client where they are and implementing plans that instill confidence in decision making and results that meet expectations. We hope everyone takes a step forward in their wealth journey during National Financial Planning month, and we look forward to speaking about how our team can optimize well-being with a trusted advisor in your corner.
To learn more about wealth management, contact one of our trusted advisors.
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