You have worked hard over the years to accumulate your wealth and continue to work hard to grow it. Making these assets last for your lifetime and beyond is quite the challenge. A Wealth Advisor will help you preserve the wealth you’ve built and maximize growth without undue risk
Since retirement is the beginning of a new phase of your life, which could last 20 – 30 years, your accumulated assets need to provide the desired lifestyle during retirement, keep pace with inflation, provide for increased health costs and ensure your legacy remains intact.
Wealth Advisors work collaboratively with a team of professionals alongside your professionals to discuss your lifestyle wishes in retirement, your desire to continue to build your estate, preserve and enhance what you have accumulated, maximize its tax efficiency and ensure that it passes intact to future generations while meeting your philanthropic objectives.
Wealth Advisors take a holistic approach to managing your wealth that goes beyond simply managing your investments. Wealth Advisors will provide coordinated strategies that integrate investment management, portfolio construction, wealth planning, business or farm succession planning, estate planning, planned giving, and personalized advice. In short, they take a comprehensive, multidisciplinary approach to managing your financial affairs.
Drawing on the expertise of their team of accounting, legal, financial, insurance, banking, business and farm succession planning, and estate planning professionals, Wealth Advisors, work closely with your legal and accounting team to provide you with a unique wealth advisory experience. Together, they would use their expertise and resources to provide you with greater financial flexibility.
Experienced Wealth Advisors have years of experience in dealing with the sophisticated needs of affluent clients. They are best positioned to deliver an individually structured wealth solution – one that reflects the complexities of your investment, wealth, and estate situation.
8 Steps to Creating Multi-Generational Family Wealth
Step 1 – VISUALIZE – your family’s desired future
Your relationship with your Wealth Advisor begins with them having a conversation with you to help you visualize your desired future.
Wealth Advisors will take the time to get to know your true fears, challenges, advantages, excitements, opportunities, lifetime goals and aspirations for your family, legacy, and yourself.
Expect them to spend a considerable amount of time helping you visualize what your future could hold and then create a summary report outlining the steps you should take to achieve it.
Step 2 – ANALYZE – your family’s current reality
Before your Wealth Advisor can begin the process of optimizing your wealth, they need to understand your current reality.
This involves exploring all the areas of your personal, family, and business life that have a financial impact on your wealth.
This results in a high-level projection of your net wealth and sufficiency of financial resources that will help you meet the objectives revealed in step 1.
Step 3 – CREATE – a solid family wealth foundation
To create a solid family wealth foundation, you need to establish a solid investment foundation.
Before a Wealth Advisor can build your Optimal Portfolio, they need to design a blueprint of how your money will be managed.
They begin by creating a document called an “Investment Policy Statement” (IPS). This document captures what they learned about you in Step 1 and Step 2.
The IPS summarizes your needs for:
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- Income;
- Time horizon;
- Risk tolerance;
- Growth expectations;
- Liquidity requirements;
- Income tax characteristics;
- Anticipated changes in lifestyle;
- Economic variables, such as inflation and market volatility.
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The IPS outlines the strategies the investment management team will employ to build your Optimal Portfolio. This provides a blueprint of how your discretionary Portfolio Manager will manage your investments.
Step 4 – COMMIT – to building your family wealth foundation
The next step is to hire a discretionary Portfolio Manager to build your Optimal Portfolio, as outlined in Step 3.
Your Optimal Portfolio is designed to maximize your investment growth while staying within your comfort zone in up markets as well as protect your capital in down markets.
This is achieved by combining different investment styles, Asset Classes, and exposure to various geographic regions and automatic rebalancing.
Tax efficiency is achieved using tax-advantaged investment structures and appropriate tax planning strategies to minimize overall family tax liability on your investments.
Step 5 – BUILD – your family’s wealth foundation
This section is where I empower you to simplify your life and optimize your wealth so you can achieve your family’s multi-generational goals of wealth accumulation, preservation, and distribution.
Drawing on the expertise of their team of accounting, legal, financial, insurance, banking, and estate planning professionals, Wealth Advisors work closely with your legal and accounting team to consolidate your sophisticated, complex financial reality.
They will analyze a variety of possible solutions, including wealth preservation and tax planning strategies across multiple generations, to protect and enhance your wealth.
Your Wealth Advisor will explore strategies and solutions that may help you to achieve your family’s desired future. The outcome—a legacy of significance for your family and cherished causes.
Step 6 – PROTECT – your family’s wealth
What’s the point of working hard to grow your family wealth if you do nothing to protect it?
Your Wealth Advisor will identify and manage the financial risks that may prevent you from achieving your multi-generational goals of wealth accumulation, preservation, and distribution.
Your Wealth Advisor will review work collaboratively with their insurance experts to implement all effective insurance and estate planning strategies that will assist you in achieving your personal and business goals.
Some of these strategies include:
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- Protecting your family and business;
- Tax-sheltering investments;
- Supplementary retirement income;
- Planning your business succession;
- Offsetting estate taxes to keep assets intact.
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Step 7 – ACHIEVE – your family’s desired future
The implementation process is sometimes lengthy as the material is intense. It takes time to decide on the most efficient course of action for you to follow.
Your Wealth Advisor should meet with you every six to twelve months, or more often, if necessary, to implement and monitor your progress.
They should also document any major changes in your personal or financial situation that require them to adjust your multi-generational family wealth plan.
Step 8 – SHARE – your family’s wealth
This step is the culmination of implementing your family multi-generational wealth plan.
You have optimized your wealth, achieved your lifetime goals and aspirations, and put in place a multi-generational legacy for your family and cherished causes.
However, your Wealth Advisor’s work is not done.
Your Wealth Advisor should continue to meet with you, and eventually, your heirs every six to twelve months or more often if necessary, to ensure your estate plan and legacy remains on track.
I cover this extensively in my book Who’s Investing Your Money? – 7 Key Questions to Ask Your Financial Advisor. This book examines the various types of advisor registrations, their limits and abilities and will help you find the right advisor for you.
To learn how you can create Multi-Generational Family Wealth, please call me at (604) 855-6846 or email me at aspitters@pfcwealthsolutions.com
Who’s investing your Money? is available as a free PDF download at www.whosinvestingyourmoney.com
Alternatively, the book is available from Amazon.ca as a paperback and Kindle version from this link: Who’s Investing Your Money? – Amazon
