three questions for clients who want to manage their own wealth

maybe they can. but should they?

by anthony glomski
your $5 million high-net-worth practice

i have told you that your business owner clients will face new challenges, new transitions and new opportunities as they navigate their way through a liquidity event and emerge on the other side. i also have emphasized that you must do everything in your power to help them preserve, protect and maintain the wealth that they have worked so hard to build.

more: how to build your team of experts | five experts your wealth management team needs | maximize your client’s charitable giving | estate plans: can you ask clients these eight questions? | do you know your client’s total picture? | 2022世界杯32强赛程表时间
exclusively for pro members. log in here or 2022世界杯足球排名 today.

nassim taleb, author of the bestselling book “the black swan: the impact of the highly improbable,” argues that we can not only learn to navigate these frightening and overwhelming events, but learn to become stronger as a result of them and to take advantage of the opportunities they provide.

by helping your clients prepare the right way to withstand the next black swan event, you can help ensure that they’ll be able to have a huge impact not only in their life, but in their family’s life, in their community and even in the world at large.

you now know the framework to use – collaborative wealth management – for helping clients make intelligent financial decisions in all areas of their wealth. you now know that this process is the only way they can achieve truly meaningful life goals. it is the same framework i use every day with my own entrepreneur clients to help them achieve all that is most important to them.

as you have seen, the strategies that collectively make up collaborative wealth management will empower your clients to address their biggest financial challenges, needs and objectives – both before and after a liquidity event. when implemented through a team of high-quality experts, the collaborative wealth management process enables your clients to take full command of their financial futures and to achieve their goals with clarity and confidence.

again, the process pertains not only to managing their investments, but to addressing the advanced concerns facing successful entrepreneurs in partnership with a team of expert professionals:

1. minimizing income taxes on the sale of their business (or other wealth-triggering events) through proactive tax planning
2. maximizing their wealth by not leaving money on the table
3. preserving their wealth by avoiding excessive single-stock risk and other investment mistakes that can damage their wealth
4. transferring wealth effectively and tax-efficiently to family members and others they care about to ensure those people are well taken care of
5. protecting their wealth from being taken unjustly by creditors, lawsuits, children’s spouses, potential ex-spouses and catastrophic loss

next steps

now that you know what works when it comes to managing your client’s wealth effectively, you have some very important decisions to help them make.

think for a moment about the most important goals your clients have shared with you as their most trusted advisor – the ones that, if you help them achieve, will allow your clients to live a life that’s not just financially secure, but extremely meaningful and engaging. the fact that your client’s wealth can do so much good for so many people means they owe it to themselves, their loved ones and the causes they care about to make the best possible decisions about their money, so it can have the maximum possible impact.

armed with that insight and all i have discussed, now is a good time to ask your clients the following questions:

1. is collaborative wealth management the right approach? in my years of helping entrepreneurs like your clients make the smart financial decisions, i have found that collaborative wealth management is the approach that takes the most comprehensive and far-reaching view of money and the decisions that must be made around it. like most entrepreneurs, your clients likely have a wide range of financial needs and complexity in their lives – such as investments, tax management, estate planning, wealth protection, succession planning and charitable giving. collaborative wealth management, hands down, provides the best possible framework for helping you and your clients successfully address those areas.
2. what is the most effective and impactful way to implement collaborative wealth management? as you can tell from reading my posts, collaborative wealth management requires a great deal of time and effort, because it includes so many components. comprehensive plans for investments and other assets must be created. specific solutions must be identified and implemented. and a team of experts (attorneys, bankers, tax specialists, insurance specialists and other professionals who are experienced in working with entrepreneurs) must be assembled and carefully managed to address the many complex issues that business owners and former business owners with wealth tend to face.

if you want to incorporate collaborative wealth management into your client service model, you must determine the best way to do so. your entrepreneurial clients are hard-charging self-starters. some may choose to manage their financial lives by themselves, and wealth management can theoretically be undertaken on a do-it-yourself basis. that said, most entrepreneurs ultimately choose to work with an advisor – wealth manager, cpa, etc. who functions as their personal cfo and who uses the collaborative wealth management process in their practices. think of the personal cfo as the “hub” in the wheel. (it should be no surprise to you that this philosophy is the core of our model at ag asset advisory.)

your client’s decision to do it themselves or to engage a personal cfo boils down to a few key factors:

1. time. do they really have the time to implement wealth management successfully? are they able to devote the time needed to make these things happen? chances are there are other responsibilities in their life that should be given (or need to be given) a higher priority.
2. expertise. do they have the deep knowledge and expertise needed to take those steps successfully? as you have seen, creating a comprehensive plan around one’s wealth – in which all the parts work in concert – requires strong knowledge of investments, insurance, business planning, accounting, trusts and estate law, and more. do any of your clients truly possess all of the requisite skills to do so?
3. desire. even if a client is very interested in finance, will they really enjoy the prospect of spending their free time trying to draft an estate plan? do they really want to spend their time dealing with the issues and tasks detailed in these posts, or would they rather spend time with family and friends, pursuing interests that give their life meaning and pleasure?

typically, we find that most successful entrepreneurs – even those who have plenty of time following a liquidity event – ultimately choose to implement this lifelong process with the help of a trusted advisor who offers a true collaborative wealth management process. the spirit of my posts is that this advisor should be you, or at the very least, you should have a seat at your client’s advice table in a much more meaningful and involved way.

we often see a pattern that surfaces repeatedly among successful entrepreneurs. success breeds complexity. and when their complexity isn’t managed in an effective and coordinated manner the results are suboptimal. that’s a significant gap that shouldn’t be allowed to continue.

think of your most driven and hard-working clients – maybe those who have created thriving businesses out of nothing and who now dominate their market. do you think they have a high tolerance for mediocrity or results that are less than satisfactory? of course not. if you could step in and close that gap, what would that do to your current practice? what would that do to the advisory and consultative part of your practice?  what would that do to make your life more meaningful?

speaking of driven, hard-charging entrepreneurs, there are two ideal levels we talk about in the advice hierarchy. at the top of the hierarchy we have the virtual family office. for people at the $10 million net worth and up level, the complexity ramps up substantially in their lives and they need a much broader set of solutions. at the virtual family office level, you need the best of the best experts to help your successful entrepreneurial clients achieve their goals. the virtual family office model brings to the table a national, sometimes global team of experts all working on behalf of your client.

whether your client is best served by a personal cfo for their financial life or a coo for their virtual family office, the central coordinator is crucial to leading a team of experts on their client’s behalf. he or she will take on the mission-critical aspects of wealth management while working closely with the client and the client’s family to ensure that any plan or solution reflects their unique needs, goals and timeframe.

moving forward with confidence

ultimately, you have the power and the ability to put your clients on a path to post-liquidity financial success and – most importantly – to a life with financial meaning. remind your successful clients that they have created significant wealth and value throughout their lives. they owe it to themselves, their families and their communities to make the most of their money so it creates tremendous benefits and supports their deepest values.

i hope you now feel as confident as i do that collaborative wealth management is an incredibly powerful way to help your clients achieve all that is truly most important to them and to their families. i hope you are ready to explore using this process to help more of your clients live their best life, on their terms – today, tomorrow and for decades to come.

posted on december 19, 2022