{"id":118455,"date":"2023-10-23t11:56:13","date_gmt":"2023-10-23t15:56:13","guid":{"rendered":"\/\/www.g005e.com\/?p=118455"},"modified":"2024-08-27t17:00:53","modified_gmt":"2024-08-27t21:00:53","slug":"the-collaborative-wealth-management-process-outlined","status":"publish","type":"post","link":"\/\/www.g005e.com\/2023\/10\/23\/the-collaborative-wealth-management-process-outlined\/","title":{"rendered":"your entrepreneurs need advice, but which kind?"},"content":{"rendered":"

\"two<\/strong><\/p>\n

the collaborative wealth management process outlined.<\/strong><\/p>\n

by anthony glomski<\/i><\/p>\n

the financial services industry has failed some of your clients who are entrepreneurs. a big gap can exist between what they pay (and the services delivered) versus what they need.<\/p>\n

more: <\/b>three ways to work together on wealth<\/a> | target the family ceo<\/a> | how to implement collaborative wealth management<\/a> | five challenges of liquidating a business<\/a>
\n\"goprocpa.com\"exclusively for pro members. <\/span><\/strong>log in here<\/a> or 2022世界杯足球排名 today<\/a>.<\/span><\/p><\/blockquote>\n

we can agree that your clients will usually need an investment management solution. but how can you help your client sort through the different advice options to get them aligned with the right professional?\u00a0 how can you determine who is the right fit for your practice to develop a working relationship? the diagram below is the hierarchy of advice available:
\n
\n\"diagram\"<\/a>remember, level 1 and level 2 represent over 90 percent of advisors. and this is okay \u2013 it\u2019s appropriate for many types of people. however, those with complexity, specifically your business owner clients, really should be at a level 3 or level 4.<\/p>\n

titles can be very confusing. as mentioned earlier, an awful lot of people in financial services call themselves \u201cwealth managers.\u201d but research shows fewer than 10 percent of them really provide consultative wealth management services that include all aspects of advanced planning and relationship management. mostly they just focus on investments and one-off advice (which places them on the lower tiers of the hierarchy).<\/p>\n

level 4 \u2013 the virtual family office<\/strong><\/p>\n

this is a game changer. thanks to advances in technology and changes in legislation, all of a sudden, families with $10 million net worth and up can access the same tools and resources that used to be reserved exclusively for billionaires and families with $500 million-plus net worth who had full-blown single-family offices (sfos).<\/p>\n

in my experience, some business owners greatly underestimate how much their businesses are worth and may even plan to shut them down upon retiring if they don\u2019t have a trusted family member to take the business over. that\u2019s a huge missed opportunity. there can be an appetite for businesses of all kinds \u2013 even those with very low ebidta. some companies are now commanding much higher multiples than they would have as recently as three years ago. different market cycles will change demand, but there can be value for your client\u2019s business \u2013 sometimes substantial value \u2013 and you should help your client unlock that value.<\/p>\n

there are all kinds of buyers stepping into the picture. some that might not be immediately obvious to you. for instance, with the expansive growth of family offices, many are looking at all kinds of \u201cbread and butter\u201d companies for their clients to acquire.<\/p>\n

here\u2019s another thing you should understand about your business owner clients. research shows that 85 percent of owners hope to sell someday, but only one in eight (13%) have done any type of planning around a sale. as a savvy cpa, you can add massive value<\/strong> in a transaction, both on the tax side and otherwise.<\/p>\n

vetting of professionals you\u2019re considering adding to your expert team<\/strong><\/p>\n

questions to ask anyone who manages money:<\/p>\n

    \n
  1. are you a fiduciary?<\/li>\n
  2. how do you get paid?<\/li>\n
  3. do you get paid directly by the client or do you get a commission on investment products you select?<\/li>\n
  4. do you have any revenue-sharing on investment products you select?<\/li>\n
  5. do you get any 12(b)-1 (marketing\/distribution) fees on any investment products?<\/li>\n<\/ol>\n

    if the advisor you\u2019re considering is at a \u201cwirehouse\u201d (e.g., morgan stanley, ubs, major banks, etc.) they\u2019re going to have some type of revenue-sharing arrangement. by the way, that doesn\u2019t mean they\u2019re bad advisors. but as your client\u2019s most trusted<\/strong> advisor, you need to be aware that a conflict of interest exists.<\/p>\n

    for instance, if the advisor can put your client into investment a and get paid more than they would for putting your client into investment b, then which investment do you think they\u2019ll recommend? investment a is often the answer. and who do you think pays those extra fees? your client.<\/p>\n

    by contrast, fiduciaries are prohibited by law from receiving any type of revenue share or compensation for the investments they recommend to their clients. sometimes they\u2019ll end up recommending the same type of investment for a client that a wirehouse advisor recommends, but instead of fund a or fund b, it will be fund i, which stands for \u201cinvestor class.\u201d that means it\u2019s the exact same fund, but costs the client much less because the fiduciary is not getting paid by the fund administrators to recommend it.<\/p>\n

    again, there\u2019s nothing wrong with partnering with advisors at the morgan stanleys and ubss of the world. just make sure you are crystal clear about how they get paid, how they make their selections and the total<\/strong> cost structure of investing with them. you also need to ask the following:<\/p>\n