As an individual of high net worth, you need a wealth advisory firm that not only has a proven track record of delivering results but is also flexible enough to address your unique financial planning needs. Choosing a financial advisor—an expert who offers comprehensive services —can put you on the path to long-term prosperity. On the other hand, trusting the future of your financial security to a third party that is unwilling or unable to adapt to your needs can mean expensive set backs down the road.
One of the key advantages of working with an experienced but agile wealth advisory group is the ability to obtain all of your financial advice from a single source. Instead of relying on ad-hoc engagements with a variety of consultants and advisors—some of whom might even contradict one another—consolidating your wealth advisory needs under one roof distills the wisdom of many into a singular voice and cohesive strategy.
Different Types of Financial Advisors
While the services rendered sometimes overlap, financial advisory certifications typically fall into one of four categories:
- Certified Public Accountant (CPA) – Has earned a certification to work on taxes and accounting.
- Certified Financial Planner (CFP) – Focuses on creating financial plans for their client’s future goals.
- Chartered Financial Consultant (ChFC) – Performs similar services as CFPs but has completed two application based classes.
- Chartered Life Underwriter (CLU) – Is a financial professional with extensive knowledge in life insurance.
Beyond the basics of certification, there are four main types of financial advisors:
- Stockbroker – Employed by banks, brokerage firms, and insurance companies, stockbrokers must be FINRA licensed as they receive commissions /fees for the buying and selling of equities.
- Financial Planner – A financial planner advises clients on broad goals, such as retirement planning or saving for college tuition. The reality, however, is that most financial planners outsource the investment decisions to mutual funds, ETFs, or investment managers. In short, this makes them a manager of other managers and can increase the cost to the client.
- Investment Manager – An investment manager focuses exclusively on building and managing a portfolio. It is up to the client to assess (a) whether or not the portfolio is properly diversified and (b) how it fits into their overall financial plan
- Wealth Manager – A wealth manager combines the focus of a investment manager with the advisory services of a financial planner, so the overall financial planning and portfolio management is a coordinated effort designed to accomplish a client’s unique financial goals. Additional services include tax strategies, estate planning, retirement planning, debt management, asset management, and advice on insurance, real estate, social security and more.
On Wealth Advice and the HNWI
While anyone can benefit from financial advice, the high-net-worth individual (HWNI) has more wealth to manage, and more complex needs. Top wealth managers act for this clientele, applying their knowledge and experience to offer relevant advice on everything from asset management and estate planning to risk and debt management.
What Services Does a Wealth Advisor Offer?
Wealth advisory firms like Polaris Wealth Advisory Group offer a comprehensive suite of financial solutions for high-net-worth individuals.
Your wealth matters in your old age, and also it also affects those you leave behind. Estate planning protects a critical component of your financial life. Without appropriate plans, a court may make important decisions for you, in a lengthy and unsatisfying manner.
Estate planning involves the establishment of a process for dividing your assets after you pass away. A will or trust specifies who will receive which parts of your assets, as well as who will look after your remaining estate or your offspring. Estate planning further aims to minimize taxes for inheritances.
Another important aspect of estate planning is appointing the power of attorney to a trusted agent who can make medical (and sometimes financial) decisions should you become incapacitated.
Additional elements your wealth advisor can attend to include tax exclusions and business succession plans as well as numerous other asset protection methods. High-net-worth individuals have more assets to protect, requiring more precise advice.
Investment advice—another service of wealth management—involves guiding HNWI clients on whether to hold or sell financial assets based on market activity. This service includes the recommendation, selection, and management of equities or other investment vehicles. Given the sizable assets of a HNWI, these investments should form a substantial part of retirement planning.
Due to the responsibility involved and potential for fraud and insider trading, investment advice is heavily regulated. Some investment professionals—such as fee-only advisors—are actually required to act as a fiduciary for their clients. In any case, it’s important to check a potential advisor’s compliance record with the SEC, FINRA or your state’s securities commissioner to see if any noteworthy complaints have been filed.
Wealth managers provide long-range planning. High-net-worth individuals think of the future: for themselves, their families, and even for society as a whole. A wealth management service may suggest insurance policies, conduct strategic tax planning, or even assist clients in making effective charitable contributions.
The Benefits of Consolidation
High-net-worth individuals and their families have different needs than your average investor and frequently find they need multiple advisors to address those unique needs. A high-net-worth individual may feel that an investment advisor fails to offer the necessary information for estate planning, for example. In other cases, a HNWI may fret over poorly performing investments, then hire another asset manager only to see the same or worse performance, plus additional fees.
Instead of complicating processes unnecessarily with multiple advisors, it often makes sense to simplify. At Polaris Wealth, we believe working with more than one advisor is ill advised for a variety of reasons:
- More fees and added expense.
- Multiple advisors may not see the big picture or communicate effectively with each other. This means you run the risk of duplicating efforts or trying to juggle conflicting plans or advice.
- An assembled team of multiple advisors may still have gaps in their knowledge.
For a more personalized relationship and multi-faceted approach to your wealth management, consider consolidating your financial planning under one roof. Not only are you more likely to hit breakpoints in the fee schedule, but having a single advisory group or trusted wealth advisor aligns your assets to streamline performance. A full service wealth advisory firm will also coordinate to eliminate the potential for duplication, provide consistent advice across all areas of wealth management and ensure there aren’t any gaps in your financial planning.
Polaris Pro Tip: When weighing your wealth management options, consider yourself the CEO and your potential advisor a “Personal Chief Investment Officer.” The key is to see yourself as the boss but find an advisor you can trust to handle all things financial in your life.
When you partner with an experienced and versatile wealth management group like Polaris, you’ll experience less friction and more synergy. Reach out and start a conversation today!
This website is solely for informational purposes. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Polaris Wealth Advisory Group unless an investment management agreement is in place.