For affluent Minnesotans, navigating complex financial decisions can often be overwhelming. Especially in an era of inflation, recession, and bear markets, finding an experienced professional to help develop and refine a financial plan is essential.
However, not everyone claiming to be your optimal wealth management option will likely fit the bill. So, what should you look for when searching for the perfect fit? Let’s take a look at some of the essential qualities to consider.
This article explores the following:
Wealth advisory services are a specialized form of financial planning and asset management that helps affluent individuals and families pursue their financial goals and create a sustainable legacy. These services provide comprehensive advice on investments, taxes, estate planning, risk management, and more.
The cornerstone of any wealth advisory service is financial planning. Financial advisors work with you to develop a comprehensive plan for managing your finances. This takes into account your current financial situation as well as your long-term goals. They will review your income and expenses, develop a budgeting strategy, advise on investments, and design strategies to help you save for retirement or other future goals.
Wealth management is another important subset. This service involves managing the day-to-day operations of an individual’s or family’s finances to maximize potential returns while minimizing possible risks. A suitable wealth manager can help you identify the best investment opportunities for your portfolio, based on your specific needs. At the same time, they can work with you to develop strategies for protecting your assets from market volatility or other potential threats.
They can also provide advice on things like estate planning. One of the most important reasons to have an estate plan is to ensure your final wishes are carried out. This often includes determining things like who will receive your savings and assets. However, it can also mean specifying who will decide on your behalf should you become incapacitated.
Without a plan, these decisions will be left up to the courts—and while they may do their best to follow your wishes, the results may not align with what you would have wanted. There are multiple reasons to plan your legacy rather than leave it to others. Nevertheless, the chief benefit is the ability to rest assured, knowing that your final wishes will be followed.
Planning out your financial legacy can also be utilized for reducing the income tax liability of your future estate. If you die without a plan, your loved ones could face an unnecessarily large tax bill. Now that the IRS is making no secret of targeting people in higher tax brackets for audits planning ahead is more essential than ever.
The right wealth manager can also help you establish an estate trust to help further ensure that your wishes are upheld after your passing. This is a legal agreement between individuals or entities (trustors) who transfer ownership of their assets (property, investments, and so on) to another individual or entity (the trustee).
There are many possible benefits to establishing an estate trust as part of your overall Wealth Advisory Services. In addition to affording potential peace of mind for you now, it may help you protect your wealth from nuisance lawsuits by placing your assets out of reach until they are passed on to your heirs upon death.
Few people reach financial independence without learning that taxes are an ever-present, critical consideration. If you want to stay wealthy, you must ensure that you make the most of your money and take advantage of all available tax strategies to minimize your tax burden.
One of the best ways to reduce that burden is by taking advantage of as many deductions and credits as possible. Thankfully, deduction-earning opportunities are available for things like charitable giving, educational expenses, business costs, and home mortgage interest.
Another way to limit your tax liability (meaning how much you owe) is using various tax-advantaged investment account types, such as 401(k)s, IRAs, and Roth IRAs. These allow you to save money pre-tax (or, in some cases, post-tax depending on the type of account you choose), which can result in significant savings from your overall tax costs.
Tax-loss harvesting is another strategy employed by high-net-worth individuals. This involves selling investments at a loss to offset capital gains tax costs from other investments. As a result, they can offset their taxable gains on returns by selling securities at a loss, thus reducing their overall taxable income.
When managing your money, you have to be selective. While it’s great to find an advisor who is well-suited to your needs, you should also ensure they are qualified to provide financial advice. Here are some questions to ask as you vet a financial advisor.
Registered Investment Advisors (RIAs) are considered fiduciaries with a legal obligation to act in the best interests of their affluent clients. These advisors provide individualized investment advice, financial planning, and other services, requiring them to consider the investor’s financial situation.
In contrast, investment advisory representatives (IARs) typically work for a registered investment advisory firm (RIA) and are most often fiduciaries. Their compensation may be fee-only, fee-based, by commission, or a mixture, based on the services they provide.
On the other hand, brokers are typically compensated by commissions when selling an investment product such as a mutual fund or annuity. This is why it’s essential for affluent investors to not only understand how their financial advisor will be compensated.
. Understanding the breadth and experience of a financial advisory firm should be an important part of your due diligence process. This means asking about how many clients they currently manage, how long they have been in the financial services industry, and their background.
You can visit these sites to better understand if any disciplinary actions were taken against them by regulatory agencies such as FINRA or the U.S. Securities & Exchange Commission (SEC). Any red flags with either could be cause for concern.
Another step in thoroughly vetting a financial or wealth advisor is to check their qualifications and credentials. This includes ensuring they have the appropriate licenses and certifications required in your state.
It’s also essential to ensure that they have the necessary experience and expertise in the specific areas of financial planning that you need help with. For example, if you’re looking for help with asset management, ensure they have experience in this area.
Wealth managers are typically compensated in one of two ways: through either a commission or a fee. Commissions are often associated with the sale of securities or insurance products and can be paid on an ongoing basis for as long as services continue.
A fee can be a flat cost for providing advice about financial matters or based on assets under management (AUM) and charged quarterly or annually. At ViaWealth LLC, we believe that a fiduciary RIA fee structure offers clients the most potential value. As a fee-based, fiduciary independent firm, we work with you to create suitable solutions for your specific needs.
You can rest assured: Our recommendations come solely because of their potential to help you, not because we’re pocketing additional money for pointing you toward a particular financial product. Schedule an appointment to learn more.
ViaWealth, LLC is a Registered Investment Adviser. Information in this article is for educational purposes only and is not intended to be an offer or solicitation for the sale or purchase of any specific securities or other types of investments. Investing in the securities markets involve risk of principal and unless otherwise stated, returns are not guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before making any financial decisions. Past performance is not indicative of future performance.