What’s the best way for High-Net-Worth and Ultra High-Net-Worth individuals and families to efficiently manage their complex financial picture? Here are a few things to consider based on our experience working with these types of clients:
Develop a purpose.
Firstly, HNW individual should develop a purpose and meaning behind their wealth and ask questions like – What is the goal of our wealth? How does our family want to make difference within our community and around the world? What do we want to be known for? How do we want to pass on our legacy? This critical step is skipped far too often, causing confusion and the potential of mismanagement of funds. The more specific a HNW family can be with their purpose, the greater the odds are for sustaining wealth.
Form a solid team of experts.
Almost every successful high-net-worth individual has a solid team of professionals that surround them. They are very good at delegating and rely on expert advice for almost every area of their wealth planning. This doesn’t mean they aren’t involved with the decisions, but they rely on these experts to help them reach a certain outcome faster by leveraging their resources and time. A simple HNW team typically consists of a CPA, Trust & Estate Planning Attorney, Private Banker/Investment Banker, Real Estate Agent and Financial Planner. Ideally, this team of professionals are all working together seamlessly and are very familiar with each other’s way of practicing. Communication between the client and all team members is extremely important. We have found that quarterly check-ins with the entire team works well and keeps all members up-to-date. While there are some details that might not want shared between each team member, keeping everyone in the loop at a high level is key.
Take a holistic approach
Instead of managing each area of wealth separately, make sure all financial accounts are working together and the big picture is on track. This can be done by crafting a holistic financial plan, which takes a top-down versus bottom up approach. A holistic financial plan will cover every area of your finances such as insurance, retirement planning, investments, real estate, business interests, college savings, and more, showing where everything is heading and exposed to based on the facts.
Leverage secure technology.
There are many cutting edge financial management tools the high-net-worth can leverage to simplify and streamline their family’s finances. Consider moving the majority of your wealth planning over to a secure digital wealth management platform. It’s time to ditch the 100 page financial plan binder that maybe gets updated once a year. There are way more efficient ways to keep a plan updated and to share with team members. Ideally, this financial planning software is cloud based and can be shared between the CPA, Attorney and Financial Planner so that the team can have access to updated numbers and strategies when they need it. A digital approach increases accuracy, minimizes human error and keeps all plan documents secure.
Bottom line: Making the complex simple is key with HNW / UHNW clients. However, don’t mistake simplicity with lack of sophistication. It takes an expert financial planner to bring all of the complicated details together and present it to the client and team members in a way that everyone can understand.
Looking to add an expert HNW financial planner to your team? Schedule a time to speak with Trent Grzegorczyk by going to micapitaladvisors.com/talk
MICAPITAL is a boutique private wealth planning firm specializing in serving an exclusive group of HNW individuals and families.