As someone whose profession is investing or trading, you no doubt know the markets inside out and there is a high chance that you’ll be managing your family’s portfolio yourself. While this is entirely common, when was the last time you stepped back to evaluate how robust your investment plan is against your family’s evolving needs?
It is fairly typical for investment professionals to keep a tight grip on managing their own assets – after all, it is what you do for a living. However, looking after your financial future is about much more than having a bunch of well performing stocks or a stellar trading portfolio.
There are a multitude of factors that play a role in whether your family can meet your objectives. Managing your family’s wealth is about creating an overall family strategy, of which the investments form only one aspect and this is where an adviser can really come into their own.
HAVE YOU GOT THE FOLLOWING IN PLACE (OR EVEN DISCUSSED WITH YOUR NEAREST AND DEAREST)?:
STRUCTURING AROUND YOUR NEEDS
Your investment strategy needs to align with your family’s immediate and longer-term needs. This means ensuring your investments and any other assets are structured to help manage your risks and ensure you can meet your obligations, with enough flexibility to adapt to changes in your requirements. Most notably these changes are the three D’s: Divorce, Death and Debt – any one of which can erode a lot of wealth.
DIVERSIFICATION
Investment professionals have deep expertise in certain areas of the market and are often obliged to invest in their own funds or strategies, which may skew your exposure to certain market segments. An objective view of all your assets alongside your needs will help ensure that your investments work efficiently as part of your overall wealth strategy.
TAX
The impact of tax from various sources can significantly erode your overall returns. Your wealth strategy needs an overarching view of your entire portfolio to ensure you don’t rely on irrelevant structures that might not make sense as your needs and circumstances evolve over time. It is also crucial to consider the impact of taxes if you have assets in different jurisdictions.
FAMILY INVOLVEMENT
You may think you’re taking the burden of financial planning on your shoulders and away from your family. However, including your family in the wealth planning process can be extremely beneficial. It will give them valuable insight into the overarching planning for the family’s long-term needs, provide the next generation with an education into how to go about their own financial planning and ensure continuity should the worst happen to you.
REGULAR AND CONTINUOUS REVIEW
An often neglected, but a crucial part of a successful wealth management strategy. While an investment plan focused on the long term and undeterred by short-term movements is useful, your overall wealth strategy needs ongoing review to ensure your returns can continue to meet your needs and as your priorities change.
A high performing fund or investment portfolio is important to helping you achieve your goals, but we want to highlight that it is just one aspect of your wealth strategy. Planning for the future involves including evolving family needs, which might be best evaluated and reviewed objectively.
However counter-intuitive it may seem to professional investors, a good wealth manager can be an invaluable sounding board to help you think holistically about your family’s financial future. This will ensure longevity through a bespoke wealth plan that works for you.
If you’re ready to review your investment plan, please get in touch using the contact form here.
