When it’s time to get serious about getting financial help

August 25, 2014 – Published in the North Bay Business Journal

When making any major decision, it is important to know when to seek professional advice.  With financial decisions in particular, an expert can be critical given the number of options available today. Here are a series of scenarios when it may make sense to get help.

  • You own a business…

Among the biggest mistakes business owners make is over-estimating the worth of their business and under-estimating what they will spend in retirement. It isn’t uncommon for an entrepreneur to have a blurry line between business and personal expenses such as cars, computers, country clubs and travel.  A wealth manager can be invaluable in helping create a realistic retirement plan and setting goals for a meaningful transition.

  • You have just received a sudden inheritance…

A common tendency is to spend the money first and think about a long-term financial plan later. A savvy wealth manager will encourage you to slow down. Coming into a lot of money requires careful introspection. When you are ready, your advisor can create a realistic, thoughtful plan and help with tax and investment logistics.

  • You are interested in charitable giving…

Charitable giving is a common goal, whether the desire is to leave a legacy or share the bounty. With numerous options available today, a professional wealth manager can be key to achieving your philanthropic goals in the most efficient, tax effective way. It starts with helping the donor refine their vision, creating the perspective of a comprehensive financial plan and determining whether a bequest, donor-advised fund or charitable trust (among others) is the most suitable strategy.

  • You aren’t sure whether you should take Social Security sooner or later…

Social Security claiming options are so numerous that the general SSA representative cannot answer inquiries about the most sophisticated strategies. This makes a wealth manager indispensable in determining the best Social Security claiming strategy for you. The most satisfying decisions come from analyzing the best deal in terms of dollars while giving careful consideration to longevity. It is also important to consider investment opportunity when making the final decision on whether to wait another year or start receiving benefits.

  • You haven’t gotten around to consolidating and rebalancing your investments…

Rebalancing translates into bringing your portfolio back into alignment with your investment goals. A crucial part of managing your portfolio, it has been shown to significantly improve portfolio returns. Unfortunately, many people never get around to consolidating and rebalancing their investments. A wealth manager can help you put in place a disciplined strategy before execution becomes emotionally difficult during extreme market highs (or lows).

  • You and your tax professional are discussing investment tax planning after the fact…

Why would anybody pay taxes when they don’t have to? One of the value-adds of working with a wealth manager is being made aware of alternatives such as gradually taking IRA distributions before the mandatory requirement by filling in the lower tax brackets. Or if you don’t need the income, a professional can help you make the appropriate partial conversion from your Traditional IRA to a Roth IRA. Both strategies can help ensure you are paying taxes at a lower tax rate today rather than a high rate tomorrow.

  • You are selling low, buying high and regretting both…

A professional wealth manager helps you maintain the necessary discipline required to stick with a long-term investment plan, putting you on track for success and security. Just like the Tortoise and the Hare — it’s smarter to build wealth slowly and deliberately, rather than taking reckless risks and trying to get rich quick.

A lot of very smart people have been successful at accumulating wealth, but somehow financial IQ doesn’t necessarily follow business or academic excellence. Think of it the way you use a doctor to manage your family’s health, an attorney to help you with your estate plan, or a mechanic to fix your car. When it comes to your personal finances – consider hiring a professional wealth manager.