“The key to success is often the ability to adapt.” ―Anthony Brandt
Over our lifetime, we embark on fulfilling educational pursuits and one or more vocations. Then we proceed to spend, save and invest to achieve and sustain a variety of personal and family goals. I recommend pausing a few moments every now and then. The aim is to examine how conversant and comfortable we are with the disciplined processes of managing family wealth over the long run.
A straightforward definition of discipline is: “train oneself to do something in a controlled and habitual way”. Investors face a host of bumps and curves as they muster their best efforts in search of that mandatory discipline. Managing personal wealth requires extensive expertise and the ability to consistently apply it to a host of family situations over long periods. It is quite easy to become totally wrapped up with just investing the money. That can become a full time mission on its own.
My primary goal is to provide coordinated, objective and unbiased advice pertaining to a half-dozen wealth management components. The likes of risk management, retirement aspirations, long-term investing, estate planning, tax implications and business planning stand tall as your six foundations. I view these as the core requirements. Each family seeks customized processes to fulfil its path realized over many years.
My primary goal is to coordinate a half-dozen key service components over many years.”
My wealth management processes are about appreciating and understanding where clients are in their lives. Our discussions develop in several directions. Where they are heading. What is important to them. What are the family implications. What it takes to achieve the personal objectives. What is realistic to accomplish. What time horizon is available. The answers vary all over the map.
I summarize my six core foundations:
1. Risk Management
Managing risk is top priority of successful wealth management. Year in and year out. Investors have a variety of requirements for preserving and growing wealth. Today, a substantial portion of the family assets is invested in securities. Everyone can face increased market volatility. Keeping emotions out of the decisions is fundamental. Managing risk never stops during the investing lifetime. I focus heavily on client comfort with the risks taken. My processes emphasize three vital issues: ability, willingness and need to incur investment risks.
2. Retirement Aspirations
Achieving successful retirement is a goal for most families. In addition to managing the assets, the planning determines if sufficient capital is available to fund retirement. It also establishes the target investment returns required to accumulate the portfolio and meet retirement income needs. Investors need to be forthcoming about changes in their lives, concerns, and dreams. After all, retirement planning is both an art and a science. You may need to adapt to changing situations.
3. Long-Term Investing
Long-tem investing is the core service sought by investors. It’s the process of managing family assets like stocks, mutual funds, bonds, cash and real estate. It seeks to achieve and maintain a specific goal, such as retirement. My disciplined investing sets out policies and strategies before the tactics. The processes include assessments of risk tolerances, lifestyle requirements, identifying saving capacities and time horizons. A prudent asset mix is then designed and implemented. Broad diversification and quality investments are part of the plan. Managing daily distractions from the crushing weight of information overload and headlines is a constant quest.
4. Estate Planning
Estate planning covers how wealth is transferred at death to family members and other beneficiaries. It also deals with a variety of additional personal matters. The core document associated with this process is a valid will. Integrating the estate plan with the other wealth management components helps develop the prudent plan and minimizes taxation. Adopting tax-friendly strategies while living may transfer wealth to family with lower tax liability and better provide for future generations. Managing inheritances and special needs is also priority for families.
5. Tax Implications
Income tax planning minimizes and defers taxes payable. Pay close attention to the tax friendliness of the investment plan. Never place tax strategies ahead of sound investment merits. Keep things simple whenever possible. Many have aspirations to benefit favourite charities and educational institutions. Some make a difference by creating a charitable foundation, or funding a trust. These are noble legacies worth examining.
6. Business Planning
Global economies have created significant wealth management opportunities for entrepreneurs and executives. Tending to a family business addresses various matters between the owners, the business and the resulting action plan. The chosen business structure is at the centre. It also considers a variety of cross-border issues and succession strategies.
Anyone can discover the discipline of wealth management. First, decide where you are going. Then, a series of coordinated wealth management strategies will assist in getting there. You may require a team of professionals. For instance, a combination of the tax practitioner, lawyer, banker and portfolio manager may be essential. Many situations dictate that the advice professionals plan for more than one generation. Someone is often required to liaison with all the parties to maintain a unified approach.
Begin with a coordinated plan of action designed specifically for your family needs. A simple approach that points to the road ahead. Your journey may easily last five or six decades, often longer.
The disciplined road to wealth management is always worth taking. Starting early avails the family of the greatest number of options. Be flexible in adapting along the long road ahead.
Lastly, I recommend revisiting whether your family would benefit from more disciplined processes to guide its goals. Discovering and paving your road to disciplined wealth management is a long and rewarding journey indeed.