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Managing wealth takes more than a financial advisor

You should also use legal, tax and insurance expertise — and some common sense

December 20, 2016

by Guest Contributor

bob-nachman-byline-headshotPreserving and allocating your personal wealth is a complex undertaking that can be time-consuming and perplexing if you don’t have the right resources. The right resources may vary depending on your situation. A financial advisor can serve as your point person to pull in the right resources for your needs. However, according to a study conducted by research firm Spectrem Group, one-third of high-net-worth individuals in America don’t regularly consult with a financial advisor.

ubj-perspectives-calloutTo successfully manage and grow your wealth, you should start with a qualified financial advisor who understands your goals and assesses your needs. The next step is to integrate appropriate key professionals whose insights can help determine your overall wealth plan. Most often, we see the need for legal, tax and insurance expertise.

Earlier this year, our team at Nachman Norwood & Parrott interviewed several of these professionals in our community and captured some of their most salient insights.

Let’s start with the foundation. You have probably heard, Wealth management requires a plan that takes into account expertise and guidance from a solid team of professionals.” So, to be adequately prepared, you need to be aware of the many variables that could affect a plan, and how one decision or event could impact your overall wealth.

Tip 1: Spend less than you earn

Generating positive investment results requires an unwavering commitment to long-term goals. My colleague Ben Norwood says, “High-net-worth individuals need to be sure they have a plan that can survive more difficult times.” We see too many high-net-worth individuals who do not live within their means and income, but instead depend on their portfolios and returns to support their lifestyle. Being responsible with your money is necessary to guarantee long-term financial health, no matter your level of wealth.

Tip 2: Plan for your dreams

While you are making plans for your finances, don’t forget to give thought to your activities during retirement. Without a regular work schedule, you may have time to travel or pursue new endeavors that previously were out of the question. If you have spent time diligently preparing, you should be able to enjoy new and interesting pursuits.

Tip 3: Leverage legal resources

With a vision in place for your financial future, the next step is to integrate that plan with guidance from other professionals. For example, divorce is one of the single biggest life events that affect someone financially. Comprehensive wealth planning should also include legal considerations. Many people don’t consider just how big an impact a divorce can have on their financial plan. More than 40 percent of marriages end in divorce in America. Divorce tends to be very expensive and often comes as a surprise. While no one expects a marriage to end in divorce, it is important to be mindful of life’s potential legal issues when protecting your financial future.

Tip 4: Work the plan

Once you create your plan, that doesn’t mean you put it away and never think about it again. It is important that you and your financial advisor are in contact about how you are tracking toward your goals.

In our next column, my colleague Russ Miller will share how tax and legal perspectives impact wealth management. Protecting and growing your wealth doesn’t have to be time-consuming or perplexing. The key is to be proactive, work with a financial advisor and consider how advice from other professionals can help you make solid decisions.

 


PERSPECTIVES

For more on “Perspectives,” visit nnpwealth.com.

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