How HNWs Maximize Financial Planning Opportunities

How HNWs Maximize Financial Planning Opportunities

29 Sep 2022

As we have considered in other articles, wealth management for the affluent is a different breed from the everyday. This is because your needs are different and one-size-fits-all solutions, in reality, seldom do. The first step in planning for high-net-worth individuals is to analyze your current situation, including reviewing your financial goals and objectives. 

We will also quantitatively assess your risk tolerance and explore opportunities that fit within these parameters. You may think you have done this before, but our process may be much more complete than you might expect. 

This article answers these questions:

  • Why is comprehensive financial planning the best approach?
  • How is a wealth manager like a monetary physician?
  • Could risk management help limit your investment losses?
  • Can being proactive save you money on your business taxes?
  • What makes McGervey Wealth Management an ideal choice?

It Starts With Sitting Down

Whether in-person or online, the initial phase begins, predictably enough, with an informal interview. Just as a physician will take your pulse, asking about your daily routine, we take inventory of your savings, assets, and spending habits. The more relevant financial information about yourself that you disclose (including professional affiliations or associations that could impact your investing), the more accurate our understanding of your needs will be.

The resulting financial plan can be as simple or in-depth as you prefer. However, we believe your likelihood of optimal results will be higher with a comprehensive approach. For example, if we manage your portfolio and your business financial planning, we may be able to utilize overall tax strategies to reduce your costs in both areas. 

The only caveat is that it can take time: Generally speaking, the greatest potential savings on taxes are only possible over the long term. We keep vigilant to reduce your tax liability each year, but tax strategies are most effective over spans of years (or, ideally, a couple of decades or more). While it is not a completely set-it-and-forget-it process, we strive to minimize the procedural requirements for you. 

Optimized Investing

Especially during periods of market volatility, you may be eager to make your portfolio the first area to be streamlined. With this in mind, your advisor will work with you to develop an investment policy statement (IPS) specific to your unique financial situation. Your IPS is a document outlining your investment advisory goals for future asset allocation and risk tolerance. 

It also details how much of your assets are to be invested in stocks or bonds, real estate, or other asset classes, such as private equity and hedge funds. Similarly, it outlines the different ways these investments should be allocated within each category over time (in order to seek minimal potential losses and maximize returns). This is an everyday element of our full-cycle investing strategies. 

Investors who have accumulated significant wealth through some combination of hard work and good fortune need to know what kinds of investments might best suit their needs. At the same time, you should also understand why certain types of investments might not necessarily work out well under specific circumstances. This is why McGervey Wealth Management’s advisors act as—not just white-glove financial service providers, but—educational resources, as well.

Risk Management

Risk management is another crucial part of high-net-worth financial planning. It involves being prepared for the unexpected, understanding the different types of risks that affect your wealth, and mitigating your risks as much as possible beforehand. There are many types of risk that could affect your personal and financial wealth. As a result, risk management does not just apply to your investments; it also applies to your lifestyle decisions, as well. 

For instance, if you have a large number of assets in one area or you are taking on more debt than necessary (both of which are common mistakes among those who have achieved financial freedom), this could negatively impact your bottom line. Something going wrong with an investment or business decision could wreak havoc. 

Therefore, risk management means taking steps in advance, such as diversifying your asset allocations across multiple accounts. This helps to reduce the impact, should one particular investment fail to bear fruit as expected.


If You Want to Know More About What Financial Planning Involves, We Have Answers Here


Legacy Services

Many entrepreneurs who reach affluence have used providing for their loved ones as a personal incentive. As a result, they understand the importance of safeguarding their gifts to descendants, where possible. Estate planning exists to help you fulfill these needs.

Typical estate plans include distributing your assets during life, planning for major purchases or sales, and developing a plan for when you are no longer able to manage your property for yourself. While it often features provisions and instructions should you find yourself incapacitated, an estate plan primarily helps you determine how you want to distribute your assets after you die.

In addition, an effective estate plan can also help minimize taxes by avoiding probate fees and preserving capital gains exemptions on gifts made during your lifetime (through charitable contributions, for example).

Proactive Protection

A wealth manager can help you address the risk of losing some of your assets through liability claims or lawsuits, as well. There are strategies both before and after a lawsuit has been filed (or an insurance claim has been made) that can help protect you in the event of something unforeseen. For instance, liability insurance can help protect against the financial consequences of accidents or injuries on your property, should someone trip over a step and break their leg on your front porch. 

Anytime there’s potential liability somewhere, it might also be necessary to consider trust funds or asset protection strategies that keep certain assets out of reach from those who might want them. This could include establishing trusts before litigation begins (to justify why certain assets were not included as part of any settlement agreement): Even arbitration awards may not cover all expenses associated with defending yourself against allegations made by others. 

Strategized Taxation

Ohio financial advisor typing a financial plan on a laptop computer

When it involves $5 million or more in assets, your financial plan must be more complex. The IRS will never hesitate to claim every dime they can. Therefore, we never hesitate to utilize tax planning opportunities for you. In other words, we use legal means to reduce your tax liability; how much you are assessed to owe. 

For example, finding the various tax benefits associated with different types of investments can help. However, sometimes, it is only a matter of promptness: Getting proactive about minimizing your liability now can save thousands or even millions of dollars in taxes over time (depending on how much money you have saved up). 

McGervey Wealth Management has the tools, knowledge, and experience to help you make sure that everything is taken care of. Find out for yourself why we might be the best fiduciary financial advisor Akron-Canton OH has to offer. Contact us today.  

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More About the Author: E. Michael McGervey, CFP®, CRPC®

Mike is passionate and skilled at helping clients solve complex financial challenges. He’s known for his thoughtful communication, educational approach, and exceptional customized service. Mike has been a sought-after source for financial television, magazines, and newspapers looking for insightful analysis. His expertise has been featured by CNBC, FOX Business and...