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Why Should You Have A Wealth Manager?

Posted by Jim Kantowski, CFP®, CPA on June 24, 2021

Why Should You Have A Wealth Manager?

Proper wealth management can make or break plans for your financial future. However, managing your wealth doesn’t have to be daunting or complicated. Having a wealth manager in your corner to help you make financial decisions is the first simple step to achieving your goals.

In this article, we’ll answer the common question, “Why have a wealth manager?” We’ll also explore four benefits of working with a wealth management firm and four specific scenarios where you may want to consult a wealth manager for guidance.

Are you looking to create a personalized financial road map for your future? Schedule a call with Bay Point Wealth today to learn how we can help.

Why Wealth Management Is Important

Regardless of your family’s financial situation, working with a wealth manager instead of tackling financial planning on your own can free up time to spend with your loved ones, or pursue other passions or hobbies. Having a trusted financial advisor taking care of your money can also provide peace of mind that your wealth is in expert hands. Here are two important ways a wealth manager can help you along your financial journey.

Navigating Life Transitions And Difficult Times

If you’re going through a life transition such as a career change, preparing for retirement, a divorce, or the death of a spouse, a wealth manager can help you stay focused on adjusting to your new circumstances by taking financial matters off your plate. They’ll make sure your financial plan and investments align with your new life situation. Even if you’ve accumulated a great deal of assets and are knowledgeable about investing, you may still want to hand your financial to-do list to a professional so you can direct attention elsewhere—whether it’s a new job or a mid-morning tee time.

In addition, when times are tough, working with a wealth manager takes the burden of financial planning off your family’s shoulders. In the midst of situations like the COVID-19 pandemic, your financial advisor can be a valuable resource. They can ensure that you stay on track with your financial plan instead of reacting to short-term market conditions and making decisions that may end up costing you money at tax time.

A wealth manager can also help you interpret changes to tax law or other legislation that could affect your financial portfolio. This expertise is especially useful considering that these laws change frequently.

Identifying And Taking Advantage Of Opportunities

Eventually, challenges will pass, and you’ll be back on Easy Street. So, why have a wealth manager if everything in your life is going according to plan? Another key reason why wealth management is important is that a financial advisor can help you seek out and implement strategies to reach your goals or prepare for the next market downturn.

For example, if you’re interested in charitable giving, a financial advisor can explain all of your options so that you can choose the best fit, such as a donor-advised fund, which allows you to receive an upfront tax deduction while taking the time to carefully decide which charities to support. Or as you near retirement, an advisor can help you rebalance your portfolio in a tax-efficient way so that you’re prepared to handle any uncertainty that life may throw your way! They can also work with you to take advantage of opportunities like rebalancing your portfolio or tax-loss harvesting, which can pay off in the long-run by keeping your portfolio on track and minimizing taxes.

Benefits Of Having A Wealth Manager

You now know that an expert financial advisor will stick with you through thick and thin to help you grow and preserve your wealth. One of the main benefits they’ll offer you is creating and coordinating a financial plan that takes your entire financial picture into consideration. A financial advisor will tailor your financial plan to your unique situation and objectives and update it regularly as your life changes. This close attention to your needs will provide you with a number of spin-off benefits.

1. Optimizing Your Investments

A wealth manager can help allocate your investments based on your specific needs and ensure you have enough cash set aside in the event of a job loss, divorce, or other unexpected circumstance. In addition, if you’re transitioning from your working years to retirement, a wealth manager can structure your portfolio in a way that aligns with your new objectives and risk tolerance.

2. Minimizing Your Tax Burden

A seasoned wealth manager will also look for tax savings opportunities at every turn. For example, if you’re thinking about selling an investment, a financial advisor can determine whether that would be a smart move or create an unnecessary tax burden. A wealth manager can guide you through tax-efficient strategies, such as Roth conversions (transferring your money from an Individual Retirement Account [IRA] to a Roth IRA) or tax loss harvesting (selling investments at a loss to avoid capital gains).

3. Protecting Your Family

It’s essential to have an added layer of protection for your finances so that in the event of an illness or death, you’ll be able to draw on insurance to minimize the impact, allowing your family to focus on what matters most. A wealth manager can help you decide which type of insurance is right for you—for example, life insurance or long-term care insurance—and the amount that makes sense for you to purchase.

4. Passing Down Wealth To Future Generations

If you have enough wealth to pass down to your children, you want to have a solid estate plan that stays up to date as your life evolves. For example, if you go through a divorce or your spouse passes away, you’ll need to update the beneficiaries on your various bank accounts and insurance policies. A wealth manager can work hand-in-hand with an attorney to keep your estate plan current.

Why Have A Wealth Manager In Different Situations?

While we’re big believers in working with a financial advisor on an ongoing basis, there are various times in life when you may find yourself especially in need of guidance from a wealth manager. Let’s explore a few of these situations:

  • Saving for your children’s education: You want the best for your children. A financial advisor can walk you through the right setting up the right accounts to ensure money for their education can grow tax-free, such as a 529 account.
  • Upgrading your home or buying a new home: When it’s time to make this shift, a wealth manager can help you figure out the amount you need for a down payment and which account to withdraw the funds from. In addition, they can coordinate your mortgage with a broker or bank and may also have relationships with trusted professionals to make the process easier.
  • Planning to start or sell a business: As a business owner, it’s crucial to have a wealth manager in your corner who has a keen eye for proactive tax planning so you can benefit from tax savings opportunities. They’ll also act as a sounding board to help with your startup or succession plan.
  • Preparing for retirement: You want to know you’ll have enough money to enjoy your golden years. A financial advisor will work with you to make sure your wealth is allocated in the best possible accounts and that your retirement plan is on track.

Wealth Management With Your Needs At The Forefront

It’s crucial to trust your wealth manager to have your best interests in mind. At Bay Point Wealth, we start every client relationship by asking and listening. We want to learn as much as we can about your financial situation and goals to create a financial plan that meets your needs.

As a fiduciary, fee-only firm, we’re legally obligated to put your interests ahead of our own. We don’t take commissions, so you’ll never have to question our motivations for recommending financial products to you.

Schedule a call with us today to learn more about how we help take financial planning off your plate.

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Topics: Financial Planning