Each person’s financial situation is different, with a unique set of existing holdings, tax constraints, long- and short-term goals, and personal preferences. In fact, your family dynamics and communication can have a much larger impact on your multi-generational financial health than any investment-related factor. Adding to the issue, financial institutions often mistake your identity as the size of your account, rather than sincerely getting to know you and your vision for the wealth you have created.
For example: say you’re an entrepreneur who has recently sold your business and, as a serial-entrepreneur, intend to launch another business in the next two to three years. Your investment strategy will be different if you are further advanced in age and now focused on preparing your children for the burden of wealth they will soon inherit. From yet another perspective, your company recently executed an IPO, and you now need to manage concentrated positions in restricted company stock. The one thing that’s clear is that none of these situations are best served by generic retirement financial planning or investment strategies. Each person requires a thoughtful approach as unique as they are.
Your advisor should work closely with you to understand your situation – not just what you own, but how you got it, and what you want to do with it. Your advisor should collaborate closely with other experts like your accountant or attorney to align your investments with tax and estate planning considerations.
So why do you need a customized wealth plan? Because only then can you be sure you are receiving the attention you deserve from a fiduciary advocating on behalf of your best interests.