Can A Wealth Management Consultant Help You Grow And Preserve Your Assets More Effectively?
Once you’ve built a substantial net worth, it’s easy to think the hard part is over. Unfortunately, that’s not always the case. Between volatile markets, changing interest rates and high tax bills, holding on to that wealth can be the real challenge. Plus, is your financial advisor proactive, or do they just call you after you contact them? If you’re serious about carefully building and preserving your net worth, it might be time to consider the benefits of a wealth management consultant.
What Is A Wealth Management Consultant?
A wealth management consultant is a specialized type of financial advisor who focuses on effectively serving the needs of high-net-worth individuals. Unlike financial advisors or generalist wealth managers, they are equipped to deal with the unique challenges and opportunities that come with significant wealth. They often have a team of experts, including tax advisors and estate planners, to provide a holistic approach to managing your wealth. These specialized teams also focus on preserving your wealth since you don’t want to lose what you have worked so hard to build.
What Does A Wealth Management Consultant Do?
A wealth management consultant is not just a financial advisor; think of them as your financial quarterback. They don’t just handle your investments and provide some occasional financial planning. Instead, they coordinate all aspects of your financial life, from investment management to estate planning, tax strategies, and even philanthropy.
Their role is to understand your financial goals and lifestyle needs and develop a comprehensive plan to meet them. They are the architects of your financial future, ensuring your wealth grows and is protected against risks.
What Credentials Should A Quality Wealth Management Consultant Possess?
When entrusting someone with your hard-earned wealth, credentials, experience and training all matter. You need someone who has put in the time to earn the credentials and education necessary to serve you best.
Two of the most respected credentials in the financial industry are the CHARTERED FINANCIAL ANALYST® (CFA) and the CERTIFIED FINANCIAL PLANNER™ (CFP®) designations.
These credentials are not easily earned; they both require rigorous exams, ongoing education, and adherence to ethical standards. The CHARTERED FINANCIAL ANALYST®, or CFA, is notorious for being a difficult certification to earn. Offered by the nonprofit CFA Institute, individuals must study and pass three levels of exams. Each exam requires over 250 hours of independent study. The tests take about six hours each. According to the CFA Institute, fewer than 1 in 5 candidates successfully pass all three exams and obtain the charter. Over and above all of that, the professional must have four years of qualified work experience. Looking for advisors with the CFA charter will help you identify those with advanced investment expertise and broad knowledge. You want these qualifications in an investment manager when markets get rocky.
The CERTIFIED FINANCIAL PLANNER™ or CFP® designation is well respected for personal financial planning. Like the CFA, this mark requires candidates to complete extensive study, pass an exam and meet an experience requirement.
Having one or both of these credentials is a strong indicator that a wealth management consultant has the expertise and commitment necessary to manage your financial affairs effectively.
Do I Need A Wealth Management Advisor?
If you wonder if you’re doing everything you can to protect and grow your wealth, a wealth management advisor can be invaluable. They can help you navigate volatile markets, optimize tax strategies, and plan for the long term. They can also save you significant time by helping with financial decisions and analysis of your options. These advisors can also provide valuable insight to help you evaluate opportunities and risks.
If you have multiple income streams, substantial investments, or complex estate planning needs, the expertise of a wealth management advisor can be particularly beneficial. Bottom line…the more complex your financial life, the more you can benefit from a wealth management consultant.
How Rich Do You Need To Be For Wealth Management?
There’s a common misconception that you need to be a multi-millionaire to benefit from wealth management services. While it’s true that many firms have minimum asset requirements, some consultants specialize in clients who are still accumulating wealth. Generally, you are a good candidate for wealth management services if you have investable assets of $1 million or more.
What Is The Difference Between A Wealth Manager And An Investment Consultant?
While both aim to grow your wealth, an investment consultant focuses solely on your investment portfolio. A wealth manager, on the other hand, takes a more holistic approach, helping you with many aspects of your financial life. Think of an investment consultant as a specialist, while a wealth manager is more of a general practitioner for your financial health. Ideally, your wealth manager will bring in other specialists to participate on your team to address more specific areas, such as setting up a trust or identifying more sophisticated tax strategies.
What Is The Difference Between Wealth Management And A Financial Advisor?
A financial advisor typically focuses on basics such as retirement planning and investment management. Wealth management is more encompassing, integrating these tasks into a comprehensive strategy that also includes tax planning, estate planning, and much more. Wealth management is more suited to higher net-worth individuals who will likely need help with advanced topics such as asset protection, trusts and complex tax strategies.
What Is The Difference Between An Independent Wealth Management Consultant And One At A Bank Or Trust Department?
Independent wealth management firms often provide a more personalized service than banks or trust departments. With no ties to any particular financial products, they also are able to offer unbiased advice. Banks and trust departments, on the other hand, may prioritize selling their own proprietary financial products, which could limit your options and lead to higher costs. Also, because these banks are often public companies, the employees often owe a fiduciary duty first to shareholders, not necessarily to you as a client.
Independent firms are usually small, locally-owned businesses. Where banks may provide a near-constant stream of prospective clients to their wealth managers, independents must generate their own new business. That means they need to keep their clients happy so they will refer their family and friends. Often, this equates to more personalized and dedicated service since your business is more important to them.
Why It’s Critical To Find A Wealth Management Consultant You Won’t Outgrow
Many people like to find one financial professional and stick with them, but as your wealth grows, your needs often change. That’s why it is critical to make sure that the wealth management consultant you hire is one that you won’t outgrow.
One wise approach is to look for a team, not just one person. No matter how experienced the individual is, one person cannot usually be an expert in multiple subjects.
That’s why you will often benefit most from a team approach. After all, wealth management encompasses many different disciplines, including investing, retirement planning, estate planning, trusts and tax planning. Each area is its own specialty, requiring years of practice to master.
Usually, it works best to have one “quarterback” you work with directly who then coordinates specialists to help with specific needs. The end result? You get expert help in all areas and the synergy of multiple professionals focusing on finding you the best solutions.
How To Select The Right Wealth Management Consultant
For such a critical role, you must hire with care. Here are some tips to find and choose the right team:
- Look for a team with the right experience. You don’t want your money to be part of anyone’s learning curve, so be sure whoever you consider has significant experience helping those with similar needs. If you’re a physician, for example, look for those who help other physicians and high-income professionals. Or, if you’re a business owner, be sure the firms you consider serve many people like you.
- Look for the right credentials. Credentials are essential to separate those with the proper training and demonstrated skills from the rest. Finding those who have invested and attained both a CFA® and CFP® designation is a solid start.
- Insist on working with a fiduciary. A firm that acts as your fiduciary is required by law to put your interests before theirs. Surprisingly, not all financial advisory firms are required to do so. Be sure to ask. Those who are fiduciaries understand and will be happy to put this in writing for you. Firms that make you feel awkward about asking are providing you with valuable information, so these are best to avoid. Bottom line, you don’t want to have to guess whether you’re getting good advice or just a product recommendation, so don’t accept anything less than true fiduciary advice.
- Be sure they have the expertise you need. You don’t want to sign up with a firm you’ll quickly outgrow, so ensure the range of services fits your needs. Ideally, look for a team that can provide you with more sophisticated strategies such as asset protection, tax planning and trusts. While you may not need all of these services today, having access to them may help you achieve other financial goals down the road.
Is A Brand-Name Wealth Management Consultant Better?
When it comes to managing significant wealth, many people assume that a well-known brand name is a safer choice. However, this is not always the case. Brand-name firms often have business models that are not necessarily consumer-friendly. These firms are often product-focused, selling mutual funds, exchange-traded funds (ETFs), or insurance, which can create a conflict of interest. You might find yourself questioning whether the advice you’re receiving is genuinely in your best interest or if you’re just getting a product recommendation.
Moreover, many big-name firms are not true fiduciaries, meaning they are not legally obligated to put your interests before theirs. They may operate on a commission basis, making their advisors seem more like salespeople than genuine consultants. And, because many are publicly owned firms, employees usually owe a duty of loyalty to shareholders first (rather than to their clients). So, while a brand name might offer a sense of security, it’s crucial to dig deeper to understand whether their services align with your financial goals and needs.
How Do We Help Clients Achieve High-Impact Results?
At Holland Capital Management, we take a personalized approach to wealth management, setting us apart from others in the commoditized financial services industry. We also prioritize what is often overlooked: preserving your wealth.
We employ both offensive and defensive strategies designed to protect what you’ve built while also striving for higher after-tax, risk-adjusted returns. By offering comprehensive financial planning, investment management, and trust advisory coordinated with your existing CPA and attorney, we aim to deliver high-impact results that align with your financial and life objectives.
Are Financial Advisor Management Fees Tax Deductible?
When it comes to the tax deductibility of financial advisor management fees, the landscape has changed significantly in recent years. Before 2018, you could partially or fully deduct these fees on your federal income tax return. However, the Tax Cuts and Jobs Act eliminated this miscellaneous itemized deduction for investment fees and expenses. According to Internal Revenue Code Section 212, you can still deduct costs that directly relate to the production of income, such as investment management fees charged by a Registered Investment Advisor (such as Holland Capital Management).
But general financial planning fees or fees for per-project or hourly consulting are not directly connected to income production and thus are not deductible. This exclusion, however, is only in place through 2025, after which the suspension of miscellaneous deductions may end.
It’s worth noting that there are some possible workarounds as well. It’s always best to consult with a tax advisor for your specific situation.
What Type Of Client Do You Typically Work With?
Holland Capital Management usually works with business owners, physicians, dentists and other high-income or high-net-worth individuals. Of course, finding a consultant who understands your unique needs and has experience working with clients like you is vital. So be sure to ask and talk with prospective professionals to see if it is a fit.
Which Financial Advisory Services Do You Offer?
At Holland Capital Management, we offer a comprehensive suite of financial advisory services tailored to meet your unique needs. Our services are not just about growing your wealth but also about preserving it.
We offer comprehensive financial and retirement planning guided by a CERTIFIED FINANCIAL PLANNER™ professional. Our investment management process strives for higher after-tax, risk-adjusted returns, especially during volatile market conditions. We also provide trust advisory services, coordinating directly with your existing CPA and attorney—to help you maximize tax, estate planning, and asset protection opportunities.
Additionally, we offer advanced financial and tax planning strategies specifically for business owners, which can include employee retirement plan setup and business succession planning. Finally, we can help coordinate flexible lending options, allowing you to tap into your wealth when needed without the hassle of traditional lending. All these services are provided with a single point of contact, saving you time and eliminating headaches.
Is A Wealth Advisor Worth It?
Once you’ve built a significant net worth, you don’t want to lose money you can’t easily make back. That’s where Holland Capital can help you focus on preserving your legacy and safely growing it. But the value of a wealth advisor extends beyond just financial returns. They can provide you with a sense of control, experienced guidance, and a well-thought-out strategy for your financial future. If you consider the potential cost of mistakes made without professional advice—such as significant losses in the markets or missing out on lucrative tax strategies you weren’t aware of—the fees for a wealth advisor are a wise investment in your and your family’s future.
IRS CIRCULAR 230 DISCLOSURE: To comply with certain U.S. Treasury regulations, we inform you that, unless expressly stated otherwise, any tax advice contained in this email, including attachments, is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any tax penalties that may be imposed on that person by the Internal Revenue Service. If any such tax advice is made to any person or party other than the intended recipient to whom the advice is directed, then the advice expressed above is being delivered to support the promotion or marketing of the transaction or matter discussed or referenced. Each taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.
CONFIDENTIALITY NOTICE: The information in this e-mail is confidential and may be legally privileged and confidential and/or may include attorney work product. It is intended solely for the addressee. Access to this e-mail by anyone else is unauthorized. If you are not the intended recipient, any disclosure, copying, distribution or any action taken or omitted to be taken in reliance on it, is prohibited and may be unlawful. When addressed to our clients, any opinions or advice contained in this e-mail are subject to the terms and conditions expressed in the governing HCM, LLC client engagement letter.
