Money means different things to different people and each of us has different goals. While our attitudes may change depending on our age, and stage in life, money is often about possibilities and the choices that are available to us because of it.
Let’s look at an example. Sean and Alexandra are a young, successful couple. Both are medical professionals and they have a family of four children, aged between eight (8) and two (2) years. Alexandra works part time, enabling her to keep up her professionals skills, while also spending more time with the children while they are younger.
Money has enabled them to make decisions about their ideal work/life balance. It allows them, and their children, to experience the world and all it has to offer, rather than focussing on the accumulation of things. It provides them with financial security, and ultimately will allow them to stop work, having provided their children with an exceptional education, and raised them to be independent adults.
Whatever your goals, you need a framework for making wise decisions about your money that will enable you to achieve all that is important to you. A broad range of financial issues calls for a broad, comprehensive outlook. It is for this reason that many successful individuals want help with more than just investments. They want real wealth management—a complete approach to addressing their entire financial lives.
Our clients, which includes doctors and other professionals, tell us that when considering financial matters, they are predominantly concerned with 5 key areas:
- Making smart investment decisions.
- Mitigating the impact of taxation.
- Protecting their assets.
- Ensuring assets are transferred to the appropriate people and entities at the appropriate time.
- Philanthropy, or giving back to the community.
Expressed another way, you can look at wealth management as being the end result of a formula that addresses all of these issues:
WM = IC + AP + RM
Investment Consulting (IC), the first component of this formula, can be defined as the astute management of investments over time. The second element, Advanced Planning (AP), relates to concepts such as philanthropy, and the enhancement, transfer, and protection of wealth. The final factor in this equation is Relationship Management (RM). This refers to management of relationships with clients, the advisor’s network of financial professionals, and also the clients’ other professional advisors.
Once you understand your needs, you must then work out how you want them to be addressed. Are you happy to do it all yourself? Would you prefer to co-ordinate various individual specialists? Do you want someone to take care of this for you, allowing you to spend your limited free time on the people and things that you enjoy?
If you decide to work with a specialist advisor be aware that there are those in the financial services industry today that call themselves wealth managers, but offer little more than investment management. How then will you know whether you are dealing with a true wealth manager? Understanding what the advisor is able to offer is essential. A wealth manager should offer a full range of financial services, including the four areas of advanced planning. Their manner, and the language they use, should indicate a desire to work with you on a long-term, consultative basis.
Finally, you want to know exactly who you are dealing with. Is your relationship with an individual or an institution? Who do you have ongoing contact with and how long can you expect to deal with this person. In order to understand your goals, the advisor you entrust with your wealth management must first understand where you are coming from. Talk to the prospective advisor about your own experience and gauge their reaction. Make sure your philosophy and theirs are aligned, both business and investment management. For example, you may own your practice and place a high value on long term, personal relationships. In this case you may feel most comfortable working with a wealth advisor who is similarly structured and whose focus is on working with you over the longer term.
Money can provide us with opportunities and choices throughout every stage of our lives. Making the most of this hard-earned wealth requires forethought, planning and ongoing management. A true wealth manager can help to develop a roadmap that will take you to where you want to go; will simplify the process, and give you confidence that you are in control.
If you would like a second opinion on your finances, feel free to call David Hazlewood of Western Pacific on 02 9959 0510.
Western Pacific Financial Group Ltd AFSL No 224662, is a wholly owned subsidiary of IOOF Holdings Limited (IOOF). This document contains general advice and/or information prepared without taking into account your investment objectives, financial situation or needs. You should, before taking any action, consider whether any general advice is appropriate having regard to your financial objectives, situation or needs. This document has been prepared in good faith and with reasonable care. Neither IOOF nor any other person make any representation or warranty, express or implied, as to the accuracy, reliability, reasonableness or completeness of the contents of this presentation (including any projections, forecasts, estimates, prospects and returns and any omissions from this document). To the maximum extent permitted by law, IOOF and their respective officers, employees and advisers disclaim and exclude all liability for any loss or damage (whether foreseeable or not foreseeable) suffered or incurred by any person acting on any information (including any projections, forecasts, estimates, prospects and returns) provided in, or omitted from this document. We recommend that you consult with your own legal, tax, business and/or financial advisers in connection with any investment decision.
