<img height="1" width="1" style="display:none;" alt="" src="https://dc.ads.linkedin.com/collect/?pid=529113&amp;fmt=gif">
login-iconeXchange™   Schedule a Strategy Session

Financial Planning: The Future of Your Wealth

By ClientWise | March 27, 2014

Guest blogger and economist Matthew T. Shafer helps ClientWise and the financial professionals and investors in our network understand the future of their wealth in an uncertain economic climate.


The economic environment has changed quickly and dramatically in the last several years. Many successful investors are uncertain where to turn, what to do with their liquid investments, and how to manage and grow their enterprises considering the dangerous implications of rising taxes and increasing regulations. On top of these concerns, this segment of the population is also being vilified for slow economic growth and unemployment, resulting in a cultural uprising against successful Americans, many of whom have built their wealth up from almost nothing and are representative of the American dream.


In my book, The Future of Your Wealth, I advocate for this group and provide a reality check for many Americans who aren’t even aware they’re being considered within this demographic. This book is written for an investor audience, but below I outline how financial advisors can use this information to become advocates for their clients, and work with them to successfully protect their wealth.


Address the lifestyle piece early on: The cultural implications of these new regulations and social stigmas are more apparent than ever before, and your clients are experiencing the affects of this in their day-to-day lives as well as in their wallets. It’s gotten to the point that many Americans feel as though they can’t drive nice cars or go on vacations without being judged for the privileges (and rights!) they’ve worked so diligently to earn. They may feel these lifestyle repercussions more than the direct financial ones, and by connecting with them at this level you are forging a deeper relationship and providing support they aren’t experiencing elsewhere.


Do your clients understand the risk? If, like many Americans, your clients are unsure as to the nature of the situation, they’re probably not fully aware of its grave implications and might not grasp the fact that they could fall into the most heavily affected bracket of investors. People think about this demographic as the “uber-rich” but, according to current tax codes, you are within the highest tax bracket if you bring in $250,000 in income annually, and you’re in the top 5% of wealth holders if you earn $186,000. Do your clients in this income bracket grasp the impact of what this means?


Use this as an opportunity to assess your services: Your clients need much more than investment advice right now. As their advisor it’s important to understand and acknowledge their risk exposures and work form a holistic wealth management approach to address all of these factors. Go through your high net worth clients and look beyond their investment portfolios to determine if exposures in other areas could dramatically impact their situations. These findings can reveal critical opportunities for the financial security of your clients and for the growth of your business.


Consider the breadth of your professional referral network: The biggest takeaway I hope investors get from this book is the importance of hiring professionals to manage their wealth. The tax code is more complicated than ever, and no single advisor can keep track of all the changes. Even if you’ve done this work yourself in the past, have a network of several CPAs and tax specialists at the ready to address these concerns for your clients. You are in a better position than your clients to understand the specialization of experts in these areas, and can easily amass a network of professionals to refer your clients to. Further, if you leverage the knowledge of people in your network, they are more likely to do the same for you in return, which will lead to a better allocation of expertise across the industry.


Paint a picture for a bright future: While future implications based on current regulations may seem grim, it’s still a great time for investors to be active in the market as long as they are informed. I also anticipate that there will be a turn toward more rational economics and free markets once the failures of over-regulation and over-taxation start to solidify in people’s minds. The millennial generation is inclined to be more pragmatic in their approach and, in turn, will likely inspire their heirs to do the same.  


By educating your clients about the specific nuances currently affecting the economic climate, you are contributing to a growing awareness surrounding this under-represented and stigmatized population, while at the same time improving the future of your clients’ wealth. For more information about this book, please visit: The Future of Your Wealth.

Follow Matt on Twitter @mshafer13 and LinkedIn



Certified Financial Services Coach Training Program  

Topics: Learning Change Financial Planning

Leave a Comment