Professional help Different people have different attitudes towards wealth management. Some want to manage everything on their own, others want to delegate the responsibilities.
Satisfactory wealth management is usually achieved by those who can strike a balance between control and delegation. Your role is to define the goals, but the implementation of your wealth management blueprint is best delegated to a select group of professionals.
Effective wealth management requires a number of professional competencies, but not necessarily a large number of advisers. What you need to do is understand and define the key competencies you require of your advisers.
Tax accountants You will need a tax accountant to complete your tax returns and advise you on effective tax planning and tax issues. He may also provide accounting and audit services. He can highlight the tax implications on your wealth before key financial decisions are made.
Investment managers Often, wealthy individuals have more than one investment manager to provide diversification in investment style. For example, you may have a few equity managers, each specialising in a specific area, as well as a bond manager, a hedge fund manager, a commodities manager, a real estate manager and even one for private deals! By engaging investment managers, you gain the benefit of investments tailor-made to fit your goals, needs and risk profile. He will make the day-to-day decisions concerning the purchase and sale of assets and advise you on asset allocation as your goals change over time.
Banks Banks provide loans, transactions and other services to support the entire wealth management process. A bank may also serve as the trustee of substantial assets in your portfolio. Lawyers A lawyer prepares the documents that govern and facilitate the transfer of your wealth such as wills, trusts, powers of attorney and agreements. He helps you define your wealth objectives and strategies clearly and effectively. Though you may not use a lawyer’s services as frequently as that of other professionals, you should be rigorous in your selection process to make sure you employ a competent lawyer, especially one familiar with the nuances of wealth management.
Life insurance advisers Life insurance is an effective wealth management tool. But as insurance companies introduce more and more complicated products, this tool becomes more complex. That’s why many prefer to rely on the services of an expert. Even in life insurance, there are different types of specialists. One consultant may simply focus on the placement, design and pricing of policies, another may focus on the optimal application of life policies in wealth management systems.
Other professionals There are many other professionals that form the wealth management team. Some specialise in providing personal concierge services, others focus on designing philanthropic programmes that fulfil your charitable goals.
Independent financial advisers The challenge in managing a team of multiple professionals is to make sure that all are working together for your benefit. Otherwise, they may be working separately or worse, in conflict with each other. To mitigate that, bring in an independent financial adviser. He will play a central role to ensure synchronisation in your team, just like the conductor of an orchestra. The conductor makes sure that all the musical instruments (your financial professionals) are playing in harmony and not deviating from the musical score (your wealth management plan). This analogy also reveals other similarities with wealth management. Each member of the orchestra reads only the notes that he must play. They are specialists who just need to concentrate on their respective responsibilities and usually have a limited understanding of the roles of other professionals and the overall plan. Like the conductor, your independent financial adviser will co-ordinate all the specialists’ activities and reports to you on their performance.
Your success in wealth management depends on developing a good relationship with your independent financial adviser. Even the most experienced investor should not go this route alone as missteps can be costly.
Getting objective advice and leveraging on your advisers’ breadth of experience are crucial to making informed, balanced decisions. Whether you work with three, five or 10 professionals, the rapport and trust you build with your independent financial adviser could be what determines your wealth management success.
Read more: Money: Managing your wealth http://www.nst.com.my/nst/articles/Money_Managingyourwealth/Article#ixzz1P3CYjNGo
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