It’s easy to put off your investment review, but with our handy framework you can quickly understand the portfolio performance and service value you are getting.
It is never too early, or too late, to start thinking about making your wealth work harder.
You could reap serious rewards if, for example, you sought advice about tax-efficient investment vehicles; or you may find that an offshore structure is actually a far more viable option for managing family wealth than you first thought. Taking a little time to work through the following steps will go a long way towards optimising the management of your wealth.
1. What do you have (and where is it)?
You must first understand what you already hold in terms of assets before you can formulate a plan for the future, so you should start by getting a full understanding of how much of your wealth is locked-up, how long it is locked-up for and how much of it is accessible.
2. What is your life plan?
What are your financial needs over the coming years? Are any significant life events coming along for either you or your family that you wish to invest in preparation for? Your investment strategy needs to be designed so that it can cover necessary expenditures like school fees, along with helping you towards dreams like early retirement or a holiday home.
3. Set investment objectives
Now think more specifically about what you want to achieve from your investments. Is it predominantly income or capital growth or a mixture of the two? Is tax-efficiency a consideration? Your investment time horizon is also crucial to determining how much risk you can take on (because if it is longer you have more time to recover any potential losses).
4. Get the right professional help
With the groundwork in place, you can now find the right professionals to help you achieve your goals. It’s certainly possible to invest on a Do-it-Yourself basis, but there are a host of reasons why a wealth manager could deliver better results (and save you a lot of hassle and stress). findaWEALTHMANAGER.com’s unique matching methodology will objectively determine the best-matched wealth managers for your needs.
5. Consolidate your relationships
There is little to be gained by using multiple advisers just for the sake of it. Remember that your time is a precious commodity too. Opening new accounts because slightly cheaper fees have caught your eye can be a false economy. It’s far better to find one wealth manager you can work with over the long term.
6. Be tax-efficient
Minimising your tax liabilities could make all the difference to your overall wealth. There are tax mitigation strategies appropriate for all kinds of personal circumstances and using suitable structures can significantly improve your financial future.
7. Allocate investment responsibility
Be realistic when thinking about how much involvement you wish to have in the management of your investments – whether you want to be involved in every decision, cede control completely to a professional or define the top-line strategy and delegate the particulars. This will be a function of how much time you have, but also your level of interest in monitoring the markets day-to-day.
8. Consider your fees
Wealth managers must be transparent on their fees, so make sure you understand what you are paying and don’t be afraid to ask if you do not. Before starting a relationship with a wealth manager, you should be very clear about what you will be paying, when and why. This must be documented and agreed by you. Make sure you read your account statements and check that fees are being deducted correctly from your account.
While DIY investors need to keep their finger on the pulse every day, those who have entrusted responsibility to their wealth manager can take a bit more of a back seat. You should still be checking your portfolio regularly, however. This may be monthly, quarterly or semi-annually, depending on your profile. Understand the overall strategy for your portfolio and review its performance. Don’t be afraid to voice concerns or ask for other investment options if you are dissatisfied.
10. Be happy!
Professional wealth management, when set up properly with an institution which matches your needs, should be a wholly positive experience. It should increase, and structure, your overall wealth in such a way that it makes it easier for you (and your family) to achieve life goals. Having your finances properly managed should also take a great weight off your mind.
The affluent individuals who come to findaWEALTHMANAGER.com vary hugely on where they are in life, and in the management of their wealth. Some are taking the first steps, while others are veteran investors looking for something different. Wherever you are on this spectrum, taking stock as described above is likely to prove a useful exercise and when you are ready to find the right professional try our smart online tool.