The Forgotten Key to Successful Wealth Management: Non-Investment Financial Management

Ask most people to define “wealth,” and while you will hear a lot about stock and bond investments, you will also likely hear about non-investment financial elements too, such as insurance, credit, loans, taxes, etc.

Most people would also readily understand how important some decidedly non-financial aspects of wealth are: family relationships, jealousy, fairness, personalities, openness and other factors will have a great impact on your and your family’s wealth and ultimate happiness.

Unfortunately, most professional wealth managers don’t use such common-sense understandings of wealth. Instead, they use a narrow definition, and so limit the “wealth” they “manage” to what their Bloomberg investment terminals display.

When choosing a wealth manager, individuals and families should look for professionals who can do a great job with investments, while also assisting with the complex financial and non-financial issues that arise when life, family, money and business intersect over time. (Remember wealth management is not a one-time event, but an ongoing process that evolves over a lifetime, and sometimes, generations.)

True Wealth Management

Effective wealth management is composed of three critical, related pieces:

  • Investment Management: managing investments to grow wealth.
  • Non-Investment Financial Management: managing non-investment finances to enhance, protect and transfer
  • Relationship Management: (1) managing client, client family and wealth manager relationships and (2) managing the professional network of tax, legal & accounting advisors that are required to execute a comprehensive wealth management

In the world of Wealth Management, Non-Investment   Financial

Management and Relationship Management are talked about a lot in theory but are rarely executed in practice. Despite claiming to offer these services, most wealth managers are concerned primarily with investments. Industry research, in fact, shows only 7% of financial advisors provide these critically important services.

The Core Elements of Non-Investment Financial Management

Non-Investment Financial Management must start with a comprehensive financial plan. Your wealth  manager  should  analyze  your  overall  financial  situation  in  detail,  identify   planning solutions and evaluate alternatives. They should then develop a goal based financial plan and make recommendations designed to meet your desired objectives.

While not every wealth manager will necessarily make recommendations using the following nomenclature, all of them would need to address these financial areas to be considered a true wealth manager:

  1. Wealth Enhancement maximizes cash flow while minimizing
  2. Retirement Planning and Execution are the foundations of a financially independent retirement.
  3. Estate Planning and Wealth Transfer facilitates the tax-efficient distribution of your assets to future generations in a manner that respects your final
  4. Planning for Common and Uncommon Life Events until someone invents a crystal ball it’s best to be prepared for the good and bad, that life can throw at
  5. Insurance and Wealth Protection aims to safeguard your wealth against all forms of loss through a combination of insurance strategies, income protection and liability
  6. Credit and Lending are foundational tools for achieving business and investment
  7. Charitable Giving maximizes the impact of your charitable intent and can often support efforts in each of the other areas of your wealth management

For a plan to function effectively, none of these areas can stand in isolation from the rest. It is up to the wealth manager to combine them with Investment and Relationship Management into an effective wealth management financial plan that evolves over time.

In all the above, wealth managers whose advice is elevated to the level of a fiduciary, (for example, a CFP™ professional) are better positioned to execute your wealth management strategy. That’s because fiduciaries have a duty to execute investment strategies that are in your best interest (and not anyone else’s, including their own). Why would you allow anyone who didn’t have your best interests at heart to manage your wealth?

Meet The Harvest Group: A Family Wealth Advisor

Based in Waltham, MA, The Harvest Group is a family-owned investment advisory firm specializing in family wealth management. Led by a family team of CERTIFIED FINANCIAL PLANNERS™, Roger H. Ingwersen, CFP®, CIMA®, CRPC®, his son Todd M. Ingwersen, CFP®, CIMA®, and daughter Laurie E. Ingwersen, CFP®, CRPC®, CDFA™ provide individuals, families and family businesses with customized wealth management and financial planning services. The Harvest Group takes a generational approach to wealth management by applying the proven principles of Advanced Planning, Investment Management and Relationship Management – and doing so with your best interest in mind.


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