How to Get the Most Value from a Wealth Advisor

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Whether you’re managing your wealth on your own or use the services of a robo-advisor or a basic advisor, there’s always room for more personalized planning. Going it alone can be overwhelming and time consuming when your finances get more complex. You’re also missing out on professional guidance. If you do have a relationship with an advisor, that doesn’t mean you’re necessarily getting the most value. The cost is only justified if they’re really helping you to plan and maximize your wealth.

What the Right Advisor Can Bring to the Table

A good wealth advisor can do a whole lot more than just map out a basic financial plan. Beyond helping you strategize for retirement and manage your investment portfolio, an experienced advisor can also provide valuable guidance throughout critical moments of your life. They can help you anticipate and reduce your tax burden, navigate major life changes, and ultimately grow your wealth over the long haul. One 2021 study found that people who worked with a financial advisor were three times happier than those who didn’t.

The right financial advisor will understand what matters to you most, then help you use your wealth to live the life you want. They can also quell fears that are fueled by misconceptions. The 24-hour news cycle can get investors worked up and contribute to a distorted view of how the markets and economy work. A good advisor can help you filter out the noise and keep your focus on your long-term plan. The value they bring to the table can be well worth the cost if it ultimately leads to greater fulfillment. They can also put real muscle behind your wealth and help your money work even harder for you.

You may be convinced that you don’t need an advisor at all, or that the basic advisor you currently have is enough. But the truth is that a skilled advisor can see things that the average investor might miss. For example, it can be tempting to minimize your investments or stay out of the market altogether to avoid potential losses. But holding too much cash is a risk in itself. That cash is losing value every day, thanks to inflation. In other words, there is a very real risk of doing nothing. The right advisor can guide you through the right investment choices for your risk tolerance and goals.

Even if you’re satisfied with your investment plan, having a professional in your corner can help you dodge potential tax pitfalls and better manage major life transitions. They can also offer personalized advice you simply won’t get otherwise—but you won’t know what you’re missing if you look the other way.

What It Looks Like in Practice

The following three scenarios demonstrate how these things could play out it in real life. Each one shows how a qualified advisor can open up possibilities, help you take advantage of opportunities, and manage your finances in a way that lets you be free to do what you want. It goes far beyond what a basic advisor can provide or you doing it on your own.

1. Mary: Newly Single and Looking for Personalized Financial Advice

Mary is a 56-year-old recent divorcee living in Manhasset, New York. She has long managed the household finances for her family, but her husband oversaw their investments and retirement savings. She has no idea what her assets are or where to start. (This story could also apply to someone who is newly widowed.) She’s been tasked with making key financial and investment decisions about her future without the support of her spouse. As a result, she’s worried about meeting her retirement savings goal.

The right advisor can lay out all her options. They can provide guidance and projections on how this situation may impact her wealth—and uncover creative solutions for moving forward. Is it possible for her to stay in the workforce longer than expected? Or delay her Social Security benefit? She might also reexamine her investment approach and risk tolerance. All of these options could help her close the income gap and enjoy a comfortable retirement. Also, does she grasp the tax implications of drawing on her nest egg?

These decisions are about more than just finances. They’ll also shape her quality of life as she moves through this time of change. Looking at the big picture can help her balance her financial needs with her new lifestyle. Understanding these things might also allow her to retire earlier and have the freedom to pursue her passions. This might include doing volunteer work, endowing charities, changing lives by sponsoring scholarships, or simply spending more time with people she loves.

2. Steve: Interested in Real Estate Investing

Steve is a 44-year-old successful business executive living in Westport, Connecticut. He recently came into a windfall of money and is excited about the idea of investing in real estate. He sees friends and colleagues making passive income here and wants to get involved himself, but jumping in blindly could spell financial trouble. Does Steve want to manage rental properties, or fix and flip homes? Does he have the means to do either? Being a landlord can be a costly and time-consuming commitment. Meanwhile, flipping fixer-uppers tends to require a large upfront investment.

A good advisor can help Steve create a plan to leverage all his available options and make use of resources he may not have already considered. This might include financing rental properties or exploring real estate investment trusts (REITs). These allow you to invest in private and public companies that own real estate portfolios. An advisor can show him how to position these investments within his overall portfolio. They can also explain the complex tax implications of buying and selling income-producing properties. Showing Steve how all of this will impact his portfolio and asset allocation can help him grow his wealth in a more effective way.

3. David: Small Business Owner Looking to Sell

David is a 62-year-old owner of fast-food franchises in Hoboken, New Jersey. He’s done well for himself and is at a point where he feels ready to sell his businesses. The problem is that he doesn’t know how to command the best price or sort through offers. He’s also unclear about mapping his exit strategy, and how all of this will ultimately affect his retirement.

Enter an experienced wealth advisor. This person can be a key resource to someone like David. They can bring in a team of professionals to help him determine his franchise’s true value. From there, they can provide personalized advice on how to boost its value before accepting offers. This includes asking key questions like:

  • Is your business meeting its revenue goals?
  • Is it on track for growth?
  • If sales continue upward, is the business ready and able to scale?

When buyers do start biting, a good advisor can help David manage different offers and negotiate in a way that gives him the most leverage. They can also help him craft a viable exit strategy to make for a smooth transition. What’s more, the advisor can show him how this liquidity event will impact his income and retirement goals—and explain the best strategies to minimize his taxes.

The Bottom Line

When all is said and done, a good wealth advisor is much more than a money manager. They’re looking out for you, thinking about the consequences and implications of your life changes, and ultimately helping you secure the strongest financial future possible. Client engagement is where they excel, and they’re uniquely positioned to help you anticipate upcoming changes and potential risks. When taken together, this can create unmatched value. This is what drives us at JJ Burns & Company. We pride ourselves on cultivating and nurturing long-term relationships. Get in touch with us today to see what the right wealth advisor can do for you.

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