Hi and thank you for stopping by today. Today I’m going to talk about financial planning for high net worth clientele.
My name is Tina Anders and I am the Fee Only Certified Financial Planner for my wealth management firm here in Petaluma, California, Anders Wealth Management, serving primarily clients in Sonoma and Marin and Napa counties.
Again, thank you for stopping by. Financial planning for high net worth clientele. While some clientele may need to think about and consider and plan for paying off student loans, saving for retirement, buying or refinancing a home, things of that nature – very important. High net worth clientele oftentimes, think about things like estate planning, how to plan for the wealth of future generations, how to avoid paying more tax and absolutely necessary. A financial plan can help deal with all of those issues.
A financial plan is a comprehensive breakdown of your goals, but also how to make them happen. The methodology to which you can achieve your goals. Your financial goals, the makeup of your investment portfolio, your age, even where you live, and your lifestyle choices play a part in making your financial situation, excuse me, situation unique.
On top of those, high net worth individuals are even further in a category of their own. Having more wealth than the average person means you’ll fall into a different tax bracket. And you’ll have to consider additional types of tax like capital gains tax. A unique situation requires a unique approach. Financial plans are especially important for the extra wealthy and so is finding the right Fee Only Certified Financial Planner.
For individuals with particularly high net worth proper tax planning is even more important. Without intelligent tax strategies, you run the risk of missing out on crucial tax benefits, which can mean paying much more than you need to. Most especially, wealthy people benefit from capital gains. And the associated tax is something you’re probably familiar with. It’s the tax imposed on earnings made from investments. One thing that’s good to be aware of is the different ways the tax applies to short term gains, and long term gains. If you have holdings that you need to take out, before you’ve held them for at least a year, you’re going to be taxed or the earnings, you’re going to be taxed at ordinary income tax rates. Which are generally speaking quite high for high net worth clientele. If you are able and willing to hold your investments for at least a year if not longer, when you go about taxation, when you pull those assets out, you will only have to pay long term capital gains rates. Which are typically 15 to 20%. Quite a bit lower than your ordinary tax rates. Now, these tax rates do not apply to individual retirement accounts such as traditional IRAs, Roth IRAs, employer sponsored plans, things of that nature. But for taxable accounts, very important information.
Good tax planning involves planning accordingly to these two different classes of capital gains – important. The tax cuts and JOBS Act passed by the Trump administration meant quite a few changes to the tax code. Many of which have a significant impact on high net worth individuals. One of the things that changed is the exclusion limit on gift and estate taxes. The exclusion limit has doubled since 2017, meaning you can leave more money to others while getting your tax break when you pre decease them. Taking advantage of this change is just one way you can make tax planning work for you.
The fundamental approach to a strong investment portfolio doesn’t change much with a net worth of you the investor. You need to take into account your financial goals, your risk tolerance, your time horizons. Then you need to remember to strive for diversifying in every step of the way. High net worth individuals tend to have goals that could be directed toward a state planning and providing wealth for future generations also avoiding paying taxes beyond what you’re required to pay. Investing in any capacity involves some risk, how much risk you’re comfortable with is up to you. Of course, keep in mind that the risk return trade optics dictates that higher risk brings higher returns. I am known for being a conservative, yet also assertive investor for my clients.
Thank you for stopping in today. I do appreciate it. If you are a high net worth individual, please find a Fee Only Certified Financial Planner. Tina Anders, Anders Wealth Management here in California. Happy to take care of you. If you have comments about this video or questions of any kind, please comment below and I will address them. If you’d like a topic on a video, let me know I will do that as well. Tina Anders again, in your corner. Thank you
Hi there and thank you for stopping by today. Welcome to part three of questions to ask a potential financial planner (view part one by clicking here). My name is Tina Anders. I am the owner and founder and certified financial planner for Anders Wealth Management located in Petaluma, California serving Sonoma and Marin counties, and the greater area.
Here’s one question that you can ask a potential financial planner. Are you accountable to your clients and how so? In other words, do you say what you’re going to do? And do you do what you’ve said, you’re going to do? The answer obviously, should be yes. How I’m accountable to my clients, I talk about what I’m going to do, and I follow through. I asked my clients to do things they follow through. I’m accountable for following up. I’m accountable for checking in. I’m accountable when there are COVID-19 situations at hand. I check in with clients. I am accountable, I will do, and I do what I say I’m going to do.
Another question you might ask is, how do you work in my best interest? Have you taken a fiduciary oath to work in my best interest as a potential client? The answer, of course, should be yes. A fiduciary oath is critical, because that indicates to you that the financial advisor that you’re interviewing actually is not going to be selling you products at the expense of your financial success. That they have your best interest in mind. Critical, definitely asked that question.
Another question that you might ask is, for how long have you been investing? And do you provide expert investment management? The answer is yes to expert investment management by looking at funds for instance, diversification about funds, sales loads, expense ratios, returns, fund management. There are things that an investment manager for your portfolio needs to be looking at to make sure you are positioned properly and diversify. But also, expert Investment Management means positioning you in a way that’s going to work for you over the long term, and also is going to work for you for your peace of mind. It also doesn’t mean aggressive, it means successful. So, for how long have you been investing? You might ask? I’ve been investing personally since 1983. Successfully, not aggressively, successfully, and really, really enjoy it.
Another question that you might ask is have you built your firm on integrity and trust because not only was it going to be good for business, but also the right thing to do? And that’s kind of, kind of an obvious answer you’re looking for, which is, of course, yes. How do we do that we build relationship over time. There’s no rush. When you’re ready, we proceed to the next step, integrity. I have integrity with my clients. I have integrity with the people I deal with. I am also trustworthy. That’s important. You’re going to get a feel for somebody, when you walk in the door and you sit down and start asking these kinds of questions. Is this something that I feel like I can trust? Does this person seem to have integrity? So, it’s going to be a personal, subjective feeling on your part? It’s always the right thing to do to build a business on integrity and trust. Always the right thing to do, whether it’s good for business or not. And it always is.
Another question you might consider is are you passionate and unwavering with the work that you do with your clients. What I mean is, do you care about your clients? Or do you close the file at the end of the day? And you don’t talk to them for a year? And then you open their file again? Do you care? Are you unwavering in your care? Are you checking in, at least with their portfolio? If not with them a few times a year? Passionate and unwavering also means are you interested in the industry? And what’s going on in the industry that could affect your clients? Are you staying abreast of the material and I touched on that earlier regarding being a certified financial planner? If your Certified Financial Planner, you’re mandated within the certification rules to be getting at least 30 units of continuing education over the two-year period, every two year period. But passion unwavering? Yeah, that would include staying up to date on what’s going in the industry so that you can be as helpful to your clients as they hope that you will be.
Tune into part four for questions to ask a potential financial planner. Thanks again for stopping by. I appreciate you listening in. Comment below with any questions, comments, or if you have any topics you would like me to discuss in the future, I will try to put a video out for you. Thanks again. I am in your corner.
Tina has been investing since 1983. She is a Certified Financial Planner™, a Registered Investment Advisor and has a Series 65 license ~ Uniform Investment Advisor Law Exam. Tina received a graduate certificate in Personal Financial Planning, awarded with distinction, from the University of California, Berkeley, then went on to pass the Certified Financial Planner Board of Standards (CFP®) exams. Tina is an active member of the National Association of Personal Financial Advisors (NAPFA) and the Alliance of Comprehensive Planners (ACPlanners). She is located in Petaluma, CA. Tina taught Algebra in Petaluma for fourteen years prior to her financial planning career. She enjoys reading, cycling, traveling and yoga.
Anders Wealth Management is an objective and trusted Investment Advisor. Investment portfolios are engineered to be diversified, low-cost, tax-efficient, and customized for each client’s time horizon, financial goals, and ability or need to take risk.
Portfolio management service includes meetings with the client, portfolio implementation, and access to Anders Wealth Management during the year for financial needs as clients bring them to my attention. I primarily employ Dimensional Fund Advisors (DFA) and Vanguard families of funds, while occasionally implementing others.