Tips for Financial Wellness: How to Get Organized While Staying at Home

A New Year, A New Opportunity to Work Toward Your Financial
Resolutions

For many people, the New Year is a time for personal reflection, a time to consider commitments, and resolutions for the coming year. This year, why not resolve to make your finances a priority? With proper planning and appropriate guidance, you can begin to build financial stability and prepare for the uncertainties of tomorrow.

Consider the following steps:

1. Get Organized. Gather all your important financial documents—life insurance policies, homeowners insurance, wills, trusts, and other pertinent financial records—and organize them so you can access them quickly and easily.
2. Schedule a Legal Consultation. Arrange a time to meet with your attorney to review or write your will and establish any necessary trusts. Prior to your meeting, discuss with your spouse or other loved ones how to handle property dispositions and guardian appointments.
3. Keep Debt in Check. Pay off high interest debt first, especially if the interest is not tax deductible. Do your best to avoid the minimum payment trap. By making only the minimum monthly payment, the interest that accumulates over time can make even “bargain” purchases costly in the long run.
4. Review Insurance Coverage. Review your life insurance policies to ensure that your beneficiary designations are appropriate to your current situation and that all arrangements are up-to-date. Also, consider repaying any loans you may have against your insurance policies. This can help to reestablish
   an emergency fund for the future.
5. Apply for Scholarships. If your children plan to attend college next year and require financial aid, remember that financial aid forms are due early in the year. The earlier you apply, the better your chances may be for obtaining aid.
6. Prepare a Tax Strategy. Begin to gather your tax information and arrange a time to meet with your accountant, if necessary. It is important to file your income taxes on time and to be aware of any tax changes that may affect your return.
7. Write It All Down. Once you’ve met with your financial, insurance, and tax professionals, write down a few realistic goals that you think are achievable. Make the commitment now to plan your finances accordingly. This is your first step to building a solid financial future.

The New Year offers us a fresh beginning. This year, resolve to make your finances a priority. With proper planning and appropriate guidance, you can begin to work toward financial independence and prepare for life’s
uncertainties.

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Who Needs a Wealth Manager

Wealth managers are professionals that handle complex financial matters on behalf of their clients, typically for an agreed-upon fee. Wealth management services are mainly for high-net-worth individuals and entities. A wealth manager often coordinates services between different experts, such as an accountant and attorney, on behalf of the client.

Wealth management is broader than portfolio management as it offers more encompassing financial planning. Wealth managers provide comprehensive guidance on financial situations that can include investment management in hedge or equity funds, accounting, estate, and tax planning, and retirement planning, as well as legal considerations pertaining to financial matters. Wealth managers may choose to work independently or in larger wealth management firms.

How does one decide whether they need a wealth manager? One indicator is when they outgrow their regular financial advisor and join the ranks of high-net-worth individuals (HNWIs). As an HNWI, one may seek wealth management services to help plan and coordinate their wider financial world. The exact amount of wealth deemed appropriate for wealth management services can vary. The U.S. Securities and Exchange Commission defines HNWIs as those with a net worth above $1.5 million or over $750,000 in investable financial assets.

Another reason one may need a wealth manager is the desire to leave a financial legacy. Legacy planning is complex and aims to protect assets in a tax-advantaged, structured vehicle such as a family trust. When well planned, such a vehicle ensures a thriving and secure future for the family and the charitable causes one supports.

The ever-rising cost of living, including medical care for the elderly and longer life expectancies, have made some people doubt their ability to maintain their standard of living while in retirement. People are keen to secure their retirement, and a wealth manager has the expertise and tools to help such people secure their future.

The strategies used by wealth managers also tend to be more holistic, covering most aspects of a client’s life, not just investments. Wealth managers may guide a client in tax planning, philanthropic giving, and setting up a family or private foundation. The work involves coordinating a comprehensive set of services needed to manage the client’s assets, creating a strategic plan for current needs, and planning for future needs; this may include creating a business succession plan or providing will and trust services. Some wealth managers also provide banking services, while others advise on philanthropic activities.

To illustrate the work of a wealth manager, consider a client worth $2 million in investable assets, with a family trust but has an investment partner who has passed away recently. In such a situation, a wealth manager would invest these investable funds in a discretionary account for the client. Then they would provide the will and trust services necessary for tax minimization. The manager will also guide on estate planning.

A wealth manager understands that a higher-net-worth individual has more complex financial and investment needs than an ordinary investor, which demands a more complex and holistic planning strategy that involves diverse areas. Conversely, for one with a rich and diversified portfolio or a more complex financial and personal situation, it's critical to ask the right questions before picking a wealth manager. It would be best to have someone equipped to help create a comprehensive strategy that covers all needs, from portfolio management, investments, and estate and tax planning.