|The Wealth Counselor
A Team of Coordinated Professionals Is Your Clients’ Best Bet
Picture a symphony’s worth of classical musicians all trying to play a piece in perfect harmony, but they can’t see one another. Each of them also has slightly different sheet music. It doesn’t take a stretch of the imagination to know it’s not going to sound pretty.
That’s what it’s like for clients whose various advisors don’t communicate. Of course, an individual’s wealth management strategy doesn’t come from just one part of their approach, but rather a comprehensive and holistic combination of the efforts of several professionals.
You might be surprised to consider just how often disjointed planning and advising can impact a client’s long-term financial well-being. Estate planning attorneys, CPAs, financial advisors, and insurance agents may have access to the same initial set of client documents or client goals. But, once isolated strategies created by each of those advisors are in place, things can begin to go sideways. On the other hand, a quick recap among a client’s advisors is often all it takes to smooth over any issues and develop a great, integrated plan for clients.
Put yourself in your clients’ shoes
Consider the situation of a typical client — let’s call her Dana. Dana is a successful IT manager with a rich family life and a very busy schedule. Even though free time is hard to come by, she’s decided it’s time to stop putting off financial and estate planning. Here are a few of the advisors she’ll likely meet with in order to get started:
Without collaboration between these specific professionals, she does not realize these discrepancies herself. It might not become clear that anything is wrong until complex and stressful situations arise that bring problems to the surface.
A little communication goes a long way, too
Even a 20-minute roundtable discussion may be all that’s needed in order to share a quick rundown of pertinent details and determine if any further action is needed to make Dana’s various plans fit together.
In addition to finding problems that can be easily resolved now, they may also notice missed opportunities that could benefit Dana and her family for years to come. When opportunities to benefit clients are discovered, it’s only a matter of time before each of these professionals receives referrals from Dana’s colleagues and friends.
For example, Dana’s financial advisor and CPA might recognize that she has several low basis assets. They notify her estate planning attorney, who suggests she add a charitable remainder trust and an irrevocable life insurance trust to diversify her portfolio at a lower tax cost. Her life insurance agent then implements a policy for the ILIT that essentially replaces the value of the now donated asset in the charitable remainder trust.
On the other hand, let’s say Dana doesn’t have charitable goals and she’s comfortable holding onto a specific asset instead. With no immediate need to diversify the portfolio or divest the asset, a community property trust might provide a significant income tax savings after her death. By extension, the community property trust will improve the availability of assets for her surviving spouse (and, of course, those assets will need management by the financial advisor). These are just two examples of ways that a little communication and collaboration can yield amazing results for clients.
Bring your clients’ estate planning attorneys into the loop
The goal of every advisory professional is to put their clients in the best possible position to achieve their aims. And collaboration with estate planning attorneys is a fantastic strategy to have at your disposal. When we work together as a coordinated team, we’re strengthening our own practices as well as the chances for highly positive outcomes for our clients. Get in touch with us today to discuss how we can benefit our mutual clients.
Stephen W. Butler, JD, CPA