What Millionaires Look for in a Financial Plan

Many, if not all, millionaires enjoy financial freedom and financial independence. However, they also value a lifestyle of hard work and fiscal prudence no matter how high their account balances, and they do not spend money frivolously. Most were not born into wealthy families but have built their wealth through self-control and a focus on long-term goals. 

At Financial Freedom Fee-Only Wealth Management our comprehensive financial planning is designed to help keep you on the secure financial pathway you have created for yourself. 

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Financial Planning Needs

When seeking a financial advisor, millionaires care about much more than just investment management services. Because so many millionaires have built their wealth over decades of working demanding jobs and saving considerable portions of their incomes, many are concerned with reducing unnecessary expenses. These clients highly value advisors who can help them reduce their taxable income and avoid or minimize other expenses.

Millionaires also require financial planners who can develop estate plans and financial planning roadmaps that will safeguard their clients’ assets, benefit heirs without enabling unproductiveness, and make meaningful contributions to charitable causes in ways that will have the greatest impact and make the most financial sense with their clients’ overarching financial objectives.

Expectations from Financial Planners

Because clients are generally investing considerable amounts of resources with their financial planner, they have high expectations for how they will be treated. They expect to communicate with financial professionals who are knowledgeable, dependable and caring, who fully understand the clients’ situation and incorporate the clients’ objectives into the plan, and who provide high-quality services in line with the fees they charge. 

At Financial Freedom Fee-Only Wealth Management we offer SDR (same day response). We understand the importance of providing this level of service to our clients.

Estate Planning

With the assistance of an estate planning attorney, the financial planner should coordinate either the building or updating of an existing estate plan to ensure that clients’ assets pass the way the client intends. Many millionaires can benefit from incorporating trusts into their estate plan, rather than just a will that passes assets outright to heirs. 

Financial planners should regularly review their clients’ estate planning strategy. Tax laws are constantly changing, meaning that financial planners must ensure that the client’s current plan is still advantageous under current legislation. It is also beneficial to regularly review the client’s designated heirs, trustees, executors, charity beneficiaries, and all other components of the estate plan to ensure that that the current documents continue to represent the client’s wishes. 

Many millionaires also care deeply about philanthropy. They prefer seeing visible results from their contributions because they are able to make such large donations. Some tax-advantaged estate planning approaches can benefit both the client and the charity, such as establishing charitable remainder trusts, which remove assets from the client’s taxable estate.

Clients who are small business owners will benefit from help with deciding whether the business should outlive the client. Financial planners can assist clients who eventually want to sell their business in determining the process and timeline, and for clients who decide to pass the business to their heirs to continue running it, financial planners can help ensure the business succession plan is integrated with the client’s estate plan.

Investment and Tax Planning

With high incomes can come considerable tax implications, and financial planners should work with their clients to take advantage of tax reduction strategies. For example, inherited assets might come in tax-deferred retirement accounts that require the client to make annual withdrawals. Financial planners can counsel their clients to make only minimum withdrawals from these accounts until the clients are in a lower tax bracket year.

Clients who prefer active investment management may not be aware of the income tax implications of trading too frequently, meaning that investments are not held for long enough to qualify for the reduced capital gains tax rate on their earnings. Bonds and certain stocks can also generate taxable income that investors might not need during their working years. Financial planners can work with clients to mitigate these tax consequences. 

Advisors can also help clients take advantage of special tax strategies, such as deferring Social Security payments or converting a Traditional IRA to a Roth IRA during a low tax bracket year and paying taxes now rather than at withdrawal. Other ongoing tax reduction strategies include donating appreciated stocks to charity rather than cash and “lumping” planned charitable contributions into a single tax year.

Many millionaires have small projects in addition to their main career that generate income, such as a side business, specialty investments, or owning and renting out real estate. These clients can benefit from an advisor who can incorporate these side investments into the rest of their financial plan.

Comprehensive Financial Planning

At Financial Freedom Fee-Only Wealth Management we see the value in understanding what is most important to our clients. That is why we take the time to find out what drives you. What your financial dreams and goals are. Our goal is to put together a comprehensive financial plan that will deliver your desired expectations. To do this, we work on a roadmap to include these areas of your financial life:

• Financial (and Non-Financial) Goal Setting and Goal Achievement
• Investment Management and Asset Allocation
• Retirement Planning
• Retirement Distribution Cash Planning
• Estate Planning
• Cash Flow and Savings Analysis
• Insurance, Risk Analysis,and Risk Reduction
• Tax Planning and Effective Tax Reduction Strategies
• College Funding (for Children & Grandchildren)
• Getting the Most from Executive Compensation and Stock Options

Conclusion

High-earning individuals have specific financial planning needs that other clients may not have, such as specific tax or estate planning considerations. However, just as with any other client, millionaires expect prompt, personalized attention from an experienced financial professional who will work with the client to build a comprehensive financial plan that the planner regularly reviews and updates as legislation and the client’s life evolves. Contact Financial Freedom Fee-Only Wealth Management today to schedule a complimentary, no-strings-attached, conversation with our team to see if we’re the right fit for your needs. We have office locations in Pennsylvania, Ohio, Florida, and Maine.