What Is High Net Worth Financial Planning?

High net worth financial planning involves more than simply managing a larger investment portfolio.

As assets grow and financial situations become more complex, decisions involving investments, taxes, estate planning, businesses, real estate, and future generations can increasingly affect one another.

In this episode, Greg Welborn of First Financial Consulting explains what high net worth financial planning is, how it differs from traditional financial planning, and some of the challenges families may encounter as their wealth grows.

Greg begins by discussing who may benefit from a more comprehensive wealth-planning approach. This can include families with significant investment assets, business owners, executives with equity compensation, people with concentrated stock positions or multiple real estate holdings, and families facing increasingly complex estate-planning decisions.

One of the most common problems is uncoordinated advice. High net worth families often work with several professionals, including financial advisors, accountants, estate attorneys, bankers, and insurance professionals. Each may provide valuable advice within a particular specialty, but recommendations made independently can sometimes conflict with decisions being made elsewhere in the financial plan.

Greg explains why high net worth planning can benefit from having someone act as a financial “quarterback”—developing the overall strategy and helping coordinate the different professionals involved so that investment, tax, estate, retirement, and family decisions are working toward the same goals.

The episode then looks at two real-world planning examples.

In the first case study, a couple approaching retirement had approximately $6 million in investments. Their retirement projections indicated that only part of those assets would likely be necessary to maintain their lifestyle, while the remaining assets could potentially be positioned for children and grandchildren.

Rather than treating everything as one investment portfolio, Greg discusses using an investment policy statement to identify different goals, time horizons, target returns, risk levels, and liquidity needs. Assets intended to support retirement could be invested differently from assets intended for children or grandchildren decades into the future.

That distinction allowed the retirement assets to emphasize liquidity and risk management while longer-term family assets could pursue different growth objectives. It also opened opportunities for coordinating investment decisions with longer-term tax and Roth planning.

The second case study involves a family with investment accounts, substantial real estate holdings, and a privately owned business. In this situation, the issue wasn’t simply generating enough retirement income—it was considering how continued growth of the business and real estate could affect the family’s future estate and their ability to eventually transfer those assets to their children.

Greg discusses how advanced planning strategies, including family limited partnerships and dynasty trusts, may be considered when appropriate to help address estate-planning, asset-protection, and multi-generational goals. These strategies are highly dependent on the family’s circumstances and require careful coordination with legal and tax professionals.

Ultimately, high net worth financial planning is about coordinating the different pieces of a complicated financial life. Investments, retirement income, taxes, businesses, real estate, estate planning, and future generations should not be treated as completely separate decisions.

Topics discussed in this episode include:

• What high net worth financial planning means
• When traditional financial planning becomes wealth planning
• Coordinating multiple financial professionals
• Lifetime tax planning
• Estate and legacy planning
• Investment policy statements
• Matching investments to different financial goals
• Retirement liquidity and investment risk
• Planning for children and grandchildren
• Business and real estate ownership
• Multi-generational wealth planning
• Family limited partnerships
• Dynasty trusts
• Choosing a financial advisor
• The role of a fiduciary wealth advisor

Timestamps

00:00 — What is high net worth financial planning?
00:50 — Common high net worth planning mistakes
02:04 — Coordinating multiple financial professionals
03:38 — Tax planning and high net worth families
07:09 — Case study: Planning investments for multiple generations
09:39 — Using an investment policy statement
13:00 — Case study: Business, real estate and estate planning
15:00 — Family limited partnerships and dynasty trusts
16:34 — Choosing objective financial advice
18:38 — When high net worth planning may be appropriate

Learn more about First Financial Consulting: High-Net-Worth Financial Planning

The information discussed in this episode is intended for educational purposes only and should not be considered individualized financial, investment, tax, or legal advice. Everyone’s financial situation is different, and the strategies discussed may not be appropriate for every investor.

First Financial Consulting is an independent, fee-only fiduciary financial advisory firm providing comprehensive financial planning and investment management services.

Learn more about First Financial Consulting:
https://firstfinancial.is/