How does a financial planner add value in a Family Office? How does financial planning contribute to operating as a Fiduciary Business®? While there are certainly many elements of “hard science”, a large part of financial planning depends on other factors – getting to know the client and being able to clearly articulate their goals and needs.
The relationship between a financial advisor and a prospective client should start with a comprehensive meeting aimed at developing the foundation of a well-honed initial plan, including an explanation of how fiduciary principles will be employed. The goal is to help organize, streamline and simplify the complex details of their financial picture. No one should expect a dollar of their money to be invested until their advisor really gets to know their situation and objectives.
The process isn’t complete after that first meeting. It typically takes a series of conversations to understand how various factors – such as taxes, estate planning, and cash flow needs – will impact one’s financial plan and resulting investment portfolio. In many cases, it’s the first time a client will be pivoting from working for their money to a situation where their money is working for them, and that may require a change of world view.
After the second meeting, the advisor should be able to lay out a road map, a combination of data and their assessment of the client’s needs. An understanding of factors such as risk tolerance will come into play, too. After running models and analyzing the data, the road map should be fairly complete – but the job doesn’t end at that point.
By quantifying the “magic number” that can provide financial independence for a particular client, it quickly becomes apparent if they are past that point, or if they will need to continue generating income. That helps guide the discussions around investing, estate planning, wealth transfer and charitable bequests.
The advice provided at this point should remain objective with no incentives towards any particular products. One hallmark of a Fiduciary Business® is that financial planning strategies themselves are NOT for sale. An advisor should not receive fees for implementing strategies such as an elaborate estate plan or life insurance product. This ties directly into True Fiduciary® standards which focus squarely on transparency and place clients’ interests first.
As life happens, the financial planner and a team of specialists will continue to work directly with the client. The team is there to combine resources and be “detail-fanatics”, dedicated to dotting the “I’s” and crossing the “T’s”, such as titling assets in a way that honors one’s estate plan and regular beneficiary reviews. With comprehensive services for planning, investment, tax, legal, governance, and concierge all under one umbrella, the Family Office team can strive to streamline not just finances, but the lives of the families involved.
At PagnatoKarp, we help high-net-worth families flourish and move forward. Our boutique team of professionals manage complex needs through investments, financial planning, tax, legal, private banking, family governance, concierge and travel. With True Fiduciary® standards of transparency, we embrace the legal obligation to put your interests first while focusing on asset protection, cost, and opportunities.
Please call 703-468-2700 or email here to schedule a private, confidential meeting at your convenience.