4 Signs You Need Help With Wealth Management

8 February 2022
 Categories: , Blog


Many people are comfortable managing a growing portfolio of assets and investments. However, there can come a point where even the most skilled of numbers whizzes will find themselves facing unique challenges. If you're wondering whether it's time to consult with a wealth management firm, here are four common signs someone needs assistance.

Taxes Become a Noticeable Problem

As you grow your wealth, you may find yourself encountering new tax situations. Especially in the highest tax brackets, the difference between paying taxes on a short- or long-term capital gain, for example, can be significant.

In the world of wealth management, a lot of effort goes into economizing a client's taxes. Managers encourage their clients to avoid situations where they needlessly realize tax events. The goal is to keep as much money working for you as possible.

Your Estate Is at Risk

The disposition of an estate is challenging under most circumstances. However, when someone has accumulated significant wealth, those issues all become bigger. You may want to preserve your legacy by equitably distributing assets to your descendants, for example. A wealth manager will tell you to structure your estate to reduce the basis cost so your estate's beneficiaries get the most benefits.

A Cumbersome Portfolio

As wealth grows, it can become cumbersome to manage. If someone developed their wealth through real estate, for example, they might have started out dealing with one house at a time. However, as they compounded their returns, the portfolio may have grown into a list of properties across several regions. Especially if you want to convert these kinds of assets into money, it won't be a small undertaking to handle the process without realizing major tax events, accounting issues, and general transactional difficulties.

Too Much Exposure to One Asset Class

Plenty of folks who build wealth do so because they understand one asset class very well. Suppose you're comfortable selling property rights for resource extraction with commodities like natural gas and timber. That is great when the market is humming along, but it can expose you to major collapses when the economic winds turn against you.

Diversification is critical in wealth management. An experienced manager can help you to identify when you're overcommitted in one asset class. They can then help you to convert assets and proceeds from those sectors into more diverse investments. Likewise, they can assess your risk profile and long-term financial goals to ensure you'll have access to the resources you need now and in the future.

For more information on wealth management, contact a company like Horan.