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In recent years, the United States has witnessed a remarkable surge in wealthy individuals. The number of millionaires has nearly tripled in the last two decades, from 7.64 million in 2000 to 21.95 million in 20231. This growth underscores the increasing demand Americans are placing on financial planning strategies to preserve and grow their wealth.
As your wealth grows, so does the complexity of managing it. Many affluent individuals find themselves overwhelmed by the intricacies of investment strategies, tax obligations, and estate planning. In fact, industry surveys consistently show that individuals often feel overwhelmed by financial planning, and money concerns can create regular bouts of anxiety (even for those with substantial assets). This is where professional wealth management comes into play.
A 2024 survey2 showed that 69% of millionaires work with a financial advisor, which is more than double the rate of the general population. A separate survey3 showed that 89% of Americans (not just millionaires) who work with a financial advisor believe their advisor helped them grow their wealth faster than if on their own.
But how do you know when it’s time to seek professional help? Here are some key signs:
Your tax obligations have become too complex to handle on your own.
You’ve maxed out your retirement account contributions and need additional strategies.
Your investment portfolio lacks direction, diversification, and needs expert guidance.
You’re facing complex financial decisions that require specialized knowledge.
You’re experiencing major life changes, such as selling a business or receiving an inheritance.
Your life has become exceedingly busy, and important financial decisions aren’t made in a timely manner.
It’s crucial to recognize these signs early. The sooner you address the financial concerns in your life, the better positioned you’ll be to achieve your financial goals and secure your future. Assess your current financial situation and identify any of the signs mentioned above. If you recognize even one, it is time to consider professional wealth management.
Wealth management is not just about investing your money. It’s about making smart decisions to optimize your wealth and your overall financial well-being. It’s about creating a personalized strategy that addresses all aspects of your financial life, from investments and taxes to estate planning and philanthropy. It can also involve special needs planning, eldercare planning, divorce planning, and asset protection planning - areas of focus often beyond DIY planning.
By partnering with a wealth manager, you can delegate the financial responsibilities in your life to a seasoned expert – a partner, who adheres to the fiduciary standard. Wealth managers who take a comprehensive approach, and understand how all the financial elements in your life interconnect, can help you create a tailored plan to grow and preserve your wealth over the long-term while ensuring the plan evolves with your goals and objectives.
Remember, the earlier you start planning proactively, the more opportunities you have to grow and protect your wealth. Don’t wait until you feel overwhelmed or make costly mistakes.
Stay tuned for our next post: " Setting the Foundation - Your First 90 Days of Wealth Management," where we’ll explore the initial steps of starting your wealth management journey.
Tad Jakes, CFP®, EA, ECA
(1) 2024 UBS Survey
(2) 2024 Northwestern Mutual Survey
(3) 2024 Wealthtender Survey
