Cash Flow Planning
This is where the adviser will ask you to complete an income and expenditure forecast so that they can take into account both your income and capital now and in the future and this will enable them to give you a full picture of how much income and capital you will have in the lead up to and after retirement. This can be an important exercise to calculate how much you need to save or what sort of return your capital needs to achieve to enable you to do the things you want, be that moving to warmer shores or changing your car every 2 years.
Helping you to put in place the right strategies that will enable you to build up a capital sum, be that in a Pension or investing in the markets with spare income or capital to reach a saving goal or lifestyle goal. It may be that certain insurances have to be put in place so that in the event of a crisis (injury, illness or death) that the plan can still be achieved by the surviving members of the family.
Taking a capital sum already in place, using the clients risk profile and personal circumstances to grow the capital sum with a carefully planned investment strategy, backed up by regular reviews to ensure that things remain on track and changes can be made if required.
It takes time and commitment to build up wealth in most cases, sometimes people inherit wealth and need coaching on how to preserve or grow the wealth they inherit. When clients build up wealth through property, investments and other assets it can be important to them that their wealth passes to the right people when they die. This requires careful planning in advance and will take into account tax mitigation on death taxes and make sure the estate is in the right hands at the right time, taking into account a beneficiary’s age and capacity to receive such an inheritance. Some people like to know that in the event of a child’s future divorce that their money would continue down the bloodline and not benefit an estranged partner who remarries. These things can all be taken into account when planning for wealth preservation.
All advisers should provide you with an initial consultation to gather your information and what it is you want to achieve, this will then be followed by some contact in between to gather any additional information. After this stage, once the adviser has formulated a plan in line with your risk and reward profile, you can expect to have a presentation meeting where the plan should be carefully explained to you. At the presentation meeting you should agree or adapt any strategy as required and should agree what fees should apply and how often you are going to review the plan should this be required. I would like to point out that no matter how successful or intelligent you are, you should have questions and should not be embarrassed or confused as to what you are entering into , it is the adviser’s job to explain in a clear and concise way in a format you understand!
What should you expect from a Dublin Wealth Manager?
The Dublin Wealth Management landscape has been slowly changing over the last 10 years but the majority of the market is still controlled by a few of the large Insurance companies, namely Irish Life, Zurich and one or two others. The UK market changed dramatically under the retail distribution review in December 2012, effectively outlawing commission payments and making fee only business the future of that market. Ireland still lags someway behind on this and commission is still how most advisers are remunerated for their services, although some are now coming around to operating a hybrid model, where fees and commission have a place.
Whether fees or commission the end result should always be the same, the client should be at the heart of everything and should benefit from regular annual reviews as well as transparent pricing.
Clients currently have a plethora of firms that they can approach and get wealth management advice from but what is important is that they should be clear in what their aims are, this will enable the adviser to arm them with the strategy to achieve those aims.
Some of the services a Wealth Manager will offer are listed below and a short description of what they entail;
There can be different costs and fees involved in wealth management, they are detailed below with a brief explanation;
Cost of Advice
This covers the research and time required to set up the appropriate structures and is usually the bulk of the upfront cost, this can be paid for on a commission basis or agreed as a set fee.
All investments need to be held on some form of platform, be that a wealth platform that holds custody of the assets or an insurance bond. This enables the adviser to act on behalf of the client and make adjustments as and when required, it also means that the assets are held at arm’s length from the adviser. It is very rare that a Wealth Management firm would hold client assets and if anything should raise a red flag.
Underlying fund costs
All investment funds have a cost to manage, funds that are managed by fund managers (humans) are generally more expensive to run as they have to pay someone to do that. Exchange Traded Funds or ETF’s as they are more commonly known tend to have lower costs as they are run by computers and algorithms and have no “human” costs as such.
Sometimes to bring in additional investment oversight, a Wealth Manager may use a Discretionary Fund Manager (DFM) and they may also have a cost but this tends to mean that the fund costs are lower as they can buy at institutional rates, whereas the public would pay more going direct.
The Wealth Management space in Dublin is competitive and there are a number of companies to choose from, the main thing to look for is that your adviser is looking at the best deal for you, not them and is reviewing your assets on a regular basis. If your adviser is opaque when it comes to fees, ask yourself why? Do they have something to hide or is it that they cannot justify their costs. Expect to pay for a good service but a good Wealth Manager will more than pay for their costs over the medium to long term.
When is the last time you reviewed your plans or assets, has it been a while since your adviser has been in touch?
Contact us for a no obligation consultation at firstname.lastname@example.org or get in touch through our website www.imperiuswealth.com.