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With Wealth Management Coordination Counts

Jason Macgregor portfolio manager, financial advisor Jason Macgregor portfolio manager, financial advisor Jason Macgregor portfolio manager, financial advisor Jason Macgregor portfolio manager, financial advisor Jason Macgregor portfolio manager, financial advisor

While the phrase, “wealth management” means many things to many different people, the industry accepted concept is this: wealth management is a professional service that provides financial planning and investment portfolio management coordinated with estate and tax planning. Note the word “coordinated.”

In some instances, wealth management companies have all the necessary resources under one roof to guide a client while others rely on relationships with firms and experts in very specific, silo-ed areas. In either case, the key to successful wealth management is making sure that all the individuals involved in guiding and advising a client are aware of what actions other advisers are taking to accomplish the same. In other words, they’re coordinating their efforts.

Here’s why that’s important.

If all of your advisers are working independently of each other without an understanding of the overall strategy being implemented, your chances of missing opportunities to make or save money increases.

Let’s take portfolio managers, for example. Operating in their silo of investments, they tend to focus only on managing money and take actions geared toward doing so. Meanwhile, in the next silo over, the accountant is looking at and acting on behalf of the tax-side of things. By taking actions without understanding all the other factors at play, they may put their client’s assets at risk.

It’s not uncommon, for example, to hear of individuals who checked with their accountant to calculate the tax implications of selling real estate for gains but unknowingly left unrealized losses in their stock portfolio by not coordinating with their portfolio manager; losses that could have easily offset some of those gains.

Another common example of the negative impact of poor coordination is when more than one investment manager implements a strategy that duplicates what has been done elsewhere. Instead of doubling the benefit of the move, it can actually lead to compounded losses.

It’s important to note that the one common thread in these tales of financial woe is the client. It’s up to you, the client, to make sure all the professionals you work with are up to speed on where you’re currently at in life and where you want to be, and that they are acting in a coordinated manner to ensure you get there.

Make sure that they are aware of any actions others are taking on your behalf and ask how those actions might impact their thinking and plans.

Simply put, communicating with your wealth management advisers and striving to keep their actions coordinated is the best way to ensure you actually have wealth to manage in the future.