My name is Mark Goodfield. Welcome to The Blunt Bean Counter ™, a blog that shares my thoughts on income taxes, finance and the psychology of money. I am a Chartered Professional Accountant. This blog is meant for everyone, but in particular for high net worth individuals and owners of private corporations. My posts are blunt, opinionated and even have a twist of humour/sarcasm. You've been warned. Please note the blog posts are time sensitive and subject to changes in legislation or law.

Monday, July 3, 2017

What High Net Worth People Really Want from Their Financial Advisors

In my experience, the best investment managers that my firm and clients work with stress three particular investment themes.

They are as follows:

1. Maintenance of lifestyle
2. Protection of Capital
3. Growth of Capital

I don’t think the above mentioned priorities were picked out of thin air. These are the true concerns of high net worth individuals and were discussed in a 2012 Forbes Magazine article titled  “What High Net Worth Investors Really Want" by Andrew Klausner. While this article is now almost five years old, I still find it as applicable today, as when it was written five years ago. I would also suggest that even if you are not a high net worth person, these priorities would still be important to you.

The Forbes article was based on the results of a Cerulli Associates/Phoenix Market International survey.  The survey found the top nine 9 things that high net worth individuals are looking for from their advisors (and the percentage of respondents that listed each item as being the most important) were as follows:

1. Maintain lifestyle in retirement – 31.4%

2. College education funding – 19.6%

3. Protect current level of wealth – 14.6%

4. Aggressively grow wealth – 14%

5. Leave an estate for heirs – 9.8%

6. Charitable giving – 4.2%

7. Minimize income and capital gains taxes – 2.4%

8. Improve household cash flow – 1.9%

9. Better manage market risk – 1.9%

It is somewhat surprising, maybe even shocking, that beating the market is nowhere to be found on this list. I find this interesting since when you hear people talk about their investment advisors results, they are often bragging about how they beat the market. Maybe these are just the type of people I noted in my blog post on investment bravado.

If you were surveyed, would your three top selections be maintenance of your lifestyle, protection of your capital and growing your wealth (college funding is typically a higher priority in the U.S. than Canada, so I moved it arbitrarily down the list. But with the increased costs to attend University in Canada, it is likely a high priority for Canadians, but I am not as sure as high as for Americans)? If not, you may want to revisit the priorities you have for your advisor and yourself.

Book Giveaway

Thank you to everyone who has completed the financial/wealth survey linked to my previous blog posting. The response has been tremendous. I will announce the five winners the week of July 17th.

This site provides general information on various tax issues and other matters. The information is not intended to constitute professional advice and may not be appropriate for a specific individual or fact situation. It is written by the author solely in their personal capacity and cannot be attributed to the accounting firm with which they are affiliated. It is not intended to constitute professional advice, and neither the author nor the firm with which the author is associated shall accept any liability in respect of any reliance on the information contained herein. Readers should always consult with their professional advisors in respect of their particular situation.

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