How Financial Advisers Help Private Wealth Clients to Reach Their Goals?

Regardless of net worth or financial standing, a sound approach to wealth management is the backbone of long-term prosperity. Investing in financial advisers who specialise in private wealth is a viable way to solidify, build and expand on your wealth.

While not limited to this group, the services of a financial adviser are particularly beneficial to high-net-worth individuals. The high-net-worth classification is given to any individual with many financial assets, including investable assets such as stocks, bonds, cash, and real estate that exceed $1 million. 

After all, investing and managing your assets can be complicated, especially given the nuances of tax laws, assets, liabilities, debt, cash flow, and overall financial objectives. So, how can financial advisers support you as a private wealth client and keep your finances stable for the future?

This article will explore how they help to safeguard your financial future, why they are worth the additional investment, and how they can take a holistic approach.

What is a Private Wealth Financial Adviser and What Do They Do?

Compared to the average consultant, a private wealth financial adviser offers advice and guidance primarily focused on the client’s financial standing. This goes beyond traditional wealth advice, such as making informed decisions regarding philanthropic strategies, wealth preservation, or estate planning.

Often, these consultants create strategies for entire families and aren't limited to the primary account holder. These strategies may relate to property investment, specialist tax planning, navigating international tax, cross-border transactions, coordinating with other professionals, and planning trusts, foundations, or governance structures.

A private wealth adviser is more familiar with high and ultra-high-net-worth groups' unique financial and tax needs. Very-high-net-worth individuals have a net worth of at least $5 million, and ultra-high-net-worth individuals have $30 million or more in assets. A financial adviser can support these groups with specialised advice and guidance.

How Can Financial Advisers Help Private Wealth Clients?

While everyone has unique challenges and circumstances, the financial needs of a high-net-worth individual can be more complicated and nuanced. This is why many of these individuals seek out the assistance of certified financial advisers. 

An experienced financial planner focuses on managing current assets, building wealth - which may relate to expansion into multiple income streams - and finding ways to grow this wealth using their specialised skill set.


Assess Risk Tolerance

Risk assessment is typically one of the most critical financial strategies for any financial adviser. An adviser works to prevent high-net-worth individuals from experiencing severe market losses through due diligence and sound financial advice. 

Here are a few areas where risk tolerance must be assessed and handled carefully.

Investment preferences. How does a client want to design their portfolio? Is there a particular industry or sector they want to focus on? Some clients may have a stock they don't wish to sell, so all client preferences must be considered. Overall, a financial planner will always focus on balancing a portfolio.

Factoring in emergencies. Does a client have enough liquidity to cash in an investment to cover living expenses? If a client needs to touch funds, long-term asset financial plans and money on the side will be recommended as cash or low-risk accounts.

Look at family circumstances. Long-term investing goals and short-term cash needs can change if a client is married or has children. A financial planner needs to look at all angles.

Financial goals for the future. Do clients have a longer time horizon for an invested asset? A financial planner can assess if less risk is involved as portfolios can be added to during market fluctuations. 

Sources of retirement income. If a client is close to retiring, a financial adviser will look at all sources of income to assess the risks of their financial situation. 

Analysing Cash Flow Needs and Debt Management

Regarding financial management, cash flow underscores the cash available to pay bills and make purchases. A specialised financial consultant can analyse cash flow to ensure a company's stability.

An example of this analysis could be cash flow from operations such as net income, payroll, depreciation, office rent, accounts receivable, cash flow from investing such as equipment sales, property purchase, and net cash from investing. Cash flow analysis from financing can cover a loan payment, net cash from financing, or net change in a cash account.

The net cash flow figure is calculated by analysing what cash goes in and out, deducting current assets from liabilities and putting private wealth clients in a better position for business activities that lead to growth.

Support Estate Planning

Due to the value and complexity of estate wealth management, high- and very-high-net-worth individuals require specialised guidance and planning. 

For high and very high net worth groups, estate planning may cover a will, trust, power of attorney, and other components that affect the distribution of assets. Here, an individual's wealth is preserved for beneficiaries, whether gifting, annual exclusion gifts or transferring assets to reduce taxes. Life insurance policies can also be used to protect the estate value. Succession planning is also a common concern, so strategies such as buy-sell agreements and family-limited partnerships to manage assets are valuable.

Control, flexibility, and asset protection are all essential for ultra-high-net-worth individuals. Sophisticated trust structures (such as charitable remainder trusts) help clients to achieve long-term wealth without tax liabilities. Assets such as trust structures, offshore accounts, and legal or tax advisers from other countries may also need to be considered internationally. This may also be in the form of philanthropic donations and contributions.

Retirement Planning

A plan is vital for all financial goals, and an adviser works with their clients to develop a pathway to turn these into a tangible reality. Even if you have a high net worth, it is useful to put together a substantial nest egg for retirement.

For high-net-worth individuals, a financial adviser will support goal-oriented planning. Private clients may want to accumulate enough wealth for a retirement home, travel the world, or focus on optimising assets and investment strategies. A diversified portfolio of bonds, stocks, mutual funds, and real estate typically translates to balanced growth and a stable income.

For very high-net-worth individuals, the advice and insight of a  financial consultant are often crucial to people who want to sustain a high-end lifestyle. Retirement planning can include reducing the impact of inflation, preserving capital, and steadying an income stream from investments. A portion of their portfolio may also be dedicated to alternative assets, such as real estate or private equity. Legacy planning and wealth transfer are often prioritised using trusts, charitable giving, and life insurance policies.

For ultra-high-net-worth individuals,  a financial adviser will focus on supporting multi-generational wealth creation for the future, minimising estate taxes, and ensuring wealth is passed on smoothly. Custom investment strategies such as direct business investments, real estate, and anything that can generate a higher return will also be explored. Retirement planning strategies take into consideration lifestyle flexibility.

Unsure about how to boost your current income streams? An experienced financial advisor servicing Richmond, St Kilda, and Brunswick can help you put together a plan that puts you in control of your financial future.

Working with a Financial Adviser

As a high-net-worth individual, having a financial consultant by your side can pay significant dividends in the long run. So, what can you expect when asking for professional financial advice, and how can it help you? 

Whether you need assistance with investment management or an advanced strategy for your self-managed super funds, choosing the right adviser is incredibly important. Here are some factors to keep a close eye on. 

1. Build a Relationship

The adviser-client relationship needs to be built on a firm foundation of trust. After all, you're discussing personal finances, assets and goals. Building a healthy business relationship means having open communication. You need to feel comfortable discussing your past and current financial goals and be confident to raise any concerns.

Personal compatibility is one of the fundamental building blocks of effective financial planning. Financial advisory is a collaborative process where both parties work together for a long-term period, so compatibility is a must. 

Trust and transparency. From investment management to personal assets, your adviser needs to be completely open about their fees, approach, and if there's any conflict of interest

Consistent interaction is another key factor. If you engage in regular meetings, this helps with a more proactive and nuanced financial strategy.

2. Define Objectives and Set Expectations

Managing your financial situation can be more complex without clear expectations or objectives.

Identify your goals. What kind of short-term or long-term goals do you have? This could include planning for retirement or changing your investment strategies. Either way, meeting with a certified adviser lets you assess your current standing and formulate realistic goals.

Consider timeframes and priorities. What are your timeframes for achieving these goals? A financial adviser can prioritise strategies based on their level of urgency. 

Risk tolerance. Assess the risks involved with investments. Your financial adviser will consider and present all the avenues available.

Tax and legal considerations. Depending on what tax and legal issues affect your financial strategy, an adviser will work with you to create the best financial outcome.

3. Evaluate the Services Available

As you seek a financial consultant, verify that they provide services relevant to your circumstances. Here is a quick checklist:

Specialisation. What do they focus on? Does the adviser concentrate on a combination of estate planning, investment strategies, and retirement planning? Always choose an adviser that aligns with your current and future financial goals. 

Qualifications. Always double-check experience, qualifications, and certifications. You want an advisory firm that is verified and can deliver the relevant advice.

Track record. Always request testimonials and reviews from past and current clients. This way, you can feel more confident and secure in your partnership.

Fee structure. What kind of fee structure does the advisory firm have? Your adviser may charge a percentage of assets under management, while others have a flat or hourly fee.

Conflict of interest. Make sure that recommendations made by the advisory firm are independent and not based on a conflict of interest.

Reach Out to a Financial Consultant in Melbourne

Do you want to live life on your terms? Now, there’s no better time to partner with a certified financial adviser. At Dominium Capital, we care about your plans for the future and develop personalised solutions for every client.

With a range of personalised wealth management solutions, we can help you leverage assets to your advantage and secure a prosperous future. Whether you need to build a diversified portfolio, protect your legacy, refinance an existing loan, or maximise your wealth outside business assets, we have experts on your side.

Partner with Dominium Capital and start to live life the way you want to.

General Advice Warning: This article does not consider your personal circumstances and is general advice only – unless otherwise stated. 

You should not act on any recommendation without considering your personal needs, circumstances and objectives. Dominium Capital recommends you obtain professional financial advice specific to your circumstances.

Any general financial advice is provided by Dominium Capital Financial Advisers Pty Ltd, a Corporate Authorised Representative of Dominium Capital Pty Limited ACN 142 188 510 125 AFSL 461653

More finance news and insights

Learn about the problems we solve for our clients

1. Any financial advice is provided by Dominium Capital Financial Advisers Pty Ltd, an Authorised Representatives of Dominium Capital Pty Limited (ABN 54 513 176) 674 AFSL 461653
2. Any credit & finance advice is provided by Dominium Capital Pty Ltd. Australian Credit Licence 461653
3. General Advice Warning – The information provided is general advice only. It has been prepared without taking into account any of your individual objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs.