I am in the process of revamping how we present information to owners of private businesses. I think that many of us who work in this field have done a good job of helping our Clients achieve particular goals. I also think that we can move past the tactical work we do to help our Clients on a more global basis.
I believe that there is an opportunity for us to help our Clients as true wealth managers. A wealth manager by definition is someone who works in a multi-disciplinary manner to help Clients achieve outcomes in a variety of areas. The one common thread being helping the owner of the private business create and harvest value from their business and their life.
With this in mind I’ve come up with ten areas that I think are part of the wealth management process for a private business owner. When you look at this list you will see there is plenty of room for any advisor to private business owners to work on a consultative and comprehensive manner with these owner Clients.
My list for what a private business wealth manager needs to work with is:
- Financial Planning (both personal and business)
- Value Creation in the business
- Financing and capital structure
- Harvesting financial value from the business
- Asset protection
- Risk management
- Tax planning
- Exit planning
- Investment management
- Wealth transfer planning
All of these areas are what we call Stage 2 and Stage 3 activities. They all are strategic in nature and before they can be used with our business owners, the owner must have capacity to deal with these issues. This means the business must be tactically excellent before moving to most if not all of the items on the list. As we know, tactical excellence exists in Stage 1. If we’re to help our Clients with true wealth management, the first step is to make sure the Client has navigated through the Stage 1 process.
The two main goals in stage 1 companies is for the owner to become operationally irrelevant in their company and to have systems in place that allow them to do so. I don’t believe these two activities are within the realm of the wealth manager for a private business owner, but I do believe the wealth manager must be aware of the need and to have strategies available to help the owner in this quest.
Over the next year I’ll be writing newsletters that will deal with each of the bullet points as it relates to wealth management for the private business owner. If you want to be on our newsletter list, please click on newsletter to sign up. It’s free.
Josh Patrick
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