As you know by now, a lot of what a quality fiduciary firm will do are the things that other firms don’t. But make no mistake, we know one of your major concerns: How much will your money grow?
And while the answer can never be guaranteed, we absolutely do consider wealth management a major aspect of what fiduciaries do. After all, part of securing time and freedom is also securing your money.
Here are four essential ways a fiduciary can help your money grow:
1. We help you think differently. Many of the successful investors that we meet are of the opinion that they need to be prepared to call it quits at work at age 65. Sadly, this thought process has become the norm in the American way to transition into retirement.
This idea is antiquated and encourages sedentary behavior during some of the most promising years of your life. What we see here is that a mindset shift is essential to continue living your active, vibrant professional life in new and creative ways.
Perhaps you decide to work part-time as a consultant. Or you could change fields completely and take on a new challenge. Or you could partner with one of your children to make a go at an entirely new business.
Whatever you decide, our view is that your fiduciary advisory firm should help you with doing the research to succeed at your new venture.
2. A committed fiduciary firm will help you rethink how you diversify. Many investors get hung up on the idea of finding the best stock out there and staking their future on that stock purchase decision. Since I’ve never met anyone with a crystal ball, we, like many fiduciaries, mentor our clients to thoroughly diversify their portfolios and to balance their desire for attractive returns with their desire to sleep comfortably at night.
As technology has expanded, the systems to diversify have become increasingly more effective. With sufficient funds you can buy a direct index, as part of your portfolio, which rebalances every trading day. The advantage to you, the investor, is significant as these direct indexed portfolios allow for more effective tax loss harvesting and keep more money in your pocket.
3. Fiduciary advisors offer up-to-date knowledge and a personal touch. Big box firms are well equipped but often lack a personal touch. Small firms can offer you the TLC you desire but may not be equipped with the latest sophisticated technology. So, which one serves your best interest? You want to make sure your fiduciary advisor is both well-equipped and excels at providing the personal touch.
4. A good fiduciary firm should provide the knowledge you need to borrow funds effectively when needed.Borrowing money depends on the time horizon of how long you will need the money. You could of course use a line of credit at the bank. But due to the amount of paperwork and committee approvals, there could be significant time delays and the costs may be higher with that line of credit.
If the amount needed is modest, say $50,000 – $100,000, you may consider searching out a zero percent interest rate credit card for the 6 to 12 month period of time offered. A smarter way to borrow may be to find a HELOC (Home Equity Line of Credit) which could provide tax benefits as well as an attractive rate.
Finally, there are margin borrowing opportunities available at your favorite custodian or brokerage firm which may have significantly lower interest rates with potential tax benefits as well. You may get access to borrow funds more quickly with repayment flexibility.
Partnering with an experienced fiduciary firm offers you more than just financial guidance—it provides a comprehensive strategy for growing and preserving your wealth. Ultimately, the fiduciary advisory firm should help empower you to live the life you envision, with the confidence that your money is working as hard as you are.