How to Create a Comprehensive Wealth Plan and Strategy

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Considering the demands of your career, family, and daily life, a comprehensive wealth strategy may feel like a luxury. After all, shouldn’t you focus on accumulating wealth before figuring out what to do with it? Yet, decisions you make now about cash flow, investments, risk and other issues can directly impact the wealth you build. And if you have already accumulated substantial wealth, you need to ensure that it continues to grow.

While the effort to create a sound strategy may seem daunting, a well-designed wealth plan can in fact reduce life’s complexities by drawing clearer connections between your financial assets and your short-and longterm goals for you and your family. "A wealth strategy is vital in every phase of your life," says Michael Niederst, Senior Wealth Strategist for Fifth Third Private Bank. "It is the roadmap that tells you where you’re going and includes a methodical process, an experienced team to help guide you, and the flexibility to review and revise your strategy as life, needs, and conditions evolve."

A comprehensive, customized view

An investment strategy is not the same as your wealth strategy, Niederst says. While the former considers your investable assets, the wealth strategy aims to captur the full scope of your financial life—business interests, income, investments, hard assets, liabilities, personal goals, retirement objectives and more—to make sure the interlocking pieces mesh seamlessly together.

There is no one-size-fits-all wealth strategy and it’s crucial to customize a plan for an individual’s unique requirements. Key elements may depend on the sources of your wealth, your career path, and the risks and opportunities of your profession. A corporate executive with substantial wealth tied up in company stock, for example, may need special strategies on tax planning and ways to diversify that stock position without running afoul of government regulations. A family of multigenerational wealth may need special help creating and managing trusts that support family members’ lives and dreams while still preserving wealth from one generation to the next.

Business owners, too, face unique challenges. "Oftentimes, they are taking a lot of risk with their business, so we want to make sure that their other assets are positioned more conservatively," Niederst says. For business owners, the wealth strategy must work together with the business plan. "There’s a lot of intersection between personal and business cash flow," Niederst adds. Your strategy may involve key decisions on how your assets are titled, and, when the time comes to sell, making sure the transfer happens as tax efficiently as possible.

A simplified approach

Developing a customized wealth strategy requires patience and listening to the client rather than leaping immediately into solutions, Niederst explains. "We’re not sitting down for hours and going over everything from A to Z." The process starts with a high-level "discovery" conversation that covers an individual’s goals and objectives, financial resources and income, stage of life and other factors.

In addition to helping the wealth strategist understand your goals and objectives, thinking through and verbalizing what’s most important in your life could help you better understand your own priorities. It may also reveal cash flow gaps, tradeoffs you may need to consider, or risks that you might address through insurance or other measures before they become serious problems.

With discovery complete, the next step is creating a strategy that encompasses short-and long-term needs in areas such as:

• Liquidity. Even individuals with substantial real estate holdings, private investments, a business or other illiquid assets could wind up short of cash for expenses, emergencies, or to capitalize on a sudden opportunity. Yet having too much cash on hand could limit your ability to invest and keep your wealth growing. A comprehensive strategy can help you find the proper balance.
• Lifestyle. People who have accumulated substantial wealth may require sharply different strategies to f inance their lives and dreams, now and for retirement. Whether your idea of paradise is first-class global travel or afternoons of gardening at home, a key part of a wealth strategy involves accounting for, and providing for, the life you lead and the things you want to pursue today and moving forward.
• Legacy. "Assets in excess of what you need to maintain your lifestyle feed directly into your legacy strategy," Niederst says. Steps include everything from ensuring that your will and other vital documents are in place to exploring trust and estate tools for tax efficient transfer of wealth to family and loved ones and charities you wish to support.

An experienced team on your side

Weaving these threads into a cohesive strategy requires not one or two advisors but an entire team of highly credentialed experts. In addition to a wealth management advisor (the client’s primary point of contact) and a wealth strategist, the team includes portfolio managers, trust and estate advisors, insurance experts, as well as private bankers offering access to handle cash management, mortgages, lending strategies, and other resources. "Each member has a distinct discipline, allowing us to go really deep on each part of the strategy," Niederst says. The team approach extends to working closely with outside experts such as your CPA and attorney.

Expert knowledge is best delivered with a human touch. "We’re a regional bank that’s relationship-based," Niederst says. "It’s a local team with local advisors that are involved in the community." The Private Bank operates on a fiduciary basis, he adds, meaning that specialists make recommendations purely on an assessment of the client’s best interests.

A living, breathing document

Once in place, your wealth strategy becomes a working part of your life. "It’s a live, interactive plan," Niederst says. At Fifth Third Private Bank, visibility comes in the form of Life360, a secure online platform that organizes and displays your financial accounts, net worth, important documents and strategy through a single portal.

At the onset of a new planning engagement you may want to meet with your team twice a year, or even every quarter, Niederst suggests. The agenda could evolve to focus on various wealth topics throughout the year. One meeting could be more investment focused, while the next might consist of a review of your estate plan. Other topics, such as cash flow management, tax planning and risk management/insurance planning, would be areas of focus as well.

After your plan details are finalized over time, you might decide to scale back the frequency of the consultations, but it’s important to review your strategy at least once a year. An addition to the family, a change in marital status, realizing a business windfall—these and other personal developments would each warrant revisiting some part of your strategy.

While there’s no predicting for certain what challenges and opportunities life may send your way next, having a personalized wealth strategy in place, reviewing it regularly with your wealth management team and amending it as needed, offers peace of mind and the knowledge that you can meet challenges with confidence.

For more information, contact your Fifth Third Private Bank advisor.