6 Financial Planning Needs of Wealthy Families

March 1, 2019

You have enough money to support an affluent lifestyle — with more than adequate savings to spare. You’re not concerned about your ability to pay for your children’s college or fund your retirement. But significant wealth comes with its own set of challenges and complexities.

Here are some of the unique financial planning needs that families of significant means might need to address with a team of professionals.

#1: Understanding Your Net Worth

Many high-net-worth individuals don’t have a clear understanding of the value of all their assets and liabilities. They may have a good grasp of individual investments or assets but are missing an organized view of their total net worth.

It’s not uncommon for high earners or those with inherited wealth to lack an up-to-date, comprehensive view of their personal balance sheet showing how much they own and how much they owe.

You may have multiple investment accounts but lack consolidated reporting and real-time updates to valuation.  Net worth can also be difficult to assess when there are significant private investments such as real estate, collectibles, or business ownership which may be challenging to value.

Having all your assets and liabilities assessed and assembled by a planning professional provides keen insights into asset accumulation and depletion, consolidated asset allocation, and net worth.  Having a single consolidated up-to-date view of all your assets and liabilities also makes it easy to share this information with your advisors, attorneys, and CPAs.

#2: Planning for Your Goals

Wealthy families have financial goals, but they are less likely to be about paying for their children’s college and funding retirement, and more likely to be focused on transferring wealth across multiple generations, philanthropic gifting, or succession planning for a business.

Establishing goals when your primary needs are “covered” requires a different perspective. You must conceptualize what you ultimately want, and what the next phase of life will look like. You may have broad, general goals that haven’t come clearly into focus, or more specific goals but are not sure if they’re achievable.  A planning professional can help you make the goals “S.M.A.R.T” (Specific, Measurable, Actionable, Relevant, and Time-Bound), and map out the strategies for achieving them. A plan illustrates how to use the assets on your balance sheet to achieve your goals.

#3: Managing Liquidity 

Liquidity —the ability to convert the value of an asset into cash — tends to become more important as wealthy individuals age. As you transition beyond your earning years and no longer have a paycheck, your assets need to generate enough income to fund your lifestyle. If significant dollar amounts are tied up in artwork, vacation homes, or a business partnership, those assets may not generate sufficient cash flow. Illiquid assets may need to be converted into income-generating investments to fund your goals.

Liquidity can also be important in estate planning. Illiquid assets can be problematic to pass down, particularly when the assets need to be divided among multiple heirs.  It’s one thing when business ownership and management is carried on by the family. It’s another when the heirs do not intend to operate the business nor understand its value.

You need an experienced team in place to ask the right questions and determine to what extent liquidity is a factor when it comes to meeting your goals.

#4: Creating a Legacy

Some wealthy individuals have significant philanthropic goals they want to accomplish. There are many considerations when making substantial legacy gifts. This includes whether future generations of your family will have any influence over the way the donation is used.

Effective financial planning helps you understand what your money can accomplish and what you can realistically afford to do.   The planning process provides a sounding board to think through the terms, conditions, and expected outcomes of your philanthropy.

#5: Connecting Wealth Within Families and Across Generations 

According to a Williams Group wealth consultancy study, 70% of family wealth is gone by the second generation and 90% is gone by the third.[i]  

A planning professional with experience in heritage design can facilitate family meetings and activities that will help build a multi-generational family governance structure and prepare your children and grandchildren for both the financial and non-financial inheritance they will receive.[ii]

#6: Minimizing Unexpected Surprises

There are many risks in not having a proper team in place to help prevent unexpected surprises for your family and future generations.  Many negative, surprising outcomes can occur when the assets are improperly invested, liquidity constraints aren’t managed, or asset valuations are inaccurate. It could be that the desired legacies, which could be perfectly achievable, do not come to fruition because of ill advised decisions along the way.

We have met with prospective clients who are worth tens of millions of dollars and don’t even have a simple will. These types of details can be “out of sight” and therefore “out of mind.”  Until someone asks the right questions and provides a clear path, there’s a risk that it simply won’t get done.

How to Choose The Right Team

Finding professionals that understand the needs of high net worth individuals isn’t always easy. If you have a friend or colleague of similar financial stature who is highly satisfied with his or her advisor, that’s certainly worth exploring. If you have a CPA or an estate attorney you admire and already know performs at a high level, they can be a good source for referrals.

You’ll want to ask questions of the advisors about the types of clients they typically deal with, the services provided, and the matters they’re called upon to resolve frequently. You’ll want to be comfortable that the team you choose is working with other clients that have complex situations like yours. They will be helping you develop your own personal roadmap to reach your most important financial goals, so choose carefully.

The team at the Fiduciary Group works every day to help individuals and families fulfill their life goals. Do you have an idea of what you want to accomplish with your wealth? We’re ready to roll up our sleeves and get to work. Give us a call or reach out anytime.

This article does not represent a specific investment recommendation. No client or prospective client should assume that the above information serves as the receipt of, or a substitute for, personalized individual advice from The Fiduciary Group which can only be provided through a formal advisory relationship. Clients of the firm who have specific questions should contact their The Fiduciary Group advisor. All other inquiries, including a potential advisory relationship The Fiduciary Group, can be directed here.


[i] https://www.marketwatch.com/story/heres-why-90-of-rich-people-squander-their-fortunes-2017-04-23

[ii] Heritage Design — The 3rd Element of Successful Multi-Generational Planning by Rod Zeeb/ https://theheritageinstitute.com/families