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What To Expect From Your Wealth Adviser in Today's Challenging Times

We’re certainly experiencing challenging times in the financial markets around the world. Undoubtedly, they’re causing investors varying levels of stress and anxiety as a result. As an upshot of these challenges, there’s never been a better time to review and re-engage in the execution of your wealth plan.

Here’s an analogy. Have you ever left on a trip to an unfamiliar area without getting directions? That’s when you find yourself in that stressful situation where you’re lost, the kids are hungry and your spouse is providing navigation input and saying “I told you so” in the same breath. It’s very stressful—and downright dangerous. Had you taken the time to plan the trip, all of it would be taken in stride because you had a plan in place. The same goes for wealth management.

Reviewing your wealth plan now can help you adjust expectations. You’ll be able to make changes that can benefit you and your family over the long term, and uncover opportunities to transfer wealth under favorable conditions created by the current market conditions. In these rough economic times, a top priority for everyone should be to revisit their wealth plan with their adviser to determine if it’s comprehensive enough. It can’t be based on wishful thinking or unrealistic assumptions. A comprehensive plan is one that considers three essential areas.

•  Cash flow projections. Do them for now and in the future as determined by accurate modeling.

•  Protection. You’ll need to protect yourself and your assets as you move through different phases of life.

•  Legacy planning. It’s important to create the legacy you’d like to leave at the time or your death.

Most notably, your comprehensive wealth plan should let you identify and document important goals and objectives, which will then serve as a guide to help meet and exceed them. It’s a good idea to review your plan and make adjustments for changes in your personal circumstances on a regular basis. It’s during times like these, when the value of your assets have changed, that you may be able to use assets that have lost value as part of a gifting strategy. An outdated plan based on assumptions that are no longer valid can be worse than having no plan at all.

As an example, the plan might make adjustments for the transition of a closely held business to the next generation and a corresponding change in cash flow as a result. Or it might require more complex advanced planning strategies to ensure legacy goals are ultimately achieved.

In these turbulent times, switching to cash may feel safe, but risks remain. By running for the comfort of safe and insured, investors with a time horizon beyond a few years may be doing real damage to their long-term finances. History has shown that in the last 10 market downturns, when the recovery begins (and there’s always a recovery), it yields about a 30 to 40 percent upside in the following three or four months.

Another consideration is to make sure your heirs are equipped to handle the type of market turmoil we’re experiencing today. Including your heirs in discussions around money potentially sets the stage for a more successful transfer of wealth. One of the biggest concerns many people have is what money will do to their family. At the same time, it’s a subject that’s very hard for most people to talk about, often because discussions around the topic tend to be uncomfortable. But the fact remains that families who are the most successful in passing on wealth through multiple generations are those that have regular meetings about wealth and the responsibilities that go with it.

Tough economic times remind all of us of the importance of involving and educating future generations so they’re better equipped to handle financial decisions going forward. Educating others in your family could be as simple as a joint meeting with parents, children and a financial adviser to discuss investing and preparing a budget. Or it might be as involved as coordinating a multigenerational family meeting to establish and work on family values and a vision statement that can often include philanthropic planning.

Now’s the time to take action and seize control of your finances. We recommend you step back and assess where you are and where you want to go. That requires taking a thorough look at the wealth plan you have in place. If you don’t have an updated, comprehensive plan, it’s important to create one. Market circumstances have not only created new realities, but also some compelling opportunities you can use to your advantage.

Henry Pilger is CEO and Joe Delaney is a director with Vista Wealth Management, which has North Bay offices in Santa Rosa and Novato. To contact them, you can call (415) 842-3100 or email them at or, respectively.


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