Ask any art history major what “art” is, and they’ll likely pause and comment, “where do I begin?” For those of us not versed in the history of art, it’s easy to simply classify art as the famous paintings or sculptures we’ve seen in textbooks. However, art itself encompasses so much more including – and not limited to – architecture, sculpture, painting, film, photography, graphic arts performance art and more. That same art history major will tell you that the history of art is often told as “a chronology of masterpieces created during each civilization.”
Believe it or not, your wealth management plan is a work of art, unique to all other variations of a wealth or financial plan that are created, tailored and managed. Afterall, your circumstances are as unique as the artists that create in every medium of art that exists.
Perhaps this seems different than the approach you’ve seen before. I saw this for myself when I first graduated from school; I found that most people in the industry offered one product. They basically had a hammer that they sold to everyone. Whether it was an annuity, life insurance, mutual fund, or some other kind of superstar investment, one hammer was badged and rebadged as some sort of magic or miracle product that would save a person’s retirement. Just put all your money in this hammer, and you’ll be fine. However, that isn’t the key to creating a wealth masterpiece for yourself.
Part of recognizing that there isn’t a one-size-fits-all solution is understanding there is a difference between financial planning and wealth management. That difference is found in the titles alone – one focuses on mere finances while the other focuses on wealth. Managing wealth is all about building a legacy. Wealth management at its core is about you. It involves a philosophy that encompasses not only your cash flows, but involves your beliefs, interests, and goals.
I get frustrated when other Certified Financial Planners (CFPs) offer only one product to their clients, and those same clients end up coming to me with only one product in their portfolio. As a Certified Financial Planner (CFP), I have a fiduciary responsibility to provide my clients with the best financial advice. But I do that with a grand-scheme view of wealth management. That doesn’t mean offering the same hammer as a magic tool to solve every client’s problems.
Unfortunately, too many individuals get sold on a reproduced print of an art piece as opposed to a unique original based on their wants and needs. Too many of these CFPs convince clients to buy their product because it’s the easiest way to make a sale. I can hear the conversation now: “Hey, you’re spending $20,000 a year on a life insurance policy, and you’ve got $300,000 in cash. We can take that $300,000, put it in a different policy or another investment product, and now you can spend $5,000 a year.” They’re not adding on; they’re taking away—and the client ends up losing because of it. Instead, the fiduciary should be looking at the product itself, whereby the conversation might then go, “Hey, that’s a really good product. But I think you need additional coverage and let me tell you why.”
It might feel complicated and a little overwhelming to create a plan that is all your own, which is why so many people are led into a false sense of safety that one magic investment is going to save their life. The truth is, there isn’t only one way to get things done; there are many ways to get it done. There are a lot of really good financial strategies out there, and when they are all put together, they’re even better. Layer two, three, four, five, six financial strategies together, and bring together multiple financial products designed to do all those benefits. Now, you’ve got a masterpiece of a plan.
Determining Your Unique Color Palate
As human beings, when it comes to retirement, we always think it’s a trade-off—if I want more retirement income, I have to leave less to my family. If I want to leave more to my family, that means less retirement income for me. If I want to hit my goals, I’ve got to take on more risk. But those assumptions are not necessarily true. It really depends on the individual.
But as I’ve mentioned, everyone is different and therefore, every financial plan should also be different. Creating a financial work of art means peeling back the layers on your financial life and looking at current and past circumstances, then chiseling away what’s not great about a plan. A financial plan is a work of art because the unique dynamics of the individual dictate the outcome of that plan.
Together we need to understand the unique colors, textures and end goals we are working with. It’s critical to dig into any existing plan to create a balance today, tomorrow, and every year to come. We want to work together to build and execute a plan, and then constantly refine it based on your life changes. That plan must have multiple financial products coming together to help reduce taxes, reduce risk, reduce fees and costs, while increasing your savings rate and retirement income, putting more benefits and protection around your wealth, and ultimately, passing more to your family.
Work with an Artist
My father used to say, “Give me the best tools and the best wood, and I could build a crude table that will be uneven and lopsided and downright ugly. Give the same tools and the same wood to a fine craftsman, you might get a Louis XV armoire.” The point was that creating a real work of art is not just about the knowledge and tools a person has, it’s about understanding how to organize and plan details, and then seeing a project through to its completion.
When it comes to the financial health of your future, make sure you work with more than just a craftsman of the trade, work with a true artist who will ensure you create a true piece of art together that you and your family will enjoy for generations to come.