For some, financial planning may present a few hurdles. They have preconceived notions about the process, including who it is meant for, and assume a certain benchmark wealth is required.
Village Media Content Studio spoke to Ahmad Bakhshai, CFA®, CFP®, TEP, CLU®, FCSI®, Associate Vice-President, Advanced Wealth Planning, at Wellington-Altus Private Wealth to get answers to some of the most pressing questions. Bakhshai is an extended member of the team at Moyle Rowley Wealth Management Group.
Here he explains how all families can benefit from a financial and estate plan, how to overcome the discomfort that financial planning can elicit for some, and how navigating unexpected life events can be made easier with advance planning.
Village Media: What are the biggest benefits clients experience from having a full financial and estate plan in place?
Ahmad Bakhshai: Success doesn’t happen by chance. Financial success is no different and shouldn’t be left to chance either. It means different things to different people, so a comprehensive wealth plan defines that for each client and establishes a roadmap with specific steps.
The wealth plan guides our work as advisors. What is the client aiming to achieve, what steps are required to get there, and what level of risk is the client comfortable taking to achieve those goals?
For high-net-worth families—where financial resources are abundant—the focus of wealth plans typically shifts to wealth preservation, tax efficiency, estate, and legacy planning. They may be less concerned about funding their children’s education, for example, and more focused on preparing them to handle the family wealth responsibly.
VM: How does an integrated approach to financial and estate planning enhance clients’ sense of security?
AB: Whether we like to admit it or not, money is extremely personal and everyone views it through a different lens. It is also very private and often considered impolite to discuss, even between parents and children. Combine that with the technical complexities of financial planning and life’s uncertainties, and we have a cocktail of something with which everybody has a deep yet unique relationship, is very complex, and is not talked about.
This creates a lot of discomfort and anxiety for many, including those who are knowledgeable in one area (like investments), because financial planning touches on multiple disciplines including tax, law, and even psychology. Our process provides reassurance for all clients, regardless of their level of wealth or circumstances, because it offers a confidential space to discuss their deepest concerns with experts who will formulate a plan that is aligned with their wishes. They can’t get that elsewhere due to privacy concerns and lack of expertise.
Even if everything is on track, having an unbiased sounding board and seeing the plan in writing takes it from concept to completion. It reassures clients that they are on track and helps them rest easier.
VM: How can a comprehensive plan help clients navigate unexpected life events, such as a health crisis or economic downturn?
AB: If your plan is for everything to go according to plan, you don’t have a plan. Risk management is crucial. We build plans based on a number of variables and assumptions, and it’s important to consider their limitations.
When I finish a plan, I put on my critical hat and ask myself: How could things go wrong? How can this plan get derailed? A good process recognizes that we all have blind spots and designs systems to minimize them. Our process involves a peer review of every plan to get a second pair of eyes on it before we present it. I’ve yet to see a review with zero suggestions. We consider everything, including life events and economic conditions like interest rates.
Some risks can be easily managed through financial techniques. Others can be sold to a third party like an insurance company. Some we mitigate by creating a cushion and using conservative assumptions. Finally, some cannot be sheltered entirely or are too uneconomic to do so; we accept those and respond by making adjustments as we go along. This is another reason why periodic reviews are necessary.
VM: How do estate planning strategies, like trusts or charitable giving, align with a client’s long-term financial goals?
AB: Trusts can be powerful wealth planning tools in the right circumstances, although they are generally misunderstood. They allow for flexible and customized planning that would be impossible otherwise.
Charitable giving ties in with money being deeply personal. Financial planning first helps identify opportunities by estimating the excess wealth a client has above what is required to meet their needs. There are also strategies that maximize the tax advantages of charitable giving that benefit both the charity and the client, increasing the size of the pie. We can optimize giving to achieve the same outcome with less money or magnify it with the same resources.
Wellington-Altus Private Wealth was founded in April 2017 to revolutionize wealth management in Canada. They are one of Canada’s Best Managed Companies, known for their successful, entrepreneurial advisors and portfolio managers, and high-net-worth clients.
The Moyle Rowley Wealth Management Group will soon expand, bringing their financial planning and investment management expertise to Barrie. The growth aligns with their desire to effectively service clients in the GTA and Simcoe area.
Visit the Moyle Rowley Wealth Management Group of Wellington-Altus Private Wealth to build or reassess a customized wealth plan and portfolio. Follow them on Facebook.