Have $1M+ Saved? Consider a Financial Planning One-Stop Shop

The old ways of financial planning are gone. Well, actually, they're not. But they should be gone for high-net-worth individuals who now have opportunities to get way more service for the same costs as getting only investment management.

For so long, the financial planning industry has focused on investment management alone — and charges an all-around 1% fee. But now, you can get a whole team to serve you for that same fee.

This could include a financial planner, an estate planning attorney, a CPA and more all working together. These are the three essential professionals when it comes to your savings and retirement. It’s important to make sure all three of these professionals collaborate, but it doesn’t always happen.

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Often, retirees and pre-retirees work with three different individuals to manage their taxes, estate planning and retirement savings. But the best-case scenario is when all of these professionals participate in meetings together, so nothing gets overlooked. This typically starts with the financial planner being the quarterback to ensure that everything gets done the right way.

The good news: There are now offices out there that offer this comprehensive and holistic approach for those with $1 million or more. Why is this valuable? Let’s discuss each area.

Financial planner and estate planning attorney

It is a huge relief when you get estate planning documents done. But how do you know you’re getting exactly what you need? How do you know you're not overpaying? (Attorneys can get paid more to draft complex and sophisticated documents that you may not need.) How do you ensure the documents actually get implemented?

Joe F. Schmitz Jr., CFP®, ChFC®

Joe has built a comprehensive retirement planning company focused on helping clients grow and preserve their wealth. Under his leadership, a team of experienced financial advisers use tax-efficient strategies, investment management, income planning and proactive health care planning to help their clients feel confident in their financial future — and the legacy they leave behind.

Some estate planning attorneys do not fully understand a client’s situation since they didn't have hours of meetings with them to help get the rest of their financial plans set. But family offices spend a significant amount of time with their clients.

Many of these family offices will have a conversation with the estate planning attorney to fill them in on what they know about the client, since the client may not fully understand what the attorney needs to know.

Lack of communication between the client and estate planning attorney can mean the wrong things get done — or the right things don’t get done.

Financial planning offices who act as fiduciaries will sometimes also meet with the estate planning attorney to ensure their clients are getting only what they need — and nothing more. Not all financial advisers do this, though, so be sure to hold your adviser accountable.

Another danger of not having your estate planning attorney and financial planning team work together is the risk that while the documents get done, nothing gets completed. It is crucial that the documents that are prepared are actually put in place.

For example, if you set up a trust, then you need to make sure your trust is assigned to the appropriate accounts. Some attorneys will take this step for you but cost thousands of dollars extra.

Too many times, people get the completed binder with all the documents and don't take the extra step. But when everyone is in the same room together, you can have the extra assurance that all of the necessary steps are taken.

Financial planner and CPA

It’s mind-blowing that many advisers do not work closely with CPAs, considering how much taxes factor in financial plans. Of course, there is certainly a difference between tax planning and tax preparation. Typically, advisers who do comprehensive planning specialize in tax planning, but they will not file your taxes.

You've probably even heard a financial planner at some point in your life tell you they're not a tax professional and to seek out a CPA instead. But then when you find a CPA, they tell you they only do tax prep.

Working with a comprehensive financial planning team helps ensure all tax planning gets done by the end of the year. Some even put together a report with all their documents and analysis of the strategies they implemented for their in-house CPA to ensure that everything gets done the right way.

Another issue that can come up between financial planners and CPAs is the fact that the client could overpay. We see some CPAs will charge up to $1,000 for basic tax preparation.

In my opinion, that is way too expensive when all they should have to do is file the documents using their software. If you are paying someone $1,000 to do tax prep and also paying a financial planner, you are paying two people to do one person's job.

The “one-stop shop” approach was originally designed and available for only ultra-high-net-worth individuals (typically those with a net worth of $30 million or more).

But, fortunately, the more innovative financial firms who are trying to do their best work for the client are starting to offer this service to those with $1 million to $30 million.

If you are not getting this service, it may be time to search for a team that provides what you deserve.

The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.

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