The High Net Worth Investor’s “Coronavirus” Financial Plan: The One Thing A High Net Worth Investor Must Do To Take Advantage of the Crisis
What Your Financial Advisor Should Be Doing Right Now
It’s official. The coronavirus black swan market crash is here. And just about everyone – as usual – is caught like a deer in the headlights.
Frozen in place. Unsure whether to run or stand still. Whether it’s fight or flight time.
For high net worth and ultra-high net worth investors, these are the moments when your wealth manager shows their true worth. Or fails to…
As we frequently say on this blog, anyone can do well when times are good. But now that the market is crashing by double digits and the last several years of gains are being wiped out for so many, what is your financial advisor doing about it?
May be they sent you an email, or may be they have even called you. But did they really eliminate all your concerns about the future of your portfolio?
Aren’t you important enough to them to merit a peace of mind and financial serenity call?
We should think so. How many ultra-high net worth clients do they have? How long would it take to give you a quick phone call and update you on the game plan they already had in place?
Yes, You Can Take Advantage of the Coronavirus Crash
If your advisor has been silent or lacking a reaction to the markets, maybe it’s because they don’t know what to say other than “stay the course,” or similar useless advice. Just cower in your hole until the storm blows over and hope the damage isn’t irreparable.
In other words, if you’ve been given a financial “shelter in place” strategy, you’re being done a dis-service.
A financial advisor truly expert at helping ultra-high net worth wealth clients should be doing many things but staying the course at times like this. Holding on to your current investments and making no changes might be the worst possible idea. But selling everything off in a panic isn’t much better. It depends in a large part on your asset allocation before the virus crash hit.
The best path through a black swan event like the one we’re in isn’t simple, but it does exist.
We’ve spoken to one of our own clients who has investments with multiple firms. One such firm has lost him $600,000 in just the last four weeks. This is a BIG name firm. And like most people would feel when losing so much in such a short time, he is frozen in place, unsure of what to do. Making things worse, his advisor has pitched him the ridiculous “just hang on and everything will be fine” speech!
It won’t be “fine.” If your financial advisor is counseling you to “stay the course”, we encourage you have a short chat with Pillar Wealth Management CEO and Co-founder, Hutch Ashoo. With his deep experience and expertise spanning 30 years of black swan events, it could make all the difference right now–saving you, the ultra-high net worth investor, tens of thousands perhaps millions.
Just know there is a better way. A better way to protect your wealth as well as maximize market gains.
Our Recommendations to Help One Client Save $300,000 in Taxes
One of the most effective methods of reducing costs – including losses like the ones happening now during the covid-19 crash – is called tax loss cultivation. Using this strategy effectively requires proactive and timely interventions.
In other words, it takes a wealth manager who knows what they’re doing and doesn’t panic even in times like this.
We explained to this client that he will be able to save $300,000 in taxes if he takes timely action. He is currently sitting on some short-term gains that will be charged with ordinary income tax at the highest tax bracket. By holding on to his investments and taking some losses, he will be able to use some of those to offset his tax bill from his current and future gains.
The client in this case doesn’t want to reduce the over-exposure to risk. He is afraid he’ll miss the uptick in the market when it corrects so we assured him we’d still be able to capture his losses while avoiding a wash-sale. This way he’ll participate in future market gain, or losses (per his wishes), yet is able to slash his loss by $300,000 through the tax savings.
Yes, he will still lose some money. But he will lose far, far less than if he just sits by the phone waiting for his big name brokerage to call.
Are You Getting Financial Advice Like This from Your Wealth Manager?
Maybe now is the time to seek new guidance. Go ahead and click below to take action before this market crash and possible recession gets worse, or better!