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What Is Goals-Based Wealth Management — and Why Is It Important?

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“If you don’t know where you’re going, any road will get you there.”

This saying rings true in a lot of areas of life, including wealth management. To reach your financial destination, you need a roadmap or plan. But before you can create a plan, you need to have a good idea of where it is that you want to go.

Determining this requires setting wealth management goals. Goal setting is not a cookie-cutter process — no two individuals’ or families’ wealth management goals will be exactly the same. It’s up to you to sit down with your wealth manager and determine what you want to accomplish from a financial standpoint. Working together, you can then create a wealth management roadmap designed to get you to your ultimate financial destination.

Following are 5 areas where we typically work with our wealth management clients in setting goals:

  1. Estate planning — Affluent individuals and families need to think carefully about how they want their assets to be distributed to their heirs after they die, and then set goals for the estate planning process. The consequences of failing to plan can be high for the affluent, including a high estate tax burden on heirs, disputes among heirs about how assets are to be divided, and the estate having to go through the costly and cumbersome probate process.
  2. Business succession — If like many affluent families you own a closely held business, it’s critical to plan well in advance of your planned business exit how the company will be transitioned to new ownership. For example, do you plan to transfer the business to the next generation of family ownership, sell it to managers and employees, or sell to an outside buyer?
  3. Financial liquidity — This goal is especially important if you own a business that constitutes the bulk of your wealth. The value in the business must be liquidated in order for you to be able to tap into it to meet your living expenses during retirement.Do you want to exit the business entirely — if so, what is your sale and liquidation strategy (as discussed above)? Or do you want to retain a percentage of ownership and stay involved on a more limited basis? If so, you’ll need to investigate options for liquidating a partial ownership interest.
  4. Retirement lifestyle — What do you want to do when you retire? It’s ironic that many people spend decades planning for the financial aspects of their retirement, but have no idea how they’re going to spend all their free time once they actually retire.So give some serious thought to this question and set some goals for your retirement lifestyle. For example, are there certain cities or countries you want to visit? Are there charities or other organizations you’d like to volunteer with? Are there hobbies or activities you want to pursue? Or do you want to spend more time with your children and grandchildren? Write these things down and turn them into realistic and measurable goals.
  5. Retirement healthcare expenses — This is an area many people don’t give much thought to, which can be a costly mistake. Medicare will not cover 100 percent of your healthcare expenses in retirement — far from it. Therefore, you should look into things like Medicare Supplemental Insurance (or Medigap) or purchasing a long-term care insurance policy before you retire to help cover your retirement healthcare expenses, including assisted living or nursing home care later in life.

When you have set clearly articulated and well-thought-out goals like these, it’s much easier for you and your wealth manager to create an over-arching wealth management plan. Such a plan will serve as the roadmap you can follow that will lead you to your eventual financial destination, wherever this might be.

If you need help setting wealth management goals and creating a wealth management plan, please give us a call. We’d be happy to work with you throughout this process.


The commentary is limited to the dissemination of general information pertaining to Frontier Wealth Management, LLC’s (“Frontier”) investment advisory services. This information should not be used or construed as an offer to sell, a solicitation of an offer to buy or a recommendation for any security, market sector or investment strategy. There is no guarantee that the information supplied is accurate or complete. Frontier is not responsible for any errors or omissions, and provides no warranties with regards to the results obtained from the use of the information. Nothing in this document is intended to provide any legal, accounting or tax advice and Frontier does not provide such advice. This information is subject to change without notice and should not be construed as a recommendation or investment advice. You should consult an attorney, accountant or tax professional regarding your specific legal or tax situation.