The Risks of DIY Wealth Management

Wealth management.

We live in a DIY culture, but there are still some things that you should not try to do on your own. For someone with high net worth,  wealth management is one of those things. Rather than trying to figure out investments, tax minimization strategies, and estate planning on your own, work with a knowledgeable advisor who understands the U.S. and international tax laws and works with you in your specific facts and circumstances to develop plans that reduce your tax liability and increase profitability for you in the long term.

Why You Shouldn’t Do it Yourself

It might be tempting to think that you can manage your own wealth portfolio, but for most people, there are significant drawbacks to doing this without the help of an experienced advisor.

These include:

• A tendency to make financial or investment decisions  based on emotions
• Not having all the information about current market trends
• Not having time to stay updated on the latest market research and information
• Lack of knowledge and understanding of new tax laws and regulations

All of these issues can lead to bad money management decisions, and for someone with high net worth, the stakes are often higher. Taking your cousin’s  advice on investing  or relying on an estate plan template you found online is risky for someone who has a significant portfolio or has amassed considerable wealth. In the end, even a seemingly small mistake could cost you a lot in increased taxes or investment losses.

A Better Option: Experienced Wealth Management Advisors

Working with a wealth management advisor who specializes in high-net-worth individuals can provide significant benefits, including:

• Unbiased advice on investment strategies, which is especially helpful in a market downturn when you may react negatively and want to take steps that could hurt you more in the long term
• Knowledge of all the changes to tax laws and regulations that can impact your taxes, estate plan and investment portfolio
• A broader overview of your entire financial life—including assets, investments, property, and business income—and other personal information that can affect your wealth plan, such as a marriage, divorce or children

Finally, a personal wealth manager can provide you with individualized advice about your own position. Even if you are able to find good information online, that information may not be applicable or appropriate for your unique situation. With an increasingly complex financial life, high-net-worth individuals need an increasingly personalized strategy for their own wealth management.

If you are DIY-ing your wealth management right now, talk to Cantley Dietrich today to get advice from advisors who make it their business to work with high-net-worth individuals.  As tax attorneys,  Cantley Dietrich can provide you with tools and expertise to adjust your tax and estate plans as laws and regulations change.