The Mid-Tier Millionaire

Mid-tier millionaires have complex wealth management challenges.

The mostly thriving American economy of the past decade or two has resulted in a category of people that has largely fallen under the radar of the glossy financial magazines. I’m talking about people who have been very successful financially—millionaires, even—but would never consider themselves among America’s rich. While there are plenty of financial programs targeted to America’s middle class, and the superrich need not worry about their concerns being addressed, the problems of what have come to be called the mid-tier millionaires have been frustratingly difficult to solve.The best research into this segment has been done by the consulting firm Capgemini, which has published an entire report on the needs of mid-tier millionaires. Perhaps the firm’s most significant finding was that most of these people had three or more professionals managing a portion of their portfolios, in addition to people handling their estates, insurance, and other fiscal needs. They use an average of 2.82 advisors each, up from 2.66 just two years ago. And 62 percent of the financial providers surveyed said they expect the number of professionals this group employs to continue to rise.Some 44 percent of mid-tier millionaires said they use different specialists for each financial need because they feel that no single provider can be good at everything. But they recognize the additional burdens this creates, and nearly four in ten are looking to consolidate the number of firms they work with. They’d also like their record keeping to be cleaner, as evidenced by the fact that 90 percent of the service providers surveyed said their clients wanted more customized reporting.The upshot of all this is that almost 70 percent of mid-tier millionaires say they want a single provider to coordinate their financial affairs. The arrangement that best suits these desires is the one we employ here at Bernhardt Wealth Management: The wealth management model. That is the best way for clients to maintain control over their finances without having to oversee every detail on their own. Workingwith a wealth manager like us allows clients like you to develop a quality of life that enables you to spend time with your families, focus on your professions, give back to your communities or pursue other things that are important to you.

Putting It All Together

A wealth manager can keep an eye on your entire financial team.

There are many people who play important roles in managing your financial life. You have an estate attorney who has drawn up your living trust, and an insurance agent who safeguards your family against the financial impact of death and disaster. You may have a real estate agent who works with you on buying and selling homes, and a CPA who prepares your tax return, to name a few.

The role of a wealth manager is to make sure that all the experts act in concert with each other and always in your best interest, which allows each member of the team to fulfill his or her role to its highest standards. If your real estate agent is selling your vacation property, has your CPA been consulted to make sure you’re receiving the most favorable tax treatment on it? And has your estate planner in turn updated your estate plans to reflect the increased value of your assets?

The wealth manager is the one person who keeps an eye on all aspects of your financial life, making sure all the pieces are aligned with your core values and goals, and that all are working together. We live in a highly complicated world these days. The more wealth we accumulate, the more complex managing it becomes. If we want to make the best of our money, we may have to resort to very sophisticated strategies. While a wealth manager may be filling other roles as well, his or her ultimate job is to implement those strategies most appropriate to you while simplifying your involvement.

When you go to a concert, just before the orchestra begins playing, you can hear the musicians tuning up, playing notes without regard for the sounds coming from the players around them. The effect is cacophonous, like a windstorm blowing through a junkyard. But moments later, when the conductor raises his baton, all the performers begin working together in harmony, and the effect is almost magical.

That’s how I see the role of the wealth manager. All the players are vital in their own way and bring an expertise that the conductor may not have. Like the conductor, the wealth manager ensures that each expert is heard at the proper time—and hears all the other experts, resulting in harmonious solutions to your concerns.

What Do You Think?

Tell us what wealth management means to you.

What do you think of when you hear the term “wealth manager”? What are your expectations of someone calling himself that, and is that what you’re looking for in the person to whom you entrust your finances? It’s one thing for those of us in the business to define wealth management, but it’s far more important to know what you—the people we serve—think.

We’d love to hear what “wealth manager” means to you. Give us a call at (703) 356-4380 or e-mail me directly at Gordon@BernhardtWealth.com. To learn more about how our wealth management practice can help you take control of your financial life, contact Bernhardt Wealth Management at www.BernhardtWealth.com.

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