Comprehensive Plan Entails More Effort
GRAND RAPIDS — Oftentimes people focus entirely on their retirement plan when looking toward the future. But there’s another type of plan — the comprehensive wealth management plan — that takes everything into account and really looks at the big picture.
A comprehensive wealth management plan is a compilation of customized strategies for investment, credit, insurance, taxes and wealth transfer, based on an individual’s or a family’s unique circumstances.
Tom DeMeester is senior vice president of Fifth Third Bank’s wealth management practice. Fifth Third uses a multi-disciplined team to advise clients on the best way to simplify the financial complexity of their plan. DeMeester said his team looks at all the legal documents in the client’s estate and retirement plans, including an analysis of the way in which the benefits function and the designations of primary and secondary beneficiaries to assure they all align with the client’s wishes.
The wealth management planning team looks at the client’s investment portfolios and evaluates the client’s banking relationships from an independent standpoint, checking the loans, the rates and the deductibility of insurance. The team evaluates the tax structure of the client’s current plan, looks at titlement of assets to make sure they’re consistent with the client’s estate structure, and at the client’s life insurance portfolio to identify the specific type and amount of insurance they hold.
“It’s all done in the context of a process that really helps a client evaluate what their goals and objectives are, and then we align the planning structure around those articulated goals and objectives,” DeMeester said. “It really requires us, as a team, to challenge the client a bit. Sometimes we have to introduce new ideas to them and allow them to evaluate that, and that can adjust their goals and objectives.”
For each client, there are many variables to consider: lifestyle, family, assets, charitable contributions, taxes, goals and aspirations. The needs of an individual or a family that has, say, a total net worth of $500,000 to $1 million are very different from the needs of a family that has a net worth of $3 million to $5 million, or a family that has a net worth of $25 million or more.
“The process — while comprehensive at all levels within that segmentation — would focus on different disciplines and specifics that would be directly related to what we know are common themes or specific needs of the wealthier client segment,” DeMeester explained. “It’s very individualized to the specific circumstances of the client, but then we leverage the fact that we have been doing this for quite some time and we have a very developed process that allows us to bring competing themes to those families with whom we are working.”
For Fifth Third’s most affluent clients, the process of putting together an initial comprehensive plan usually takes anywhere from nine to 10 months, DeMeester said. His team works with and coordinates its activities with all the client’s outside advisers so the client doesn’t have to pull together all the necessary documents.
“With the accumulation of wealth comes complexity, and that complexity often is represented by multiple accounts, as well as interactions with multiple professionals and working alongside of them to be able to get an accurate picture of where that affluent family is at today and where the planning process can move them forward,” DeMeester explained.
The more affluent family has more to gain from a comprehensive wealth management because it can utilize some of the current laws guiding taxation and estate planning. The dollar amounts saved are substantial, DeMeester said.
“From a monetary standpoint, there’s no question that the greater the level of affluence, the greater the economic benefit,” he added.
On the other hand, a comprehensive plan that’s truly comprehensive in nature and is crafted by a multi-disciplinary team can be beneficial to a young family, as well, DeMeester said.