Aside from significant purchasing power — the wealthy have another secret weapon in their financial arsenal: sage advice from financial advisors.
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“My guidance to the ultra-wealthy is built on three key strategies that set them apart from the merely affluent,” said Stoy Hall, certified financial planner (CFP) and the CEO of Black Mammoth, explained. “These aren’t your average financial tips; they’re the cornerstones of generational wealth preservation and philanthropic power.”
Here’s key advice from a financial advisor that will help you in your financial wealth journey.
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“My belief is that it’s not actually going to go to the hands of the lower generation. It’s going to be mostly in trusts,” Hall explained, addressing the much-talked-about wealth transfer of trillions of dollars.
He noted that complex trusts are the secret weapon of the ultra-wealthy, designed to ensure that their fortune isn’t just passed down, but passed down with purpose.
“These trusts are far more sophisticated than standard estate planning tools. They’re meticulously crafted to align with the wealth creator’s vision.”
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While trusts secure the future, Hall said foundations shape the present.
“Most wealthy people have some type of foundation,” he revealed. “It’s not just about tax write-offs; it’s about directing substantial resources towards causes they care about.”
According to Hall, foundations offer unparalleled advantages. More specifically, to allow their money and dictate where their money goes for charity or for a specific cause.
“I believe the most wealthy people in the world — it’s not about how much money they have. It’s about their ability to use money as a tool for things that they want to do or give back towards.”
For the ultra-wealthy, a family office is more than a luxury, said Hall, it’s a necessity.
“It takes care of all of those things we just talked about–but it also takes all of the burden of everyday life things off of our clients,” Hall explained.
He added that the scope of services provided by a family office is comprehensive.
“From travel [and] bill pay, the concierge service of buying vehicles, buying assets, obviously handling where your investments are, all your insurance, literally anything that pops up in life. Your family office is going to be there to take care of you.”
He said this level of support allows his clients to focus on what truly matters.
“You can focus either on your foundation, your work, and most importantly, your family and creating memories and experiences because those are truly what wealth is all about.”
According to Hall, the reason these strategies aren’t recommended for those with lower net worth is simple: cost and necessity.
“If I’m only worth a hundred thousand or less, or you name a number–something that we think is relatively low–complex trusts don’t make sense,” he noted.
For those with more modest means, Hall adapts his advice.
Instead of complex trusts, he said, “a simpler trust still makes sense for many individuals.”
In place of foundations, he suggested, “There are 501(c)(3) organizations and nonprofits you can give to if you want to give back but don’t have tens or hundreds of millions of dollars for a foundation.”
Rather than a full family office, Hall explained, “Maybe you can’t afford the full-fledged family office–which most people cannot–but you can access parts of it, certain services that apply to you and that you can afford.”
“It’s not that I don’t advise them to do these three things,” he added. “It’s just that we reduce what services are offered and tailor them to what they actually need. They don’t have the assets to justify the full suite of services.”
In the world of wealth management, Hall concluded, one size doesn’t fit all.
“The ultra-wealthy require strategies as expansive as their fortunes, while others benefit from more tailored, focused approaches.”
The key, he emphasized, is not just understanding how to grow wealth but how to wield it effectively for generations to come–always adapting the strategy to the individual’s unique financial situation and goals.
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This article originally appeared on GOBankingRates.com: I’m a Financial Advisor: This Is the Advice I Give My Wealthiest Clients
