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How Can CPAs Help Optimize Conservation of Capital? “Embrace the Next Generation”

CPAs must work with every generation of a client's family to optimize a capital conservation strategy. This helps craft and implement more effective plans.

Professionals often make the mistake of not working and planning alongside the heirs of their clients. Not exploring the wishes of both clients and their children not only causes miscommunication in the development of a plan that efficiently transfers assets but also may displace the professional relationship in the future.

Embracing multiple generations in the investment management and financial planning process should be more than a marketing opportunity. It is an opportunity to uncover and identify assets as well as plans for those assets. Even exploring the family dynamic and relationship is important, since not every family may have the same plan for their assets, or even the same relationship for that matter.

Embracing the next generation means more than embracing the family. It means embracing their advisors. Partnering and coordinating a capital preservation strategy with all parties means that more assets can be identified and transferred to the next generation, or to ensure that retirement income and long-term care objectives are met as well. Professionals and clients alike often forget that longer lifespans translate into more complex income objectives which necessitate the development of a capital preservation strategy.

But developing this strategy means nothing if the assets are not properly identified and invested towards this goal. Communicating the rationale behind an investment and its suitability is not just for financial professionals, it is a step that taxation professionals must also take for any particular tax situation. For example, if a financial professional recommends an annuity for retirement income, the tax advisor can help ascertain the suitability of the investment for the client’s income needs. It can also be determined whether the investment affects liquidity and how it affects the assets that will go to the client’s heirs.

To embrace the next generation not only identifies future plans, it also helps devise a more effective capital preservation strategy that leaves more to a client and their heirs.

Did you know...

4Thought offers a diversified investment methodology that can be geared to seek the long term preservation of assets while managing risks. Leave more assets to future goals and future generations, and not to taxes and unforeseen risks.

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