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I recently got into a conversation with someone who said that it appears that what I call wealth management is anything a business owner could experience.  I don’t think this is completely true, but I can see how they would believe that.

In my opinion wealth management for private business owners is broken into two parts:

The financial portion: where we’re dealing with the material wealth and cash flow of the business owner.  The non-financial portion: that deals with what’s important in addition to becoming financially independent and financially safe.

I’ve found that for the most part, business owners are interested in other things besides making as much money as they can.  There is an exception to this and that’s when the business owner is not making money at all.  I find that once they make enough money then money goes way down the list of important things to consider.

A wealth manager that doesn’t deal with a business owner has a big job.  It might be legacy, it might be retirement planning, or it might be estate planning.  A private business wealth manager not only gets to deal with the issues of a non-business owner wealth manager, but they also have the responsibility to help the business owner manage their largest asset; their business.

It’s around managing the business asset that many wealth managers have trouble.  For the most part wealth managers are not trained to think about value creation activities that a business owner might need to face.

We’ve found that many business owners we work with aren’t sure how to convert their business asset to cash flow after they retire.  They also aren’t sure whether that business asset is going to be large enough to allow them to retire (for the most part it’s not).

This means a business owner wealth manager needs to help the business owner understand what their options are.   Once the options are laid out then the wealth manager should help the owner make business decisions about a good direction for the owner to take.

The wealth manager doesn’t have to be an expert at all the options but it’s useful for the wealth manager to take some time to learn what the options are.

I’ve recently been on a crash course to learn about lean manufacturing.  I’m doing this because it’s an excellent option for several of my clients to dramatically increase the cash flow and value of their business.  I don’t want to be a lean expert but I do want to know why a business owner might want to install a lean system and what steps are best practices.

In the private business world helping business owners create value in their business and their life is what wealth management is about.  What are your thoughts on this?  Do you think a business wealth manager needs to understand business strategies that can add value to the business and it’s owners?

Josh Patrick

We’ve put together a special report on the Financial Life Of A Private Business Owner.  We’re sure that you’ll enjoy this report and it will help you think about some of the important issues in your financial life.  To get this special report, click on the button below.



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Topics: retirement planning, for business owners, wealth management, private business owners, Legacy Planning, estate planning

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