You have successfully dedicated yourself to growing your business. It is thriving and something is prompting you to think longer term. What about your retirement, your family, your employees and the preservation of what you have built? Have your investments been geared to growth or to preservation? What are the differences?
“Research has shown that the skill set that creates great wealth is not necessarily that which maintains and preserves it,” says Sean McHale, team leader, private wealth management and senior vice president at SunTrust Bank in Tampa. “Wealth is created by risk-taking and concentration on activity. Wealth is preserved by minimizing risk and diversifying activity.”
Smart Business talked with McHale for more insight on how successful business owners can shift their mindset to better preserve what they have created.
What are the first things a business owner should do in shifting his or her thinking from growth to preservation?
He or she must move his or her thinking beyond the day-to-day operations and growth. The owner must decide that he or she needs to develop a nonbusiness focus and consider future and family. Just as the owner has been successful by setting and attaining goals for growth, he or she needs to do the same for maintenance and preservation. It is very easy for the entrepreneur to see the need for a new piece of equipment. It is harder to recognize the need for estate and financial planning, but it requires the same type of commitment of time and resources. Business owners need to lay out what they want to accomplish. They also need to look at the strengths of family members. Are any of them going to be involved in the business down the road? If so, how? Are their talents more geared to growth or preservation? It’s important to determine how each party’s talents will be utilized.
I’ve decided that I need to work at wealth preservation. Now what do I do?
You need to get together with a trusted adviser who will provide the required guidance to meet your goals. That person should be intent on discovering what your goals are. The adviser needs to listen carefully. He or she needs to demonstrate expertise and value your time. You need to let him or her know what your goals are and whom they affect. If your goals are unrealistic or not well developed, that needs to be discovered. After the adviser discovers what you want to achieve, he or she needs to develop a solution that fits your needs and then deliver on it. The solutions should be based on need rather than on a particular financial product.
What about the business advisers that I am already working with?
They are extremely important and their input is essential to maximum success and helpful in your growth. You will want your business to continue to grow and will utilize their assistance in that continued growth. As you shift some of your thinking to investments that are going to preserve and maintain your wealth, it is important to have an adviser specifically for that area. In turn, besides listening to your goals, the adviser can obtain further insight from others, such as your CPA, attorney, senior business managers and, possibly, even your insurance adviser. In some cases, your investment adviser will not need to go outside his or her own team to provide solutions to your needs, but he or she should be willing to do whatever is necessary to meet what you have carefully articulated as your needs.
What is the most important piece of information that I can supply to this adviser?
You should determine and tell your adviser the most important unmet goal or objective you have outside of your business. Then let him or her put together some plans to meet those goals or objectives that you can evaluate and decide to implement if you think they are helpful.
Is this going to be an expensive experience?
Your chosen adviser should be willing to expend whatever is necessary upfront to show you that he or she has discovered your needs by listening, developed a solution that fits your needs and delivered that solution to you so you can implement it. Everyone should be looking for a long-term relationship that is going to compensate each party for the long-term results that were created for you.
SunTrust Private Wealth Management is a marketing name used by SunTrust Banks, Inc., and the following affiliates: Banking and trust products and services are provided by SunTrust Bank. Securities, insurance and other investment products and services are offered by SunTrust Investment Services, Inc., an SEC registered investment adviser and a member FINRA and SIPC.
Securities and Insurance Products and Services:
- Are not FDIC or any other Government Agency Insured
- Are not Bank Guaranteed
- May Lose value
SEAN MCHALE is Wealth Services Team Leader at SunTrust Bank, SunTrust Investment Services, Inc. in Tampa. Reach him at (813) 224-2467 or by e-mail at firstname.lastname@example.org.