Intelligent investment planning Featured

8:00pm EDT October 26, 2007

You’ve built your company from the ground up, business is good and retirement is at least 15 years in the future. There will be plenty of time for investment and estate planning down the road, right? Wrong!

“There are barriers that exist between people with money to invest for the future and a sound investment plan,” says Dick Wiesner, senior business relationship manager with Wells Fargo Bank.

Smart Business asked Wiesner about the best time to plan for the future of your estate and who should help you do it.

What barriers exist that keep people from taking charge of their investments?

There are three reasons why people don’t get around to tackling this task. First, they are very busy running their company. Second, there is the denial of an immediate need for estate or financial planning. Embedded within this rationale is a fear of death. These people refuse to acknowledge their mortality.

Third is a fear of the unknown. Many business owners recognize that to engage in this activity they will have to make critical decisions and the discussions surrounding these decisions may reveal their lack of knowledge in this area. Business owners are most comfortable when they are fully knowledgeable about topics being discussed and when they are ‘in charge’ of events.

So, what are the advantages of being proactive with your estate and investment planning?

One of the biggest initial advantages of engaging an investment planner is that it will assist you in consolidating all your records. Typically, most individuals have a variety of investments already in place. They may have several 401(k) plans from prior employers, plus stock or other investments with brokers they have met over the years. They may own mutual funds or even annuities from different fund families from investment decisions they made many years ago. In short, their financial records are scattered and no unifying plan exists to get them where they will want to be when retirement is at hand.

The second advantage to retaining a qualified financial planner is that it will remove emotions from the investment decision process. Once a plan is formulated and implemented you will be at peace with having tackled this task. You won’t be a victim of poor timing, selling when the stock market goes down and buying when it shoots up like a rocket. This becomes especially important as one gets closer to retirement age. You can make a financial mistake in your 30s, but when you are over 50 years of age you don’t have time to recover from a major financial error.

There are many resources to assist you with this task, including independent financial planners both large and small, traditional brokerage houses and financial institutions, such as Wells Fargo, which is the 12th largest manager of investment funds in the U.S.

How do you decide which one to use?

First, decide exactly what you want to accomplish. Are you simply going with an investment adviser who will make money for you and protect it from extreme fluctuations? Or is your expectation that, in addition to investment advice, you want help with estate planning.

A second factor to consider is the adviser’s investment track record and what fees will be charged. The trick is to understand all the fees you will be paying. Be aware that many fees are hidden. For example, if your adviser purchases bonds for you there is often a large spread between what they buy the bonds for and what you are charged. Also, you should ask if you will be charged additional brokerage fees for any assets purchased. Bottom line on cost is to not be misled. If you are paying what at first glance seems to be a high cost, say 1.25 percent of assets managed, further analysis might reveal this to be very reasonable if other ancillary services are offered, trading fees are waived and the adviser has an above-average track record.

Another key is to conduct personal interviews with potential advisers and bring along your spouse. You must feel a sense of comfort and security from the adviser you choose. Another element to consider is whether the adviser selects investments from an ‘open platform,’ meaning will they choose products from any and all sources to fit your needs.

A strength within the Wells Fargo Wealth Management Group is it operates from an ‘open’ platform, selecting products from any sources that best fit client needs.

A final key point to consider is to know expectations concerning how often you will meet personally with the adviser to update plans and discuss results.

DICK WIESNER is senior business relationship manager with Wells Fargo Bank. Reach him at or (713) 209-6703.