Wealth Planning — our experts weigh in

Three BMO Private Banking Wealth Planning professionals answer some frequently asked questions about wealth planning – and how it can benefit you.

What exactly is “Wealth Planning”, and what are its benefits? To find out, we spoke with Lesley Cameron, LL.B., Director, Wealth Planning, Dave Patel, CPA, CA, Director, Wealth Planning, and Deborah Desforges, CFP, Private Wealth Advisor.

What exactly is a Wealth Plan – and who is most likely to use one?

Deborah: Anyone who appreciates that wealth brings complexity will derive value from the process, as a Wealth Plan is designed to identify these complex issues and provide solutions. I like to think of a Wealth Plan as a road map, with a starting point, an end point and the best way to get from one to the other. If there are several ways to do this, we give advice on the possible pros and cons of the different routes.

Dave: I like that analogy. Often there are several possible routes because the plan usually covers many areas of expertise – investment management, banking, tax and estate planning, retirement and financial planning and business succession to name a few. And sometimes the end point becomes a new point of departure for the client.

Lesley: It truly is a multi-dimensional process. We look at the client’s financial situation from many different angles and perspectives. And while we understand each client’s goals, we bring our own experience and expertise to the situation and can challenge clients to look at their affairs from another angle.

What are some of the key elements of a Wealth Plan?

Lesley: Every Wealth Plan is different, of course, depending on the person, but it will include a Summary of Goals and Recommendations, most often supported by a statement of current net worth, financial projections and analyses and an estate analysis.

Deborah: One of the most important elements that a Wealth Plan will include is a snapshot of where you are today – a comprehensive net worth statement, as Lesley mentioned. That’s something that many clients haven’t taken the time to assess.

Dave: I agree. And it’s from this picture of current net worth that we can help a client look into the future at retirement and beyond and make recommendations to meet his or her goals.

Who prepares the Wealth Plan?

Lesley: The client’s lead relationship manager is the primary point of contact for the client during the Wealth Planning process. The Private Wealth Advisor will direct the initial discovery process and do the principal financial analysis.

Deborah: As a Private Wealth Advisor, I work with a group of professionals to draft the Wealth Plan. I’ll bring in specialized planners to help with tax matters and estate planning, and as a strategy team, we will refine the final recommendations for the client. We often consult with the client’s other professional advisors as well, such as their own accountants and lawyers.

Dave: While we may draw on outside expertise, in the end, the Private Wealth Advisor is responsible for ensuring that all of a client’s goals and relevant financial information are properly analyzed and considered and for presenting him or her with a clear and concise Wealth Plan.

What kind of time commitment is required on the part of the individual?

Dave: The biggest time commitment occurs up-front, as we begin to gather the necessary legal, business and financial information.

Deborah: I find that two meetings with the client and the planning team are usually required – the first for discovery and fleshing out goals and the second to review the results and possibly set some changes in motion.

Lesley: For many clients of Private Banking, we already have a lot of that information on hand, so the biggest investment of time on their part can sometimes be simply thinking about their goals.

What kind of pitfalls have you seen when individuals don’t have a proper Wealth Plan?

Deborah: I think missing opportunities is the biggest pitfall – from lowering current fees and taxes, to minimizing estate costs, to gaining better investment returns.

Lesley: It’s not uncommon for wealthy individuals to be so immersed in their day-to-day affairs and short-term goals that they don’t appreciate the issues that may arise in the future – anything from a business transition to managing their affairs in the event of death or incapacity.

Dave: That’s so true. Time can be your best friend if you plan early or your worst enemy if you wait too long. There can be a huge emotional and financial burden placed on a client’s family when unforeseen circumstances such as health problems or death are not addressed. Wealth Planning helps to ensure that you have a team of professionals you can trust who fully understand your needs – and can put a plan in place to address them.

This publication is provided for informational purposes only. The information herein is current as of June 26, 2013 and is based on sources that we believe to be reliable, but we do not guarantee it. It may be incomplete, or may change without notice. It is intended as information of a general nature and is not to be construed as specific advice. The comments included in this publication are not intended to be definitive analyses of tax applicability, trust and estates law, or investment strategy. You should consult with the appropriate professional regarding your personal circumstances. No part of this publication may be reproduced in any form or rendered in any publication without our express written permission. Unless stated otherwise, none of the information in the articles posted on the Wealth Exchange is intended for residents of Quebec.

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