The Role of a Wealth Manager in The Life of An Entrepreneur

Derek Notman |

Are you looking to grab a hold of your financial situation and use the money you have now to build true wealth for the future? Then working with a wealth manager can help you do so.

Look, this term has been thrown around a lot and often people miss the mark completely. I’ll give you a quick overview of what a wealth manager is and what they actually do. This will then be followed with tips and insights on how to make your finances work for you on your entrepreneurial journey.


What does a wealth manager do?

Wealth management combines financial and investment advice. It also includes working with teams of professionals on aspects like accounting and tax services, and legal and estate planning. Usually, firms will only take on accounts that meet a certain net worth minimum.

This varies between firms, but at the end of the day, the primary objective for a wealth manager is to build and sustain their clients’ wealth, which requires more than just giving investment advice.

A wealth manager oversees and handles all aspects of a person’s financial life, including saving for retirement, paying a mortgage, paying for an education, and much more.

Even the most successful individuals need coaching and advice.

Further to this, a wealth manager can make sound decisions without the emotions that an investor may make with their own money.  

As a wealth manager myself, I can tell you that working with other people’s money every day for the past 15 years has taught me a great deal.

Wealth management is about creating the best lifestyle possible with the financial assets you have accumulated over your lifetime.

Achieving this is done through the following:

  • A detailed financial plan that highlights your goals in and how they will be achieved
  • An investment portfolio that supports and funds your goals
  • A financial advisor who will help you stick to this plan


Where do I start?

You need to start with a financial plan which helps you determine the goals you are trying to achieve with the wealth you’ve earned. This is then followed by a plan of action that specifies how you will achieve these objectives.

Employing the services of a financial planner to help you build this plan is your best bet because a great one will assist with clarifying your goals and objectives, assessing your current financial status, and building a financial plan that brings it all together.  

They will help you monitor the plan and your finances to make sure you are on track.

A financial plan is a critical piece of the wealth management puzzle as it drives all financial decisions to realize your hopes, dreams, and goals  through an objective, mathematical perspective. 

A plan is pivotal because if you only have an advisor and an investment portfolio, but no financial plan, how will you know the portfolio your advisor recommends is appropriate to achieve your goals? How likely are you to get to your destination without a roadmap?


Now, how do you know when you need a wealth manager?


·        When your tax bill is too high

Tax planning is a crucial part of developing and preserving your wealth. This can be through income, inheritance tax or even capital gains.

There are lots of tax advantaged strategies a wealth manager can recommend in conjunction with your tax professionals to help minimize your tax obligations.

·        You’re a DIY investor and struggling to keep track

Many people’s investments are complicated. Just keeping track can be tedious, and that’s without managing your investments with proper diversification and risk management.

A wealth manager gives you a full overview of all your investments and how they are performing.

They will manage your investments in line with your objectives and risk profile, offering a strategic asset allocation for your profile.

·        You’re missing out on further investment opportunities

In order to properly diversify your investments and maximize your returns, you will need a wealth manager.

Leveraging investments like stocks and bonds are common and a DIY approach is often good enough, but alternative asset classes like private equity, hedge funds, real estate and commodities can be leveraged by a good wealth manager.  

·        You need an adviser who understands you

By having a wealth manager who knows your financial situation and goals intimately, one that truly understands your risk profile, is invaluable.

This needs to be someone who knows your story and will hopefully work with you for life. This will be a manager who values your goals and objects, with your best interest at heart.

The best part is that as this relationship builds, the advice you receive will be more personal and tailored.

You will also need a wealth manager when you’re selling a business or if you come into a substantial amount of money like an inheritance or winning the lottery. Wealth managers are able to deal with people in all kinds of situations.


When it comes to your own wealth management, consider these 5 tips:


1.   Liquid savings are imperative

Investing in illiquid assets can be beneficial but it is always a good idea to have cash savings tucked away for emergencies. To do this, you should be putting money away each month in a savings account.

2.   Use Credit

Some people will advise against it, but credit can help you accrue wealth. This is only if you know you’ll be able to pay it back on time. Whether it be for your mortgage or for a business loan, credit can be leveraged as a great tool in wealth management.

3.   Start planning for retirement now

Many people are under the impression that saving for retirement is something they can leave for a little later in life.

The truth is, the younger you start, the more comfortable your retirement will be. A wealth manager can help you define what you want your retirement to look like and help you achieve that objective.

4.   Stick to your financial goals

Those of us that succeed at wealth management have well-defined goals. This may involve paying off student loans, paying off a mortgage, investing $20,000 in the stock market, or putting $100,000 into a retirement fund.

Effective wealth management is about achieving those goals through meticulous planning.

5.   Make sure that you have a long-term strategy

Wealth management is about building a long-term strategy to create and then preserve wealth. As investors, we must always be thinking about the long-term. Don’t be distracted by quick, short-term get rich schemes. Rather focus on smart long-term investment.

Wealth management doesn’t have to be overly complicated. It is possible to successfully accrue and manage wealth by adhering to a few simple principles. 

The role of a wealth manager is of course tied into you managing your own financial situation well. As an entrepreneur, you need to manage your personal financial life.


Investing well can further be supported by the following 3 tips:


3 Personal Financial Tips for Entrepreneurs

Personal financial planning is important, but as an entrepreneur, you are pulled in so many directions already, so it is tough to add one more thing to your plate. I’m sure many of you wish you would have started planning sooner.

Based on my experience working with entrepreneurs, here are three personal financial tips entrepreneurs can start using right away:

  1. Define your hopes, dreams and goals

What does this have to do with money you may ask?  Well, everything!  If you are of the belief that money is an idea and tool, then you will agree that we need it to do the things we want to do in life.  But if we don’t define those things then how can we plan for them financially? 

All too often we get caught up in the day to day hustle & bustle of running a business, and for some, also running a family at the same time.  It is totally understandable to say “someday” I will get to planning for the things I want to do in the future given our hectic schedules. 

I can tell you from my experience working with a variety of people, time fly’s and the next thing you know years have gone by and you still haven’t taken any time to map out the future you desire.  You will never get that time back.

No two people will ever have exactly the same hopes, dreams and goals for the future, yet we all can benefit from thinking about them.  It really is taking a look at who you are and what want out of life.  It is a very personal process.  It is a lifelong process, thus what you want today will almost certainly change in the future.  

I have found the best way to start is by just getting out and experiencing all that life has to offer. My outlet has been travel. By travelling I have expanded my boundaries and comfort levels.  I have met new people & cultures, tried new foods, and had a variety of experiences all over the world.  This has taught me more about who I am at my core and helped me identify more clearly what I want out of life.

You don’t need to travel to begin defining your hopes, dreams and goals.  It could be as simple as reading a book about something you know nothing about.  Or going to a music concert of a band you have never heard of.

Simply doing is the point, it will help you learn more about yourself, which will help you figure out what you want out of life.  Then keep a running list of things you want, want to do, etc. and check them off as you go!

  1. Know Your Personal Cash Flow

Whether you are just starting your company, or you are on the brink of a liquidity event, knowing your cash flow is crucial.  It drives everything in your personal financial life.  Why is it important?  Once you see what income & expenses you have it is much easier to determine if a new purchase or saving more for retirement is feasible & responsible. 

For those who are in the early stages of their company, you need to know your personal financial needs to map out how much money you will need to live and how long your current savings will last. 

If you are bringing on investors they will have no problem using some of their money to pay you a salary, but if you don’t know what you need, then how can you determine the right amount to pay yourself while still investing in your business?

If you are about to sell your company your cash flow is just as important.  You are transitioning from earning a paycheck to receiving a lump sum.  You may never earn a regular paycheck again.  Having a strong grip on your cash flow will help you determine how to invest your windfall and what lifestyle you can expect to enjoy post-exit.

The list of why knowing your cash flow is almost endless.  At least having a basic understanding is going to make you feel better.  You will feel more in control.  You will experience less stress knowing what your financial capabilities are. 

  1. Educate Before You Implement

A commonality I have noticed among entrepreneurs is that they make it a point to educate themselves before implementing a strategy.  They prefer to do some due diligence and gain a better understanding before deciding to move forward. 

This doesn’t mean they suffer from analysis paralysis, but that they get a firm understanding of what something is, why it works the way it does, and how it will benefit them.  Once they feel comfortable with these answers, they then make the decision to implement.

So how do you educate yourself about your personal financial situation in a way that gives you insight about your relationship with money and what strategies make the most sense for you given your hopes, dreams and goals for the future?

First, figure out what you want, regardless of money. For example, do you want to do more travelling in retirement?  Ok, you have the want now figure out the how.  What must you do to save up for years of travelling? Where should you save this money?  How should it be invested? 

This is where doing some initial research online or with some books is a good place to start.  Get comfortable with the basic financial concepts and strategies so you can start to formulate your plan.  Now, this is where you may want to consider speaking with a financial professional.  Yes, you heard me, you may want to talk to one of “those people”. 

I get it, there are a lot of people in my industry that have made the idea of seeking out and working with a financial professional less than desirable. 

But there are some really great financial professionals out there that truly want to help people achieve all of their goals. They can help educate you on a variety of financial topics as well as how to implement which strategies that make the most sense for you.

So, part of your education process is to vet financial professionals before you ever reach out to them. Check out their website, does it tell you who they are, who they serve, and how they do it? Are their fees transparent? Also, check them out on independent government websites like FINRA BrockerCheck & SEC Investment Advisor Search.

If they pass muster on these fronts, then consider reaching out to them. Set up a meeting to interview them. Remember, if you don’t like and get along with them it won’t matter how smart or qualified they are, you have to connect with them on a human level to build trust.  Without trust, nothing else matters.


Insights & Tips Entrepreneurs Can Use to Help Manage Their Personal Financial Lives

Being an entrepreneur can mean a lot of different things to different people, the descriptors are almost endless. However, I believe there are some words all entrepreneurs can identify with:

  • Creative
  • Visionary
  • Bold
  • Determination
  • Problem Solver
  • Intrepid
  • Risk Takers
  • Passionate

Did you notice that none of them have anything to do with money? I have had countless conversations with entrepreneurs about their start-ups, and honestly, I can’t recall a single one that talked about money. It was always the “why” and “how”. 

Entrepreneurs tend not to create things that solve problems for money, money is simply the by-product of building something of value that benefits humankind.

It has been my experience that founders of start-up companies are so hyper-focused on building their company that they tend to forget, put aside, or are not even aware of the personal financial strategies they could be using to better position themselves and their families for the future. 

Sometimes it is simply not knowing what they don’t know and given all the stresses and time management issues that come with starting a company, who can blame them for not making this stuff a priority!

Although money is not the driving force for most entrepreneurs, it is certainly on their mind. Money is a tool. They use it to build & scale their businesses. They also use it to provide for their families, giving them a lifestyle that they never had, allowing them to experience life through a variety of opportunities. 

They also use it to give back in the forms of charity and investing in other companies. They understand how hard it was to build a successful company and want to give back to those just joining the entrepreneur ranks.

Most entrepreneurs understand that money is simply an idea. They don’t want the money for the sake of having money, but for what the money does. They respect this idea and are not afraid to pursue their passions using money to make things happen! In other words, they have a mutually respectful relationship with money.


How Does All This Help You?

If you have taken the time to identify your future wants and desires, it actually brings clarity and energy to your life. You will have focus. You won’t feel overwhelmed or distracted by your finances but empowered because you now have identified what you want, and more importantly how to get there. 

This is liberating and also allows you to put more of your time and energy into doing the things you need to do to get what you want.


Wealth management; where do I start?

Start by defining your hopes, dreams & goals. Then, and only then, can you start building your bridge. There are a lot of qualified ‘bridge builders’ (financial planners) out there. You need to find the one that best understands the importance and leverage of building your bridge. 

The process of identifying and building your bridge should be fun, but pragmatic. Building the bridge is no guarantee that everything will turn out the way you want it to, but it will greatly improve your odds for success! You will learn a lot about yourself and will be better positioned to achieve all that you want from life.

It’s important not to get emotional when making financial decisions which can be extremely difficult when working with your own money. That is why working with a wealth manager is so beneficial. Wealth management is about working toward specific goals both yearly and in the greater scheme of things.

Having a wealth manager is like having a personal trainer except for your life and business. They’ll customize a plan for your personal objectives, working with you to help make your dreams come true.

If you are ready to create a financial plan for your future, and grow your money, I suggest reaching out and start working with a trustworthy wealth manager today. 

Thank you for reading!


Derek Notman