Wealth Management at DreamWork Financial - Great Idea - Guy getting an idea with dreamwork logo bulb

Wealth Management 101: Who Needs It?


What is Wealth Management?

Wealth Management is a comprehensive financial program that combines retirement planning, insurance, investment advice & management, financial planning, budgeting, tax services, and debt management. Your personal wealth manager will compile information from various professionals (accountants, attorneys, etc) and provide a comprehensive plan to maximize your personal wealth and meet your savings goals.

“Wealth management isn’t for me, I’m not rich.” – A common misconception

First, we will acknowledge that it’s very helpful to be wealthy already. That really helps you skip past the hardest part which is building wealth. Although, most wealthy people will attest that staying wealthy also requires discipline and good management.

Unfortunately, most people aren’t inherently wealthy. And we all know, wealth doesn’t usually appear out of thin air. So, you must work very hard and very smart to become wealthy.  At most financial firms, wealth management is reserved only for high net-worth individuals. Here at DreamWork Financial Group (based in Birmingham, AL), we adamantly disagree with this philosophy (more on that later).

What makes wealth management different than the plan I got from my financial planner?

Just like any specialized profession, financial management is quite complicated. Creating a financial plan that considers income, personal expenses, debt, taxes, assets, investments, cash flow, and future savings goals can be daunting on its own. The crazy thing is that the financial plan doesn’t even begin to scratch the surface.

Once you’ve created your plan, you must then decide which investments to make to maximize your returns. You must also decide how to protect your assets, all while minimizing your taxes. And, sorry to say, that work never ends. You must constantly monitor each individual investment. In addition, you must follow global financial markets, world politics, and current financial events. There will be work to do every single day to ensure your investments are safe and maximizing your wealth. And, don’t forget about the ever changing tax code. Is your head spinning yet?

If you haven’t yet amassed great wealth, you need a plan to get there. The point we are making is this: You don’t have to be wealthy to have wealth management!®

Clint Kirby, Chief Investment Officer - "You Don't have to be wealthy to have wealth management (registered trademark)"

Taking this one step further, at DreamWork Financial Group we believe that every financially responsible adult should have a wealth manager.

I’m convinced, I need wealth management. What next?

Wealth Management at DreamWork Financial - Great Idea - Guy getting an idea with dreamwork logo bulb

DreamWork Financial Group provides wealth management services for all our clients, regardless of the size of their account.

Congratulations! The first step is admitting it. Now, you need to find someone that you can trust to help guide you through the process of developing your plan. There are many people out there who want your business and your money, but they don’t always have your best interests at heart.

If you are already wealthy, you likely already have a relationship with a wealth manager. Maybe you were given a “private banker” at your local branch or maybe you have found an independent advisor. Or, maybe you’re in the majority and don’t have a large account.

Either way, you should know that the first and most critical step to financial success is to have an honest, individual relationship with your wealth manager.

Here are a few more things to always keep in mind when selecting a wealth management service:

1. You are the boss and your wealth manager is your employee.

You hired them as an advisor to manage your money and do what is best in your interest. They should treat you with respect. If an employee doesn’t meet your expectations at work, then you have a choice to make. The same holds true with wealth managers. Don’t be afraid to voice your opinion or change your advisor, if needed. Further, take the advisor’s entire body of work into consideration before making your decision. Have they done everything you want them to do? Are they easily approachable when you have questions? Will they at least call you back after you leave a message? Do they allow you to have input on your investment decisions?

2. Life changes and the market fluctuates.

Your advisor should work to understand your specific situation. If your wealth management firm doesn’t make the effort to familiarize themselves with your specific personal situation, be skeptic. You may be just another number. When major events change your life, such as having children, losing a job, getting married, or getting sick, you need someone to give you smart advice on how to adjust your financial plan. When your advisor knows your personal situation, they will be able to remind you to make needed changes to how you are managing and investing your wealth. Additionally, partnering with an experienced advisor that has weathered wild markets can help prevent costly, emotionally charged, investment mistakes that come with inexperience. The best advisors work to make sure your assets generate cash flow and protection during market downturns, all while being well positioned to take advantage of growth during bull markets.

3. Your wealth manager should work in your best interest.

Caddy consulting Golfer - DreamWork Financial Group is your wealth management caddy.

A good caddy, like a good wealth manager, helps you make decisions that put you in the best position to succeed.

We like to think of your personal wealth manager as a golf caddy. First, a great caddy does a lot of work in the background and helps you execute the game plan that the two of you have agreed upon. Second, he knows you inside and out. Finally, he also knows when to speak up and when to back off. He wants you to be prepared for every situation and your success is paramount.

Bad caddies (and advisors) know very little about you, and often put you in bad situations. A bad advisor can even become a source of added stress. Having wealth management should greatly reduce your stress, not compound it.

Caddy allowing golfer freedom to take shot like a good wealth manager

A good caddy also knows when to back of and let you take your shot.

The fact is, throughout life you will be presented with numerous investment ideas. These ideas are often pitched by very talented “salespeople.” It is important to have someone you can trust to help you vet these ideas to ensure your financial stability. The amount of data out there is immense, so having someone to help you make sense of it all is critical. Whether it applies to public, private, or real estate investments, a trusted advisor is the perfect sounding board to help you make confident investment decisions.

A good wealth manager should:

Caddy and golfer walking together
  • Be familiar with your personal situation
  • Answer your questions in a way you can understand
  • Educate you on potential investments
  • Respect your opinions and beliefs
  • Monitor and report on your investments
  • Stay in touch

How much does Wealth Management cost?

We believe transparency is key when you hire someone to manage your money. At DreamWork Financial Group, we believe in being transparent in everything we do. That’s the reason we only charge a flat 1% fee, with zero money paid up-front, and no hidden charges or commissions. Yes, you heard that right, no commissions. This is called the “Fee-Only” model.

Our philosophy is based on incentives. Since our fee is a percentage of AUM (Assets Under Management), we make more money when you do. So, our incentives are aligned. We want you to make as much money as humanly possible so we make as much money as possible. In contrast, if you lose money, our revenue drops proportionally. Furthermore, as an RIA (Registered Investment Advisor), we are required by law to act in your best interest regardless of the impact to our bottom line. So, with the “fee-only” model, there are never any conflicts. Your best interests ARE our best interests.

Many organizations have additional costs for their Wealth Management services

Conversely, many firms employ brokers who are rewarded with commissions based on what they sell to you. You’d be surprised how many of the big firms employ brokers who don’t always act in your best interest. This has been such a problem that the government has noticed and has begun the process to intervene. There is a new regulation, often referred to as the fiduciary rule, which went into effect on June 9, 2017, that says brokers should act in their clients’ best interests and only charge reasonable fees for their services (seems like that should have been true all along, right?).

First and foremost, compliance currently hinges on “good faith” until January 1, 2018. Until then, they are advised to begin working toward compliance. Second, the announcement also mentioned that this rule is contrary to the Trump Administrations directive on deregulation, so they expect the Jan 1, 2018 deadline to be delayed. This means, until this rule is enforced, brokers can still sell you the products that make them the most commissions, even when better, cheaper options are available. They can legally sell you an inferior investment simply so they can make more money, and they do it every single day. Be sure your advisor has a fiduciary responsibility to you.

Where can I get comprehensive wealth management services?

If you’ve made it this far, you are clearly diligent with your investments and concerned about your financial future. We hope this information helps you to find the best possible wealth management firm for your situation. We also hope to get an opportunity to prove to you that DreamWork Financial Group is that firm. If DreamWork Financial Group is not a good fit for you, be sure to look at other RIAs as they are required by law to act in your best interest. DreamWork Financial Group is based in Birmingham, AL but we service clients in many places in the U.S.