Advisors as Financial Quarterbacks

Football is on the minds of many across the country as the New England Patriots and Los Angeles Rams will face off in the Super Bowl this weekend. To get to the final game, the quarterbacks of these teams demonstrated that they can execute complex plays with their team under pressure.

The role of quarterback is familiar to financial advisors, who help clients maximize and protect their wealth. Like these football play makers, advisors formulate strategy and coordinate the efforts of a client’s team – accountant, lawyer and insurance agent – to move a client toward long-term financial independence. Here are a few recent strategies from our financial advisor “playbooks”:

Tax Planning

With her 50th college reunion approaching, a client wanted to make a substantial gift to her alma mater without depleting her bank account. Her financial advisor suggested she donate some highly-appreciated stock she had inherited. She would avoid capital gains tax, potentially obtain a tax deduction, fulfill her charitable goal – and leave her bank account intact. The financial advisor consulted with her accountant to see what level of gifting would qualify her to itemize deductions on her tax return.

Raising tax issues before the end of the year is one way financial planners help clients save money. Working with an accountant, the advisor provides valuable input on capital gains management, adequacy of withholding or estimates and timing of deductions.

Retirement Planning

A quarterback has to think several plays ahead, as do all financial advisors. “When can I afford to retire?” is the question most heard in advisors’ offices. To answer that question, an advisor must integrate detailed knowledge of a client’s income, assets, benefits, and lifestyle expenses with expertise in longevity issues, and taxes as well as investment and inflation rates. Analyzing required savings to meet the retirement objective, recommending and instituting the appropriate retirement plan, and assisting in the tax-efficient withdrawal of retirement funds are critical elements in the retirement planning process.

Incapacity or Death of a Loved One

There is no greater stress than the deterioration of someone you love. A financial advisor can alleviate significant burdens for caregivers at this emotionally difficult time by managing assets, making funds available for increased expenses, and ensuring that the appropriate documentation is on record to allow family members to manage the loved one’s affairs. When a spouse or parent dies, an advisor’s extensive knowledge of the deceased’s income, savings and personal goals can also be indispensable to the estate attorney and accountant as they gather documentation and decide the best way to handle death benefits, Social Security, etc.

Estate Planning

“I’ve done my estate plan,” a client proudly confided to his advisor recently. Make no mistake — he deserves to be proud. Clients often procrastinate about estate planning. But he was surprised to hear that there was a lot of work left to do, even with his well-drafted estate plan. Proper estate planning usually requires the involvement of several professionals, including an estate attorney, an accountant, and a financial advisor. At the outset, the advisor ensures that all assets are included in the plan, and he or she may help the client articulate their long-term goals and objectives. The advisor will facilitate implementation of the plan through re-titling accounts, beneficiary designations and gifting. Once the plan is completed, the advisor works with the team to execute the estate “playbook”. In this client’s case, the client had never re-titled his accounts or revised his IRA beneficiaries. Had these areas not been attended to, he would have missed out on a tax exemption that would have cost his heirs a million dollars.

These are just a few ways that a “financial quarterback” helps clients strategize and execute the necessary plays to get them into the “end zone”: financial freedom.

Kerry B. Connell, CFP®

Kerry joined HTG in 2014. She helps clients create a picture of their financial goals and directs investments to attain those goals. Kerry is also involved in the firm’s management and strategic planning initiatives and contributes to HTG’s educational and networking efforts.

Kerry is a CERTIFIED FINANCIAL PLANNER™ practitioner. She has a BA degree from Tufts University and an MBA/JD from Northwestern University.