What we’ve learned during our 25+ years in the high net worth space, is that while many of our clients share some common characteristics, each family has their own set of needs and goals that are entirely unique. This is why, before any terms are discussed, or any obligations are made, our team members invest 40 to 50 hours of their time getting to know each prospective client and their specific situation, in what we call the GAP Process. We invite prospective clients to go through this process, free of charge, because wealth management is not the type of service they will want to change year in and year out; this type of engagement is one that builds over time, and is based on trust, competence and rapport.

The GAP Process is a three-step service, which involves Gathering information, conducting an integrated Analysis and creating a preliminary planning Presentation to share our findings and recommendations. From start to finish, prospective clients are given the opportunity to evaluate the capabilities of our firm, the competency of our people and the quality of our high-touch, concierge service. We want them to experience our comprehensive wealth management approach first-hand, so that they’ll know what to expect as a client.

Gathering Information

We ask the prospective client (or their family office) to spend approximately one to two hours of their time gathering key documents pertinent to their situation, such as tax returns, estate and trust documents, investment statements, insurance policies and corporate benefits packages. While we don’t want to burden a potential client, and are willing to work with just a tax return and their investment statements if that is all they can easily provide, the more information we get, the deeper we can dive into the analysis, and the more detailed and thorough the initial presentation will be.

Analyzing the Information

During this stage of the process, our advisors take time to organize and analyze the information provided, in order to develop a thorough understanding of the prospective client’s financial life. This analysis is completely customized, and designed to provide insights into their situation, identify risks and opportunities, and provide actionable recommendations entirely unique to their circumstances.

Presenting the Preliminary Planning Recommendations

Once the information has been analyzed and compiled, we then schedule a meeting with the prospective client, to present their custom private wealth report and our planning recommendations. The objective of this phase is to provide a better understanding of Waldron’s process, our philosophy and the quality of our people and service.

Once the GAP Process is complete, we give clients a reasonable amount of time to digest the information, and decide if they’d like to work with us. Oftentimes, prospective clients have follow-up questions subsequent to the presentation, and our advisors are more than happy to discuss any of our recommendations or any portion of the onboarding process. Our goal is not to overwhelm, but rather to identify problem areas and opportunities that the potential client may not be aware of.

We’ve found this to be the best way for prospective clients to get better acquainted with our team and our methodology. Establishing a personal connection with our clients is at the very core of our firm’s principles, and the foundation of our extraordinarily high level of client service.

Disclaimer

The news headlines over the past weeks have been riddled with two serious threats to the health and wellbeing of people across the U.S. The first and obvious threat is the novel coronavirus (COVID-19) outbreak. The less obvious danger, lurking beneath the surface, despite its daily limelight, is the stock market, which entered bear market territory for the first time in 11 years.

History tells us that pandemics like the coronavirus will emerge and are hard to control in the early stages. Once they are here, preventative actions can be taken and vaccines can be developed, but no one can possibly predict when, how or why a health crisis like this will occur.

Bear markets are both similar and different. No one can predict when a bear market is going to begin, but we have observed over time that bear markets are going to happen — about once every three to four years, in fact. And because we can predict that they will happen, we can prepare ourselves to best take advantage of those opportunities when they do happen.

Steer through the curve

In the world of competitive car racing, they say that races are won and lost in the curves. Similarly, in the world of investing, success is driven (or stalled) in times like these through your actions and inactions. There is a tremendous challenge in financial decisions, however, when panic strikes the world like it has recently. Panic — caused by this sudden “curve” in the market — naturally creates added stress and fear for everyone, inhibiting the ability to make sound and opportunistic financial decisions.

But there are wise decisions to be made in the midst of this bear market. As Warren Buffet says, “you should be fearful when others are greedy and greedy when others are fearful.” If you sell now, you are selling at a low point. Now should be the time to hold the course and stick to a well-defined financial and investment plan that is tailored to your particular situation. We often find in times like these that a big part of our job as advisors to wealthy families is to make sure that fear of the unknown does not erode their ability to stick to the plan that has proven to withstand the test of time.

Turn a negative into a positive

The current financial climate actually offers some financial opportunities that can help you grow wealth for generations to come. A few examples:

• This can be a great time for Roth IRA conversions, especially for intragenerational family wealth transfer strategies.
• The low interest rate environment has created a great opportunity to refinance existing long-term debt or intra-family loans and potentially increase principal amount of an intra-family loan for a greater family generational wealth transfer opportunity at these suppressed values. Some of our clients have elected to borrow at these lower rates to invest long term.  You need to realize that borrowing to invest creates its own considerations.
• Executives with non-qualified stock options should strongly consider executing those options today to reduce future tax bills.

For wealthy investors, there are a multitude of other opportunities that, based upon your own situation, could be relevant and build wealth. With a well-constructed plan that is tailored to your unique circumstances, you can turn negative market events like the ones seen today into positive opportunities.

Tune out the noise

One of the biggest hurdles to both sound and opportunistic financial decision is, frankly, the financial media “show business.” In our minds, the proliferation of financial news that constantly barrages the public with the latest shocking development has actually been a contributor to the speed at which bear markets like the current one accelerate. Mere months ago, we were perched upon all-time high markets, with strong earnings and a healthy financial system. Since then, we have experienced the fastest decline ever into bear market territory. The relative speed of these markets, fueled, in part, by panic spread over the airwaves and in social media feeds, makes it even more challenging to make the sound financial decisions and pull the trigger on the opportunistic ones.

Ultimately, in times like these, we all must focus on what we can control to mitigate the threats posed to both our health and our wealth. While knowledge of the coronavirus evolves, we will learn more about how to manage that threat. But we already have the knowledge and tools at our disposal to mitigate any impact that a bear market might have to our and our families’ wellbeing.

Disclaimer

Successful entrepreneurs tend to progress through four phases of the business lifecycle: survival, growth, maturation and the day after. Each phase has its own set of challenges, both financial and emotional. And while no journey is the same, there are many commonalities, and awareness of these commonalities will allow you to prepare your business and yourself to deal with them. One common challenge in the survival phase is the need for a steadfast belief in the service or product that you are bringing to market.

In the very beginning of an enterprise, think of a home brewer who has produced a perfect case of oatmeal stout, there are a lot of emotions. Excitement and confidence that this product is not only better than the competition, but something that you know people want. Maybe the initial proving ground was only friends or colleagues, but you feel it in your gut – this is going to work. Worry and concern are likely there too, that you will have to lay out a significant amount of money or take on significant debt to produce and market your product. Then there’s anxiety about timing and logistics – have you registered your business, do you have the necessary licenses, are you in compliance with all the relevant ordinances? There are a lot of planning and financial issues to work through, not to mention the related taxation and legal considerations. And whether you have saved up sufficient capital to hire professionals to identify these issues and help you develop a strategy to work through them, or whether you are flying by the seat of your pants and financing and managing everything on your own – there will likely be expenses and challenges you didn’t anticipate anyway, which will only amplify the emotions you are already dealing with.

But if you truly believe and are able to press on and launch your business, you give yourself a chance to succeed. The key is to be aware that along with a great product and an intelligently composed business plan, you need emotional balance as well. It will be a wild ride, especially in the survival stage, with the pendulum swinging from fear because of debt you’ve taken on to exuberance and perhaps overconfidence from a key initial sale. Not letting the highs get too high and or the the lows get too low will allow you to see more clearly and make objective, sound decisions. But to get to the point where your business begins bringing in revenue, you have to be willing to take that leap of faith and maintain confidence in the face of uncertainty.

For more information about The Entrepreneurial Journey or to read an excerpt from the book, click here.

Interested in learning more about business sale strategies? View our additional resources and get a free copy of John Waldron’s “The Entrepreneurial Journey” below.

Disclaimer

Three years ago, I asked a key member of my leadership team to head up a data collection project. The goal was to interview a wide range of our successful business owner clients to identify common attributes, experiences and insights from their journeys through each stage of the business lifecycle. It’s worth noting that throughout the history of our firm, we have helped hundreds of business owning families to simplify the financial complexities they face, from succession planning, to pre and post-transaction planning, to tax planning to next generation wealth planning and education, and that each client faces unique challenges and has unique goals they wish to achieve. So in many ways, each journey is entirely different. The intent of the research was to understand the emotional and technical aspects of their challenges, unearth the root causes and identify best practices which other entrepreneurs could use to guide them on their own journeys.

What I learned from our clients, and the insights I gained reflecting on my experience starting and growing Waldron Private Wealth, was the inspiration to write The Entrepreneurial Journey.

The starting point for any entrepreneur is an idea. Seeing something that doesn’t exist that should, a better way of delivering a service or a more efficient way to deliver a product. An opportunity that hasn’t been discovered yet. This is where most journeys begin, and also where many end, because two other essential components are needed to get an idea off the ground: The belief that your idea is valuable and the drive to take the idea from concept to deliverable. Doubt. Fear. Even comfort can work against you at this stage. Counteracting these emotions can be the biggest challenge to your venture, bigger than competition in the marketplace or prevailing economic factors because without a clear belief in your idea and the drive to realize your vision, no idea, no matter how great, has a chance.

This is the first in a series of posts introducing topics and takeaways from The Entrepreneurial Journey. This series will explore the lessons learned from entrepreneurs who clearly understood what it takes to be successful.

For more information about The Entrepreneurial Journey or to read an excerpt from the book, click here.

Interested in learning more about getting your business off the ground?

Disclaimer

Waldron Private Wealth named one of America’s 25 best small companies