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Client Wealth Strategies

When wealth planning with clients, you won’t be surprised to read me suggest that you ask the client, “What is the most important thing to you about building your personal wealth?”

This is of course what drives them and as with the business, most important things are pure, powerful and individual.

In essence there are only two ways to build wealth, other than have a lucky lottery win and they are;

EARN MORE, in other words increase your income and

INVEST WELL, by saving more and in a better way, including building the business value.

Owning a business provides a lot of choice and many ways to build personal wealth.

Sometimes advisers tend to over emphasise the desirability of a business sale, as in my experience, although some people do sell their businesses, many don’t, but over many years, use their business as the prime medium to generate their personal wealth.

The following can all be viable strategies for wealth generation from a business:

  • Making money each year in the business and drawing it out, in part, by salary or dividends, to build the owner’s personal wealth – year on year, step by step.
  • Building a successful business and 3 to 5 years before exit, planning a sale that optimises on capital values and delivers on the key factors affecting the business valuation.
  • Building a successful business and planning and developing succession to provide a staged withdrawal from the business that involves capital and income release, over time.
  • Building a successful business and drawing out profits to provide the owner’s personal wealth and then at retirement, simply realising the base assets, or giving away the business to the next generation of owners, family or not.
  • A mixture of any of A to D.

All of these strategies can work in one way or another and I’m sure you have seen clients follow all of them in varying degrees. There truly is more than one way to skin a cat!