The Importance of Wealth Management for Executives

Managing one’s wealth is something that takes strategic financial planning and discipline. The importance of managing one’s wealth and assets becomes even more important if they are an executive; as you earn more you are likely also taking on more responsibilities at the office, so the management of your own personal finances becomes more difficult as there are only so many hours in the day.

The importance of strategic and measured wealth management, particularly for executives, should not be underestimated. In this article we will cover the following topics which highlight the importance of strong wealth management and why it is vital for executives:

  • Common pitfalls executives tend to run into when it comes to managing their own money
  • The benefits of working with a wealth management firm
  • How wealth management firms can help executives manage their money appropriately and grow their wealth over time
  • Investment strategies that can reduce your tax liabilities

As financial advisors in the D.C. area, the professionals at Brown | Miller specialize in working with executive and affluent clientele helping them with tax planning strategies, estate planning, and investment advice


The Biggest Mistakes That Executives Make When It Comes to Managing Their Money

Financial strategy text over money and calculator graphics, wealth management strategies for executives.Many executives overlook their 401(k) management by focusing too much on maxing out their contributions but paying little to no mind to the distributions. Although maxing out your 401(k) contributions is important, focusing exclusively on that is shortsighted.

Retirement accounts like a 401(k) or a traditional IRA are taxed once you begin to take distributions. However, savvy executives consider transferring the funds from those retirement accounts into a Roth IRA so that they can take their distributions tax-free in retirement.

This Roth conversion strategy is a great way to lower your overall tax bill. Not paying attention to distribution strategies with tax benefits is a common mistake many executives overlook. Executives who diversify their distribution strategies with methods like Roth conversion will be better positioned in retirement when they begin to take distributions from their retirement accounts.

Another common mistake executives make managing their own money is how they approach risk management. Knowing the market and how it operates under specific conditions is instrumental in understanding how it relates to your own portfolio and the necessary changes you may need to make. Knowledge like this directly correlates to how much money you can earn or lose in the market.

However, many individuals, executives included, are not particularly disciplined when it comes to understanding the fine line between risk and reward and how it correlates to them. Investors who only assess the risk in the market and its connection to their portfolio once a quarter or so cannot possibly adjust their asset allocation properly. This can negatively impact your accounts and hinder your investment gains.

Risk management and understanding the markets can be difficult, but the professionals at Brown | Miller have plenty of expertise in investing and can help you to achieve your long-term investment goals.


How Wealth Management Firms Can Help Executives Manage Their Wealth

Working with a wealth management firm is an excellent choice for an executive looking for help with managing their assets and investments. There is an immense number of investment strategies, tax planning strategies, and retirement and estate planning methods available to executives to utilize. When you combine this with the ever-changing market conditions, managing your wealth can seem like a colossal undertaking.

However, working with an established and experienced wealth management firm that understands these complexities and does it day after day can have immense benefits to your financial situation. Here are some services that we offer our executive clients at Brown | Miller:

  • Asset allocation strategy
  • Constructing portfolios from scratch
  • Risk management
  • Retirement planning
  • Sophisticated wealth management strategies catered towards affluent clientele


Key Benefits of Working with a Wealth Management Firm

The benefits of wealth management for executives, benefits in block letters.

There are many benefits to working with a wealth management firm. Managing a career, especially at an executive level, having a family, and managing your own assets and investments is a tremendous undertaking that does not leave much room for anything else.

A good wealth management firm brings a level of expertise and knowledge coupled with advanced investment strategies to the table that prospective clients can use to improve their portfolio and meet their financial goals. Working with a wealth management firm should provide clarity and transparency to any questions you may have regarding your portfolio, and a good planner or advisor should provide their clients with strategic investment advice catered towards their unique situation and goals.

Working with a wealth management firm provides you with an outside perspective into your investments and overall financial standing and provides you the opportunity to examine many different financial strategies you otherwise may not have considered.


How to Reduce Your Tax Liabilities with Investment Strategies

While paying taxes is an unavoidable part of life, that does not mean you should pay more than your fair share. There are many investment strategies that have the added benefit of potentially reducing your taxable income. Here are a few strategies to consider if you are looking to reduce your tax burden:

  • Tax loss harvesting: this strategy works by offsetting capital gains with capital losses. You simply sell an underperforming investment and use the loss to reduce your taxable gains, with any excess losses providing a $3,000 decrease to your taxable ordinary income. You then reinvest the money from the sale into another asset or security.
  • Invest in municipal bonds: Municipal bonds essentially lend money to a state or local government over a set amount of interest payments over a set period. Upon the bond’s maturity date, the full original amount is repaid to whoever bought it. Any interest on municipal bonds is exempt from federal taxes and, depending on your state, possibly state and local taxes as well.
  • Focus on long-term capital gains: Investors who hold assets for longer than a year are taxed at a favorable rate of 0%, 15%, or 20% on any capital gain, depending on their income level. Should the investor sell the asset within a year, any capital gain is then taxed at their ordinary income tax rate.
  • Optimize charitable donations: Investors can get tax deductions from any cash donations to qualified charities worth up to 60% of their adjusted gross income. If you decide to donate any longer-term investments which have appreciated, you will be in for a treat; whoever donates does not have to pay the capital gains tax and will receive a tax deduction for whatever the fair market value of the asset donated.



Brown | Miller Wealth Management has a wealth of expertise in helping executive clients realize their financial goals and then help come up with a personalized strategy to achieve them. To learn more about our financial professionals and what they can do for you, contact us today.


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Disclaimer: This article is intended for informational purposes only, and not to be a client-specific suitability analysis or recommendation, an offer to participate in any investment, or a recommendation to buy, hold or sell securities. Do not use this report as the sole basis for investment decisions. Do not select an asset class or investment product based on performance alone. Consider all relevant information, including your existing portfolio, investment objectives, risk tolerance, liquidity needs, and investment time horizon. This report is for general informational purposes only and is not intended to predict or guarantee the future performance of any individual security, market sector, or the markets generally.
The information provided in this article represents the opinions of Brown Miller Wealth Management (“BMWM”) and is expressed as of the date hereof and is subject to change. BMWM assumes no obligation to update or otherwise revise our opinions or this article. The observations and views expressed herein may be changed by BMWM at any time without notice. The information may be based on third-party information, which is deemed reliable, but its accuracy and completeness cannot be guaranteed.
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Author: Christopher W. Brown, CFP®, CIMA®

Christopher W. Brown is the Founder and Managing Principal at Brown | Miller Wealth Management.