A diversified investment portfolio is crucial in today’s volatile economic climate to mitigate the risk of major loss. For large corporations, this is the task of the chief financial officer. As individuals and families do not have the expertise to navigate the balance of taking and managing risk, wealth management firm the Quantus Group acts on clients’ behalf as their Family Chief Financial Officer.
Shaun Eck, president of the Quantus Group, says that the greatest wealth transfer in history is underway. With up to $68 trillion set to transfer from the Silent Generation and Baby Boomers to their adult children, legacy planning is critical for wealthy families, and multiple generations should be brought on board to ensure continuity and a unified vision.
“When a family incorporates the younger generation in their vision, and that younger generation also has some input, then the wealth tends to last longer because there’s purpose behind it. If the second generation doesn't share the same values and same vision as the first, then they have no connection with their parents’ money. Only 30% of wealth transferred to the second generation makes it to the third. Making and inheriting money are two very different things, so we need to bring generations together to have a shared, multi-generational vision.”
The Quantus Group provides four major services: investment management, tax and financial planning, risk management, and specialty lending.
“One component that ties into both planning and risk management is what I call the wealth allocation framework. This is the foundation for how we conceptualize somebody's wealth, and it is broken into 3 categories – safe, market-based, and aspirational,” Eck says.
“What I always tell my clients is that we want to make sure the safe and the market-based layers of their framework are both secure; so that if the aspirational component doesn’t work out as anticipated, then the other two layers are enough to support and sustain their lifestyle moving forward,” Eck says.
Quantus’ investment management service involves creating tax-efficient portfolios designed for the client’s risk tolerance. While headlines and tax rates are outside of the client and the wealth manager’s control, what they can control is the tax treatment of the money and investments.
According to Eck, wealthy people care more about avoiding losses than making huge gains. And one of the largest and ever-present risks to wealth is taxation. Protection of wealth is much more important than extraordinary gains, which often come with extraordinary risks.
“I did a lot of research on the risks created by the taxation of qualified retirement plans in the United States. When sitting down with a client and looking at their IRAs and 401ks, what they don't realize is that up to 30% or 35% of that balance doesn't belong to them – it belongs to the IRS. Whether for the purposes of retirement income or leaving a legacy, these are tax inefficient investments with large, unknown risks tied to the ever-changing US tax code.”
Eck says that Quantus is aggressive in attacking tax issues, unlike many financial advisors in the United States that immediately throw their hands up and accept the status quo. Quantus helps clients simplify the tax conundrum by separating investments into three buckets: tax now, tax later, and tax never.
“This bucket approach, in conjunction with our wealth allocation framework, pairs asset classes with an account type that helps create a tax-efficient retirement and orderly transfer of wealth, lessening the IRS’ partnership stake,” Eck concludes.
Media Contact:
Name: Shaun Eck
Email: [email protected]
