Imagine you’ve just arrived at your doctor’s office. One of the first things you’ll do is answer questions about the prescription drugs and vitamins you take. Why? Your doctor needs to know what medications you’re taking to prevent any unintended consequences from drug interactions. To make the best possible recommendations, your doctor needs all the information.

The same is true of your financial advisor. Equipped with complete details about your financial picture, they can help give you better guidance to support you in reaching your goals. In fact, one analysis estimates that financial advisors can add 3% or more in annual returns, net of fees, when certain best practices are followed.

Workplace retirement accounts, such as 401(k)s and 403(b)s, make up a critical piece of the retirement savings puzzle for many investors. If you’re among the 70% of workers who contribute to a workplace retirement plan, are you making sure your account is working as hard as you are? 

A financial advisor can help you make the most of these held-away assets by including them in a comprehensive wealth management plan designed to build the financial future you want.

The Advantages of Comprehensive Wealth Management

What do we mean by comprehensive wealth management?

It means you’re working with a single point of contact who works toward understanding your unique situation, your values, and your goals, and recognizes how each part of your financial plan interacts with the bigger picture.

Your advisor can craft an integrated plan that considers your overall tax strategy, estate plan, retirement objectives, and more. Your workplace retirement account should be a part of this larger plan.

The Transition To Self-Managed Workplace Retirement Accounts

The shift away from workplace defined benefit pension plans to 401(k)s forced many people to begin managing their own workplace retirement accounts, on top of their other responsibilities. But you don’t have to do it alone. By turning these duties over to your financial advisor, you may benefit from professional guidance and ongoing planning.

In the past, advisors had limited options to help clients with held-away accounts. But recent technological advances have given advisors the ability to view and manage their clients’ outside accounts.

Opportunities To Use Advanced Wealth Management Strategies

By helping clients manage held-away assets, advisors can provide guidance around advanced wealth management strategies. 

Long-Term Tax Strategy

No matter the size of your portfolio, strategic tax planning can help make a definitive difference in your retirement.

An advisor can help design your portfolio with tax diversification in mind. 

Tax diversification means assets are intentionally distributed between investment accounts that are taxed differently. The goal is to create lifetime tax efficiency by reducing the total amount of taxes you pay over time. We sort these accounts into three primary categories:

• In tax-deferred investment accounts, contributions aren't taxed, but you pay regular income tax on distributions.
• Tax-advantaged investment accounts require ordinary income tax to be paid on contributions, but earnings grow tax-free if specific requirements are met.
• Taxable investment accounts, in which earnings and realized gains are taxed at the end of the year.

Talk to Your Advisor To Learn More

Your retirement is too important to take a set-it-and-forget-it approach. An advisor can help provide active management of your employer sponsored retirement account, offering:

• Convenience: Your advisor can carefully review your investment options in your workplace retirement account and make changes on your behalf.
• Coordination: Your advisor can holistically manage all your financial accounts according to your personalized financial plan.
• Clarity: By working with an advisor, you’ll know exactly what you’re invested in and receive guidance from professionals with deep experience.

If you have an employer-sponsored retirement account at a current or former employer and want to explore how an advisor could help, schedule time for a free consultation.