Reaching the Tipping Point: When Growing Wealth Becomes Difficult to Manage Alone

As Melbourne prepares for another AFL Grand Final, much of the focus this weekend will be on what happens across four quarters on Saturday. 

But no team arrives on Grand Final day through individual effort alone. Behind the players is a much bigger operation, with coaches, specialists and systems that have been refined throughout the season; everyone understands the game plan and how their role contributes to it. 

Managing significant wealth can reach a similar tipping point. 

We are increasingly meeting individuals and families who have successfully built considerable wealth over many years but have reached a stage where managing everything together has become more complex. 

Investments may be held personally, through superannuation, family trusts and companies, alongside property and private investments. Tax considerations become more involved; opportunities broaden, and decisions in one area can have consequences elsewhere. 

Often, there is nothing inherently wrong with any one part of the picture, but rather the challenge is making sure all the moving parts continue to work together. 

When the game becomes more complex 

Early in your wealth journey, managing your investments may be relatively straightforward, but as wealth grows, so does the number of decisions that need to be made. 

A portfolio may gradually become more concentrated in a particular sector or asset class. Similar investments might be held across several structures without the overall exposure being immediately obvious, investments purchased at different times can carry different tax considerations, while private investments may introduce longer timeframes and different liquidity requirements. 

At the same time, the purpose of your wealth may change. Retirement could be approaching; children may need support, a business might be sold, or thoughts may turn towards the legacy you would like to leave for future generations. 

At this point, investment management becomes less about looking at individual investments and more about coordinating the complete financial position. 

A good strategy needs more than a game plan 

Having a strategy is important, but so is having the right people and processes in place to execute it. 

For clients with larger and more complex circumstances, this is where we see our experience adding significant value to not just our clients but their families. 

At Hewison Private Wealth, your adviser does not work in isolation, they are supported by our broader team, with our Investment Committee providing research and oversight of our investment approach and investment selections. 

Our preference for direct investment management also gives us the flexibility to construct portfolios around each client’s individual circumstances, objectives and preferences, rather than fitting their wealth into a predetermined model. 

Just as importantly, we can consider the different components of a client’s wealth together, helping them understand what they own, how it is structured and how each decision contributes to the broader strategy that will lead them towards the achievement of their goals, hopes and dreams for the future. 

Knowing when you need a team around you 

There is no particular portfolio balance that suddenly makes wealth too difficult to manage alone; the tipping point is invariably different for everyone. 

It may come when you find yourself managing multiple structures and investment portfolios. It may be when your tax position becomes more involved, when you begin considering private investment opportunities or when decisions about retirement, family and the next generation start intersecting. 

Reaching that point is not a sign that your financial strategy has become unmanageable. In many cases, it is simply the result of successfully building wealth over time. 

Much like reaching the final Saturday in September, getting there is an achievement, but what comes next requires preparation, coordination and the right team around you.

If you’re reaching a point where your investments, structures and financial decisions are becoming harder to coordinate, our advisers can help bring them together as part of a clear, considered strategy.

Start a conversation with our team.