Wealthy individuals and families have unique financial and investment needs.  Because of their significant assets, they are potentially vulnerable to advisors with conflicting goals.  An advisor who is giving financial planning advice and selling financial products has an inherent conflict of interest, especially if the advisor’s or financial institutions compensation depends more upon the sale of a product than the value of the advice given. 

A personal “Chief Financial Officer” or CFO is someone who can provide objectivity and help ensure you’re receiving expertise and guidance void of any conflicts of interest.  A personal CFO is aligned with their client’s interests and isn’t motivated by commissions or incentives derived from the sale or products or services.

Most people are familiar with the functions performed by a corporate CFO.  Similarly, a personal CFO provides constant management and integration of your financial affairs and wealth strategies. A personal CFO takes a very active role to help ensure that agreed-upon planning strategies are implemented in a timely and effective manner.

Often times, wealthy individuals have a number of professionals such as an accountant, tax advisor, broker, banker, insurance agent, money manager and lawyer. The personal CFO’s role is to act as the quarterback of this financial team, coordinating all the professionals in an objective, and professional manner.  He or she will also review and analyze recommendations from other advisors on financial strategies or investment products being proposed.  The ultimate result is achieving the client’s goals and objectives, as well as potential cost savings.

When necessary, the personal CFO can also act as the “bad guy” deflecting investment tips sent to a client by his nephew, his broker or a college buddy who has a “can’t miss” opportunity. 

The ideal personal CFO would be from a fee-based relationship, which derives its revenues from disclosed fees and is fully transparent.  The firm should have breadth and depth of professionals and other credentialed individuals bringing a diversity of experience.  This experience should extend across multiple disciplines such as income tax planning and preparation, estate administration, business succession and cash flow planning as well as asset allocation and risk analysis.

Fees for these services are not inexpensive. However, the collective cost savings of the independent and objective advice—and the peace of mind it brings—can be significant.