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  • Cody Novak

Common questions high value investors are afraid to ask

You’ve been smart enough to both amass and hold on to your wealth through tumultuous times. Only you know what you’ve been through to get to where you are today. You shouldn’t be rewarded with vague answers to your investment questions from financial advisors. Here at Novak Private Wealth, we cater to the needs of high value investors like you—exclusively.

Here are the questions we most often encounter when onboarding investors who are tired of working with financial advisors who do not understand the unique needs of a large portfolio.

FAQ for financial peace of mind

Q: Is my current investment strategy tax efficient?

A: The high value investor is subject to all kinds of tax burdens. From capital gains to income-based to real estate investments, the tangle of tax law is daunting to most investors.

At Novak Private Wealth, we begin with a tax strategy before the first transaction occurs. Many investment firms simply do not have the experience to protect your assets like they should. We work with tax experts each year to identify any changes we need to be aware of, including legislation that can take a big bite out of your retirement plans.

Q: Should I stick to only investing in the stock market?

A: One of our areas of expertise is in stock market investing and we’re big fans of providing all of the information you need to invest wisely there. We’re not talking about those prospectuses with the tiny handwriting that almost no one can decipher (we can but we don’t like to brag).

The point is the stock market can be depended on to deliver a certain percentage on your every hard-earned dollar. Yet if your current investment firm hasn’t offered alternative or private investments as smart options for you, you’re missing out.

Our advisors take the time to explain the nuances of private investing and why only $1M-plus net worth investors will be invited to the table for many of these limited offers. Even if you already possess private investments in your portfolio, our clients tell us we deliver on their promise consistently.

Private investments usually open and close very quickly. We work with you to become the most transparent as well as the most reachable advisors you have ever worked with so that if an opportunity comes up, we will move quickly on your behalf to a) help you understand why it’s a good option and b) initiate the transaction as expeditiously as possible.

Q: How do I diversify safely?

A: As you are most likely aware, even if you watch the markets, bond performance or other financial bellwethers religiously, that’s no guarantee you will know when and how to diversify. We respect financial journalists and often use their insights to round out a strategy. But that’s simply not enough.

Our years of expertise in successfully diversifying high-value portfolios literally pays off. Before we share our diversification plan for your portfolio, we will make sure you perfectly understand the whys and hows of the strategy. We’re constantly working to clarify these strategies and will keep you up to date on what we find in our investigations and how it benefits you.

Diversification can help you reduce the risk of your portfolio without reducing the return, sometimes even enhancing the return.

Q: Why do so many business owners look for private investments?

A: When you invest solely in the public stock market, one thing is guaranteed: volatility. High-net-worth investors, pension funds, and endowments have known about private investments for over a decade. And they have been heavily invested in this alternative.

Combined in a portfolio, public investments and private investments can work quite well together. When one is underperforming, the other can help balance out that underperformance which leads to a steadier and more diversified portfolio.

Q: How do I protect my portfolio against sharp drops in the market?

A: When investing in the public market you are always at the mercy of fear and optimism. And the one thing you will certainly experience is volatility (ups and downs).

In early 2020 when Public Real Estate Investments were dropping in value by 25% to 50%, the Private Apartment REIT’s that we added to our client portfolios were experiencing positive growth every single month. This illustrates the power of private investments to stabilize returns so you can experience both consistency and big wins.

With private investments, you are investing for a longer term with less liquidity than stocks. However, you can still access your money, although you might have to pay a fee of 1% to 4% for doing so. Placing your money in private investments for a minimum set period allows you to receive a great benefit, often in the form of a higher rate of return on your money and more consistency.

Q: Am I paying too much in fees?

A: Probably. Not to be blunt, but if your current advisors are treating you like the big fish in their small pond, chances are they don’t have a good handle on keeping your fee structure manageable as they manage your portfolio. We’re used to managing successful, financially savvy business owners like you—with high value assets and the corresponding need to keep fees reasonable. After all, no one likes a high cost of doing business. And your portfolio won’t be randomly ransacked for trading fees here—ever. Fact is, 95% of advisors in Canada don’t have the licenses and designations necessary to execute on the strategies your high value portfolio demands—fee structures included.

But fees might be the least of your worries. The problem is you're not convinced your current advisors bring the level of expertise and experience your net worth demands. You're worried that missteps within your portfolio could jeopardize your security in retirement and that your fees reflect this inexperience. Here, our 30 years of experience managing only investors like you can reduce your risk, yield strong returns, and build confidence in your future.

For more straight talk from Novak experts, watch this video, Increase Your Returns and Reduce Your Risk: A simple guide to reduce taxes, strengthen your portfolio and simplify your finances.

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