Falling Behind on Financial Planning? It Might Be Time to Hire a Personal CFO

As a high net worth individual, you likely have a team of professionals handling different aspects of your personal finances – attorneys, accountants, insurance advisors, investment advisors, estate planners, financial planners, etc. These professionals all play key roles in your overall financial affairs, but who manages all of them for you? Often, coordinating your financial and legal advisors falls on your shoulders.

Managing your everyday life is challenging enough without the added stress that comes with trying to manage your overall financial life as well. Family, work, travel, meetings, deadlines, planning for retirement, coordinating events, balancing the checkbook, and more all require your time and attention. When you don’t have the time to manage your team, it’s easy for important tasks to fall through the cracks. Perhaps you’re paying less attention to your 401K selections than you should be. Or maybe it’s been a few years since you’ve reviewed your estate plan, despite important life changes.

Does this sound familiar? If so, then it may be time to talk to a Personal CFO. How will you know when the time is right to do this? What qualifications should you look for in this critical role? Below I’ll highlight the benefits of a Personal CFO and what to look for when starting your search.


What Can a Personal CFO Do for You?

In short, a Personal CFO is someone who can take on the coordination that you have been handling for so long. In addition to being your team manager, a Personal CFO should be able to offer a deep and broad range of financial knowledge and education that goes beyond investment management. They should have the following attributes:

Deep and Broad Expertise 

Your Personal CFO can be highly credentialed, (CPA, JD, LLM, MBA, CFP, etc.), but that is not a requirement.  They should have a very deep and broad expertise that can help advise you through a number of financial planning topics including investment management, estate planning, business succession planning, income tax planning, philanthropic planning, insurance planning, etc.  If they don’t have the expertise to handle the discussion in house, they should have a short list of specialists that they can introduce you to.

Thorough Discovery Process

Your Personal CFO should have a very thorough understanding of your overall assets, liabilities, income, expenses, and goals/objectives.  Once your goals are defined, your Personal CFO will implement a customized planning process to analyze where you are and what it will take to reach your goals.  Discovery conversations should continue at least annually from that point forward in order to ensure that your circumstances and/or goals have not materially changed.

Customized Financial Planning Process

Financial planning can be implemented in different ways.  Be careful of the firms offering “just enough planning” in order to get your investment or insurance business.  It is important to understand the different types of planning offered, the expertise of the advisor handling the planning, the cost of the planning service, etc.  Many clients have never been through a planning process before, but most would like to have peace of mind that they are on track for their respective goals. Whether you just sold your business, retired as a highly compensated executive, or are a recent divorcee or widow, a Personal CFO can help you build the right plan for your particular situation.


Many clients will show us the dusty financial plan notebook provided by their previous planner when we meet them for the first time.  This notebook typically includes a cash flow and net worth projection and some generic recommendations that the client was advised to discuss with their CPAs, attorneys, insurance advisors, etc.  High net worth individuals rarely have the time or expertise to discuss these concerns with a half dozen specialists.  A Personal CFO takes the customized recommendations agreed upon through the thorough planning process and coordinates the implementation with the specialists.  For example, if the estate plan needs updating, then the Personal CFO sends a memo summarizing the changes to the trust & estate attorney for review and drafting.  If the attorney has questions regarding the estate plan, the Personal CFO addresses the vast majority of them.  The Personal CFO follows the same process for each specialist so that, after a few months, all of the recommendations have been implemented.  At the end of this process, each recommendation should have a check mark next to it with notes and a completion date.

Monitoring and Maintenance

High net worth clients have very fluid financial lives. Both financial and non-financial laws can change and can have intended and unintended consequences on a family’s financial affairs.  A Personal CFO knows their clients’ needs and can be adaptive and proactive to ensure that their clients remain on track to reach their goals.


When Is It Time to Consider Hiring a Personal CFO?

It is never too early to find the right Personal CFO for you.  For most wealthy individuals, a triggering event prompts them to start the search.  For others, a need for peace of mind is what it takes to get started.  The following are some examples where a Personal CFO can create value immediately:

You Just Sold Your Business

You have grown your business over time, and you are starting to entertain offers to sell it to a third party, ESOP, management, family, etc.  You want to do it correctly and get a high net of tax dollar amount within the IRS guidelines.  A Personal CFO with business succession expertise can help coordinate this very important process, which typically requires months and sometimes years of planning before the transaction.

You Just Retired from an Executive Position in a Company

As a corporate executive nearing retirement, you may have just received a booklet from HR that shows all of the cash flow changes and income tax effects on your salary, bonus, equity awards, deferred compensation, pensions, etc., if you choose to retire at different dates.  You need to analyze these moving parts in order to make the right decision for your retirement.  A Personal CFO with executive compensation expertise can help run multiple iterations of cash flow, net worth, and income tax projections to provide you with peace of mind as you begin this new chapter of your life.

You Are New to Managing Money

You may have recently gone through a divorce or lost a loved one who managed your money. You may be the beneficiary of a trust. Whatever the case may be, you are now partially or entirely responsible for managing your overall financial plan, a team of advisors, and the financial markets, on top of mentally and emotionally managing your recent life change. A Personal CFO will allow you to have the time to adjust to your new normal while you begin the process of learning how to manage your money.

Your Work Just Picked Up

As a busy corporate executive or business owner, you are a master of managing your time and delegating when appropriate, but one person can only do so much. If the pace of work is picking up and taking up most of your time, hiring a Personal CFO is simply common sense.  They can help you on both the business and personal sides, coordinating your financial team when you no longer have the bandwidth to do so.

You Want Peace of Mind That You Are On the Right Track

You may be on cruise control with work and family but have never taken the time to assess your overall financial circumstances.  You think you are saving enough for your children’s college, you think you have enough life insurance, you think your estate plan works even after the recent changes in the tax law, you think you are on track for retirement, etc.  If you are tired of feeling “ok” about your financial circumstances and would like a second set of eyes and some eventual peace of mind, then maybe now is the right time to hire a Personal CFO.


What Makes a Good Personal CFO?

Finding a Personal CFO that meets the necessary qualification standards and has the experience is not uncommon; finding one who legitimately cares about your financial circumstances and success is the key to forming a successful and lifelong relationship.

At Gratus, we have a team of experienced and certified individuals ready to help you achieve success. Connect with a team that cares about your goals. Contact us for more information.


 Authored by: 

Joshua S. Hunter, MBA, CPA, CFP®

Gratus Capital is an SEC registered investment advisor. Registration with the SEC does not imply any level of skill or training. Our ADV documents are available upon request. The opinions expressed are as of September 2018 and may change as economic conditions vary. The information provided is not intended to be relied upon as specific investment advice and is not a recommendation, offer or solicitation to buy or sell any securities. As with any investments, past performance is not a guarantee of future results.  There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses.  The above article is intended to provide generalized financial information; it does not give personalized tax, investment, legal or other professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other matters that affect you or your business.