Few people complain when their net worth increases, but immense wealth does complicate money management. Dan Duke oversees portfolios at U.S. Trust, Bank of America’s wealth management arm that targets high-net-worth clients. Below, he explains how best to handle health care, game today’s market, and set up your tyke for a solid financial future.
1. How can families factor health care into financial planning?
Health care costs continue to rise and will be a more significant expenditure for families in the very near future. Between insurance, long-term care, and unforeseen costs, there are any number of important considerations families should take into account as they assess evolving health care needs and the impact on overall financial health. Families should know the preferences of aging parents, for example, and have tough discussions before critical needs hit.
As with physical health, there is a wellness aspect to maintaining financial health. Establishing goals and a roadmap for financial health are critical, and the more complex the situation, the more value a team of dedicated advisors can bring. These experts ensure all available vehicles, including special-needs trusts, long-term care insurance, and health savings accounts, are given appropriate consideration for the unique needs of a family. Having a team of advisors helps safeguard financial health and creates good support structures for health care costs.
2. What are some ways your clients are taking advantage of current market conditions?
We see clients using traditional investment vehicles — stocks, bonds, etc. — as well as alternative asset classes as a part of an overall portfolio. Hard assets including timber, farmland, and commercial real estate are getting much more attention from an increasing proportion of clients. When we are able to engage in candid, thoughtful discussions about a client’s complete balance sheet, clients can consider the full range of options including the merits of incorporating effective levels of debt in support of overall objectives.
The Eastside is set up in a unique way to take advantage of an expanding economy. With the greater-Seattle market growing and thriving, and local companies continuing to do well, we are seeing more people outgrow their jobs, or retire early. These are smart, successful people with high expectations of themselves and the contributions they will make. Many are determining now to be an opportune time to start businesses and bring their creativity into the economy in a different way. The Eastside is a veritable hotbed for talent and sustained growth.
3. How do you effectively educate the next generation on financial matters?
By starting the conversation early.
Talking to children about money, privilege, and responsibility in an age-appropriate way and modeling values in action is the most effective way to educate the next generation. U.S. Trust’s “Insights on Wealth and Worth” study, a bi-annual survey of high-net-worth households, revealed that 58 percent of parents think their children are ready for an inheritance, and 46 percent believe investing in accordance with family values is very important. Successfully educating and preparing the next generation on difficult subjects by having increasingly more complex conversations should be driven by parents. Their advisors can support that effective dialogue. The example we set for young adults and the advice they receive as they prepare for their own futures is critical.
About the Expert
Name: Dan Duke
Title: Managing director, market executive
Residence: West Bellevue
Education: Economics degree from Queen’s University in Canada, MBA from UCLA
In His Free Time: Supporting Seattle-based sports teams, eating great food, drinking great wine, and spending time with his wife and two daughters