Total Wealth for You

What is Total Wealth? Is it for you?

Put simply, Total Wealth is the balance of Family Wealth, Physical Wealth, Inner Wealth and Financial Wealth.

“Among our recent seminar participants only 3% claimed that they have planned for their Total Wealth with their spouse/family. But, all of them felt that it is something they must do.”

Conventional wealth management still focuses on financial aspects of “wealth”. It does not bring out the “total needs” of an individual and then plan the financial aspects accordingly. With a range of choices available for investments, insurance and retirement planning a broader approach to understanding the clients’ needs is even more important.

Let’s look at the extreme. Take, for example, a person who has worked all his life in trying conditions to accumulate wealth at the cost of family, health or even marriage. Are these uncommon scenarios? Not at all.

As one of the most successful financial planners confided “My high net worth clients do not need pure financial planning really, because they have enough to retire on for this generation and, in some cases, for the next as well. What they really need is what you call Total Wealth Planning. I have to be more than a financial planner to satisfy these clients.”

Wealth Management sales propositions are often flawed due to the lack of understanding of clients. They do not or cannot articulate the non-financial aspects of their needs. But the non-financial aspects are also wealth. At times, they do matter more than the financial needs. The same applies to risk. Non-financial risks eg. risk of divorce, risk of health problems etc. are difficult to articulate but ultimately they can affect wealth including financial wealth.

Dr Yahanpath puts these in a neat quadrant and calls it Total Wealth Quadrant (TWQ). Then, he develops a range of metrics to measure the “balance” of different drivers of Total Wealth. Only when you press the non-financial buttons people come up with the total picture. Two different scores are calculated using the computer-based calculator. Very soon financial planners and insurance advisors will have to wear the hat of a life coach and what really matters is where the client wants to be in Total Wealth terms.

The approach is relevant to blue collar workers as much as the high net worth individuals. For example, it may be even more important to manage physical wealth for blue collar workers due to the risk involved in their jobs. As a truck driver puts it “Total Wealth Quadrant (TWQ) showed for the first time how poorly I scored on family and physical wealth. If I fix them it will help me to score well even in financial wealth”. The models, processes and metrics can also be used in the Human Resources area in general and in “life balance” coaching in particular.

This is a new approach to wealth management. It is more robust not only in Total Wealth terms but also in financial wealth terms. It brings all key drivers of life under the umbrella of Total Wealth. Once you learn how to view wealth through the prism of Total Wealth it helps you to embrace a more balanced and fulfilling approach to wealth management including financial wealth management.

The approach is agile and flexible. Some can use it as a sales tool or as a “getting to know the client” tool. Others can use the approach to develop deeper client relationships and provide a broader service. This in turn is likely to increase the client profitability.

If the Total Wealth approach is implemented with a long term view in mind then one can expect exponential marginal returns in terms of Total Wealth.