As the owner of a midsize business, your situation is unique, compared to those running smaller or larger companies. You are likely less agile than the owner of a small firm; but, at the same time, you lack the resources of a large business. Additionally, a disproportionate share of your wealth may well be tied up in your company, an undesirable position since it directly links the value of that business to your family’s financial future.

The good news for all midsize-business owners is that, with a thoughtful and systematic approach to your financial challenges, you can continue to grow your business.

Delving into the challenges: To better understand the specific financial challenges midsize-business owners face, we conducted in-depth interviews with a number of them and related professionals. Here are some key findings:

  • Current business environment— Many of our interviewees cited issues such as healthcare reform, increased competition, globalization and the regulatory environment as important concerns as they endeavored to further grow their businesses.
  • Optimizing retirement savings— Several business owners we spoke with were concerned about helping both themselves and their employees maximize their retirement savings through a defined contribution plan. Given the many, and sometimes complex, options, they expressed uncertainty that their companies were offering the best possible plan.
  • Refining succession planning— While many business owners reported giving little or no thought to succession planning when their businesses were smaller, succession planning is now on the minds of many. While many had not yet developed detailed succession plans, they were aware of the importance of doing so. Those who were part of family-owned businesses where ownership was to be transferred to family were particularly sensitive to the need for astute succession planning.
  • Philanthropic concerns— Many of the business owners we spoke with are beginning to consider their legacies and the best way to fulfill their charitable goals. With much of their net worth in their businesses, they understand that fulfilling these goals may be highly dependent on a profitable succession.

Taking a systematic approach: While these issues may pose significant challenges for some midsize-business owners, employing a systematic wealth management approach will increase the likelihood of owners achieving their goals.

To define wealth management (WM), we use this formula: WM = IM + AWM + RM

Wealth management (WM) begins with investment management (IM), which can be the foundation of a midsize-business owner’s ability to address a company’s most important goals. However, many owners we interviewed also expressed a need for the formula’s second element, advanced wealth management (AWM). AWM addresses four major financial concerns beyond investing: wealth enhancement, wealth transfer, wealth preservation and charitable giving.

Since no one person can be an expert in all these complex areas, wealth managers often work closely with a client’s other advisors, such as CPAs and attorneys. This brings us to the formula’s third element: relationship management (RM). Effective wealth managers must cultivate trusting, long-term consultative relationships with their clients.

In sum, while midsize-business owners may face a unique set of challenges, a systematic approach can address their financial lives and help increase the probability of achieving their most important goals.

Kathleen Entwistle and Bryan Stephens are Financial Advisors with UBS Financial Services Inc., 61 South Paramus Road, Paramus, N.J. 07652 and 299 Park Avenue, New York, N.Y. 10171. UBS Financial Services Inc. Financial Advisors engage Worth to feature this article. As a firm providing wealth management services to clients, we offer both investment advisory and brokerage services. These services are separate and distinct, differ in material ways and are governed by different laws and separate contracts. For more information on the distinctions between our brokerage and investment advisory services, please speak with your Financial Advisor or visit our website at The strategies and/or investments referenced may not be suitable for all investors. UBS Financial Services Inc., its affiliates and its employees are not in the business of providing tax or legal advice. Clients should seek advice based on their particular circumstances from an independent tax advisor. Wealth management services in the United States are provided by UBS Financial Services, Inc., a registered broker/dealer offering securities, trading, brokerage and related products and services.

The information contained in this article is based on sources believed reliable, but its accuracy cannot be guaranteed. This article is for informational and educational purposes only and should not be relied upon as the basis for an investment decision. Portions of this article were developed in collaboration between CEG Worldwide and UBS for use by their Financial Advisors. This article approved by UBS Financial Services Inc. for use by its Financial Advisors. ©UBS 2015. All rights reserved. UBS Financial Services Inc. is a subsidiary of UBS AG. Member FINRA/SIPC. WHAT MAKES A GOOD ADVISOR… Listens, goes beyond investing; addresses wealth protection, wealth enhancement, wealth transfer and charitable intentions.
This article was originally published in the December/January 2016 issue of Worth.