If there is one word to describe CEOs, it would be the word “busy.” This is backed by a 2018 study outlined in the Harvard Business Review that revealed CEOs work on average 9.7 hours per weekday and 62.5 hours per week.
Having worked with more than 30 CEOs and key executives as my clients in 2022, I’ve extracted the five biggest financial mistakes ubiquitously made by them. This can help you understand how you can best serve them as a financial advisor.
1. Prioritize work over personal planning
CEOs often allow their own work priorities to encroach into their personal time. When this happens, this takes away their active mental space to do their own personal financial planning. This comes with a huge price to pay.
Many CEOs who meet with me are in their mid- to late-50s. Suddenly, they realize the clock is ticking and retirement may be in less than 10 years. Instead of taking the same strategic approach they would professionally, though, they become very reactive. This is atypical of their usual proactive working styles.
2. Making bad financial decisions
With a shorter runway and time horizon, it can lead them to take aggressive investment mechanisms to achieve their financial goals. This creates another problem. It’s that high returns mean high risks. They could be undertaking unnecessary, relatively high risks to get to their hope for financial freedom post-retirement.
3. Delaying planning because they don’t know who to trust
CEOs and key executives are known to delegate and leverage their valuable key players to get things done. Ironically, when it comes to their own personal finances, they simply do not know who to trust.
They are probably surrounded with private bankers and financial advisors, yet how do they select the most suitable one who is genuinely aligned with their values and interests?
Choosing the right one takes time. This can greatly delay the financial planning process as they search for the right advisor to work with.
4. Paying too much in taxes
CEOs are paid well because of their wisdom and value they bring to companies. They are unlikely, however, to know everything beyond their area of competencies. Many CEOs I have worked with overlooked the opportunity to save in taxes through certain legal tax strategies.
5. Failing to maximize returns
Some CEOs are not leveraging the right instruments to grow their assets. Some of them keep far too much cash, which is not generating the desired returns.
Such mistakes can be costly. Maybe not in the short term, but in the long term it could be easily a five- to six-figure difference in returns.
Jaslyn Ng is a five-year MDRT member and a Court of the Table qualifier from Singapore.
For more ideas about working with high-net-worth clients:
- Read “Who do high-net-worth people want to know?”
- Watch “Connect with high-net-worth prospects”
- Read “Targeting high-net-worth prospects” [MDRT member exclusive]