In general, real estate investors experience increased return potential because of their use of leverage and its favorable tax treatment. Most real estate investment experts advocate the use of leverage to build wealth.
Today, many advisors are partnering with those who have alternative products in which to invest, whether they are real estate-related or other private offerings. These partnerships provide the advisor with the ability to meet the changing demands of their clients. Advisors are learning to work more closely with clients who may have a property or real estate professional already in mind. As investors’ needs change, alternative assets and self-directed retirement accounts will become important tools for advisors to help clients diversify and grow their retirement wealth. Those advisors that are prepared for this change will be at the forefront of the financial services industry for years to come.
As a financial advisor, you play a trusted role in guiding your clients into both short term and long term financial goals. You assist them by exposing them to investment instruments, tax laws and considerations, insurance and propose recommendations to attain those goals. Additionally, you apply appropriate disciplines into investment class selection and diversification strategies.
PRIMARQ can complement your existing activities by enabling your client to access liquidity from their primary residence and reinvest the proceeds into more managed accounts in other asset classes. In general, most households have the bulk of their net worth in their home’s equity, leaving a much housing-biased portfolio, subject, particularly recently, to significant price volatility. By assisting your client into a “equity sharing” transaction, he can increase more liquid investments to assist in retirement planning, managing healthcare costs, and other longer term needs.
Additionally, as part of your client’s estate planning, life insurance can have a positive effect on addressing estate tax liability, and some advisors see monetizing a portion of his home equity and purchasing a fully paid up life policy to offset the tax burden.
By releasing value in the home for such a purchase should increase the ultimate value of the estate, whereas with no insurance, even the home is subject to the tax liability. So, why not sell a portion of the home and being better situated upon the resolution of the estate.