Taxes and tax planning in wealth management

2024-09-26 16:59:14

In the world of investments and wealth management, understanding how taxes work and the tax planning to be followed is essential to increase returns and protect everything you’ve achieved.

In this article, we will explore the concept of wealth management, what tax planning is and how to apply it to wealth management.

You will also discover how to choose a company to take care of your assets and learn a little more about the differentiators of Warren’s wealth management.

What is wealth management?

Wealth management, or wealth management, is a financial solution that involves managing all financial aspects of an individual or family.

This includes investments, financial planning, succession planning, risk management, and, of course, tax planning.

The goal of wealth management is to help clients achieve their long-term financial goals by protecting and growing their wealth over time.

READ ABOUT | Introduction to wealth management: what it is and why it is important for your financial health

What is tax planning?

Tax planning is the process of analyzing and organizing the finances of a person or company with the objective of minimizing the tax burden in a legal and efficient way.

In other words, tax planning involves use of tax strategies and tools to reduce the amount of taxes to be paidtaking advantage of deductions, exemptions and tax incentives.

Tax planning is a crucial part of financial management, as it allows individuals and companies to maximize your resources and increase your financial efficiency.

UNDERSTAND | What elements make up financial planning and why not evaluate them separately

Tax Planning Strategies

One of the main tax planning strategies involves taking advantage of tax deductions allowed by legislation. These deductions can include medical expenses, education and private pension contributions.

By identifying and using these deductions, you can reduce the income tax calculation baseresulting in a lower tax burden.

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Another important strategy is the identifying tax-exempt sources of income.

Certain types of investments and tax benefits may be exempt from taxation, and taking advantage of them can be an effective way to minimize taxes.

For example, Real Estate Investment Funds (FIIs) offer income tax exemption on distributed income, as long as certain conditions are met.

A use of tax incentives offered by the Government It is also a valuable strategy in tax planning. These incentives are created to encourage investments in certain economic activities.

By investing in areas that benefit from these incentives, it is possible to reduce the tax burden and, at the same time, contribute to economic growth.

Planning how income is received is another effective technique.

For example, the use of dividends and interest on equity may have more favorable tax treatment compared to other forms of income. Structuring income efficiently can result in a lower tax burden and greater financial efficiency.

Finally, o succession planning It is a crucial part of tax planning. Structuring inheritances and donations efficiently can reduce property transfer taxes as much as possible.

This may involve mechanisms such as the creation of trusts, living donations and other legal strategies that minimize the tax burden on the transfer of assets to the next generations.

UNDERSTAND HOW | Everything about the transfer of assets

How do taxes and tax planning work in wealth management?

Taxes and tax planning in wealth management involve strategies that seek to minimize the tax burden and maximize the financial efficiency of the client’s assets.

Below, we list some ways to achieve these objectives:

• Investment Structuring: selection of investments that offer tax advantages, such as investment funds exempt from income tax.
• Succession Planning: structuring inheritances and donations in order to minimize taxes on property transfer.
• Use of Tax Incentives: Taking advantage of tax incentives offered by the Government for certain types of investments or economic activities.
• Risk Management: Implementation of strategies to protect assets against possible tax risks, such as audits and changes in tax legislation.

READ MORE | How risk management works in wealth management

How to choose a company to carry out your wealth management?

Choosing a company or brokerage specialized in wealth management is an important decision that can significantly impact your financial health.

Here are some factors to consider:

Experience and qualifications

Check the experience and qualifications of the professionals involved in managing your assets. Certifications like CFP® (Certified Financial Planner) can be a strong indication of competence.

Transparency and alignment of interests

Choose a company that is transparent about its fees and services. Seek to understand the remuneration model for the specialists involved and other costs of the process.

UNDERSTAND | How conflict of interest hinders your investments

Customization

A good wealth management service must offer personalized services that meet your specific needs and financial goals.

Reputation

Search the reputation of the company and the professionals who work there. Read reviews and ask for references to ensure you are choosing a reputable location.

Technology and Tools

Check if the company uses technology cutting-edge technology to monitor and manage your investments efficiently.

Holistic Approach

A good wealth management solution must adopt a holistic approach, considering all aspects of your financial lifeincluding investments, taxes, succession and risks.

Differentiators of Warren’s wealth management

Warren stands out in the wealth management market for making the model something that all investors can access.

Here are some of the differences:

1. No conflict of interest

Warren is a pioneer in Brazil in providing investors with a model where the manager that takes care of your assets does not receive a commission for selling investment products.

This gives you the security of knowing that all decisions are based exclusively on what is best for your goals.

At Warren, we are compensated by fixed fees for managing your portfolios.

UNDERSTAND OUR MODEL | Discover the 3.0 model and understand how it puts the customer at the center of the experience

2. Managed portfolios

At Warren, you invest through managed portfolios. Behind them, there is management of professionals with the necessary expertise to select investments best suited for you according to the market moment.

READ ABOUT | Managed portfolio: what it is, how it works, what are the advantages and how to create it

3. Your assets in the hands of certified experts

All Warren Experts have some of the most important certifications on the market financial, having the ability to assist you in all stages of financial planning.

4. Complete ecosystem of products and services

Warren will always look for solutions suited to your investor profile, objectives and moment in life.

Therefore, it has solutions that go beyond investments: exchange, private pension, insurance, real estate and vehicle credit e consortia.

5. Access to exclusive international portfolios

Through Warren International, you can access the global market and diversify your assetsexposing it to the dollar.

Reduction in taxes on dividends, exemption from income tax on inheritance and ease of declaring income tax are among the advantages of Warren International Portfolios.

Do you want to understand more about the benefits and advantages of relying on Warren’s wealth management for your assets? Fill out the form below to speak to one of our experts:

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