Investment Management for Business Owners: Benefits & Costs
- Will Grant
- May 8
- 7 min read
As a business owner, you pour your energy into building and growing your company.
But have you thought about how your financial future looks beyond your business? Many business owners focus on reinvesting profits into their company, which can be a great way to scale.
However, relying only on your business assets can leave you financially exposed. That’s why investment management for business owners is essential — not just for growing wealth, but for safeguarding your wealth and diversifying your portfolio. If you’re seeking to secure your financial future, then working with a qualified investment professional may be a wise decision.
Whether you’re planning for retirement, managing risk, or simply looking for ways to grow your assets, the right investment strategies can make all the difference.
Will Grant, 360 Financial, CFP®, CPWA®, Senior Wealth Manager
As a Certified Financial Planner™ and Certified Private Wealth Advisor®, Will helps clients create their ideal life through values-based financial planning.
Table of Contents
The Importance of Investment Management for Business Owners
Running a successful business is already a big financial commitment.
But what happens if market conditions shift? What if an economic downturn impacts your revenue?
Based on our research, we’ve found that approximately 20% of small businesses fail within the first year, with financial mismanagement being one of the leading causes. Business owners find themselves overly reliant on their company as their primary financial resource, which can be risky.
Now, if you’re reading this post, you’re probably doing quite well.
But that doesn’t mean it’s time to rest on your laurels. Instead, it’s time to double down on risk management and seek to ensure you are confident in your future.
That's where investment management comes in. A balanced mix of active and passive strategies can support your long-term goals, whether through retirement accounts, personal investments, insurance, or other financial products.
How Your Investment Advisor Can Help
An investment advisor is a strategic partner who aims to help you manage risk, grow wealth, and align your finances with your broader goals. Here's how they may help:
1. Financial Planning
As a business owner, your personal and business finances are closely tied together.
An investment advisor can help you create a solid financial plan that makes the most of both. Whether it’s managing cash flow, risk tolerance, or figuring out how to grow your wealth while still investing in your business, they offer strategies that aim to keep you on track.
From tax-smart investing to retirement planning, an investment advisor helps you make decisions that are supportive of both your long-term financial and business objectives.
Without a strong financial plan, you may not get to your desired “final destination.”
A financial advisor can create a customized financial plan that’s tailored to your specific needs and goals. They’ll also update your plan as your life changes.
Whether you sell the business or add a new family member, your financial plan should change as your circumstances change.
2. Investment Management
Should you take an active or passive approach to investing? It depends on your goals.
Active strategies aim for higher returns, while passive ones focus on steady, long-term growth. A diversified portfolio may combine both depending on your risk tolerance.
Your advisor will always aim to help you build wealth while minimizing risk in alignment with your specific risk tolerance level. No two investors are alike. And it’s critical to make sure that your portfolio suits your needs and goals.
3. Retirement Planning
Retirement planning for business owners is different from that of employees.
While your business may be your biggest asset, how do you transition out of ownership?
An investment advisor who has experience working with business owners can help set up retirement accounts, succession plans, and exit strategies, aiming to ensure you're prepared for retirement.
They’ll also diversify your income streams, so you're not dependent on selling your business to fund your retirement.
4. Wealth Management
Your wealth isn't just about what you earn. It's also about what you keep.
Tax advisors, financial professionals and investment advisors work together to minimize tax liabilities and maximize savings.
Proactive wealth management for business owners includes seeking to optimize investment strategies, structuring your business for tax efficiency, estate planning, and charitable giving.
The goal is long-term growth and flexibility. If you have complex finances (which many business owners do), then working with a wealth management firm is likely the best fit for you.
It’s critical that your wealth management team can help you with estate planning and tax planning.
5. Estate Planning
What happens to your business and personal assets when you’re no longer around?
That’s where an investment advisor with experience in business owner estate planning can make a real difference. They help you create a plan to safeguard and transfer your wealth efficiently, whether that means providing guidance around setting up trusts or facilitating a smooth business succession.
Without a solid strategy, your heirs could face legal battles, tax challenges, or even the forced sale of your business.
An investment advisor works with estate attorneys and tax professionals who work to ensure your wishes are carried out, giving you more confidence about the future.
6. Tax Planning to Preserve Wealth
Nobody likes paying more taxes than they have to, and as a business owner, smart tax planning can save you thousands (or even millions) over time.
But tax laws are complex, and without a solid strategy, you could be missing out on major savings opportunities.
An investment advisor helps by structuring your portfolio for tax efficiency, using strategies like tax-deferred retirement accounts and strategic asset allocation to reduce liabilities and grow wealth. When paired with a tax advisor’s expertise, you can make sure your investments are optimized to keep more of what you earn.
7. Risk Management & Insurance Planning
No matter how well you plan, unexpected events can threaten your financial future.
A solid risk management strategy safeguards both your personal wealth and your business. An investment advisor helps you assess potential financial risks, diversify investments to reduce exposure, and identify insurance solutions catered to your needs.
From life insurance and liability coverage to key person insurance, they seek to ensure your business remains financially stable, even in worst-case scenarios.
What to Look for in an Investment Advisor or Financial Advisor
Look for an advisor who understands the complexities of business investment management and has experience helping business owners align their personal and business financial strategies.
A good advisor should take the time to understand your unique needs, financial goals, and business assets. Credentials like AIF®, CFA®, CFP®, Series 65, or Series 7/63/66 indicate expertise, but the right fit also depends on their approach and how well they align with your vision for the future.
Investment Advisor vs. Financial Advisor vs. Financial Planner
When it comes to managing your finances, it's easy to assume that all financial professionals offer the same services, but that's not the case.
Each type of advisor brings a different level of expertise and focus to the table. Understanding these distinctions can help you choose the right fit for your needs.
Investment Advisor: Specializes in managing investment portfolios and optimizing asset allocation, focusing on building wealth while managing risk.
Financial Advisor: Offers a broad range of services, including retirement planning, risk management, and tax strategies. They take a comprehensive view of your finances beyond just investments.
Financial Planner: Develops long-term strategies, addressing both personal and business financial goals.
Why Select a Holistic Wealth Management Firm
Running a business involves managing cash flow, taxes, retirement planning, risk, and investments, among other responsibilities.
With so many moving parts, it's easy to overlook areas that impact long-term financial success.
A holistic wealth management firm can help by offering an integrated approach.
Instead of working with separate professionals, these firms bring together financial advisors, tax specialists, estate planners, and investment managers to create a customized plan that corresponds with both your personal and business goals.
What Does Working with an Investment Advisor Cost?
Investment management fees typically range from 0.65% to 1.5% of assets under management (AUM).
The larger the investment portfolio, the lower the fee percentage.
When evaluating fees, consider what services are included and whether your advisor is focused on creating cost-effective, tax-efficient investment strategies.
Also, make sure that you feel comfortable speaking with your advisor about every single aspect of your financial life. You’ll get the best value when your advisor is able to help you with all aspects of your wealth management.
Common Questions
What does an investment management company do?
An investment management company helps clients accumulate and preserve their wealth by handling asset allocation, risk management, and long-term financial strategies.
For a business owner, this may mean balancing business assets with personal investments to pursue financial security.
What is the average fee for an investment manager?
Investment management fees typically range from 0.65% to 1.5% of AUM.
Larger portfolios often have lower percentage fees, but it's important to understand what services are included and how they align with your financial goals.
What is business investment management?
Business investment management focuses on helping business owners diversify beyond their company, manage financial risk, and build long-term wealth.
It involves strategic planning for retirement, tax efficiency, and asset preservation to strive toward financial stability both during and after business ownership.
About the Author
William Grant
Will Grant enjoys empowering people to make informed decisions and seeing the positive impact his guidance can have on their lives.
Prior to joining 360, he spent seven years serving hundreds of clients at a boutique RIA focused on healthcare executives with equity compensation and then at a large, independent RIA. He earned a Bachelor of Science degree in Finance from Miami University and holds his Series 7 and 63 licenses through LPL Financial and his 65 license through 360 Financial.
Will lives in Minneapolis with his fiancée, Melissa. In his free time, he enjoys competing in triathlons, golfing and is an active member of the Minnesota Leadership Council for the Chick Evans Scholarship Foundation, of which he was a recipient.
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360 Financial is an independent wealth management firm with a team of specialized financial advisors and financial planners. As fiduciaries, 360 Financial’s advisors provide services to business owners, entrepreneurs, and professionals. We help investors with sudden wealth, retirement planning, tax planning, estate planning, and business financial planning.
Headquartered in Minnesota, we serve investors across the US with online and in-person wealth management and financial planning services.
