When Eric Raether co-founded Canopy Wealth Management in August 2018, he not only brought decades of experience to the firm but also a commitment to focus on creating highly customized financial plans for clients.
To that end, Canopy emphasizes tax-sensitive planning rather than simply building investment portfolios. This approach allows the firm’s wealth advisors to manage client portfolios with specific goals in mind.
“Tax-sensitive planning is a more complex area of wealth management and not something a lot of people like to do on their own,” says Raether, who also is a wealth advisor in Canopy’s Middleton office (a second office is located in Southfield, Michigan). “Our value proposition revolves around creating a customized financial plan and helping clients make sound decisions with their money, so they can meet their goals. We don’t manage money in a vacuum. We need to understand the big picture.”
One way that Raether and his team help clients add significant value to their portfolio is by working with them to develop tax-efficient planning strategies.
“The goal is determining how to increase your return — improve your after-tax income — without increasing your risk,” Raether says.
Such strategies commonly include:
- Locating assets, which is a strategy of holding less tax-efficient investments in retirement accounts and holding more tax-efficient investments in taxable accounts.
- Tax-loss harvesting, which takes advantage of capital losses when markets are down.
- Optimizing charitable contributions, which can be done by donating appreciated securities, as well as using charitable IRA distributions and donor-advised funds.
- Maximizing tax-favored retirement savings vehicles. Ideally, this is done while the client still is in the wealth-accumulation stage.
- Developing tax-efficient distribution strategies for retirement income.
- Utilizing Roth conversion strategies to help clients maximize pre- tax income during lower-earning years or during early post-retirement years.
Canopy incorporates some of the wealth management industry’s latest technology into the planning process. “The software we use now is relatively new and does a better job than before of showing clients exactly what we’re doing, because it has a high level of tax projections built into it,” says Dave Muehl, a Canopy partner and wealth advisor in the Middleton office. “It allows us to more easily and accurately estimate tax returns for any given year and project tax savings, and it helps set us apart from other wealth-management firms.”
Canopy generally works with clients who have at least $500,000 of investable assets. The firm has experienced significant growth over the past 12 months, mainly driven by referrals from existing clients, according to Raether. While he expects such organic growth to continue, Canopy may consider adding more advisors — the Middleton and Southfield, Michigan, offices each have five employees — as well as expanding to additional locations in the future.
Canopy was formed as an independent Registered Investment Advisory firm, which means the company acts as a fiduciary on behalf of its clients at all times. As a fee-based fiduciary firm, Canopy’s wealth advisors do not accept commissions from the investments they recommend.
Contact:
Eric Raether, CFP® Founder & Wealth Advisor, eric@canopy-wealth.com
Dave Muehl, CFP® Partner & Wealth Advisor, dave@canopy-wealth.com
