To attract high-net-worth clients, offer more than financial planning

IN webcast panel also says to keep it in the family for long-term success

Apr 24, 2013 @ 1:55 pm

By Darla Mercado

high net worth, webcast
+ Zoom

In the never-ending search for high-net-worth clients and more assets, wealth managers might want to keep it in the family.

Advisers catering to the wealthiest clients aim to provide comprehensive advice to those investors and wield influence by being aware of what's going on with clients' assets — even those held elsewhere.

“The most important strategy, if you have a wealthy individual with multiple advisers, is that someone has to be the adviser who puts it all together and tracks the overall allocation,” said Chris Cordaro, chief executive of RegentAtlantic Capital LLC and a panelist on yesterday's InvestmentNews webcast, “Attracting High-Net-Worth Clients.”

But there's also plenty of growth potential when working with children of wealthy clients, which allows advisers to prepare to keep these young investors when they eventually inherit assets.

Advisers don't have to break their own account minimum rules in order to tap into that up-and-coming generation of investors. Rather, they can aggregate assets across generations of a family to ensure that the minimum is met.

“We aggregate up and down linearly, parent to child, and we do that to reach the minimum,” said Mr. Cordaro, whose firm requires a $1 million asset minimum. “A child starting out won't reach the minimum, and most of their wealth will be gifts from the parent anyway.”

Most high-net-worth clients want to ensure that the adviser can care for the rest of the family, and they place a premium on that.

“Many investors don't see their advisers asking [to discuss their children],” said webcast panelist Catherine McBreen, president of Spectrem Group's Millionaire Corner. “Most of these [heirs] don't know who to call other than the attorney. The attorney acts as a gatekeeper for many of these individuals, but most of them should have had a relationship with their parents' adviser.”

Aggregating assets across generations can also pave the way for the most comprehensive planning, according to panelist Murray Stoltz, president of Manchester Capital Management LLC. His firm has a $10 million asset minimum for clients but will aggregate a family's assets to treat multiple generations.

“We are often integrating the estate plan, the legacy and the future,” he said. “Working on that $300,000 or $400,000 portfolio with the son or daughter in their 20s or 30s is part of the plan, and we're hired to make sure that we can do that face-to-face work with that generation.”

Further, to be a successful wealth manager, advisers need to prepare themselves to handle all of their clients' financial affairs. Results from a quiz on InvestmentNews.com found that two-thirds of advisers describe themselves as wealth managers, but very few of them actually are, noted moderator Mark Bruno, director of digital strategy at InvestmentNews.

“You have to have a menu of services that a client would want, and different clients will want different services according to what's going on in their lives,” Mr. Cordaro said. For instance, last year, estate planning was a huge focal point for many high-net-worth clients. This year, tax planning is what's hot, he observed. Mr. Stoltz added that clients are also looking for advice on alternative assets.

There is also the matter of addressing fees that come with providing that suite of services. Both Mr. Cordaro and Mr. Stoltz charge based on the assets they actually manage. Mr. Cordaro's firm doesn't charge separately for additional estate- and tax-planning services, and Mr. Stoltz's firm scales down the fee as the client relationship expands.

“If there are other assets we're advising or assisting them on, the fee is based strictly on the asset that we manage,” Mr. Stoltz said. “Across the board, we provide a high level of service, and we look to keep the fees very simple and transparent.”

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