WealthManagement Magazine

Wealth Management, No Longer an Option

Now that the markets are up approximately 75 percent from their crisis low, a lot of veterans are echoing the opinion of Hugh's senior partner. They've seen it all, been through serious ups and downs in the markets, heard rationale for advisors changing, never paid it much attention, and from their perspective, business returned to what they considered was normal.

Dallas -- "My partner has been in the business nearly 40 years, he's always been the voice of experience, but now I think he's on the wrong track," Hugh said during a break in our workshop. "He keeps saying he's seen it all before; the markets go down, a recession settles in, everyone screams about change, the markets recover, and everything goes back to business as usual."

Now that the markets are up approximately 75 percent from their crisis low, a lot of veterans are echoing the opinion of Hugh's senior partner. They've seen it all, been through serious ups and downs in the markets, heard rationale for advisors changing, never paid it much attention, and from their perspective, business returned to what they considered was normal. However, unless these veteran advisors were plying their trade during the Great Depression, they have not witnessed anything even remotely similar to this financial crisis.

Whether or not you consider the past couple of years a crisis is up to you, but Harvard Business Review does. I'm going share with you a quote from the editors:

"In times of crisis, people's behaviors and perspective change irrevocably. As we begin to emerge from a worldwide economic collapse, it will be critical that business leaders understand what the new norms are - and most important - how to adapt."

-- Special Managing in the New World, Harvard Business Review, July-August 2009

“How to adapt” means change. Our current research is clear regarding what today's affluent investor is looking for from a financial advisor. It has also identified the financial advisors who are adapting to address these needs; we refer to them as New World Advisors, and there is no mistaking it, they are the industry's elite. In addressing these new norms and expectations, New World Advisors are providing comprehensive wealth management services.

Because of the intangible nature or wealth management and the complexity of delivering all of these services, I've found that a handful of simple questions serve as a helpful exercise. If you're serious about this, approach these questions in the manner I suggested to Hugh; ask everyone on your team to think about and write out their answers to the following questions:

What does your team / practice do?
What value are you delivering to your clients?
What do you do?
What is your team's value statement?

Unless you've previously worked through an exercise similar to what I've outlined in these questions, the odds are that you're going to have a wide range of responses. Unfortunately, Hugh's partner did not attend this workshop, but as Hugh struggled with these questions it was obvious that his entire team would benefit from this exercise.

Gone are the days of lofty promises and fancy brochures. New World Advisors commit to the timely and professional delivery of all the services promised. Regardless of whether or not a particular wealth management solution is profitable, or time consuming, or an area that you don't enjoy, New World Advisors deliver. The affluent want a solutions provider to oversee the multi-dimensional aspect of their family's financial affairs.

As I list the full compliment of wealth management services, it's important to remember that these areas are where today's affluent investor wants advice and guidance. As you peruse the list below, think in terms of whether you have the expertise within your team or practice or you have to coordinate with an outside expert.

• Financial planning
• Portfolio management
• Alternative investments
• Estate planning
• Organizing and updating financial documents
• Insurance planning
• Real estate
• Tax planning
• Banking
• Charitable giving
• Budgeting and cash flow management


Obviously, not every affluent client is going to want all of the above services. Your responsibility is to have a working knowledge of each, know how to access the necessary expertise, and have some appreciation for the wealth management advisory or financial advisory process that you apply with every client. Our latest 2010 research tells us that two areas are at the core of a New World Advisor's wealth management process; 77 percent provide financial planning, and 58.9 percent provide organization and updating of financial documents.

The objective of every team or financial practice should be to work towards a unified response to those four questions posed earlier. Yet, without a clear wealth management process in place, this is very challenging for any team.

To answer the questions I posed to Hugh's team, and help craft your teams value proposition, visit our download center for a FREE copy of our “15 Benefits You Bring to Clients” PDF. Enjoy!

Once again, we want to thank all of you who have emailed comments and questions to us. We will continue to do our best to answer each one.

If you have any topic suggestions or special requests, please contact Rich Santos, publisher of Registered Rep. and Trust & Estates magazines, at [email protected]

TAGS: Research
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