One of the benefits of multi-disciplinary teams is that they can uncover hidden problems–or details–in a client’s financial life. As we saw in last month’s column, prospects and even long-term clients may intentionally or unintentionally hold back on giving you the full picture. Having a team of financial detectives with different specialties on the case often leads to better solutions.
While family offices and multiple family offices provide a variety of services for their ultra-high-net-worth clients, the price of admission is substantial–as are the annual fees and long-term commitment. (For single-family offices, a minimum of $100 million net worth is required, and about $20 million for multiple-family offices.) For the high-net-worth client who wants bookkeeping, family business oversight, concierge services, and other support from a central source, the family office may make sense. However, for most families of similar and greater net worth, strategic advanced planning teams are more efficient, effective, and economical.
A variety of independent advisors–from solo practices to firms with multiple-teams in several cities–use this approach to provide the best service for clients. While the management and selection of teams varies, flexibility and matching client needs with the right expert are constant themes.
Internal and External Experts
“You have to have a multi-disciplinary approach, whether you are doing it in-house, or whether you are teaming it up with five specialists,” says Mark Brown, of Brown & Tedstrom in Denver. “Based on our experience with technical sub-specialties, we’ll match the client situation with an outside expert. We will work with these people since we know their standards and that they are all thorough.”
Selecting the right blend on internal and external team members becomes an exercise in subtle analysis of the client situation. “We have multiple professionals within the firm providing different services and at different levels of expertise,” says Peter Carnathan of the Fiduciary Trust Company International office in Washington, D.C. “Depending on the individual client, we often have to involve external professionals, external team members. For example, we don’t have any attorneys in-house that would draft a will or trust document. We would always need to use an outside attorney.” Once an outside attorney creates the documents, however, the staff legal professionals would serve as trust counsel and serve ultimately as trustees.
Other areas of advanced planning, in addition to the drafting of documents, may reach beyond the firm’s internal business capabilities, including insurance solutions, providing legal advice, or accessing certain lending vehicles.
A Multiple-Team Service Model
“One of the things we noticed as we got bigger that was really important was to continue to provide the same level of service to each client, says Brent Beene of RegentAtlantic Capital, LLC in Chatham, New Jersey. “If you’re working with high-net-worth clients, they’re just not going to put up with bad service.”
For Beene’s firm, which now has 13 wealth managers, the solution was to create in-house service teams assigned to each client. Operating these much as smaller independent financial planning firms, the members of each include a manager, financial advisor, analyst, and client service administrator. Each team looks after AUM of $150-250 million, a figure similar to many independent investment practices. “We have been able to fully create economies of scale by having an investment team that does the trading and the rebalancing for each of the teams,” he says.
Beene sees his role as the quarterback overseeing the entire process. The firm pulls in outside experts, and the additional professionals they require in particular technical areas, once it determines the client’s needs. “We review documents, not for the legality but just to make sure that all the Is are dotted and the Ts are crossed. For example, we oversee whatever needs to be done to fund an irrevocable life insurance trust. We see implementation all the way through.”
Beene prefers to have all team members meet in person when possible so all details are communicated correctly and effectively. If the firm has worked with an outside expert previously, they invite him to the office to meet with clients and lay out the case. On the other hand, if team members aren’t familiar with a new expert, they spend time getting to known him before any meetings with clients take place.
Beene’s firm managed the trusts for the wife of a Denver couple whose net worth was about $30 million with a total of about $15 million in investable assets. The husband, “John,” had had a long-term relationship with another firm, but began discussing some additional work with very large trust firms. After some preliminary conversations, he became interested in considering Beene’s firm–while a large independent, it was considerably smaller than the other contenders. John liked the idea that he’d be a substantial client for Beene’s firm and he’d get a higher level personal service than he’d likely receive at a larger firm where his assets were less significant.