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How To Break Into The Private Wealth Management Market

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In the past several years, the wealth management and financial planning market has developed an approach commonly referred to as “private wealth management.” The typical client seeking private wealth management is generally defined as ultra affluent, with a net worth in excess of $20 million or more. Clients in this market seek teams of advisors to help them achieve their goals of passing their wealth and values to the next generation and beyond. The hallmarks of private wealth management services are highly customized and integrated multi-generational planning.

Clients in this market typically work with banks, trust companies, boutique investment firms, family offices and multifamily offices (MFOs). Insurance professionals often ask me how they can enter the circle of these other advisors. The opportunity exists every day, especially for the financial representative with expertise in insurance, an area few lawyers, CPAs or private bankers truly understand.

However, it is of paramount importance that we never start with a product or strategy when entering this market or when entering a client meeting. The key is to focus on the service and process you provide to help the client and the client’s other advisors (attorneys, CPAs, etc.).

It’s also important to focus on the particular model of private wealth management employed by the other advisors with whom you work and how your process links to their process. Most private wealth management models are organized as “hub-and-spoke” models. With the client at the center, the private wealth manager coordinates all resources for the client.

These typically include investment management, financial and estate planning, business planning, estate planning, estate settlement, trust planning and administration. Sometimes private wealth areas offer other services, such as real estate management, bill-paying and travel services.

Almost every model also incorporates an area where most insurance professionals integrate their services: risk management. Insurance has always helped meet certain needs of the ultra affluent. For example, insurance provides a death benefit that can provide liquidity for the estates of the ultra affluent to offset estate taxes and other taxes and expenses due at death. Educating the client and the client’s other advisors about how insurance serves their risk management objectives is critical in every step in marketing to this audience.

In addition, this market requires a collaborative and consultative approach. Many insurance professionals are familiar with the coordinating role in a financial planning setting. To the extent the insurance professional is called upon to play, and has the resources to fulfill, that role, he or she may be seen as the coordinator. However, in many cases, another member of the planning team (e.g. private banker, attorney or investment advisor) will be the coordinator.

Therefore, the insurance professional must network with private bankers, attorneys and other advisors likely to have these clients. Joining a local estate planning counsel or hosting study groups for these advisors are ways to meet the right group of advisors. Once you are introduced to a client in a planning situation, a consultative and collaborative approach is required.

We generally emphasize five “Cs” of success in serving the client and the client’s other advisors.

Credibility–Insurance professionals working in this market must be viewed as credible with respect to the customer needs and their area of expertise. Pre-work, research and planning are also a requirement to be a player in this market. Remember, you have been included on the planning team because of your expertise in a specialized area. More importantly, you have been selected because of your ability to clearly articulate your ideas, your process and how it benefits the client and the client’s team in the context of the overall planning.