Advisors to very wealthy clients like the complexity of their work, but they find technical knowledge of their discipline isn’t enough to do the job right. In last month’s column, we reported on the findings of a new study that looked at the interaction between wealth counselors and their ultra-high-net-worth clients. Although this group represented a range of backgrounds, their practice models reflected the overall concept of comprehensive team planning, which at this asset level often includes wealth psychology professionals as team members. They confirmed that the planning issues, service demands, and family dynamics of affluent families are just too multi-dimensional to be left to a single skilled financial professional–outside experts in charitable giving, multiple-jurisdiction tax planning, and even private banking, for example, may need to join the team to fully serve this clientele.
More Than Technical Skills
Regardless of the particular technical discipline, all advisors–not just the team captain–require advanced listening skills, a subtle understanding of client and money psychology, and some familiarity with the full range of financial planning issues. The combination of these abilities permit advisors to build up relationships based on trust. Interestingly, trusting relationships guide wealth counselors more than their technical knowledge or experience in a particular discipline, according to the findings in “From Wealth Counselors to Wise Counselors: A Dialogue with Leading Advisors to Wealthy Families” from Wise Counsel Research, Inc. As one advisor expressed it, her deep technical background in economics and professional experience in running family offices weren’t enough–they only partially prepared her for clients who needed help with both financial challenges and their feelings about being wealthy.
For these kinds of clients, going beyond one’s discipline can be seen in the area of retirement planning, for example. Many advisors have expanded their practices to include client support well beyond investment management of retirement assets to include life planning, guidance on volunteer opportunities, post-retirement career strategy, relocation planning, and healthcare planning.
Wisdom as a Service
Not surprisingly, the advisors in the study spoke in terms of a client-centered view of their activities, which goes beyond the financial details to understanding goals, values, and history. As one wealth counselor expressed it, these savvy clients can recognize when solutions are truly best for the family. “I think clients can tell when wise counsel is involved because the outcomes are more in their self-interest [than the advisors'].”
Many of the respondents see providing wise counsel as discovering missing elements in planning which clients might not have recognized and helping them to fulfill them. “How do I define wise counsel?” asked one of the advisors. “Meeting the true needs of a person, gaining clarification so that these people will make wise choices in how to connect and implement their capacities and their aspirations. This [approach] enables the client to make wise choices.” These advisors follow a defined process that gives them a fruitful path for building relationships and creating comprehensive plans, but the wisdom works when clients gain new perceptions of their situations and greater understandings of their wealth.
Advisors achieve the true wisdom they need from sources beyond schooling and even beyond the core knowledge of their own discipline. They develop a wider network of experts that goes farther than just their slice of estate planning or investment management, for example. As one attorney expressed it, “The real problem is ‘Who heals the healer?’ Most disciplines don’t have a supervisory function [to help them]. . . I look to several people whom I practiced law with. I also have wonderful friends from other disciplines.”
Them vs. Us