I recently sat down with three top wealth managers to talk about why they chose wealth management and the steps they take to distinguish themselves in a crowded field.
Q. Can you talk a little bit about why you decided to direct your practice toward wealth management, as well as the practical steps you took to move in that direction?
Charles D. Dodds Jr., CFP, CLU, ChFC, CIMA: I decided to make wealth management a part of our practice in the late 1990s. I could see transaction business was being replaced by fee-based business at the wire house I worked for, and more emphasis was placed on working with estate attorneys and CPAs to get a plan for clients. The steps I took were to obtain my CLU and ChFC designations in 1995, my CFP designation in 2001, and my CIMA — Certified Investment Management Analyst — certification in 2005. I joined the local Estate Planning Council in the early 1990s. We then encouraged all of our clients to have a financial plan.
Wayne D. Minich, CLU, ChFC: I began doing financial planning in 1971 and have had my securities license and the precursor to the Series 7 since that time. Then, things were far less sophisticated, but I was helping clients implement mutual funds along with life and disability insurance as part of a total financial plan.
In 1982, I incorporated, became independent and formed a second company to charge fees for our planning work. The second company became an RIA in 1984. I pinpoint that year as the time when our focus became the planning process. That process helped our clients determine their direction. Thus, product decisions and implementation became a by-product of the planning process.
Our clientele is comprised of business owners. Our business model is tailored to deal with the specific issues they face and provide advice accordingly. Because they are now “mature,” helping our clients develop exit strategies from their businesses is becoming an even more significant and important part of the planning services we offer.
As a result of our processes, wealth management is an integral piece to the jigsaw puzzle that is the life of a business owner.
Barbara A. Pietrangelo, CFP, CLU, ChFC, LUTCF, RFC, CLT: My move into wealth management was really more of an evolution of what I could do and what my clients needed. Our society has moved away from the old world of defined-benefit pensions. People have to make crucial decisions about their financial future, and it’s important they have the tools to do so. The majority of my work focuses on retirement income planning and managing rollovers when people change jobs.
As far as practical steps to move in that direction, I had valuable experience with sales in life insurance before I was securities licensed and moved into wealth management. Then, I took the ChFC courses and ultimately the CFP. I tried to learn a great deal in those courses and be a student of our business. The financial industry is always changing and evolving. There’s always something more to learn.
Q. There is, no doubt, a lot of competition in the area of wealth management, with professionals from various financial services backgrounds all competing with one another to assist the wealthy client. How do you set yourself apart from the competition, and do you consider your own background in the life insurance business a help or a hindrance in that regard?
Minich: Our processes are a distinguishing factor. When building client relationships, our clients remain loyal and refer us to colleagues looking for a similar relationship. Expertise in life insurance is an arrow in our planning quiver that is effective when appropriate and needed.
Pietrangelo: I don’t worry too much about competition. Almost all of my business comes from referrals, but even without that, I think there are far more people who need our services than there are qualified professionals who can serve them.
As far as my life insurance background is concerned, it is a great help. First, to sell life insurance you have to get good at relationship-building. You have to listen to people, help them find their real needs and wants, quantify those needs and then present a solution to satisfy them. Wealth management is the same process, just different in that we’re selling services instead of a product. But the sale is really the same; we’re selling movement toward financial security. I focus on the plan and then sell the products that fit the plan.
Dodds: The designations help to set us apart, and we try to meet one-on-one or as a team with each client’s estate planning attorney and CPA. Attorneys, in particular, seem to recognize the value of life insurance in the planning process. My background in life insurance has been helpful and has given me more credibility.
Charles K. Hirsch, CLU, is a contributing editor to Life Insurance Selling. He is the president of Hirsch Communications Consulting in Florissant, Mo.