The holiday season doesn’t have to mean only stress and deadlines for advisors. It’s also a time to strengthen client relationships.
In a conversation with ThinkAdvisor, Sarah McDaniel, managing director of Morgan Stanley Family Office Resources, discussed how financial advisors can connect better with their clients during this time.
McDaniel leads the ultra-high net worth planning specialists that are a part of Family Office Resources. The specialists are tasked with helping advisors and their clients navigate and curate resources so their clients can make complicated decisions confidently.
Four years ago, Morgan Stanley formed the Family Office Resources Unit, aimed at clients with $20 million or more of investable assets, by combining services it already provided. These include family governance and wealth education, philanthropy management, as well as single family office and “lifestyle” advisories.
The team of about 70 employees has engaged with about 2,000 advisors year to date through November.
Here are McDaniel’s tips on how to make this time of year less stressful and more beneficial.
1. Have an ongoing dialogue to avoid end-of-the-year stress.
“While this time of year tends to be fun because families are getting together, it might be a little hectic because people are trying to accomplish things within a particular year so they feel a little more rushed,” McDaniel told ThinkAdvisor.
To avoid this, McDaniel suggested having an “ongoing process and dialogue that’s memorialized for clients” so there’s not the rush to get things done by the end of the year.
If there’s a plan in place with the advisor and the client, it should “transcend any time of year and hopefully any market environment,” according to McDaniel.
“Because we know what they’re trying to accomplish, we know what the risk profiles are, and it’s more of just checking in to make sure things are on track and that [something] hasn’t drastically changed which would warrant a re-evaluation of the plan,” she added.
2. Make a road map to ease tax-loss harvesting.
“Hopefully people have been doing tax-loss harvesting throughout the year, but sometimes people wait till the end of the year when they’re managing their tax bill in April,” McDaniel said.
Tax-loss harvesting requires identifying which portfolio holdings appear likely to distribute net capital gains before the end of the year while also finding holdings that are likely to sustain losses.
Have a navigation or a map of what the family tree is, what the legal structures are in place, which assets from balance sheets are in each of those entities and who the beneficiaries are, McDaniel suggests.
McDaniel’s suggestion it to make essentially what she calls a “road map of a tax identification number.”
“When people tax-loss harvest, oftentimes they think of doing it within an equity portfolio,” she explained. “They may not think about doing it across the equity and the fixed income and potentially the alternatives, which tend to be a little more illiquid so it tends to be more tricky.”