Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Financial Planning > UHNW Client Services > UHNW Client Advice

UBS Advisor to the Ultra-Wealthy Tells What His Clients Need Right Now

Your article was successfully shared with the contacts you provided.
Managing assets of $4.5 billion owned by a select group of ultra-high net worth families, Peter L. Rukeyser and partners run one of the biggest practices in UBS Private Wealth Management.

Rukeyser, 51, was fortunate enough to be mentored by his late uncle, Louis Rukeyser, host of the longtime PBS TV show “Wall $treet Week.” “I like to think I’m doing the same thing he did — just in a different venue,” says the advisor.

Here, in an interview with ThinkAdvisor, the advisor looks ahead at the markets: “Unlike the financial crisis [of 2008-2009], this time there’s light at the end of the tunnel: As soon as there’s a [coronavirus] vaccine that people feel is safe, the world will turn on again.”

Overall, he thinks that ,”Over the next 12 to 36 months, you need to be very bullish … . It really doesn‘t matter who wins the White House [because] the markets are focused on a vaccine and the stimulus. Those are the two drivers.”

Managing director Rukeyser and his three partners advise three billionaire families and about 17 other families worth $100 million or more via their New York-based practice. Several clients work in the biotech industry or other areas of technology.

Of course, his super-wealthy clientele are concerned about protecting and preserving their money. So, as the advisor frames it: “Our job is to make sure they stay wealthy.”

He works with clients to review their long-term financial plans, pivoting on “the three L’s”: liquidity, lifestyle and legacy. They also work together on the value — to both client and advisor — of comprehensive estate planning, and on his new enthusiasm for environmental, social and governance (or ESG) investing.

His Resume

Rukeyser grew up in suburban Larchmont, part of Westchester County in New York, graduated from Harvard with an economics degree and joined Prudential Investment’s leveraged buyout group.

Later, he earned an MBA in finance from Wharton and then  figuring he was better suited for wealth management than “impersonal” investment banking  joined Morgan Stanley.

There, he and Alexander Williams, whom he met at Wharton, became advisory partners. They remain so 25 years later.

The UHNW practice he and Williams built is open to new clients with at least $25 million. “The common theme is that all the families are rich,” he said, summing up his clientele.

Rukeyser spoke about his practice in a lengthy phone interview, from his home in Rye, New York, on July 24. Here are highlights of our conversation:

THINKADVISOR: Will the pandemic bring changes to the financial advisor’s job or the industry in general?

PETER RUKEYSER: I don’t think it will ultimately change the delivery of financial advice. Unlike the financial crisis [of 2008-2009], this time there’s light at the end of the tunnel: one or [more] coronavirus vaccines.

So people can see beyond this crisis and know it’s going to come to an end — maybe in the fall or around the new year or the first quarter. As soon as there’s a vaccine that people feel is safe, the world will turn on again.

To what extent?

We’re all going to live like it’s New Year’s Eve for a few months. Short-term, anything can happen: We can always have a 5%, 10% or 15% pullback, which is normal.

But over the next 12 to 36 months, you need to be very bullish because we’re going through a period of incredible stimulus; and it really doesn’t matter who wins the White House.

Really? Please explain.

That isn’t meant to be a statement on politics. I’m saying that the markets are focused on a vaccine and the stimulus. Those are the two drivers. The economy and the virus are the two most important things.

How have you been interacting with your clients during the pandemic?

I’ve started to invite them to my backyard. We sit outside on chairs 10 feet apart; I order in dinner, and we have some nice wine.

People are really craving a human connection. They need almost an emotional timeout from the 24-hour news cycle about COVID and the market [volatility].

Do you discuss their accounts in the backyard?

We talk about the markets, but it’s more reconnecting about what’s going on with their families, their kids. We talk about all the important stuff.

What other special events do you provide these ultra-high net worth clients?

One interesting thing we do is an annual ski trip for all the clients, and they ski together. Last year we went to Yellowstone Club in Montana; we’ve been to Vail and Aspen, Europe — all over.

By getting the families together in a relaxed setting, they’re often able to talk and share ideas — like how to raise kids in a wealthy family without causing them problems.

What else happens on those trips?

We have speakers and little roundtable discussions at dinner about different topics. Clients love it.

It’s almost like a club that the families join. They meet really interesting people in different industries. This has been very effective.

Amid the pandemic, what are your clients concerned about most?

They’re not worried about where their next meal is coming from, but they are worried about protecting and preserving their money. Our job is to make sure they stay wealthy — to protect and help families no matter what pitch comes their way.

What’s one specific way you’re helping during this difficult time?

Much of what we do is about clients’ emotional behavior. Whether going through the 2008-2009 financial crisis, the dotcom bust or now this, the common characteristic is that people tend to overreact emotionally — and emotion always leads to making the wrong investing decisions.

That’s when clients [in general] really crave and need guidance the most, because if left to their own devices, they’re likely to make the wrong decisions.

What behavioral biases are your own clients exhibiting?

People have a recency bias. They think that whatever has happened most recently is going to continue.

Right now, they’re asking a lot about where markets are going from here — are they ahead of themselves?

Do they want to know if they should change their asset allocation?

Absolutely. We spend time reviewing their long-term plan.

UBS has “the three L’s”: a liquidity bucket that has cash needs for the next couple of years; a lifestyle bucket that will fund lifestyle over the next number of decades; and a legacy bucket — long-term money for philanthropy or for kids or grandkids.

So [the idea is] to turn off the noise and refocus on the strategy in the plan with assets invested in different ways.

Your late uncle, Louis Rukeyser, a financial journalist by trade, hosted “Wall $treet Week” for 32 years. What did you learn from him?

He was always a mentor to me and helpful in setting in motion the idea of [my] guiding families. I like to think that I’m doing the same thing he did — just in a different venue.

Some said no one would watch when they came to him to create a show about money. But he was able to make it entertaining, and he used plain vanilla language. Our industry tends to use too much jargon, and it over-complicates things.

What commonality characterizes your clients?

I don’t [focus on a particular industry]. The common theme is that all the families are rich. I’ve done this [advising the super-wealthy] now for 25 years, and there’s no question that a family is going to ask that I haven’t heard before.

So it’s about sharing that encyclopedia of knowledge and then oftentimes connecting clients [with one another], which is really useful for them.

What’s one area that you’ve stressed more in recent years?

I’m not a lawyer, but I’ve become very fluent in the estate planning techniques that wealthy families use.

Estate-planning work changes the relationship from [focusing on the question], “How have we done for the last quarter?” To “Are we really answering the needs of our clients long-term?”

If you help clients with estate planning, a huge amount of money can be saved at their passing. This is almost more important than getting 7% or 8% when you’re paying almost 50% in estate taxes.

Broadly, what’s your clients’ mindset with regard to spending their money?

They’re doing really interesting things and want to change the world.

Are they investing much in the ESG area?

We’re doing that, increasingly. It’s probably the fastest growing new thing that I’ve learned about. I  thought you had to give up some investment performance to get ESG.

But today, we’re seeing more and more that companies focused on [environmental, social and governance] metrics are actually leaders and do well over time. So you can do ESG investing and not give up performance.

How did you develop your ultra-high net worth client niche?

In the summer between my first and second years at business school, I worked in Morgan Stanley’s institutional equity division.

A guy that ran the morning meeting told me: “Rukeyser, if I were going into the business today, I wouldn’t go to the institutional side; I’d go to the private wealth side, where you can own our own franchise — and it’s not a business that’s seeing a lot of margin compression.”

And you took his advice?

At the end of the summer, I spent a few weeks in Morgan Stanley’s private wealth division and realized that was the thing I wanted to do. I was always very entrepreneurial.

Unlike the institutional business, which is very impersonal, the ultra-high net worth side is helping people accomplish their wishes, hopes and dreams. So after [I earned] my MBA, I went back to Morgan Stanley full-time and started my career.

What’s the secret to your success?

There’s no secret. It’s being dedicated, putting clients first, caring about them, putting yourself in their shoes, managing relationships and loving the world of investing. A lot of advisors like a piece of that — but they don’t like a lot of it.

— Related on ThinkAdvisor:


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.